Executive Summary

Q3 FY2025 results beat management’s November outlook: revenue declined 6% to $1.401B, better than the ~10% decline guided; gross margin expanded 240 bps to 47.5%; GAAP diluted EPS was $0.00 and adjusted EPS was $0.08, both above guidance ranges driven by supply chain savings, lower discounting, and favorable FX mix .
Management raised full‑year FY2025 guidance on gross margin (+160 bps vs +125–150 bps prior), adjusted operating income ($185–$195M vs $165–$185M prior), and adjusted EPS ($0.28–$0.30 vs $0.24–$0.27 prior), while trimming capex ($170–$180M vs $190–$210M) .
North America (-8%) remained pressured by planned DTC promotional pullback and softer eCommerce (-20%), while EMEA grew +5% (DTC and full‑price wholesale strength) and APAC fell -5% amid a highly competitive, promotional market; DTC discipline and supply chain cost tailwinds were the primary profit drivers .
Stock reaction catalysts: material beat vs company guidance (adj. EPS $0.08 vs $0.02–$0.04 guided; adj. OI $60M vs $20–$30M guided), and higher FY25 margin/earnings outlook, partly tempered by ongoing top‑line decline and a weaker APAC outlook .

What Went Well and What Went Wrong

What Went Well

Gross margin expansion of +240 bps to 47.5% on less discounting, lower product and freight costs, and favorable FX; beat vs plan due to additional product cost/freight savings, FX, and lower off‑price mix .
Tight promotional discipline: eCommerce revenue -20% by design, with mix benefits in DTC and lower wholesale markdowns supporting pricing power; DTC accounted for $673M as planned discounting was reduced .
Management raised FY25 outlook, with adjusted operating income midpoint lifted by ~$15M and adjusted EPS by ~$0.03, citing margin overdrive and reinvestment into brand initiatives; capex also reduced by ~$30M vs prior plan .
Quote: “Our fiscal third quarter results exceeded expectations, driven by strong gross margin performance…we were able to raise our full year outlook again” — Kevin Plank .

What Went Wrong

Top‑line contraction persisted: revenue -6% YoY to $1.401B; North America -8% and APAC -5% reflecting planned pullback in DTC promotions and a highly competitive APAC environment; wholesale off‑price sales down .
SG&A +6% to $638M, including a $28M impairment for exiting the prior HQ and ~$4M in transformation expenses; restructuring charges of $14M; GAAP operating income only $13.5M (adjusted $59.6M) .
APAC outlook cut: full‑year APAC now expected to decline low‑teens vs prior high single‑digit decline, reflecting mounting competitive/promotional pressure; Q4 flagged as the most pressured period given order book softness, APAC weakness, tougher NA comparisons, and FX headwinds .

Financial Results

Headline P&L vs Prior Year and Prior Quarter

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Billions)	$1.486	$1.399	$1.401
Gross Margin (%)	45.1%	49.8%	47.5%
Operating Income (GAAP, $USD Millions)	$71.4	$173.1	$13.5
Adjusted Operating Income ($USD Millions)	N/A	$166.1	$59.6
SG&A (GAAP, $USD Millions)	$599.2	$519.8	$637.7
Adjusted SG&A ($USD Millions)	N/A	$530.1	$605.5
Diluted EPS (GAAP, $)	$0.25	$0.39	$0.00
Adjusted Diluted EPS ($)	N/A	$0.30	$0.08

Notes: Adjusted figures exclude litigation settlement/insurance effects, restructuring and transformation expenses, and impairment charges as defined by the company .

Performance vs Company Guidance (from Nov 7, 2024)

Metric	Q3 Guidance (from Q2 8‑K)	Q3 Actual	Result
Revenue YoY	~-10%	-5.7%	Beat
Adjusted Operating Income ($M)	$20–$30	$59.6	Beat
Adjusted Diluted EPS ($)	$0.02–$0.04	$0.08	Beat

Segment Breakdown (Net Revenues)

Geography ($USD Millions)	Q3 2024	Q3 2025	YoY %
North America	$915.3	$843.6	-7.8%
EMEA	$284.0	$297.9	+4.9%
Asia‑Pacific	$212.0	$201.1	-5.1%
Latin America	$69.8	$59.0	-15.5%
Corporate/Other	$4.8	-$0.6	N/M

Channel ($USD Millions)	Q3 2024	Q3 2025	YoY %
Wholesale	$711.7	$704.8	-1.0%
Direct‑to‑Consumer	$740.5	$672.9	-9.1%
License	$29.1	$23.9	-17.8%

Product ($USD Millions)	Q3 2024	Q3 2025	YoY %
Apparel	$1,016.7	$966.1	-5.0%
Footwear	$331.0	$301.2	-9.0%
Accessories	$104.5	$110.4	+5.7%

KPIs and Balance Sheet Highlights

KPI	Q1 2025	Q2 2025	Q3 2025
eCommerce as % of DTC	34%	30%	39%
eCommerce YoY	-25%	-21%	-20%
Owned & Operated Stores YoY	-3%	~0%	-1%
Inventory ($B)	$1.120	$1.106	$1.101
Cash & Equivalents ($M)	$885	$531	$727
Share Repurchases ($M)	$40	N/A	$25 (2.8M shares)
Revolver Drawn	$0	$0	$0

Guidance Changes

Metric	Period	Previous Guidance (Nov 7, 2024)	Current Guidance (Feb 6, 2025)	Change
Total Revenue YoY	FY2025	Low double‑digit decline	~-10%	Raised
North America Revenue	FY2025	-14% to -16%	-12% to -13%	Raised
International Revenue	FY2025	Low single‑digit decline	Mid‑single‑digit decline	Lowered
EMEA	FY2025	Flat	Flat	Maintained
APAC	FY2025	High single‑digit decline	Low‑teen % decline	Lowered
Gross Margin	FY2025	+125 to +150 bps	~+160 bps	Raised
Adjusted SG&A	FY2025	Low‑to‑mid single‑digit decline	Low single‑digit decline	Slightly Higher (less decline)
Operating Loss (GAAP)	FY2025	$(176) to $(196)M	$(179) to $(189)M	Largely In‑line
Adjusted Operating Income	FY2025	$165 to $185M	$185 to $195M	Raised
Diluted EPS (GAAP)	FY2025	$(0.51) to $(0.48)	$(0.50) to $(0.48)	Narrowed
Adjusted Diluted EPS	FY2025	$0.24 to $0.27	$0.28 to $0.30	Raised
Capital Expenditures	FY2025	$190 to $210M	$170 to $180M	Lowered

Earnings Call Themes & Trends

Topic	Q1 FY25 (Aug)	Q2 FY25 (Nov)	Q3 FY25 (Feb)	Trend
Brand/Marketing Repositioning	Early reset; reduce promotions; premium positioning	Hired Eric Liedtke; planning biggest 2025 brand campaign; underdog positioning	“Dynamic, multi‑year initiative” centralizing marketing; focus on youth channels; redeploy budget	Increasing investment and clarity
DTC Promotional Discipline	eCom -25% on deliberate promo pullback	eCom -21%; full‑price mix up; AUR/AOV up double digits	eCom -20%; continued pricing power; DTC discipline drove margin	Sustained discipline, margin accretive
Supply Chain Costs	Lower product costs aided GM	Supply chain benefits drove GM beat	Additional product/freight savings vs plan; FX tailwind	Tailwinds persist
Regional Dynamics	EMEA flat; APAC -10%	EMEA ~flat, strong brand; APAC -11%	EMEA +5%; APAC -5%; APAC outlook cut	EMEA resilient; APAC challenged
Restructuring	$70–$90M plan	Expanded to $140–$160M; exit Rialto DC	$57M incurred YTD; remainder in FY25–26	Program ramping
Legal One‑offs	Litigation reserve elevated Q1 SG&A	$27M insurance recovery in Q2	SG&A outlook references litigation items	Non‑recurring items flowing through
Tariffs/Macro	—	Flagged FX headwinds in H2	Proposed US tariff changes seen as immaterial (only ~3% imports from China)	Monitor, low exposure

Management Commentary

Strategic focus: “We are transitioning from an apparel, footwear and accessory led operating model to a consumer‑focused, category managed model that emphasizes singular accountability” — Kevin Plank .
Pricing power and discipline: “We are dedicated to refining our messaging…stop asking [consumers] to buy…through performance marketing… focus on showing them why they should love our individual products and our brand” .
Margin drivers: “Three main factors drove our gross margin beat… additional product cost savings and lower freight; unplanned FX benefits; lower than planned off‑price sales” — CFO David Bergman .
APAC: “The region's highly competitive and promotional landscape contributed to the mounting pressure…we’re working to stabilize our trajectory there… strengthen our brand and restore our pricing power” — Plank .
Long‑term margin ambition: “There’s certainly nothing that we see stopping us from a road map to a 50% gross margin… despite footwear mix headwind” — Bergman .

Q&A Highlights

DTC promo pullback: Management emphasized further room to reduce eCommerce discounting in NA and APAC while holding recent gains in EMEA; discipline remains a key lever for margin .
Q4 caution: Order book softness, APAC pressure, tough NA outlet comps, and FX headwinds make Q4 the most pressured quarter, consistent with prior commentary .
Tariffs: Proposed US tariff changes expected to have limited impact given ~3% of US imports sourced from China; no exposure to Canada and minimal from Mexico .
Wholesale: Regaining shelf space will take time; mix shift away from off‑price aided margins; retailers receptive to UA’s upcoming product/brand narrative .
Account exposure: No single account approaches 10% of revenue, limiting customer concentration risk .

Estimates Context

Wall Street consensus (S&P Global) for Q3 FY2025 EPS and revenue was unavailable at time of retrieval due to data access limits; therefore, we cannot present a vs‑consensus comparison (values not retrieved).*
However, relative to company guidance issued in November, Q3 delivered a material beat (adj. EPS $0.08 vs $0.02–$0.04; adj. OI $59.6M vs $20–$30M), with revenue outperforming the ~-10% decline guided (actual -5.7%) .

*Values typically sourced from S&P Global; unavailable due to temporary access limits.

Key Takeaways for Investors

The quarter’s upside vs internal guidance was driven by structural levers (pricing discipline, supply chain savings, lower off‑price mix), not one‑time items—supporting a higher FY25 margin and earnings outlook .
Top‑line remains a drag near‑term as promotions are dialed back and wholesale/off‑price are reduced; EMEA resilience offsets APAC headwinds; Q4 will be the toughest compare .
Brand/marketing pivot and category‑led operating model should increasingly show through starting fall/winter ’25; near‑term, expect elevated marketing spend and further SG&A variance as UA repositions .
Cash remains solid ($727M) with no revolver borrowings and active buybacks; inventory stable at ~$1.1B, supported by tight off‑price management and planning improvements .
Watch APAC: management downgraded the outlook to a low‑teens decline, citing heavy promotions and execution gaps; successful stabilization is a key medium‑term swing factor .
Longer‑term, management reiterates a path toward ~50% gross margin and double‑digit operating margins as the brand premiumizes and footwear/apparel mix and DTC scale are optimized .

Additional Press Releases During Q3 Window

UA published consumer/product‑oriented press content in December, including running/training/basketball shoe rundowns (brand marketing/SEO content; not financially material) .

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