EPS of $-0.01 decreased by 916.7% from previous year
Gross margin of 48.2%
Net income of -2.61M
"No earnings call transcript was provided with this dataset." -
Under Armour Inc (0R2I.L) QQ1 2026 Results: Revenue Decline with Margin Stabilization and Cash-Flow Support
Executive Summary
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.
Key Performance Indicators
Revenue
1.13B
QoQ: -19.06% | YoY:-14.86%
Gross Profit
546.50M
48.19% margin
QoQ: -17.84% | YoY:-8.82%
Operating Income
3.32M
QoQ: -75.40% | YoY:151.46%
Net Income
-2.61M
QoQ: -311.67% | YoY:-889.39%
EPS
-0.01
QoQ: -310.34% | YoY:-916.67%
Revenue Trend
Margin Analysis
Key Insights
Net cash provided by operating activities: $48.852 million
Capital expenditures: $(35.362) million
Free cash flow: $14.490 million
Cash at end of period: $925.158 million; Cash at beginning: $515.051 million
Net income: $(2.612) million; Depreciation & amortization: $28.981 million; Change in working capital: $25.706 million; Accounts receivable: $(50.885) million; Inventory: $(196.568) million; Accounts payable: $213.712 million; Other working capital: $(42.323) million
Cash Flow and Balance:
- Net cash provided by operating activities: $48.852 million
- Capital expenditures: $(35.362) million
- Free cash flow: $14.490 million
- Cash at end of period: $925.158 million; Cash at beginning: $515.051 million
- Net income: $(2.612) million; Depreciation & amortization: $28.981 million; Change in working capital: $25.706 million; Accounts receivable: $(50.885) million; Inventory: $(196.568) million; Accounts payable: $213.712 million; Other working capital: $(42.323) million
- Total debt: $1,675.724 million; Net debt: $764.739 million
Balance Sheet Snapshot:
- Total assets: $4,865.191 million
- Total current assets: $2,902.858 million
- Inventory: $1,141.829 million; Accounts receivable: $623.736 million
- Total current liabilities: $1,895.375 million
- Total liabilities: $2,990.762 million
- Total stockholders’ equity: $1,874.429 million
- Cash and cash equivalents: $910.985 million; Cash at end: $925.158 million
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.13B
-14.86%
-19.06%
Gross Profit
546.50M
-8.82%
-17.84%
Operating Income
3.32M
151.46%
-75.40%
Net Income
-2.61M
-889.39%
-311.67%
EPS
-0.01
-916.67%
-310.34%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript was not provided in the data set. As a result, thematic insights are drawn from the press release and SEC filing materials. Key themes for stakeholders include:
- Strategy: Ongoing emphasis on direct-to-consumer (DTC) growth and inventory optimization embedded in the balance sheet strength and free cash flow generation.
- Operations: Modest operating income improvement YoY but continued profitability headwinds due to gross margin pressure and SG&A dynamics.
- Market Conditions: Persistent macro weakness and competitive intensity in athletic/apparel categories, with variability across wholesale versus DTC channels.
- Financial Flexibility: Solid liquidity position and debt management activity that underpins continued investment in strategic initiatives.
No earnings call transcript was provided with this dataset.
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Forward Guidance
No formal forward guidance was published in the data provided. Based on the quarterly performance and the strategic posture, near-term guidance would likely hinge on: (1) Gross margin stabilization or expansion through product mix, pricing actions, and better inventory turnover; (2) DTC growth versus wholesale mix to improve contribution margins; (3) Ongoing SG&A discipline to protect operating leverage; (4) Cash flow discipline to sustain deleveraging and balance sheet strength. A cautious assessment suggests achievability hinges on a stabilizing demand environment, successful execution of DTC initiatives, and continued cost controls. Investors should monitor: gross margin trajectory, inventory levels and turns, DTC/Sell-through ratios, and the company’s progress on reducing reliance on wholesale channels.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0R2I.L Focus
48.19%
N/A
N/A
N/A
0QZS.L
93.20%
-3.77%
-1.71%
-45.41%
0LJN.L
0.00%
7.09%
1.85%
19.05%
0JXD.L
41.10%
2.86%
1.48%
21.73%
0JU0.L
19.20%
8.96%
2.26%
15.31%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Neutral-to-cautiously-positive. The QQ1 2026 results illustrate a clear top-line decline but a stabilizing gross margin and modest operating income progress, backed by strong liquidity and positive free cash flow. The critical drivers for a more constructive stance are sustained DTC growth, meaningful margin expansion through pricing/product mix, and continued deleveraging. If management can convert revenue stability into sustained profitability and generate sustained cash flow, UA could re-rate on fundamentals. However, near-term earnings visibility remains constrained by wholesale exposure and broader macro headwinds. Investors should monitor gross margin trajectory, inventory turnover, DTC penetration metrics, and debt repayment progress as key catalysts for the stock’s risk-reward.
Key Investment Factors
Growth Potential
Direct-to-consumer expansion remains a primary growth vector, supported by an extensive store network (brand and factory stores) and a growing digital ecosystem via MapMyRun/MapMyRide platforms. Potential upside from improved gross margins through product mix optimization, price optimization, and increased share of higher-margin categories. Global expansion, particularly in Europe, the Middle East, Africa, and Asia-Pacific, presents incremental revenue opportunities as consumer demand recovers and brand equity strengthens.
Profitability Risk
Near-term revenue volatility driven by wholesale channel pressure and macro consumer weakness. Persistent net losses and a limited operating margin create earnings risk. High inventory levels and potential markdowns could weigh on margins. Leverage and debt maturities require monitoring, as does foreign exchange exposure and competitive dynamics from peers in the athletic apparel space.
Financial Position
Liquidity remains robust with cash and equivalents of ~$911M and total debt of ~$1.676B, yielding a net debt of ~$764.7M. Current ratio approx. 1.53x indicates adequate short-term liquidity. The balance sheet shows meaningful working capital financing activity and a free cash flow contribution, supporting deleverage efforts and potential strategic investments.
SWOT Analysis
Strengths
Strong brand recognition and global distribution network in athletic apparel.
Solid cash position and liquidity with significant operating cash flow capability.
Growing direct-to-consumer footprint and digital platform potential (MapMyRun/MapMyRide).
Inventory and working capital management supporting liquidity.
Weaknesses
Net income and operating margins remain fragile despite margin stability in gross profit.