Under Armour's downturn in FY25 was observed across all regions, with the company's North American revenues falling by 11%. The international segment also experienced a decrease, with revenues contracting by 6% to reach $2.1bn.

Revenues generated from owned and operated stores saw a 2% dip, while e-commerce revenues plummeted by 23%, attributed to deliberate reductions in promotional activities.

In terms of product categories, apparel revenues decreased by 9% to $3.5bn, footwear followed suit with a 13% decline to $1.2bn, whereas accessories bucked the trend with a modest 1% increase to $411m.

Under Armour president and CEO Kevin Plank said: "One year into our strategic reset, we're laying the groundwork for a more focused Under Armour. By elevating products and storytelling, tightening distribution, and refining our operating model, we are in the process of reigniting brand relevance and positioning the business for sustainable, profitable growth. Our fourth quarter performance contributed to fiscal 2025 results that were better than the expectations we set a year ago and we are demonstrating traction in our efforts to reposition the brand."

Under Armour key performance metrics in fiscal 2025

Looking at gross margins for FY25, Under Armour reported an improvement of 180 basis points to 47.9%. This was credited mainly to supply chain efficiencies that led to decreased freight and product costs, alongside reduced discounting in direct-to-consumer sales.

However, these gains were partially negated by adverse effects from changes in regional and channel mix as well as foreign currency exchange rate fluctuations.

Net loss for the year was recorded at $201.27m compared to a net income of $232.04m in the prior fiscal year. However, when adjusted for specific items, net income was at $135m.

This translates to diluted loss per share of $0.47 in FY25 compared to earnings per share of $0.52 in fiscal 2024.

Under Armour fourth quarter (Q4) fiscal 2025

Under Armour saw an 11% revenue decline with North American revenue decreasing by 11%, and international revenue falling by 13%. Revenue from owned and operated stores declined by 6%, while e-commerce revenue dropped significantly by 27% due to continued planned reductions in promotional activities.

The gross margin for Q4 increased by 170 basis points to 46.7%, primarily driven by supply chain benefits such as lower product and freight costs and reduced discounting in direct-to-consumer sales.

Net loss for Q4 was reported at $67.46m with an adjusted net loss of $35m. Diluted loss per share was at $0.16 while adjusted diluted loss per share was at $0.08.

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Under Armour recognised a total of $58m in restructuring and impairment charges alongside $31m in other related transformational expenses by the end of Q4 FY25.

The plan, announced in May 2024, is expected to incur costs ranging from $140m to $160m with up to $90m anticipated as cash-related charges and up to $70m as non-cash charges.

Q1 FY26 outlook and tariff mitigation strategies

Under Armour has provided guidance only for the first quarter of fiscal 2026, amid uncertainties surrounding trade policies and macroeconomic conditions which include potential impacts from tariffs on demand and costs.

In the first quarter, revenue is projected to decrease between 4-5% compared to Q1 FY25.

Gross margin is expected to improve between 40-60 basis points over the previous year due to a more favourable product mix along with lower product and freight costs coupled with positive foreign exchange impacts.

In the earnings call, Under Armour chief financial officer David Bergman indicated that the company is taking proactive measures in anticipation of significant impacts from shifts in trade policy.

The strategies being considered include collaborative cost-sharing with key partners, diversifying the sourcing base to reduce reliance on regions that might be affected by these changes, and selectively adjusting prices to maintain profit margins in markets where they have the ability to do so.

In terms of Under Armour's global sourcing distribution, Bergman clarified that Vietnam accounts for about 30% of their production volume, Jordan contributes 20%, and Indonesia makes up 15%. The remaining 35% is spread across various other countries, each contributing a smaller share in the low to mid-single-digit percentage range.

Bergman said: “This deliberate diversification creates a well-balanced portfolio, reducing reliance on any single market and enhancing our ability to navigate geopolitical costs and supply chain complexities from a position of strength.”

“It is important to highlight, however, that changes in tariff policy are not expected to significantly impact our first quarter,” he added.

"Under Armour sees Q4 & FY25 revenue dip, shares tariff mitigation" was originally created and published by Just Style, a GlobalData owned brand.

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