Under Armour lifts annual forecasts as reset strategy stems sales slide

The company logo graces a sales tag on a compression shirt for sale in an Under Armour store in an outlet mall in Lakewood, Colo. (AP Photo/David Zalubowski, File)

Under Armour raised its annual forecasts after posting better‑than‑expected third‑quarter results on Friday, as its strategy to simplify product mix and launch new apparel and footwear helped retain budget‑conscious shoppers.

The sportswear retailer has deepened its restructuring push over the last year to revive sales through streamlined operations and cost-cutting measures, while expanding its premium segment portfolio.

CEO Kevin Plank said he expects Under Armour to have greater stability ahead after surviving “the most challenging phase” of business reset in the December quarter, sending its shares up four per cent before the bell. The shares had lost nearly 40 per cent of their value last year.

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Under Armour has pulled back on discounts and plans to cut about 25 per cent of its product lines and focus on higher‑priced items in categories such as training, running and team sports, its executives have said.

“Elevating product and pricing takes time, and the company faces a delicate balance between growing higher end offerings and protecting near term sales from its core, lower priced basics,” said Patrick Ricciardi, analyst at Third Bridge.

Higher U.S. tariffs on goods from manufacturing hubs such as Vietnam and Indonesia are expected to add about US$100 million to Under Armour’s costs this fiscal year.

It expects fiscal 2026 adjusted profit per share of 10 cents to 11 cents, compared to its prior target of three to five cents.

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The company forecast annual revenue to drop four per cent, compared to its prior view of a four per cent to five per cent decline. Analysts expected a 4.2 per cent drop to US$4.95 billion, according to data compiled by LSEG.

Gross margin is expected to contract 190 basis points, largely tied to tariff costs. For the quarter, it fell 310 basis points to 44.4 per cent.

The company logged a five per cent decline in revenue to $1.33 billion in the third quarter, compared to expectations of a 6.3 per cent drop to $1.31 billion.

Excluding items, it earned 9 cents per share, compared to expectations of a loss of 2 cents.

(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)