Company Reports

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million, and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s sales in the region have barely grown over the past decade owing to challenges from established competitors and new entrants. CEO Kevin Plank has been focused on developing technical products for athletes (primarily aged 16-24) to improve results, but tangible signs of progress have been elusive.

Under Armour's first-quarter sales fell 3%, with a 9% decrease in North America (55% of sales) and a 5% international increase. Although gross margin increased nearly 6 percentage points to 54.1% and adjusted operating margin rose to 4.8% from 2.2%, these gains were mainly due to a tariff refund.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million, and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges from established competitors and new entrants. CEO Kevin Plank has been focused on developing technical products for athletes (primarily aged 16-24) to improve results, but tangible signs of progress have been elusive.

With a 7% sales decline in North America (54% of total), Under Armour ended fiscal 2026 with a 1% total sales drop. Its adjusted gross margin fell 360 basis points to 43.1% (reflecting higher tariffs and markdowns), its adjusted operating margin was 0.2%, and its adjusted loss per share was $0.03.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million, and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges from established competitors and new entrants. CEO Kevin Plank intends to return the firm to its glory years as a performance sports pioneer, but tangible signs of progress have been elusive.

Under Armour's revenue declined 5% in the third quarter of fiscal 2026 as North America sales (57% of total) plummeted10%. Gross margin fell 310 basis points to 44.4% on higher US tariffs, and adjusted operating margin dropped 230 basis points to 2% as cost cuts offset some tariff expense.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million, and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges from established competitors and new entrants. CEO Kevin Plank intends to return the firm to its glory years as a performance sports pioneer, but signs of progress have been hard to find.

Under Armour announced larger cuts in personnel and sponsorships under its ongoing turnaround plan than originally expected. Most significantly, Curry Brand will become independent. Under Armour raised its expectation for total restructuring charges to $255 million from $160 million previously.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges by established competitors and new entrants. CEO Kevin Plank intends to return the firm to its glory years as a performance sports pioneer, but the process has been slow.

Under Armour's fiscal 2026 second-quarter sales fell 5% with an 8% decline in North America (59% of total sales). Its adjusted operating margin fell more than 5 percentage points to 4% on higher tariff and supply chain costs and the shift of some marketing expenses from the third quarter.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges by established competitors and new entrants. CEO Kevin Plank intends to return the firm to its glory years as a performance sports pioneer, but the process is slow.

Under Armour's fiscal 2026 first-quarter revenue fell 4%, while gross and adjusted operating margins rose to 48.2% (up 70 basis points) and 2.2% (up 150), respectively. However, the firm expects sizable second-quarter margin declines on a 6%-7% drop in sales and higher tariff and marketing costs.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales have barely grown over the past decade due to challenges by established competitors and new entrants. CEO Kevin Plank intends to return the firm to its glory years as a performance sports pioneer, but a turnaround will take time.

In fiscal 2025's (March-ended) fourth quarter, Under Armour's sales declined 11% in North America and overall. Its gross margin rose 170 basis points to 46.7% on lower freight and raw materials costs and greater full-price direct selling, but its adjusted operating loss was $36 million.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million and it passed Adidas as the region’s second-largest athletic apparel brand after Nike. However, Under Armour’s North America sales are little changed over the past seven years as it has been challenged by established competitors and new entrants. In March 2024, controlling shareholder Kevin Plank returned to the CEO position with the intention of restoring the firm to its glory years as a performance sports pioneer, but a turnaround will take time.

Under Armour’s (December-ended) fiscal 2025 third-quarter results surpassed our expectations and provide confidence that it can return to consistent sales growth and profitability by fiscal 2027. Although we rate it as a no-moat company, we think it has strengths, including its strong association with professional and amateur sports and its healthy balance sheet. We do not expect to make any material change to our $14.50 fair value estimate, leaving its shares as very undervalued.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the company’s North American sales increased to $4 billion from $700 million and it passed narrow-moat Adidas as the region’s second-largest athletic apparel brand (after wide-moat Nike). However, Under Armour’s North America sales are little changed over the past seven years as it has been challenged by established competitors and new entrants. In March 2024, controlling shareholder Kevin Plank returned to the CEO position with the intention of returning the firm to its glory years as a performance sports pioneer, but he cautioned that sales in North America are likely to get worse before they get better.

Under Armour’s fiscal 2025 second-quarter sales fell 11% (a bit better than our 12% decline estimate) as CEO Kevin Plank continued to implement his restructuring plan. Yet, both its Class A and C shares were up by mid-20s percentages on Nov. 7 as its margins were significantly better than expected. We also think there was significant short covering. We expect to lift our $14 per share fair value estimate (on both classes) by a mid-single-digit percentage on the results and continue to rate shares as undervalued. We rate Under Armour as no-moat but regard its position in performance sportswear as a strength.

We view Under Armour as lacking a moat, given its failure to build a competitive advantage over other athletic apparel firms. Between 2008 and 2016, the firm’s North American sales increased to $4 billion from $700 million and it passed narrow-moat Adidas as the region’s second-largest athletic apparel brand (after wide-moat Nike). However, Under Armour’s North America sales are little changed over the past seven years as it has been challenged by established competitors and new entrants. In March 2024, controlling shareholder Kevin Plank returned to the CEO position with the intention of returning the firm to its glory years as a performance sports pioneer, but he cautioned that sales in North America are likely to get worse before they get better.

No-moat Under Armour outperformed our expectations by posting a small (non-GAAP) profit in fiscal 2025’s first quarter, sending its shares up 19% on Aug. 8. While the firm has a long way to go on its turnaround plan and guidance for the rest of the fiscal year is underwhelming, we anticipate improving sales growth in fiscal 2026 and thereafter as its product elevation, pricing, supply chain, and marketing plans take effect. Since returning as CEO, Kevin Plank has brought in new leaders to implement his vision for a company that operates more efficiently and is less dependent on discounting. We rate shares as undervalued in relation to our $14 per share fair value estimate, which we do not expect to change materially.