Under Armour surprised analysts with their first quarter results, reporting better numbers than expected despite a drop in sales. The company’s earnings per share of 1 cent adjusted outperformed the anticipated loss of 8 cents. Revenue also exceeded predictions, reaching $1.18 billion compared to the projected $1.15 billion. This positive outcome reflected the company’s ability to navigate a challenging market landscape.
Under Armour recently settled a securities lawsuit, signaling a resolution to a longstanding legal issue. However, this settlement, totaling $434 million, impacted the company’s financial standing. The anticipated loss for fiscal 2025 highlights the challenges ahead, with projected losses per share between 53 cents and 56 cents. In contrast, previous expectations indicated earnings per share of 2 cents to 5 cents, showcasing a downward revision in financial outlook.
The athletic apparel retailer is undergoing a broad restructuring plan to revive its relevance in the market. By implementing layoffs, reducing promotions, streamlining assortments, and emphasizing premium brand positioning, Under Armour aims to reverse a sales decline and boost profitability. These strategic initiatives align the company with industry trends and consumer preferences, enabling it to adapt to a rapidly changing retail landscape.
Despite a decline in sales across its business segments, Under Armour managed to surpass expectations in its North America market. Apparel revenue fell by 8%, footwear sales dropped 15%, and accessories revenue slid by 5%. The company’s gross margin improvement, rising to 47.5%, demonstrated effective cost management and pricing strategies. By leveraging reduced promotions to enhance margins, Under Armour showcased a disciplined approach to revenue generation.
Under Armour’s acquisition of sustainable fashion brand Unless Collective reflects its commitment to environmental responsibility and innovation. With the addition of former Adidas-exec Eric Liedtke as executive vice president of brand strategy, the company aims to amplify its brand identity and storytelling. This strategic move positions Under Armour as a leader in sustainable fashion, appealing to socially conscious consumers and driving long-term growth opportunities.
While Under Armour’s first quarter results were better than expected, challenges persist in the brand’s journey towards sustainable growth. The restructuring efforts to establish a premium positioning will require time to yield meaningful results. Analysts caution that a critical mass of new products is not expected until the second half of fiscal 2026, highlighting the importance of sustained strategic execution. Despite intense competition and leadership turnover risks, Under Armour’s focus on brand image and product innovation offers potential for long-term success.
Under Armour’s first quarter performance reflects a mix of positive outcomes and ongoing challenges. By navigating legal settlements, implementing strategic initiatives, improving margins, and expanding into sustainable fashion, the company is positioning itself for future growth. While uncertainties remain in the competitive athletic apparel market, Under Armour’s commitment to innovation and brand reinvention underscores its resilience and potential for long-term success.