Under Armour's (UAA, Financial) 18-month restructuring plan is nearing its midpoint, but the company has yet to achieve growth. For the fiscal quarter ending September 30, 2025, Under Armour reported a revenue decline of 11% year-over-year to $1.4 billion.
The company's performance across various regions and business segments remains less than optimistic. In the second quarter, wholesale revenue fell by 12% to $823 million, while direct-to-consumer revenue decreased 8% to $550 million. E-commerce sales also saw a significant drop of 21%.
Regionally, North American revenue decreased by 13% to $863 million, while revenue from the Asia-Pacific market, including China, declined 11%. The Europe, Middle East, and Africa (EMEA) market saw a 1% decrease, and Latin America experienced a 13% downturn.
Under Armour has been facing declining performance for several quarters. In the first quarter of fiscal 2025, the company recorded $1.2 billion in revenue, a 10% year-over-year decline. North American revenue dropped 14% to $709 million, and the Asia-Pacific region saw a 10% decrease.
Despite ongoing decline, Under Armour's management remains optimistic. Founder Kevin Plank highlighted that the company is still in the early phases of the restructuring plan. Plank emphasized that financial improvements will not be immediate and that strategic transformation takes time. He believes the brand is starting to gain traction with its strategic changes.
The industry is skeptical about whether Under Armour can recover within the plan's timeframe, as no significant growth has been seen six months into the restructuring. Initially, Under Armour allocated $70-90 million for the plan. However, updated forecasts from September suggested costs will exceed expectations, with pre-tax expenses estimated at $140-160 million for fiscal 2025 and 2026. Consequently, Under Armour has lowered its fiscal 2025 performance forecast, anticipating an operating loss between $220-240 million.
Fashion industry analyst Cheng Weixiong stated that the restructuring is necessary for Under Armour, as the brand faces deficiencies in sports specialization and functionality. The company also needs to adapt to challenges within its primarily distribution-based domestic operations affected by offline channel disruptions.
Since Kevin Plank's return in April, Under Armour has focused on reform, with China playing a key role. The company has leveraged brand ambassador Curry in its marketing efforts, hosting a series of fan events in China and opening the first global Curry brand store in Chengdu. During a financial call, Plank noted Curry's China tour doubled product sales and enhanced brand exposure, achieving significant online engagement.
Looking ahead, Plank announced plans to increase marketing investments to expand the brand, particularly in the Asia-Pacific market. However, the competitive Chinese sports market poses significant challenges with both international giants like Nike and Adidas and domestic brands such as Anta, Li Ning, and Xtep vying for market share. The success of Under Armour's restructuring and its timeline remains uncertain.
