Source: Davit Kirakosyan
Under Armour’s Q1 2026 Earnings Miss Analyst Forecasts
Under Armour (NYSE:UAA), a leading global manufacturer and distributor of branded performance apparel, footwear, and accessories, recently announced its fiscal first quarter 2026 results. Unfortunately, the report revealed results that were lower than what analysts had projected. This caused a significant decline in the company’s shares by over 18% on Friday. Additionally, Under Armour also issued a considerably lower-than-expected guidance for the upcoming quarter, which further aggravated the situation.
Detailed Breakdown of Q1 2026 Earnings
Under Armour reported adjusted earnings of $0.02 per share in the first quarter, which fell short of the consensus estimate of $0.03. Furthermore, the company’s revenue saw a 4% year-over-year decline, standing at $1.1 billion. This was below the expected revenue of $1.13 billion, marking another miss against analysts’ expectations.
For the second quarter, Under Armour projects earnings to be within the range of $0.01 to $0.02 per share. This outlook is significantly under analysts’ forecast of $0.26, indicating a potential continuation of the company’s struggle in the current market scenario.
Underperformance Across Various Segments
The company’s North American sales, a major revenue driver, fell by 5%, amounting to $670 million. This decline is worrisome as North America has traditionally been Under Armour’s stronghold. Additionally, international revenue also slipped by 1% to $467 million, indicating a global slowdown for the company.
Looking at product categories, footwear sales experienced a significant drop of 14%, totaling $266 million. Apparel sales, one of the core segments, dipped 1% to $747 million. However, accessories managed to buck the trend with an 8% rise to $100 million, showing some silver lining in an otherwise bleak quarterly report.
Gross Margin Improvements and Future Expectations
Despite the disappointing earnings and revenue figures, Under Armour did manage to report an improved gross margin. The company’s gross margin rose by 70 basis points to 48.2%, aided by favorable currency exchange rates, effective pricing strategy, and an efficient product mix.
However, the company expects the gross margin for the second quarter to contract by 340 to 360 basis points. This expected contraction is attributed to ongoing supply chain challenges and the impacts of tariffs, which have been common pain points for many companies in the current global business landscape.
Revenue Forecast for Q2
Looking forward, Under Armour forecasts a decline of 6% to 7% in revenue for the second quarter. This includes an anticipated double-digit decline in two major markets, North America and Asia-Pacific. These declines are expected to be partially offset by high-single-digit growth in the Europe, Middle East, and Africa (EMEA) region.
To conclude, Under Armour’s Q1 2026 results reflect the challenges the company is facing in a highly competitive market. The disappointing numbers and bleak outlook for Q2 underline the need for a focused strategy to address these challenges and return the company to a growth trajectory. Investors and market watchers will be keeping a close eye on how Under Armour navigates this difficult period and the steps it takes to regain its footing.