Under Armour’s 2026 Results Show International Growth Offsetting North America Weakness as Gross Margins Set to Rebound
Key Takeaway: International Strength and Leaner Cost Structure Poised to Drive Margin Recovery
Under Armour’s latest earnings signal a business in transition: while domestic revenues faced ongoing headwinds, international markets delivered solid growth, and management expects a meaningful gross margin improvement in 2027 as strategic resets and restructuring efforts begin paying off.
International Sales Outpace Soft North America Performance
Diving into the numbers, fiscal 2026 revenue dropped 4% to $5.0 billion (-5% on a constant currency basis). The story splits sharply along geographic lines: North America sank 8% while international sales improved 4%. EMEA and Latin America were standouts, up 9% each for the year. Meanwhile, Asia-Pacific revenue dropped by 5% but managed double-digit growth in Q4, suggesting quarterly momentum may be returning.
| Segment | FY 2026 Revenue ($M) | FY 2025 Revenue ($M) | % Change |
|---|---|---|---|
| North America | 2,859.4 | 3,105.6 | -7.9% |
| EMEA | 1,180.5 | 1,086.6 | +8.6% |
| Asia-Pacific | 719.1 | 755.4 | -4.8% |
| Latin America | 234.2 | 215.4 | +8.7% |
Lean Cost Structure and Restructuring Extension Boost Profit Outlook
Management’s drive to tighten operations shrank SG&A costs by 12% (to $2.3B). Adjusted net income for the year hit $50 million, even as reported net losses widened to $496 million due to a one-time U.S. tax valuation allowance. Under Armour also extended its restructuring plan, now totaling $305 million, aiming for completion by the end of 2026, suggesting further cost stabilization is on the horizon.
| Key Profit Metrics | FY 2026 | FY 2025 | % Change |
|---|---|---|---|
| Reported Net Income (Loss) ($M) | -495.6 | -201.3 | -146% |
| Adjusted Net Income ($M) | 49.6 | 135.1 | -63% |
| Adjusted Operating Income ($M) | 106.9 | 198.1 | -46% |
| SG&A Expense ($M) | 2,294.3 | 2,602.0 | -12% |
Gross Margin Improvement Expected in 2027
Investors should note management’s outlook for fiscal 2027: gross margin is forecast to rise by 220–270 basis points, reversing much of 2026’s tariff- and cost-driven decline. This is due in part to an expected $70 million benefit from tariff refunds and more favorable product and channel mix. Importantly, North America is expected to dip further, but international markets—especially EMEA and Asia-Pacific—are projected to provide offsetting growth. Adjusted EPS for 2027 is guided between $0.08 and $0.12.
| 2027 Outlook | Low End Estimate | High End Estimate |
|---|---|---|
| Gross Margin Increase vs 2026 | +220 bps | +270 bps |
| GAAP Operating Income ($M) | 96 | 116 |
| Adjusted Operating Income ($M) | 140 | 160 |
| Adjusted Diluted EPS | $0.08 | $0.12 |
What Should Investors Watch Next?
As Under Armour enters fiscal 2027, all eyes will be on whether international momentum can balance domestic softness, and if margin expansion can overcome external cost pressures and restructuring volatility. With a reset cost structure, expanded international presence, and margin recovery in view, Under Armour offers a compelling watch for those interested in global retail turnarounds.
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