Under Armour Swings to Loss Amid Revenue Dip, Soaring Restructuring Costs

Ticker: UA · Form: 10-Q · Filed: 2025-11-06T00:00:00.000Z

Sentiment: bearish

Topics: Athletic Apparel, Earnings Miss, Restructuring, Net Loss, Revenue Decline, Debt Financing, Cash Flow Concerns

Related Tickers: UAA, NKE, ADDYY, LULU

TL;DR

**UA's Q3 is a disaster, with a net loss and massive restructuring hits – sell before it gets worse.**

AI Summary

Under Armour, Inc. reported a net loss of $18.814 million for the three months ended September 30, 2025, a significant decline from a net income of $170.382 million in the same period of 2024. Net revenues decreased by 4.7% to $1.333 billion from $1.399 billion year-over-year. The company's gross profit also fell to $630.584 million from $696.132 million, while selling, general and administrative expenses increased by 11.9% to $581.632 million. Restructuring charges surged to $31.906 million, up from $3.212 million in the prior year, indicating ongoing operational adjustments. Cash and cash equivalents decreased to $395.991 million as of September 30, 2025, from $501.361 million as of March 31, 2025. Total assets increased to $4.899 billion from $4.301 billion, primarily due to a new restricted investment of $604.065 million and an increase in inventories to $1.037 billion. The company also incurred $599.439 million in current maturities of long-term debt, a new liability compared to zero in March 2025, and issued $600 million in new long-term debt. This period reflects a challenging environment with declining profitability and increased operational costs.

Why It Matters

Under Armour's swing to a net loss and declining revenues signal significant headwinds for investors, raising concerns about the company's ability to compete effectively against rivals like Nike and Adidas. The substantial increase in restructuring charges suggests ongoing operational inefficiencies or a major strategic overhaul, which could impact employee morale and job security. For customers, these financial pressures might lead to fewer product innovations or changes in pricing strategies. The broader market will watch closely to see if Under Armour can regain its footing, as its performance reflects trends in the athletic apparel sector and consumer discretionary spending.

Risk Assessment

Risk Level: high — The company reported a net loss of $18.814 million for the three months ended September 30, 2025, a stark reversal from a $170.382 million net income in the prior year. This is compounded by a 4.7% decrease in net revenues and a significant increase in restructuring charges to $31.906 million from $3.212 million, indicating substantial operational challenges and potential future write-downs.

Analyst Insight

Investors should consider reducing their exposure to Under Armour given the sharp decline in profitability, increased restructuring costs, and negative cash flow from operations. Monitor upcoming earnings calls for detailed explanations of the restructuring plan and any signs of stabilization in revenue and expense management.

Financial Highlights

revenue
$1.333B
total Assets
$4.899B
total Debt
$1.2B
net Income
$(18.814)M
gross Margin
47.3%
cash Position
$395.991M
revenue Growth
-4.7%

Key Numbers

Key Players & Entities

FAQ

What were Under Armour's net revenues for the quarter ended September 30, 2025?

Under Armour's net revenues for the three months ended September 30, 2025, were $1.333 billion, a decrease from $1.399 billion in the same period of 2024.

Did Under Armour report a profit or loss in the latest quarter?

Under Armour reported a net loss of $18.814 million for the three months ended September 30, 2025, compared to a net income of $170.382 million in the prior year's quarter.

How much did Under Armour spend on restructuring charges in Q3 2025?

Under Armour incurred $31.906 million in restructuring charges for the three months ended September 30, 2025, a significant increase from $3.212 million in the same period last year.

What is the current cash position of Under Armour?

As of September 30, 2025, Under Armour's cash and cash equivalents stood at $395.991 million, down from $501.361 million as of March 31, 2025.

What new debt did Under Armour incur in the last six months?

Under Armour reported $599.439 million in current maturities of long-term debt as of September 30, 2025, and received $600 million in proceeds from long-term debt and revolving credit facility during the six months ended September 30, 2025.

How have Under Armour's selling, general and administrative expenses changed?

Selling, general and administrative expenses for Under Armour increased to $581.632 million for the three months ended September 30, 2025, up from $519.840 million in the comparable period of 2024.

What was Under Armour's gross profit for the quarter?

Under Armour's gross profit for the three months ended September 30, 2025, was $630.584 million, a decrease from $696.132 million in the same period last year.

What is the impact of foreign currency translation on Under Armour's comprehensive income?

For the three months ended September 30, 2025, Under Armour reported a foreign currency translation adjustment loss of $1.916 million, contributing to an accumulated other comprehensive loss of $100.449 million.

What are the key risks highlighted in Under Armour's 10-Q filing?

The filing indicates risks related to declining profitability, increased restructuring charges, and negative cash flow from operating activities, which could impact future financial performance and investor confidence.

How many shares of Class A Common Stock are outstanding for Under Armour?

As of September 30, 2025, there were 188,834,386 shares of Class A Common Stock issued and outstanding for Under Armour.

Risk Factors

Industry Context

The athletic apparel and footwear market remains highly competitive, with established global players and emerging brands vying for market share. Consumers increasingly demand innovation in performance, sustainability, and digital engagement. Supply chain disruptions and shifting consumer preferences continue to influence demand and operational strategies within the industry.

Regulatory Implications

Under Armour must comply with SEC reporting requirements, including accurate disclosure of financial performance, risks, and executive compensation. Any misstatements or omissions could lead to regulatory scrutiny and penalties. Compliance with international trade regulations and labor laws in its global manufacturing operations is also critical.

What Investors Should Do

  1. Monitor inventory levels closely for signs of potential markdowns or obsolescence, which could further impact margins.
  2. Analyze the impact of increased debt on future interest expenses and cash flow generation, particularly given the negative operating cash flow.
  3. Evaluate the effectiveness of restructuring initiatives and their long-term impact on operational efficiency and profitability.
  4. Assess management's strategy to reverse the trend of declining revenues and profitability in the face of rising operating costs.

Glossary

Restructuring Charges
Costs associated with significant reorganizations or shutdowns of business operations, such as severance pay, asset write-downs, or closure costs. (A substantial increase in restructuring charges to $31.9 million indicates significant ongoing operational adjustments and potential future impacts on the company's structure and costs.)
Current maturities of long-term debt
The portion of long-term debt that is due within the next twelve months. (The appearance of $599.4 million in current maturities of long-term debt, which was zero in the prior period, signifies an immediate repayment obligation and a shift in the company's short-term financial obligations.)
Restricted investments
Investments that are not readily convertible to cash due to contractual or legal restrictions. (The addition of a $604.1 million restricted investment suggests a significant allocation of capital to assets with limited liquidity, impacting the company's readily available cash.)
Selling, general and administrative expenses (SG&A)
Costs incurred by a company for selling products and for the general management of the business, excluding direct costs of production. (The 11.9% increase in SG&A expenses to $581.6 million, outpacing revenue growth, is a key contributor to the company's reduced profitability.)
Gross profit
The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. (The decrease in gross profit to $630.6 million from $696.1 million indicates pressure on the company's core profitability from its product sales.)

Year-Over-Year Comparison

Compared to the prior year's filing, Under Armour has experienced a significant downturn in profitability, swinging from a substantial net income to a net loss. Revenue has declined, while operating expenses, particularly SG&A and restructuring charges, have increased. The company has also taken on new debt and increased its inventory levels, while its cash position has decreased, indicating a more challenging financial and operational environment.

Filing Stats: 4,713 words · 19 min read · ~16 pages · Grade level 17.3 · Accepted 2025-11-06 16:28:33

Filing Documents

- F INANCIAL INFORMATION

PART I - F INANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 1 Condensed Consolidated Balance Sheets as of September 30, 2025 and March 31, 2025 (unaudited) 1 Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2025 and 2024 (unaudited) 2 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended September 30, 2025 and 2024 (unaudited) 3 Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025 and 2024 (unaudited) 6 Notes to the Condensed Consolidated Financial Statements (unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operation s

Management's Discussion and Analysis of Financial Condition and Results of Operation s 31 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 46 Item 4.

Controls and Procedures

Controls and Procedures 47 P ART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 49 Item 1A.

Risk Factors

Risk Factors 49 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 49 Item 5. Other Information 49 Item 6. Exhibits 50

SIGNATURES

SIGNATURES 51 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS UNDER ARMOUR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; In thousands, except share data) September 30, 2025 March 31, 2025 Assets Current assets Cash and cash equivalents $ 395,991 $ 501,361 Accounts receivable, net of allowance for doubtful accounts of $ 18,447 and $ 17,020 as of September 30, 2025 and March 31, 2025, respectively. 688,476 675,822 Inventories 1,037,166 945,836 Restricted investments (Note 7) 604,065 — Prepaid expenses and other current assets, net 218,085 206,078 Total current assets 2,943,783 2,329,097 Property and equipment, net (Note 3) 605,321 645,147 Operating lease right-of-use assets (Note 4) 372,791 384,341 Goodwill (Note 5) 495,027 487,632 Intangible assets, net 4,758 5,224 Deferred income taxes (Note 15) 306,218 286,160 Other long-term assets 171,580 163,270 Total assets $ 4,899,478 $ 4,300,871 Liabilities and Stockholders' Equity Current liabilities Current maturities of long-term debt (Note 7) $ 599,439 $ — Accounts payable 470,311 429,944 Accrued expenses 328,398 348,747 Customer refund liabilities (Note 10) 134,957 146,021 Operating lease liabilities (Note 4) 137,402 130,050 Other current liabilities 66,643 54,381 Total current liabilities 1,737,150 1,109,143 Long-term debt, net of current maturities (Note 7) 589,783 595,125 Operating lease liabilities, non-current (Note 4) 573,158 574,277 Other long-term liabilities 143,709 132,048 Total liabilities 3,043,800 2,410,593 Stockholders' equity (Note 9) Class A Common Stock, $ 0.0003 1/3 par value; 400,000,000 shares authorized as of September 30, 2025 and March 31, 2025; 188,834,386 shares issued and outstanding as of September 30, 2025 (March 31, 2025: 188,822,726 ) 63 63 Class B Convertible Common Stock, $ 0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of September 30, 2025 and March 31, 2025 11 11 Class C Common Stock, $ 0.0003 1/3 par value; 400,000,000 shares

Business

Business Under Armour, Inc. (together with its wholly owned subsidiaries, the "Company") is a developer, marketer and distributor of branded athletic performance apparel, footwear and accessories. The Company creates products engineered to make athletes better with a vision to inspire athletes with innovative performance and design solutions they can't live without. The Company's products are made, sold and worn worldwide. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements, which are presented in U.S. Dollars, include the accounts of Under Armour, Inc. and its wholly owned subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain information in footnote disclosures normally included in annual financial statements were condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (the "SEC") and U.S. GAAP for interim consolidated financial statements. In the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair statement of the financial position and results of operations were included. Intercompany balances and transactions were eliminated upon consolidation. The unaudited Condensed Consolidated Balance Sheets as of September 30, 2025 is derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 ("Fiscal 2025"), filed with the SEC on May 22, 2025 ("Annual Report on Form 10-K for Fiscal 2025"), which should be read in conjunction with these unaudited Condensed Consolidated Financial Statements. The unaudited results for the three and six months ended September 30, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2026 ("Fiscal 2026"), or any other portions thereof.

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