Under Armour (UA) Q2 2025 earnings summary

Executive summary

• Q2 revenue declined 11% year-over-year to $1.4 billion, with all major regions and channels down, but gross margin improved by 200 basis points to 49.8% due to supply chain benefits and reduced discounting.

• Net income rose to $170.4 million, with adjusted net income at $131 million and diluted EPS at $0.39; adjusted diluted EPS was $0.30.

• Profitability exceeded expectations, driven by lower SG&A expenses, improved product costing, and reduced promotions, with significant investment in marketing and brand building.

• Brand reset and premium positioning strategies are gaining traction, supported by innovation in men's apparel and footwear and a focus on DTC and loyalty programs.

• Restructuring plan and major litigation settlement were implemented, with ongoing focus on operational efficiency and inventory management.

Financial highlights

• Q2 net revenues: $1.40 billion, down 11% year-over-year; North America down 13%, EMEA down 1%, APAC down 11%, Latin America down 13%.

• Gross margin increased to 49.8% (up 200 bps); gross profit was $696.1 million.

• Operating income was $173 million; adjusted operating income $166 million.

• Net income was $170.4 million; diluted EPS $0.39, adjusted diluted EPS $0.30.

• SG&A expenses down 15% to $520 million; adjusted SG&A down 13% to $530 million.

• Inventory down 3% year-over-year to $1.1 billion; cash position at $531 million with no borrowings on the $1.1 billion credit facility.

Outlook and guidance

• Full-year revenue expected to decline at a low double-digit rate; North America down 14–16%, EMEA flat, APAC down high single digits, international down low single digits.

• Gross margin outlook raised to 125–150 basis points improvement for the year.

• Adjusted operating income expected at $165–$185 million; adjusted diluted EPS $0.24–$0.27.

• Adjusted SG&A to decline low to mid single digits; half of Q2's operating income beat reinvested in marketing.

• Q3 revenue expected down ~10%; Q4 to be more pressured due to timing and FX headwinds.

• Capital expenditures projected at $190–$210 million.