Under Armour, Inc

Under Armour, Inc (NYSE: UAA) designs, markets, and distributes branded athletic apparel, footwear, and accessories. The company focuses on creating performance-oriented products for men, women, and youth. Its operations are divided into four geographic regions: North America (including the U.S. and Canada), Europe, the Middle East and Africa (EMEA), Asia-Pacific, and Latin America.\

Recent Business and Financial Updates

• Quarterly Performance Exceeds Expectations: Under Armour's third-quarter fiscal 2025 results surpassed expectations, as highlighted by President and CEO Kevin Plank. The company is actively focusing on strengthening its brand through an updated product strategy and a shift to a category-led operating model. Plank also announced a multi-year storytelling initiative aimed at enhancing brand visibility by showcasing its products, athletes, and influential creators.
• Revenue Decline Across Key Markets: Despite exceeding expectations, Under Armour reported a 6% decline in total revenue, reaching USD 1.4 billion. North American revenue fell 8% to USD 844 million, while international revenue declined 1% to USD 558 million (down 2% currency neutral). Within international markets, EMEA revenue increased 5%, while Asia-Pacific and Latin America saw declines of 5% and 16%, respectively. Wholesale revenue dipped 1% to USD 705 million, and direct-to-consumer revenue fell 9% to USD 673 million, with eCommerce sales dropping 20% due to strategic reductions in promotional activities.
• Product Segment Performance and Cost Management: Under Armour experienced a 5% decline in apparel revenue (USD 966 million) and a 9% drop in footwear revenue (USD 301 million), while accessories revenue saw a 6% increase to USD 110 million. Despite revenue pressures, the company improved its gross margin by 240 basis points to 47.5%, primarily due to lower discounting, reduced product and freight costs, and favorable foreign currency impacts.
• Financial Position and Strategic Investments: Operating income stood at USD 14 million, while adjusted operating income—excluding impairment, restructuring, and transformation charges—was USD 60 million. Net income was USD 1 million, with an adjusted net income of USD 35 million. Diluted earnings per share remained at USD 0.00, while adjusted diluted earnings per share reached USD 0.08. The company's inventory remained stable at USD 1.1 billion, and it ended the quarter with USD 727 million in cash and no outstanding borrowings under its USD 1.1 billion revolving credit facility.
• Share Buyback and Restructuring Initiatives: Under Armour repurchased USD 25 million worth of Class C common stock in the third quarter, retiring 2.8 million shares. By December 31, 2024, the company had repurchased 8.7 million shares for USD 65 million under a three-year, USD 500 million share buyback program. Additionally, as part of its fiscal 2025 restructuring plan, Under Armour expanded its cost-cutting initiatives, including the closure of a distribution center in Rialto, California, raising the total anticipated restructuring charges to USD 140–USD 160 million. As of the third quarter, USD 57 million in restructuring-related costs had been incurred, with USD 40 million in cash-related expenses.
• Updated Fiscal 2025 Outlook: For fiscal 2025, Under Armour expects a 10% revenue decline, with North America projected to decline 12–13%, a slight improvement from the previous forecast. The company anticipates gross margin growth of 160 basis points, driven by lower discounting and freight costs. Adjusted operating income is expected to range between USD 185–USD 195 million, an upward revision from the previous estimate. Adjusted diluted earnings per share are now forecasted between USD 0.28–USD 0.30, while capital expenditures are projected to be USD 170–USD 180 million, lower than the initial forecast. These updates reflect Under Armour's strategic efforts to stabilize financial performance while navigating ongoing market challenges.

Technical Observation (on the daily chart):

The stock is in a downtrend, trading below both the 21-day (6.88) and 50-day (7.47) moving averages, indicating bearish momentum. The RSI at 39.85 suggests it is approaching oversold territory, potentially signaling a reversal if buying pressure increases. Current support is near USD 5.62-USD 6.08, with resistance around USD 7.14-USD 7.80. A breakout above the 21-day MA with strong volume could indicate a short-term recovery, while failure to hold support may lead to further declines.

Under Armour exceeded expectations in its third-quarter fiscal 2025 results, demonstrating resilience amid a strategic transformation. Despite a 6% revenue decline, the company improved gross margin by 240 basis points through reduced discounting and cost efficiencies. Strong brand repositioning efforts, including a multi-year marketing initiative, are expected to enhance visibility and engagement. Additionally, Under Armour’s restructuring plan and disciplined marketplace approach are driving long-term stability, with adjusted operating income projected to improve to USD 185–USD 195 million. With solid cash reserves, no outstanding debt, and an ongoing share buyback program, the company is well-positioned for future growth. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Under Armour, Inc (NYSE: UAA) at the closing market price of USD 6.61 as of March 24,2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is March 24,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.