Under Armour beat its operating income forecasts in the second quarter of fiscal 2027, despite a 7% decline in revenue, which came in at $1.2 billion for the quarter ended September 30, 2026.
Operating income reached $15 million, compared with $17 million a year earlier. On an adjusted basis, it stood at $25 million, compared with $53.4 million in the same period of the previous fiscal year. Net loss narrowed to $0.4 million, from $18.8 million previously, while adjusted net loss came to $2 million, compared with an adjusted net profit of $15.3 million a year ago.
Revenue down in every region except Latin America
Revenue in Amérique du Nord fell 7% to $737 million. Internationally, revenue also declined 7%, to $509 million, a 9% drop on a constant-currency basis. The EMEA region recorded a 9% decline, while Latin America grew 3%.
By channel, wholesale sales fell 6%, to $725 million, and direct-to-consumer sales dropped 8%, to $494 million. Revenue from owned stores fell 7%, while e-commerce revenue plunged 12%. By category, apparel declined 6% to $880 million, footwear fell 11% to $234 million, and accessories dropped 7% to $105 million.
Gross margin contracted by 30 basis points, to 47.0%, a decline the company attributes mainly to unfavourable currency effects, shifts in distribution channel and regional mix, and tariff policy. Selling, general and administrative expenses fell 4%, to $557 million, while inventory rose 4%, to $1.1 billion.
Restructuration and raised guidance
L'entreprise recorded $13 million in charges under its fiscal 2025 Restructuration plan during the quarter, bringing total costs incurred to date to $280 million, out of an overall estimated budget of $305 million. At the end of the quarter, Under Armour operated 438 owned stores, compared with 447 a year earlier.
Under Armour raised its operating income guidance for fiscal 2027, now expected to be between $99 million and $119 million. This figure includes a gain of around $70 million related to a tariff refund under the IEEPA law, partially offset by a negative impact of around $45 million linked to the conflict in the Moyen-Orient, compared with a previous estimate of $35 million. Annual revenue is still expected to decline at a moderate single-digit rate, around 5%.
For the third quarter, the group expects an operating loss of between $20 million and $30 million, and on an adjusted basis a result ranging from a loss of $5 million to a profit of $5 million.
