Under Armour now expects FY27 operating income of $99m to $119m, up from its previous forecast of $96m to $116m. It maintains its expectation that revenue will decline at a mid-single-digit percentage rate.
Gross margin is now projected to rise by 170 to 220 basis points, down from the previous forecast of a 220 to 270 basis point increase.
Under Armour cited higher fuel and freight costs, the effects of planned inventory management actions and foreign exchange headwinds as the main drivers of the reduced outlook.
The revised outlook includes an estimated $70m benefit from refunds related to prior-year IEEPA tariff expenses. This is expected to be partly offset by approximately $45m in costs associated with the ongoing conflict in the Middle East, compared with an earlier estimate of $35m.
Fiscal 2027 Q2 Financial Overview for Under Armour
Under Armour generated $1.2bn in revenue for Q2, compared to $1.3bn a year earlier. This included a 7% decrease in North American revenue to $737m and a 7% drop in international revenue to $509m, which equated to a 9% decline on a constant-currency basis.
Wholesale revenue decreased 6% to $725m, while direct-to-consumer sales fell 8% to $494m. Within the direct-to-consumer business, e-commerce revenue dropped 12%.
The company’s gross margin narrowed by 30 basis points to 47%. Under Armour attributed the movement to foreign exchange, channel and regional mix, and pricing, partly offset by supply-chain benefits and product mix.
Operating income was $15m, compared with adjusted operating income of $25m after excluding transformation expenses, restructuring charges and the reversal of certain previously accrued litigation reserve expenses.
The company reported a net loss of $0.4m.
Under Armour recorded $11m in restructuring charges and $2m in transformation-related selling, general and administrative costs during Q2. Cumulative restructuring and transformation costs under its fiscal 2025 restructuring plan have reached $280m.
Under Armour expects total costs under the plan to be approximately $305m and said it expects the programme to be substantially complete by 31 December 2026.
Kevin Plank, Under Armour's president and chief executive, said: “We delivered against our revenue expectation and exceeded our operating income outlook. As we progress in this transformation, we are driving greater efficiency across our business, sharpening our product offering, and amplifying global marketing to strengthen our brand and improve financial performance.”
