As expected, the US sporting goods provider Under Armor Inc. had to accept losses in sales and red numbers in the second quarter of the 2025/26 financial year. However, the current results that the company presented on Thursday were slightly better than management and analysts had previously forecast.
In the period from July to September, Under Armor generated sales of 1.33 billion US dollars (1.16 billion euros). This corresponded to a decline of 4.7 percent compared to the same quarter of the previous year. Adjusted for exchange rate changes, revenue fell by 5.8 percent.
Losses in North America and Asia are weighing on sales development
In North America, sales fell by 8.3 percent to $791.5 million, while in the Asia-Pacific region they fell by 13.7 percent to $179.2 million.
However, there was an upward trend in the EMEA region, which includes Europe, the Middle East and Africa. Quarterly sales there rose by 12.2 percent to $317.7 million. In Latin America, revenue increased by 14.6 percent to $53.8 million.
Higher tariffs squeeze the gross margin
Higher tariffs and a less favorable distribution channel mix contributed to the gross margin, which was 49.8 percent in the same quarter last year, falling to 47.3 percent. In addition, negative special effects weighed on the result. The operating profit shrank by around 90 percent to 17.0 million US dollars.
The bottom line was a reported net loss of 18.8 million US dollars (16.3 million euros), after the company had achieved a surplus of 170.4 million US dollars in the same period of the previous year. Adjusted for special items, net profit fell from $131.1 million to $15.3 million, but exceeded company and financial market expectations.
CEO Kevin Plank sees further progress in the ongoing reforms
President and CEO Kevin Plank called the surprisingly solid numbers, particularly the progress in North America, “encouraging.” The company has established its strategy and new business model and remains “disciplined and focused”. The response from consumers and retail partners underlines the successful realignment, which is “driven by stronger products, more concise storytelling and a new trust in the Under Armor brand,” emphasized Plank.
Management is now forecasting a decline in sales of four to five percent for the entire 2025/26 financial year. The target range for operating profit is between $19 and $34 million.