Under Armour Posts 7% Revenue Decline as Middle East Conflict Raises Costs

November 7, 2026 | By Semahegn Nigatu

Under Armour reported a 7 percent decline in second-quarter fiscal 2027 revenue to 1.2 billion US dollars, while higher freight costs, foreign exchange pressures and weaker sales weighed on its margins.

The US sportswear company said revenue for the three months ended September 30, 2026, fell across its major markets and product categories, although operating income exceeded its expectations.

North American revenue declined 7 percent to 737 million US dollars, while international revenue fell by the same rate to 509 million US dollars. On a constant-currency basis, international revenue decreased 9 percent.

Within international markets, revenue in Europe, the Middle East and Africa declined 9 percent, while Asia-Pacific sales fell 9 percent. Latin American revenue increased 3 percent, although it declined 4 percent on a constant-currency basis.

Wholesale revenue decreased 6 percent to 725 million US dollars, while direct-to-consumer sales fell 8 percent to 494 million US dollars. E-commerce revenue declined 12 percent, accounting for 27 percent of direct-to-consumer sales during the quarter.

By product category, apparel revenue fell 6 percent to 880 million US dollars, footwear declined 11 percent to 234 million US dollars, and accessories revenue decreased 7 percent to 105 million US dollars.

Gross margin narrowed by 30 basis points to 47 percent, reflecting unfavourable foreign exchange movements, changes in sales channels and regional mix, and pricing pressures. Supply chain benefits and a more favourable product mix partly offset the decline.

Operating income stood at 15 million US dollars, while the company recorded a net loss of 400,000 US dollars. Selling, general and administrative expenses declined 4 percent to 557 million US dollars, mainly due to lower marketing expenditure and cost controls.

Chief executive Kevin Plank said the company met its revenue expectations and exceeded its operating income outlook, adding that it was working to improve efficiency, refine its product offering and strengthen global marketing.

The company also revised its fiscal 2027 gross margin outlook, now expecting an improvement of 170 to 220 basis points from the previous forecast of 220 to 270 basis points. It attributed the adjustment to higher fuel and freight costs, planned inventory management actions and foreign exchange pressures.

Under Armour said supply chain headwinds linked to the ongoing conflict in the Middle East were expected to cost approximately 45 million US dollars, up from its previous estimate of 35 million US dollars.

Despite the pressures, the company maintained its full-year revenue forecast for a mid-single-digit percentage decline. It raised its operating income forecast to between 99 million and 119 million US dollars, from the previous range of 96 million to 116 million US dollars.

The revised operating income outlook includes an estimated 70 million US dollars in refunds related to tariffs incurred in the previous fiscal year under the International Emergency Economic Powers Act (IEEPA). The company said the benefit would partly offset higher costs associated with the Middle East conflict.

Under Armour also reported that inventory increased 4 percent to 1.1 billion US dollars at the end of the quarter. Cash and cash equivalents stood at 285 million US dollars, while borrowings under its revolving credit facility totalled 190 million US dollars.

The company expects its Fiscal 2025 Restructuring Plan to be substantially completed by December 31, 2026. It has incurred 280 million US dollars in restructuring and transformation costs to date and expects total programme costs to reach approximately 305 million US dollars.

For fiscal 2027, Under Armour expects adjusted operating income of 140 million to 160 million US dollars and adjusted diluted earnings per share of eight to 12 cents, excluding specified restructuring, transformation and litigation-related items.

Source: FSX Business News