Under Armour (NYSE: UAA) faced a brutal market reaction on Friday, with shares plunging more than 18% after the company reported weaker-than-expected fiscal first-quarter 2026 results and slashed its guidance. The athletic apparel giant posted adjusted earnings of just $0.02 per share, falling short of the $0.03 analysts had anticipated. Revenue also declined, dropping 4% year-over-year to $1.1 billion, missing the projected $1.13 billion.
The company’s outlook for the second quarter was even more concerning, with projected earnings of just $0.01 to $0.02 per share—far below the $0.26 Wall Street had forecast. Sales in North America, Under Armour’s largest market, dropped 5% to $670 million, while international revenue dipped 1% to $467 million. The footwear segment took the hardest hit, plummeting 14% to $266 million, while apparel sales slipped 1% to $747 million. The lone bright spot was accessories, which saw an 8% increase to $100 million.
Despite a 70-basis-point improvement in gross margin to 48.2%, driven by favorable currency exchange, pricing strategies, and product mix, Under Armour warned of significant margin pressure ahead. The company expects second-quarter gross margins to shrink by 340 to 360 basis points due to ongoing supply chain disruptions and tariff-related costs. Revenue is projected to fall another 6% to 7%, with double-digit declines in North America and Asia-Pacific, partially offset by high-single-digit growth in the EMEA region.
Investors reacted swiftly to the grim report, erasing billions in market value as concerns mount over Under Armour’s ability to navigate rising costs and weakening demand. The disappointing results raise questions about the brand’s competitive positioning in a crowded athletic wear market dominated by rivals like Nike and Adidas..
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