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01/11 03:12
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: a decline in revenue and operating losses contrast with improved gross margins and inventory management. The Q&A reveals cautious optimism about restructuring and brand activation, but concerns about tariffs and unclear guidance linger. The market cap of $2.99 billion suggests moderate sensitivity to these factors. Overall, the neutral sentiment reflects balanced positive and negative elements, with no strong catalysts to drive significant stock price movement.
Revenue Q4 2025 $1.2 billion, down 11% year-over-year due to a decrease in DTC business and lower e-commerce sales from limiting promotional activities.
North American Revenue Q4 2025 Declined 11%, primarily due to lower e-commerce sales and a decrease in revenue from owned and operated stores.
EMEA Revenue Q4 2025 Decreased 2%, remained flat on a currency neutral basis, with a decline in full price wholesale partially offset by growth in DTC and off-price businesses.
APAC Revenue Q4 2025 Down 27% (26% adjusted for currency), primarily due to a highly competitive environment and efforts to foster a healthier business.
Latin America Revenue Q4 2025 Declined 10%, primarily due to unfavorable foreign exchange impacts, but currency-neutral revenue rose by 3% driven by distributor business.
Wholesale Revenue Q4 2025 Decreased 10%, driven by lower full price sales, partially offset by growth in the off-price channel.
Direct-to-Consumer Revenue Q4 2025 Down 15%, mainly due to a 27% decrease in e-commerce sales from fewer promotions and discounts.
Licensing Revenue Q4 2025 Down 15%, primarily due to bringing the socks business in-house.
Apparel Revenue Q4 2025 Down 11%, with softness across most categories, partially offset by strength in outdoor.
Footwear Revenue Q4 2025 Declined by 17%, reflecting ongoing portfolio management efforts.
Accessories Revenue Q4 2025 Up 2%, with strength in team sports and run.
Gross Margin Q4 2025 Increased 170 basis points to 46.7%, driven by lower product and freight costs, pricing benefits from lower discounting, and favorable royalty terms.
SG&A Q4 2025 Increased 1% to $607 million; adjusted SG&A was $586 million, up 7% due to higher marketing expenses and incentive compensation.
Operating Loss Q4 2025 $72 million; adjusted operating loss was $36 million.
Diluted Loss Per Share Q4 2025 Reported at $0.16; adjusted diluted loss per share was $0.08.
Inventory Q4 2025 Down 1% year-over-year to $946 million.
Cash Balance Q4 2025 $501 million, with no amounts outstanding on the $1.1 billion revolving credit facility.
Share Repurchase Q4 2025 $25 million worth of Class C stock repurchased, retiring 4.1 million shares.
Fiscal 2025 Revenue Declined 9% to $5.2 billion, slightly better than expected.
Fiscal 2025 Gross Margin Increased by 180 basis points to 47.9%, driven by reduced freight and product costs.
Fiscal 2025 SG&A Rose 8% to $2.6 billion; adjusted SG&A decreased by 2% to $2.3 billion due to cost management initiatives.
Operating Loss Fiscal 2025 $185 million; adjusted operating income was $198 million.
Fiscal 2025 Diluted Loss Per Share $0.47; adjusted diluted earnings per share was $0.31.
New Product Launches: Introduced the boldest SlipSpeed yet, ECHO, launched with Stephan Curry at the 2025 NBA All-Star Weekend through a collaboration with luxury car designer, MANSORY. A premium apparel collection will debut this fall, uniting performance, sport, and style.
Innovative Accessories: Launched the No Weigh backpack with patent pending auxetic suspension straps, priced at $140, aimed at a market typically priced at $40 to $65.
New Footwear Collections: Curry brand continues to expand with new colorways and exclusive designs, including the new Curry 12 and De'Aaron’s Fox 1.
Sustainable Product Initiatives: Introduced a regenerative plant-based sportswear collection crafted from natural fibers designed to decompose without leaving toxic residue.
Upcoming Product Direction: Focus on winning in men's apparel, unlocking footwear potential, and strengthening women's connection with trusted essentials.
Market Positioning: Repositioning Under Armour brand through higher quality revenue decisions and reducing promotions in DTC businesses.
E-commerce Strategy: Redefined e-commerce channel to prioritize brand equity and profitability, resulting in a more than 10 point increase in full price sales mix.
Global Market Focus: Concentrating on key growth markets in EMEA like France, Spain, and Germany, while resetting APAC for sustainable premium growth.
Operational Efficiencies: Streamlined operations and exited lower value activities to boost efficiency and direct capital to high impact uses.
Inventory Management: Maintained disciplined inventory management with a 25% SKU reduction over the past year.
Cost Management: Focused on enhancing organizational efficiency and reducing discretionary spending.
Strategic Shifts: Transitioning to a category management operating model to align product, marketing, and regional teams around key categories.
Leadership Changes: Welcomed three new Board members to support strategic priorities and accelerate financial performance.
Brand Storytelling Strategy: Established a distinct storytelling strategy aligned with product vision to enhance brand relevance.
Competitive Pressures: The company is facing a highly competitive and promotional environment, particularly in the APAC region, which has led to a 27% decline in revenue. This competitive landscape is impacting pricing power and overall sales.
Regulatory Issues: Recent changes in trade policy are expected to significantly impact the company's operations, leading to a proactive evaluation of mitigation strategies, including cost-sharing initiatives and diversifying the sourcing footprint.
Supply Chain Challenges: Approximately 30% of Under Armour's volume is sourced from Vietnam, 20% from Jordan, and 15% from Indonesia, creating potential vulnerabilities in the supply chain due to geopolitical and cost complexities.
Economic Factors: The company anticipates a modest top-line contraction for fiscal '26, influenced by the evolving economic environment and uncertainty surrounding consumer demand due to tariff changes.
Inventory Management: The company is maintaining disciplined inventory management to create space for a stronger product architecture, which is critical in a declining revenue environment.
SG&A Expenses: SG&A expenses increased by 8% to $2.6 billion, driven by higher marketing expenses and incentive compensation, which could pose a risk to profitability if not managed effectively.
Strategic Initiatives: Under Armour is focusing on building agility within the organization, enhancing brand positioning through higher quality revenue decisions, and improving SG&A efficiencies. The company is streamlining operations and exiting lower value activities to sharpen execution and direct capital to high-impact uses.
Product Innovation: The company is accelerating innovation with new product launches, including the UA Halo collection and NEOLAST material, aimed at enhancing performance and sustainability.
Go-to-Market Strategy: Under Armour is implementing a comprehensive go-to-market strategy that emphasizes fewer, high-impact products each season, supported by strong storytelling and marketing efforts.
Category Management Model: The shift to a category management operating model aims to align product, marketing, and regional teams around key categories, enhancing decision-making speed and efficiency.
Leadership and Culture: A high caliber leadership team is in place to drive sustained performance, with a focus on cultural transformation and operational excellence.
Revenue Expectations: For Q1 FY26, Under Armour expects revenue to decline by 4% to 5%, with North America experiencing similar declines.
Gross Margin Outlook: The company anticipates gross margin expansion of 40 to 60 basis points compared to the previous year, driven by favorable product mix and reduced freight costs.
SG&A Management: Adjusted SG&A expenses are expected to leverage slightly compared to the prior year, driven by ongoing savings from restructuring efforts.
Operating Income Projections: Adjusted operating income for Q1 FY26 is projected to be between $20 million to $30 million.
Earnings Per Share Guidance: Adjusted diluted earnings per share for Q1 FY26 is expected to be between $0.01 to $0.03.
Share Repurchase Program: Under Armour has a three-year $500 million share repurchase program. As of the fourth quarter, they have repurchased $90 million worth of Class C stock, retiring 12.8 million shares.
The earnings call presents mixed signals: a decline in revenue and operating losses contrast with improved gross margins and inventory management. The Q&A reveals cautious optimism about restructuring and brand activation, but concerns about tariffs and unclear guidance linger. The market cap of $2.99 billion suggests moderate sensitivity to these factors. Overall, the neutral sentiment reflects balanced positive and negative elements, with no strong catalysts to drive significant stock price movement.
The earnings call reveals mixed sentiments. Financial performance shows a revenue decline but improved margins and profitability. The raised guidance for operating income and EPS is positive, yet supply chain challenges and competitive pressures persist. Q&A highlights strategic marketing investments and product development, but lacks clarity on gross margin opportunities and product feedback. Given the company's market cap, the stock price is likely to remain stable, with no major catalysts for significant movement.
The earnings call presents mixed signals: a strong cash position and EPS beat are positive, but revenue decline and operating loss are concerning. The Q&A highlights management's cautious optimism, focusing on brand elevation and leadership changes. The market cap suggests moderate volatility, leading to a neutral stock price prediction.
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