Under Armour Q2 Revenue Falls 7% as It Trims Margin Outlook and Raises GAAP Operating Income Forecast

Under Armour reported a 7% fall in second-quarter revenue to about $1.2 billion on Nov. 6, 2026, for the quarter ended Sept. 30. The Baltimore sportswear company said operating income was $15 million, ahead of its own outlook.

Alongside the results, the company lowered its full-year gross margin expectation and raised its GAAP operating income forecast. It left its revenue guidance at a mid-single-digit decline for the fiscal year ending March 31, 2027.

What Under Armour Reported for the Quarter

Revenue fell 7% in the second quarter of fiscal 2027, according to the company’s earnings release filed with the U.S. Securities and Exchange Commission. In the prior quarter, which ended June 30, revenue had fallen about 3% to $1.098 billion.

North America revenue fell 7% to $737 million. International revenue also fell 7%, to $509 million, or 9% in constant currency. EMEA and Asia-Pacific were each down 9%, while Latin America rose 3%.

Wholesale revenue fell 6% to $725 million. Direct-to-consumer revenue fell 8% to $494 million, and within that, eCommerce fell 12%.

By category, apparel fell 6% to $880 million, footwear fell 11% to $234 million and accessories fell 7% to $105 million.

Gross margin was 47.0%, down 30 basis points. Selling, general and administrative expenses fell 4% to $557 million. Inventory rose 4% to $1.1 billion.

Guidance Change
Under Armour cut its fiscal 2027 gross margin expansion outlook to 170 to 220 basis points from 220 to 270, while raising GAAP operating income guidance to $99 million to $119 million from $96 million to $116 million.

Profit Beat the Company’s Outlook

Operating income was $15 million, compared with $17 million a year earlier. Adjusted operating income was $25 million. The company reported a net loss of $0.4 million, against a loss of $18.8 million in the same quarter last year, and diluted earnings per share of $0.00.

FashionUnited reports that adjusted operating income was $25 million, down from $53.4 million a year earlier, and that the company operated 438 owned stores, down from 447.

Chief executive Kevin Plank said in the release: “We delivered against our revenue expectation and exceeded our operating income outlook.” FashionUnited reports that he pointed to continuing work on efficiency, a sharper product line and wider global marketing.

The company ended the quarter with $285 million in cash and $190 million drawn on its $1.1 billion revolving credit facility.

Revised Full-Year and Third-Quarter Guidance

Under Armour now expects gross margin to rise 170 to 220 basis points for the fiscal year. In August it had forecast a rise of 220 to 270 basis points. About 150 basis points of the expected gain reflects recovery of tariff costs expensed in fiscal 2026 under the International Emergency Economic Powers Act (IEEPA), the company said.

The release attributes the lower margin forecast largely to higher fuel and freight costs, planned inventory management actions and foreign exchange headwinds. The release also says the outlook includes an approximate $70 million benefit from refunds of prior-year IEEPA tariff expenses, partly offset by about $45 million of Middle East conflict headwinds, up from an earlier estimate of $35 million.

GAAP operating income is now forecast at $99 million to $119 million, up from $96 million to $116 million. Adjusted operating income is still forecast at $140 million to $160 million. Adjusted diluted earnings per share is expected at $0.08 to $0.12, and GAAP diluted earnings per share between a loss of $0.02 and earnings of $0.02.

For the third quarter, which ends Dec. 31, 2026, the company expects a GAAP operating loss of $20 million to $30 million. On an adjusted basis, it expects results between a $5 million loss and a $5 million profit.

Under Armour now expects gross margin to rise 170 to 220 basis points for the fiscal year, down from the 220 to 270 basis points it forecast in August.

What Happens Next

FashionUnited reports that Under Armour booked $13 million of charges in the quarter under its fiscal 2025 restructuring plan, bringing total costs to $280 million of an expected $305 million. The company expects the plan to be substantially complete by Dec. 31, 2026.

The third quarter of fiscal 2027 ends Dec. 31, 2026.

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