Shares of Under Armour cratered 14.9% to $4.74 in pre-market trading November 6 after the company's fiscal second-quarter results revealed yet another crack in its turnaround story. Adjusted earnings per share came in at $0.00 versus the consensus estimate of -$0.01, and revenue of $1.24 billion edged past the $1.23 billion estimate — but investors zeroed in on what came next: a downgrade to the full-year profit outlook that undercuts the central bull case.
Revenue Keeps Falling While the Company Claims Progress. Revenue decreased 7% to $1.2 billion , accelerating from a 3% decline in Q1. Apparel revenue declined 6% to $880 million, footwear fell 11% to $234 million, and accessories dropped 7%. CEO Kevin Plank insisted the company "delivered against our revenue expectation," but every single product category shrank. A turnaround story with no revenue growth in any segment is a cost-cutting story — and that's a thinner margin for error.
The Margin Downgrade Is the Real Blow. Under Armour updated its fiscal 2027 outlook to reflect additional external cost pressures and planned inventory actions, cutting expected gross-margin improvement to 170–220 basis points from 220–270 — a 50-basis-point haircut. The company blamed higher fuel and freight costs, planned inventory management actions, and foreign exchange headwinds. Crucially, approximately 150 basis points of the remaining improvement comes from recovering prior-year tariff costs rather than organic gains. Strip that one-time benefit out, and underlying margin expansion is negligible — perhaps 20 to 70 basis points at best.
Profits Are Tiny Relative to the Restructuring Investment. Q2 GAAP operating income was just $15 million; adjusted operating income was $25 million.
Full-year adjusted EPS guidance of $0.08–$0.12 sits far below the analyst consensus of $0.81. Meanwhile, the company has poured roughly $261 million into restructuring costs since fiscal 2025. That is an enormous spend for a company generating only $140–$160 million in expected adjusted operating income.
The Stock Is Pricing In Doubt, Not Disaster — Yet. At $4.74, UAA trades at roughly 0.5× trailing sales and sits near its 52-week low of $4.13 . The market is signaling that until revenue stabilizes — not just declines less — margin guidance cuts will keep eroding confidence. With freight costs rising and no demand catalyst in sight, Under Armour's turnaround clock is ticking louder.