Under Armour (UA) Q1 2025 earnings summary

Executive summary

• Revenue declined 10–10.1% year-over-year to $1.18–$1.2 billion, with gross margin up 110 bps to 47.5% due to reduced discounting and lower product costs.

• Net loss was $305 million, mainly due to a $274 million litigation expense and restructuring charges; adjusted net income was $4 million.

• Operational focus on premium brand positioning, SKU reduction, and cost controls, with new leadership and restructuring initiatives.

• Inventory decreased 15% year-over-year; cash and cash equivalents stood at $885 million with no outstanding borrowings.

• $500 million share repurchase program authorized, with $40 million repurchased in Q1/Q2.

Financial highlights

• North America revenue fell 14–14.2%; EMEA was flat; Asia-Pacific down 10–10.1%; Latin America up 15.6–16%.

• Wholesale revenue declined 8–8.3%; direct-to-consumer revenue dropped 11.8–12%, with eCommerce down 25%.

• Apparel revenue down 8–8.1%, footwear down 14.7–15%, accessories down 5–5.4%.

• Adjusted SG&A expenses fell 6% to $555 million; reported SG&A rose due to litigation reserves.

• Adjusted operating income was $8 million; operating loss was $299.7–$300 million due to litigation and restructuring.

Outlook and guidance

• Fiscal 2025 revenue expected to decline low double digits; North America down 14–16%, international down low single digits.

• Gross margin projected to rise 75–100 bps, but headwinds from freight, FX, and mix expected.

• Adjusted operating income outlook raised to $140–$160 million; adjusted EPS $0.19–$0.22.

• Restructuring charges for FY2025 estimated at $70–$90 million, with $33.7 million incurred in Q2.

• Year-end cash expected at ~$500 million after legal settlement and investments.