Under Armour's QQ1 2026 results show a meaningful top-line decline contrasted by a modest improvement in operating performance and solid cash generation. Revenue of $1.134 billion declined 14.9% year over year and 19.1% quarter over quarter, reflecting ongoing demand pressures and channel mix headwinds in a challenging macro environment. Despite the revenue pullback, gross profit of $546.5 million held up with a gross margin of 48.2%, supporting a near-break-even operating result of $3.3 million and an after-tax net loss of $2.6 million (EPS -0.0061). Free cash flow reached $14.5 million with operating cash flow of $48.9 million, underscoring balance sheet resilience and liquidity management as the company navigates deleveraging and working capital dynamics.
From a liquidity perspective, UA ended the period with cash and equivalents of about $911 million and net debt of roughly $764.7 million. The company also executed debt repayments of $400 million and generated financing inflows of approximately $387.3 million, contributing to a net cash increase of $410.1 million for the period. The balance sheet remains solid, with total assets of ~$4.87 billion and total liabilities of ~$2.99 billion, yielding resilient liquidity to support ongoing strategic initiatives such as direct-to-consumer (DTC) expansion, inventory optimization, and cost discipline.
Looking ahead, the key questions for investors center on whether UA can stabilize or grow revenue via DTC expansion, improve margin through product mix and pricing, and continue generating positive cash flow to support deleveraging. In the near term, the company faces outsized headwinds in wholesale channels and macro consumer demand, but cash generation and strategic focus on the balance sheet position UA to weather near-term volatility while pursuing longer-term growth opportunities.