Under Armour, Inc. Q4 FY2025 earnings call

• Strategic repositioning: The company has been repositioning the brand with a focus on higher-quality revenue, reducing promotions in DTC businesses to regain pricing power and expand gross margin.
• Product innovation: Introduced products like the SlipSpeed Echo, UA Halo collection, and regenerative plant-based sportswear. Focus on men's apparel, footwear, and women's essentials.
• Marketing shifts: Emphasizing social media, NIL, and athlete partnerships to drive brand engagement. Reallocating marketing spend to be more intentional.
• North American transformation: Redefining e-commerce as a brand flagship, rationalizing SKUs in Factory House stores, and investing in Brand Houses.
• Regional performance: EMEA was the top-performing region in fiscal 2025, APAC is being reset, and Latin America faced FX impacts.

In the fourth quarter of fiscal 2025, Under Armour's revenue was $1.2 billion, down 11%. By region: North American revenue declined 11% due to lower DTC and wholesale sales; EMEA revenue decreased 2% (flat on currency-neutral basis); APAC revenue was down 27% (26% adjusted for currency fluctuations); Latin America revenue declined 10% (3% currency-neutral). By channel: Wholesale revenue decreased 10%, DTC revenue was down 15%, sales at owned and operated stores declined by 6%, and licensing revenue was down 15%. By product: Apparel revenue was down 11%, footwear declined by 17%, and accessories were up 2%. Gross margin increased 170 basis points year-over-year to 46.7%, driven by supply chain benefits, lower promotions, and favorable currency impacts.

For fiscal 2026 Q1, revenue is expected to decline 4-5%, with North America same, EMEA up high single digits, and APAC mid-teen decline. Gross margin is expected to expand 40-60 basis points. SG&A focus on efficiency. Impact of trade tariffs on sourcing and pricing, with focus on mitigating strategies like cost-sharing, diversified sourcing, and price adjustments. First quarter revenue outlook reflects softness in spring/summer '25 wholesale order book.

• Tariff impacts: Uncertainty around trade policy affecting sourcing costs, consumer demand, and product pricing. Potential shifts in supply chain and rising product costs.
• Market uncertainty: Dynamic business environment with unclear visibility beyond the near term, posing challenges to revenue and margin expectations.

Q: Jay Sole asked about the North American reset.

A: Kevin Plank discussed a comprehensive approach involving great product, effective sales communication, appropriate in-store POP, and social media engagement to model excellence.

Q: Simeon Siegel inquired about e-comm and SG&A.

A: Kevin Plank talked about e-comm focus on brand inspiration and loyalty; Dave Bergman discussed SG&A savings from restructuring and focus on efficiency.

Q: Samuel Poser questioned inventory and units.

A: David Bergman spoke about inventory management and unit/dollar dynamics, while Kevin Plank emphasized average unit retail and pricing power.

Q: Laurent Vasilescu asked about fall order book and gross margin.

A: David Bergman and Kevin Plank addressed order book changes and gross margin drivers, including supply chain benefits and regional momentum.

Q: Peter McGoldrick on product pyramid and AUR.

A: Kevin Plank explained product hierarchy, and David Bergman discussed AUR and category mix impacts on margins.

Q: Kelly Crago on North America DTC and fiscal 2026.

A: David Bergman and Kevin Plank spoke about DTC recovery and fiscal 2026 outlook, focusing on back half improvements.

Q: Krista Zuber on North America margin and category mix.

A: Kevin Plank discussed margin fundamentals, and David Bergman addressed category margin differentials and footwear mix impacts.