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UA

Under Armour, Inc. (UAA)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue fell 11.4% year over year to $1.18B, modestly above S&P Global consensus; gross margin expanded 170 bps to 46.7% on supply chain cost relief and reduced DTC discounting; adjusted diluted EPS was a loss of $0.08 and essentially in line with consensus estimates . Revenue estimate: $1.165B* vs actual $1.181B; EPS estimate: -$0.079* vs actual adjusted -$0.08 . Values retrieved from S&P Global.
  • Mix headwinds persisted (North America -10.7%, APAC -27.3%), while EMEA held flat on a currency-neutral basis; DTC eCommerce declined 27% given ongoing promotional pullbacks, consistent with the premiumization strategy .
  • Management limited guidance to Q1 FY2026 amid tariff uncertainty: revenue down 4–5%, gross margin +40–60 bps YoY, adjusted operating income $20–30M, adjusted diluted EPS $0.01–$0.03 .
  • FY2025 outcomes exceeded prior outlook: gross margin +180 bps to 47.9%, adjusted operating income $198M (vs guided $185–195M), adjusted EPS $0.31 (vs guided $0.28–$0.30) .

What Went Well and What Went Wrong

What Went Well

  • Gross margin resilience: Q4 GM +170 bps to 46.7% on lower product/freight costs and reduced discounting; FY GM +180 bps to 47.9% versus guidance, demonstrating traction in premiumization and supply chain benefits .
  • SG&A control and restructuring progress: Adjusted SG&A fell 2% for FY2025; restructuring charges/transformational expenses tracked toward the $140–$160M plan with $89M recognized through Q4 (55% cash, 45% non-cash), supporting future savings .
  • Clear brand strategy and product pipeline: CEO highlighted category-led operating model, premium UA Halo launch, base layer innovation (NeoLast), and focused SKUs; emphasis on storytelling and athlete-led activations (e.g., Curry brand) to drive pricing power .

What Went Wrong

  • Top-line contraction: Q4 revenue -11.4% with notable regional weakness (APAC -27.3%) and channel pressure (DTC -15%, eCommerce -27%) as promotional days were cut to elevate brand equity .
  • Footwear softness and mix: Footwear revenue -16.5% in Q3 and -16.5%/-17% across Q3–Q4, with footwear GM below apparel; management expects footwear pressure to persist near term (helps mix GM, but impacts growth) .
  • Tariff/macro uncertainty: Management refrained from full-year FY2026 guidance due to evolving trade policy; Q1 outlook only, with exploration of mitigation (sourcing diversification, potential cost-sharing, targeted pricing) .

Financial Results

Quarterly Performance vs Prior Periods

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Billions)$1.399 $1.401 $1.181
Gross Margin (%)49.8% 47.5% 46.7%
Diluted EPS (GAAP) ($)$0.39 $0.00 $(0.16)
Adjusted Diluted EPS ($)$0.30 $0.08 $(0.08)
Operating Income (GAAP) ($USD Millions)$173.1 $13.5 $(72.1)
Adjusted Operating Income ($USD Millions)$166.1 $59.6 $(35.6)

Consensus vs Actual (S&P Global; Primary EPS is normalized)

MetricQ2 2025Q3 2025Q4 2025
Revenue Consensus Mean ($USD Billions)*$1.384$1.339$1.165
Revenue Actual ($USD Billions)$1.399 $1.401 $1.181
Primary EPS Consensus Mean ($USD)*$0.194$0.033$(0.079)
Adjusted Diluted EPS Actual ($USD)$0.30 $0.08 $(0.08)

Values retrieved from S&P Global.

Segment Revenues

Segment ($USD Billions)Q2 2025Q3 2025Q4 2025
North America$0.863 $0.844 $0.689
EMEA$0.283 $0.298 $0.279
Asia-Pacific$0.208 $0.201 $0.165
Latin America$0.047 $0.059 $0.045
Corporate Other$(0.002) $(0.001) $0.003
Total$1.399 $1.401 $1.181

Channel Mix (Quarterly)

Channel ($USD Billions)Q2 2025Q3 2025Q4 2025
Wholesale$0.826 $0.705 $0.768
Direct-to-Consumer$0.550 $0.673 $0.386
License$0.025 $0.024 $0.024
Corporate Other$(0.002) $(0.001) $0.003
Total$1.399 $1.401 $1.181

Product Category Mix (Quarterly)

Category ($USD Billions)Q2 2025Q3 2025Q4 2025
Apparel$0.947 $0.966 $0.780
Footwear$0.313 $0.301 $0.282
Accessories$0.116 $0.110 $0.092
License$0.025 $0.024 $0.024
Corporate Other$(0.002) $(0.001) $0.003
Total$1.399 $1.401 $1.181

KPIs

KPIQ2 2025Q3 2025Q4 2025
eCommerce % of DTC30% 39% 37%
Inventory ($USD Billions)$1.106 $1.101 (flat YoY) $0.946 (down 1% YoY)
Cash & Equivalents ($USD Billions)$0.531 $0.727 $0.501
Share Repurchases ($USD Millions)$40 YTD; $0 in Q2 detail $25 in Q3 (2.8M shares) $25 in Q4 (4.1M shares); $90 total to date (12.8M shares)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Revenue YoYFY2025Low double-digit decline (Q2 guide) -9.4% actual Better than guide
Gross MarginFY2025+125–150 bps (Q2 guide) +160 bps (Q3 update) ; +180 bps actual Raised, then outperformed
Adjusted Operating Income ($M)FY2025$165–$185 (Q2) $185–$195 (Q3) ; $198 actual Raised, then beat
Adjusted Diluted EPS ($)FY2025$0.24–$0.27 (Q2) $0.28–$0.30 (Q3) ; $0.31 actual Raised, then beat
Revenue YoYQ1 FY2026N/A-4% to -5% New guide (limited)
Gross Margin YoYQ1 FY2026N/A+40–60 bps New guide (limited)
Adjusted Operating Income ($M)Q1 FY2026N/A$20–$30 New guide (limited)
Adjusted Diluted EPS ($)Q1 FY2026N/A$0.01–$0.03 New guide (limited)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025)Previous Mentions (Q3 2025)Current Period (Q4 2025)Trend
Premiumization & reduced DTC promosDriving GM; full-price mix rising; double-digit AUR/AOV; eCom promos cut Continued GM benefit; reduced promos/eCom down 20% eCom down 27%; GM +170 bps; premiumization remains core Steady execution; quality over volume
Category-led operating modelEmphasis on category management, SKU reduction Reinforced in Q3 release Central theme; faster execution across training, running, basketball, sportswear, golf Institutionalized
Footwear portfolio resetFocus on better/best; Assert redesign; near-term pressure Footwear -9% in Q3 Footwear -17% in Q4; pressure persists; helps GM mix short-term Near-term headwind
EMEA strengthBalanced; DTC support EMEA +5% in Q3; flat FY guide Q1 FY26 guided high-single-digit growth; leadership momentum Positive
APAC resetSoft macro; lower traffic; China tour helped Curry Q3 APAC -5% Mid-teen decline guided for Q1; marketplace reset; reduced discounting Work-in-progress
Tariffs/macroMonitoring; manageable scenarios –Limited outlook to Q1; mitigation (sourcing diversification, partner cost-sharing, pricing) Elevated uncertainty
Marketing reallocation$25M reinvested; major 2025 campaign; athlete activations Higher marketing in H2 “Lead with story, not price”; brand heat with Curry/Velocity Elite Intensifying

Management Commentary

  • “We’re laying the groundwork for a more focused Under Armour… elevating products and storytelling, tightening distribution, and refining our operating model… reigniting brand relevance” — Kevin Plank .
  • “Gross margin being our most important metric… benefited from our strategies of reducing promotions in our own DTC businesses” — Kevin Plank .
  • “We expect adjusted operating income to reach $20–$30 million and adjusted diluted EPS to be $0.01–$0.03 in Q1 of fiscal ’26” — David Bergman .
  • “Approximately 30% of our volume is sourced from Vietnam, 20% from Jordan and 15% from Indonesia… diversified portfolio” — David Bergman .
  • “Our ambition… is to sell so much more of so much less at a much higher full price” — Kevin Plank .

Q&A Highlights

  • North America reset: Leadership and strategy modeled from EMEA; pullback from constant discounting to rebuild brand affection; revenue step-down used to reset channels and pricing power .
  • eCommerce trajectory: Premiumization (story-first, loyalty leverage) expected to stabilize over time; double-digit AUR/AOV growth; healthier foundation vs transactional site .
  • Inventory and units vs dollars: Inventory down ~1% YoY; focus on tight PO management amid tariff uncertainty; off-price constrained to ~3–4% of revenue .
  • Footwear vs apparel mix: Q1 expected footwear pressure vs apparel/accessories; footwear GM structurally below apparel, improving over time .
  • Tariff impact: Too early to quantify; Q1 minimally affected; mitigation includes sourcing diversification and potential partner cost-sharing/pricing moves .

Estimates Context

  • Q4 FY2025: Revenue beat ($1.181B vs $1.165B*) and EPS in line (adjusted -$0.08 vs -$0.079*), with margin expansion driven by lower product/freight costs and reduced discounting; EBITDA outperformed estimates (actual ~$7.46M* vs -$4.15M*) . Values retrieved from S&P Global.
  • Q3 FY2025: Revenue beat ($1.401B vs $1.339B*), EPS beat ($0.08 vs $0.033*), supported by GM +240 bps on promo reductions and cost relief . Values retrieved from S&P Global.
  • Q2 FY2025: Revenue beat ($1.399B vs $1.384B*), EPS beat ($0.30 vs $0.194*), with GM +200 bps; EBITDA well above consensus . Values retrieved from S&P Global.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Gross margin durability is the core bull point; expansion driven by structural DTC/promo reductions and cost tailwinds, even as revenue contracts, and exceeded FY guidance ranges .
  • Near-term top-line pressure likely persists (footwear reset, APAC marketplace clean-up, North America DTC transformation), but mix benefits support margins; footwear weakness is acknowledged and planned .
  • Guidance prudence (Q1 FY2026 only) reflects tariff uncertainty; mitigation actions (sourcing diversification, partner cost-sharing, targeted pricing) are underway; watch for clarity next quarter .
  • Brand strategy pivot to “story over price” and category-led execution should rebuild pricing power; expect more athlete-led activations and premium launches (UA Halo, SlipSpeed updates) to serve as demand catalysts .
  • EMEA remains a relative bright spot with leadership momentum; North America reset modeled on EMEA playbook; APAC actions aimed at healthier premium growth over time .
  • Cash remains solid with no revolver borrowings; opportunistic buybacks ($90M to date) help EPS overhang; inventory levels are healthy and down year over year .
  • Trading lens: Stock narrative hinges on continued GM resilience vs macro/tariff headlines; significant beats on FY adjusted OI/EPS and raised GM guide underpin valuation support, but limited forward visibility and top-line declines temper multiple expansion until product storytelling converts to demand .

Additional Source Notes

  • Q4 FY2025 8-K 2.02 press release and full financial tables .
  • Q4 FY2025 earnings call transcript (prepared remarks + Q&A) .
  • Q3 FY2025 8-K press release and tables .
  • Q2 FY2025 8-K press release and tables; Q2 earnings call transcript for strategy context .

No separate Q4 press releases beyond the 8-K were found in the period reviewed [List: none in Apr–Jun 2025].