8-K: Under Armour Q2 FY26 Results & CFO Transition

Under Armour reports a 5% revenue decline for Q2 Fiscal 2026, exceeding prior outlook, and announces Reza Taleghani as its new CFO, succeeding David Bergman in February 2026.

Summary

• Revenue decreased 5% to $1.3 billion (down 6% currency neutral) for the second quarter of fiscal 2026, which ended September 30, 2025.
• North American revenue declined 8% to $792 million, while international revenue grew 2% to $551 million (down 1% currency neutral).
• Gross margin declined by 250 basis points to 47.3%, primarily due to supply chain headwinds, increased tariffs, and an unfavorable channel and regional mix.
• The company reported a net loss of $19 million and a diluted loss per share of $0.04. Adjusted net income was $15 million, and adjusted diluted earnings per share was $0.04.
• Inventory declined 6% to $1.0 billion.
• Reza Taleghani will join as Executive Vice President, Chief Financial Officer, and principal financial officer in February 2026, succeeding David Bergman.
• The company repurchased $25 million of its Class C common stock (5.2 million shares) in the quarter, part of a $500 million program.
• The Fiscal 2025 Restructuring Plan has incurred $147 million in charges so far, with remaining charges expected by the end of fiscal 2026.

Sentiment

Score: 6

Explanation: While the company reported results ahead of its prior outlook and noted brand momentum in North America, overall revenue declined, and it posted a net loss. Gross margin compression due to tariffs and mix issues remains a concern. The appointment of a new CFO with strong experience is a positive step for future strategic execution. The fiscal 2026 outlook continues to project revenue declines and a net loss, indicating ongoing challenges.

Positives

• Results were delivered ahead of the prior outlook for the quarter.
• Signs of brand momentum are observed in North America, which is considered an important milestone in the company's turnaround strategy.
• International revenue grew 2% (though down 1% currency neutral), with strong growth in EMEA (up 12%, 7% currency neutral) and Latin America (up 15%, 14% currency neutral).
• Inventory declined 6% to $1.0 billion, indicating improved inventory management.
• The company successfully satisfied and discharged its $600 million Senior Notes due 2026, demonstrating effective debt management.
• The company repurchased $25 million of its Class C common stock, retiring 5.2 million shares, as part of its ongoing share buyback program.
• The appointment of Reza Taleghani as the new CFO brings extensive global financial and operational leadership experience from Samsonite Group S.A. and Brightstar Corp.

Negatives

• Overall revenue decreased 5% to $1.3 billion (down 6% currency neutral).
• North American revenue declined significantly by 8% to $792 million.
• Asia-Pacific revenue decreased 14% (down 14% currency neutral).
• Wholesale revenue decreased 6% to $775 million, and direct-to-consumer revenue declined 2% to $538 million, with eCommerce revenue decreasing 8%.
• Footwear revenue declined substantially by 16% to $264 million.
• Gross margin declined by 250 basis points to 47.3%, primarily due to supply chain headwinds, increased tariffs, and an unfavorable channel and regional mix.
• The company reported a net loss of $19 million and a diluted loss per share of $0.04.
• SG&A expenses increased 12% to $582 million, partly due to the absence of a $27 million insurance recovery benefit from the prior year and higher marketing expenses.
• The Fiscal 2025 Restructuring Plan has incurred $147 million in charges to date, with more expected by the end of fiscal 2026.
• The fiscal 2026 outlook projects a revenue decrease of 4% to 5% and a gross margin decline of 190 to 210 basis points.
• The fiscal 2026 outlook also forecasts a diluted loss per share of $0.15 to $0.17.

Risks

• Changes in general economic or market conditions (e.g., rising inflation, government fiscal/monetary/tax/trade policies) influencing overall consumer spending or the industry.
• Impact of global events beyond control, including military conflicts.
• Effects of changes in the global trade environment, such as new tariffs and countermeasures, on profitability.
• Increased competition leading to market share loss, lower product prices, or significantly increased marketing efforts.
• Fluctuations in the costs of raw materials and commodities used in products and supply chain (including labor).
• Ability to successfully execute long-term strategies and effectively drive operational efficiency.
• Changes in the financial health of customers.
• Ability to effectively develop and launch new, innovative, and updated products, accurately forecast consumer preferences and demand, and effectively manage inventory.
• Ability to successfully execute any restructuring plans and achieve expected benefits.
• Loss of key customers, suppliers, or manufacturers.
• Ability to further expand business globally and drive brand awareness and consumer acceptance of products in other countries.
• Ability to manage the increasingly complex operations of the global business and effectively market and maintain a positive brand image.
• Ability to successfully manage or achieve expected outcomes from significant transactions and investments.
• Ability to attract key talent and retain the services of senior management and other key employees.
• Ability to effectively meet regulatory requirements and stakeholder expectations with respect to sustainability and social matters.
• The availability, integration, and effective operation of information systems and other technology, as well as any potential interruption of such systems or technology.
• Any disruptions, delays, or deficiencies in the design, implementation, or application of the global operating and financial reporting information technology system.
• Ability to access capital and financing required to manage the business on terms acceptable.
• Ability to accurately anticipate and respond to seasonal or quarterly fluctuations in operating results.
• Risks related to foreign currency exchange rate fluctuations.
• Ability to comply with existing trade and other regulations.
• Risks related to data security or privacy breaches.
• The impact of global or regional public health emergencies on the industry and business, financial condition, and results of operations, including impacts on the global supply chain.
• Potential exposure to and the financial impact of litigation and other proceedings.

Future Outlook

For fiscal year 2026, revenue is expected to decrease 4% to 5%, with high-single-digit declines anticipated in North America and Asia-Pacific, offset by a high-single-digit increase in EMEA. Gross margin is projected to decline 190 to 210 basis points due to higher U.S. tariffs and unfavorable mix, partially offset by foreign currency exchange, product mix, and pricing. SG&A expenses are expected to decrease by a mid-teens percentage rate, with adjusted SG&A declining at a mid-single-digit rate. Operating income is forecasted to be between $19 million and $34 million, with adjusted operating income between $90 million and $105 million. The company expects a diluted loss per share of $0.15 to $0.17, and adjusted diluted earnings per share of $0.03 to $0.05.

Management Comments

• "We delivered results ahead of our prior outlook this quarter and are encouraged to see signs of brand momentum in North America – an important milestone in our turnaround."
• "Daves leadership, financial discipline, and unwavering commitment have been instrumental in shaping Under Armours success and resilience over more than two decades."
• "Reza brings a global perspective, strong financial expertise, and a strategic mindset that align perfectly with our goals for Under Armours next chapter. His leadership will be essential as we strengthen our foundation, drive growth, and unlock the full potential of our brand for athletes and shareholders around the world."
• "I am honored to join Under Armour at such a significant and energizing moment in its growth. This is an iconic company with a strong foundation, a passionate team, and an unwavering focus on performance and innovation. I look forward to working closely with Kevin and the leadership team to advance our strategic priorities, improve financial results, and create long-term value for our teammates, athletes, and shareholders."

Industry Context

The athletic apparel and footwear industry is highly competitive and subject to evolving consumer preferences, global economic conditions, and supply chain pressures. Under Armour's reported revenue decline and gross margin compression, driven by tariffs and unfavorable mix, reflect broader industry challenges, particularly in North America and Asia-Pacific. However, the reported brand momentum in North America and growth in EMEA and Latin America suggest regional variations in market performance and the potential for strategic initiatives to gain traction. The company's ongoing restructuring plan and focus on cost management are consistent with efforts by many established brands to adapt to a dynamic retail landscape and improve operational efficiencies.

Management Changes

Stakeholder Impact

• Shareholders: Potential for long-term value creation through strategic priorities and improved financial results, as stated by the incoming CFO. The share buyback program aims to return value to shareholders. However, current revenue declines and net losses may impact short-term share price.
• Employees: The restructuring plan involves charges that could impact employees, though specific details are not provided. The CFO transition ensures leadership continuity.
• Customers: The focus on "stronger product, sharper storytelling, and a renewed belief in the Under Armour brand" aims to improve consumer response and engagement.
• Suppliers/Creditors: Debt refinancing activities indicate active financial management. Supply chain headwinds and tariffs could impact supplier relationships and costs.

Next Steps

• Reza Taleghani to join as EVP, CFO in February 2026.
• David Bergman to remain as a senior advisor into the first quarter of fiscal year 2027 to support a smooth CFO transition.
• Remaining charges outlined in the Fiscal 2025 Restructuring Plan are expected to be recognized by the end of fiscal 2026.
• The company will continue its three-year, $500 million share buyback program.
• The company will hold its second quarter fiscal 2026 conference call on November 6, 2025, at 8:30 a.m. ET.

Key Dates

Recommendation

While Under Armour reported results ahead of its own prior outlook and noted some brand momentum in North America, the underlying financial performance for Q2 Fiscal 2026 remains challenging with a 5% revenue decline, a net loss of $19 million, and a 250 basis point drop in gross margin. The fiscal 2026 outlook continues to project revenue contraction and a diluted loss per share. The appointment of a new CFO, Reza Taleghani, is a positive step for leadership and strategic execution, bringing valuable global experience. However, the company is still in a "turnaround" phase, facing significant headwinds from tariffs, unfavorable mix, and competitive pressures. Investors should hold to observe if the new CFO's leadership and the ongoing restructuring plan can effectively reverse the negative trends and translate "brand momentum" into sustainable financial growth and profitability. The stock is not a strong buy given the current financial performance and outlook, but the strategic changes and signs of improvement in key areas prevent a strong sell recommendation.

Keywords

Under Armour, UAA, UA, Q2 Fiscal 2026, Financial Results, CFO Transition, Reza Taleghani, David Bergman, Revenue, Gross Margin, Net Loss, Restructuring Plan, Share Buyback, Athletic Apparel, Footwear, Accessories, North America, International Sales, Tariffs, Supply Chain, Corporate Governance