Under Armour (UAA, Financial) shook up the market with its Q2 results, posting a non-GAAP EPS of $0.30, topping estimates by $0.11, and pulling in $1.4 billion in revenue—$20 million over forecasts, even with an 11% drop year-over-year. North America revenue slid 13% as Under Armour works to refine its strategy, while international markets stayed relatively stable, with EMEA holding strong and Asia-Pacific facing more pressure. Despite these dips, the company's disciplined cutback on discounts pushed gross margins up 200 basis points, signaling some traction in their premium positioning game.
Looking to the rest of fiscal 2025, Under Armour expects a low double-digit revenue decline, with North America projected to drop 14%-16% as the brand resets. International sales aren't immune either, though EMEA is likely to remain steady. CEO Kevin Plank doubled down on his strategy, upping marketing investments to strengthen the brand and forecasting a gross margin boost of 125 to 150 basis points. On profitability, Plank raised the bar, now expecting adjusted operating income of $165 to $185 million, showing confidence in Under Armour's ability to navigate through headwinds.
On the operations side, Under Armour's restructuring plan—such as the decision to exit a California distribution center—has so far racked up $40 million in charges, with more adjustments planned through 2026. These moves aim to streamline the brand, cut costs, and boost North American presence. If the company keeps this course, Under Armour could emerge leaner, stronger, and better poised to thrive in a tough economic landscape, setting up a comeback that might just stick.
