Under Armour has reported second-quarter revenue of $1.2 billion for fiscal year 2027, down from $1.3 billion recorded in the same period a year earlier, as the sportswear company continued to navigate a challenging operating environment marked by rising freight costs, foreign exchange headwinds, and strategic restructuring efforts.
Revised Full-Year Outlook
The company has updated its fiscal 2027 guidance, now projecting full-year operating income in the range of $99 million to $119 million, a modest improvement over its earlier forecast of $96 million to $116 million. Under Armour maintains its expectation that full-year revenue will decline at a mid-single-digit percentage rate.
However, the gross margin outlook has been trimmed. The company now anticipates gross margin improvement of 170 to 220 basis points, compared to its previous projection of a 220 to 270 basis point increase.
Under Armour cited higher fuel and freight costs, the impact of planned inventory management actions, and foreign exchange headwinds as the primary reasons behind the revised outlook. The updated guidance also incorporates an estimated $70 million benefit from refunds related to prior-year IEEPA tariff expenses, which is expected to be partially offset by approximately $45 million in costs linked to the ongoing conflict in the Middle East — higher than the earlier estimate of $35 million.
Under Armour Q2 Results: A Closer Look at the Numbers
Both North American and international segments felt the pressure during the quarter. North American revenue declined 7% to $737 million, while international revenue fell 7% to $509 million, representing a steeper 9% drop on a constant-currency basis.
From a channel perspective, wholesale revenue decreased 6% to $725 million, while direct-to-consumer sales fell 8% to $494 million. Within the direct-to-consumer segment, e-commerce revenue recorded a sharper drop of 12%. Revenue from Under Armour’s owned-and-operated stores also declined 7% during the quarter.
Gross Margin and Operating Performance
The company’s gross margin narrowed by 30 basis points to 47%. Under Armour attributed this contraction to foreign exchange impacts, as well as channel and regional mix shifts and pricing pressures, which were partially offset by supply-chain efficiencies and favorable product mix.
Operating income for the quarter came in at $15 million. On an adjusted basis — after excluding transformation expenses, restructuring charges, and the reversal of certain previously accrued litigation reserve expenses — operating income stood at $25 million. The company reported a net loss of $0.4 million for the period.
Restructuring Charges and Transformation Costs
Under Armour recorded $11 million in restructuring charges and $2 million in transformation-related selling, general and administrative costs during Q2. Cumulative restructuring and transformation costs under the company’s fiscal 2025 restructuring plan have now reached $280 million. The company expects total costs under the plan to reach approximately $305 million and has stated that it anticipates the programme to be substantially complete by 31 December 2026.
Leadership Commentary on Q2 Performance
Kevin Plank, Under Armour’s President and Chief Executive, commented on the quarter’s performance: “We delivered against our revenue expectation and exceeded our operating income outlook. As we progress in this transformation, we are driving greater efficiency across our business, sharpening our product offering, and amplifying global marketing to strengthen our brand and improve financial performance.”
The Q2 results reflect the broader pressures facing Under Armour as the brand works through its restructuring programme while managing macroeconomic headwinds. The company’s direct-to-consumer decline and softness across both domestic and international markets underline the scale of the challenge ahead, even as management points to improving operational efficiency and a tightening strategic focus as key pillars of its ongoing transformation.
