Breaking Down Under Armour, Inc. (UA) Financial Health: Key Insights for Investors

You're looking at Under Armour, Inc. (UA) and seeing a brand in the middle of a serious reset, and honestly, the financial picture for fiscal year 2025 (FY2025) is a mixed bag that demands a clear-eyed view before you commit any capital. The company's full-year revenue fell to $5.2 billion, a 9% decline, which tells you the fight for market share is still brutal, especially with North American revenue dropping 11% to $3.1 billion. Here's the quick math: despite the revenue dip, they managed to improve their gross margin by 180 basis points to 47.9%, a sign that the focus on less discounting and better product costs is defintely working. But still, the GAAP net loss hit $201 million, even as the adjusted net income landed at $135 million, and the recent November 2025 news of separating the Curry Brand and expanding restructuring-with an updated FY2026 operating loss guidance of $56 million to $71 million-shows the tough decisions are far from over. This is a turnaround story where the foundation is being rebuilt, so let's break down where the real risks and the true opportunities lie in this evolving athletic apparel landscape.

Revenue Analysis

You need to know where Under Armour, Inc. (UA) is making its money, but more importantly, you need to see the trend. The direct takeaway is clear: for fiscal year 2025 (FY25), Under Armour's total revenue dropped 9% to $5.2 billion, a sign of deliberate contraction as the brand focuses on a strategic reset for higher-quality sales. This isn't just a simple dip; it's a planned shift away from heavy discounting, which is why the revenue numbers are down but the gross margin is up.

Here's the quick math on the product mix: Apparel remains the dominant revenue stream, but every major category saw a decline, except for Accessories. Apparel revenue fell 9% to $3.5 billion, while Footwear revenue saw the steepest drop, declining 13% to $1.2 billion. Accessories, still a smaller piece of the pie, managed a 1% increase, reaching $411 million. That small Accessories bump is defintely a bright spot in a tough year.

• Apparel: $3.5 billion (down 9%)
• Footwear: $1.2 billion (down 13%)
• Accessories: $411 million (up 1%)

When you look at how the product gets to the customer, the distribution channel breakdown shows a clear picture of the company's pivot. The Wholesale channel still accounts for the majority of sales at $3.0 billion, representing 58% of net revenues, but it fell 8% year-over-year. The Direct-to-Consumer (DTC) channel, which includes e-commerce and owned stores, declined 11% to $2.1 billion, making up 40% of total revenue. Licensing contributes the remaining 2% of net revenues. The big story here is the e-commerce component of DTC, which dropped a significant 23% because the company intentionally cut back on promotional activities to protect brand value.

The geographic segmentation highlights the challenge in the company's home market. North America revenue, which represents about 60% of the total, fell 11% to $3.1 billion. The International business, totaling $2.1 billion (about 40% of revenue), fared slightly better with a 6% decline overall, but the regional performance was mixed. EMEA (Europe, Middle East, and Africa) revenue was flat, which is a win in this environment, but Asia-Pacific revenue fell 13% and Latin America revenue declined 6%. The US market is the primary problem to solve.

The significant change you need to track is the strategic repositioning, or what the company calls its strategic reset. They are deliberately sacrificing top-line revenue-that 9% drop-to improve the quality of the sales, which is why the gross margin increased by 180 basis points to 47.9%. This is a classic case of tightening distribution and reducing promotional noise to try and regain pricing power. For a more complete picture of the company's trajectory, including valuation tools and strategic frameworks, you should read the full post: Breaking Down Under Armour, Inc. (UA) Financial Health: Key Insights for Investors.

Your next step should be to model how much of this revenue decline is truly strategic versus a loss of market share that will be difficult to claw back.

Profitability Metrics

You need to know if Under Armour, Inc. (UA) is making money, and the simple answer for fiscal year 2025 is: it's complicated. The company posted a GAAP (Generally Accepted Accounting Principles) net loss, but its core operational efficiency is defintely improving, which is the key signal for investors.

For the full fiscal year 2025, which ended March 31, 2025, Under Armour reported total revenue of $5.2 billion, a 9 percent decline from the prior year. This top-line pressure is real, but the profitability story shows a significant, positive shift in cost management and operational discipline.

• Gross Margin: 47.9 percent
• Operating Margin (GAAP): -3.56 percent
• Net Margin (GAAP): -3.87 percent

Here's the quick math: The GAAP operating loss was $185 million and the GAAP net loss was $201 million against that $5.2 billion in revenue. The bottom line loss was driven by significant one-time charges, primarily restructuring expenses of $58 million as the company executes its strategic reset. If you strip out these one-time costs, the non-GAAP figures show an adjusted operating income of $198 million and an adjusted net income of $135 million, translating to a much healthier adjusted operating margin of 3.81 percent and an adjusted net margin of 2.60 percent.

Operational Efficiency and Margin Trends

The most encouraging trend is the Gross Profit Margin, which is a direct measure of operational efficiency and pricing power. Under Armour's gross margin increased by 180 basis points to 47.9 percent in fiscal 2025. This improvement is a clear sign that management is executing on its plan to reduce reliance on heavy discounting and benefit from lower supply chain costs, including reduced freight and product costs. This is a critical pivot toward a more premium brand positioning.

Still, the high Selling, General, and Administrative (SG&A) expenses, which include the restructuring charges, are what pushed the GAAP operating and net margins into negative territory. The company is spending money to fix the business, but you need to see that SG&A expense ratio drop in fiscal 2026 to realize true, sustained GAAP profitability.

Peer Comparison: Where UA Stands

When you compare Under Armour's profitability to its key competitors and industry benchmarks, you see a mixed picture. The Gross Margin is competitive, but the Operating and Net Margins lag significantly due to the high operating costs and restructuring efforts.

The company's gross margin of 47.9 percent is slightly below the Apparel Manufacturing industry average of 49.3%, but it is notably higher than Nike, Inc.'s fiscal 2025 gross margin of 42.7 percent. This suggests Under Armour has a good handle on its cost of goods sold. However, the premium athletic apparel benchmark is Lululemon, which reported a fiscal 2025 gross margin of 59.22 percent, showing Under Armour has a long way to go to reach true premium pricing power.

The delta between Under Armour's gross margin and its negative GAAP net margin is the real story; it highlights an out-of-control operating expense (OpEx) structure that the current management team is actively trying to correct. The adjusted net margin of 2.60 percent is right in line with the Apparel Retail industry average of 2.6%, which is a good sign that the underlying business is profitable, but it's not yet generating the high returns you'd expect from a growth brand.

To get the full context on how these numbers impact the stock, you can check out the full post on Breaking Down Under Armour, Inc. (UA) Financial Health: Key Insights for Investors. Your next step should be to model a sensitivity analysis on Under Armour's SG&A for fiscal 2026, targeting a reduction to see what it takes to get the GAAP operating margin back into the 10-15 percent range that is considered ideal for apparel. Finance: draft a 2026 OpEx reduction scenario by next Friday.

Debt vs. Equity Structure

You're looking at Under Armour, Inc. (UA)'s balance sheet to figure out how they are funding their turnaround, and the answer is clear: they are leaning more on debt than they have in the past. This isn't necessarily a red flag, but it's defintely a risk to watch.

As of the quarter ending September 2025, Under Armour, Inc. (UA)'s debt-to-equity (D/E) ratio-a core measure of financial leverage-stood at 1.02. This means for every dollar of shareholder equity, the company has about a dollar in total debt. Here's the quick math on their capital structure for that period:

• Short-Term Debt & Capital Lease Obligation: $737 million
• Long-Term Debt & Capital Lease Obligation: $1,163 million
• Total Stockholders Equity: $1,856 million

A D/E ratio of 1.02 is high for Under Armour, Inc. (UA) historically, and it's certainly higher than key competitors. For context, Nike Inc.'s D/E ratio was around 0.82 as of August 2025, suggesting a more conservative capital structure. Under Armour, Inc. (UA) is using debt to finance operations and restructuring, which increases the potential for higher returns, but also amplifies risk if their revenue growth stalls. It's a high-stakes bet on their turnaround plan.

The recent refinancing activity shows exactly how Under Armour, Inc. (UA) is managing this debt load. In June 2025, the company issued $400 million in new 7.25% Senior Notes due 2030 to retire $600 million of their older, cheaper 3.25% Senior Notes due 2026. They used cash and credit to cover the remaining $200 million of the retired debt. This move bought them time-extending the maturity date by four years-but it came at a cost.

Here's the trade-off: The new, higher interest rate is expected to increase their annual interest expense by roughly $16 million. This added burden will squeeze margins at a time when the company is already fighting to stabilize its top line. While it reduces near-term refinancing risk, it locks in a higher borrowing cost for the long haul. The company is using equity funding for other purposes, like its share repurchase program, but the immediate pressure is on debt management.

For a deeper dive into how this debt structure impacts their overall profitability and valuation, you can read the full analysis at Breaking Down Under Armour, Inc. (UA) Financial Health: Key Insights for Investors.

Here's a quick comparison of the current debt composition:

The action item here is to monitor their gross margin performance in the coming quarters. If they can't improve margins faster than the $16 million in new interest expense, the refinancing will become a financial drag, not a strategic advantage.

Liquidity and Solvency

When you look at Under Armour, Inc. (UA)'s balance sheet for the 2025 fiscal year, the picture is one of managed, but tightening, liquidity. The simple takeaway is this: their short-term assets still cover their short-term debts, but the cushion is getting thinner, and cash generation from core operations is a real concern.

The first place I look is the Current Ratio (Current Assets divided by Current Liabilities), which tells us if a company can pay its bills over the next year. Under Armour, Inc.'s Current Ratio for FY 2025 stood at 2.09x. That's a solid number, suggesting the company holds $2.09 in current assets for every dollar of current liability. However, the Quick Ratio (Acid-Test Ratio), which strips out inventory-a less liquid asset for an apparel company-is more telling. This ratio was only 0.93. A Quick Ratio below 1.0 means that without selling new inventory, the company cannot cover its immediate liabilities with just cash, receivables, and short-term investments. That's a red flag that defintely warrants attention.

The working capital (Current Assets minus Current Liabilities) trends confirm this tightening. Net Working Capital for FY 2025 was $1.22 billion, which is a healthy absolute number, but the trend shows a decrease. This is partly due to strategic inventory management, as the company ended the fiscal year with inventory down to $946 million. While reducing inventory is a positive sign of market discipline, the decline in the Quick Ratio signals that the reduction in readily available cash and receivables is outpacing the debt reduction, putting pressure on short-term financial flexibility.

Here's the quick math on their liquidity position for the year:

• Current Ratio: 2.09x (Solid, but inventory-heavy)
• Quick Ratio: 0.93 (Below 1.0, indicating a reliance on inventory sales)
• Net Working Capital: $1.22 billion (Sufficient, but the trend is downward)

The Cash Flow Statement paints the most critical picture of Under Armour, Inc.'s financial health. For FY 2025, the company reported negative cash flow across all three major sections. This is a significant concern because a healthy company should generate cash from its core operations.

Here is the overview of the cash flow trends for the 2025 fiscal year:

The negative Cash Flow from Operating Activities (CFO) of -$59.32 million is the biggest risk. It means the company is not bringing in enough cash from selling products to cover its day-to-day costs. Plus, the negative Cash Flow from Financing Activities of -$180.81 million shows the company is paying down debt and buying back stock, which is good for shareholders but drains cash reserves. Total cash and cash equivalents ended the fiscal year at $501 million. What this estimate hides is the sustained pressure on cash reserves if the operating cash flow doesn't turn positive soon. The low Quick Ratio combined with negative CFO means Under Armour, Inc. is walking a tightrope; they need to move inventory quickly to stay liquid.

You need to monitor the next few quarters closely for a turnaround in operating cash flow. For a more detailed look at the full financial picture, including valuation and strategy, read our full analysis at Breaking Down Under Armour, Inc. (UA) Financial Health: Key Insights for Investors.

Valuation Analysis

Under Armour, Inc. (UA) is currently trading as a turnaround play, and based on fiscal year 2025 data, its valuation is a mixed bag that leans toward being undervalued relative to its future potential, but only if its strategic reset succeeds. The core issue is that the company's recent unprofitability makes traditional metrics like the Price-to-Earnings (P/E) ratio look distorted, so you need to look at the Enterprise Value (EV) multiples.

Honestly, the stock has been a rough ride. Over the last 12 months leading up to November 2025, the stock price has plummeted by approximately 53%. It hit a 52-week low of about $3.95 and a high of $9.38. This massive drop is a clear signal that the market is pricing in significant risk and skepticism around the brand's ability to regain relevance and profitability. Here's the quick math: a stock trading at $4.09 (as of November 21, 2025) is defintely near its floor, but that floor can always get lower.

When you look at the key valuation multiples for the fiscal year ending March 2025, the picture is complex:

• Price-to-Earnings (P/E) Ratio: The P/E ratio for FY2025 was a negative -13.3x. This isn't a valuation, it's a flashing red light telling you the company is currently unprofitable, so the classic P/E metric is useless.
• Price-to-Book (P/B) Ratio: The P/B sits at about 1.43x. This is low for a growth-oriented apparel brand, suggesting investors are paying only $1.43 for every dollar of the company's book value, which can signal undervaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is the better metric for a turnaround. The FY2025 EV/EBITDA was 8.14x. To be fair, the trailing twelve months (TTM) EV/EBITDA is much higher at 20.10, reflecting recent weaker earnings before interest, taxes, depreciation, and amortization (EBITDA). Still, the FY number of 8.14x is not overly demanding compared to industry peers.

Also, don't look for income here. Under Armour, Inc. does not pay a dividend, so both the dividend yield and payout ratio are 0.00% as of November 2025. The company is correctly prioritizing cash retention to fund its strategic reset and manage its balance sheet, not rewarding shareholders with payouts.

The consensus among Wall Street analysts reflects this uncertainty. The overall rating is a split between Hold and Reduce. Out of 25 analysts, the breakdown is typically 3 Buy, 18 Hold, and 4 Sell. The average 12-month price target is around $6.58, which suggests a potential upside of over 50% from the current price of around $4.09. The analyst community is saying: 'Wait and see.' They see the potential upside but need proof of execution before upgrading their ratings. You can dive deeper into the institutional sentiment by Exploring Under Armour, Inc. (UA) Investor Profile: Who's Buying and Why?

What this estimate hides is the execution risk. If the company misses its revenue targets or fails to improve its gross margin, that $6.58 target will drop fast. Finance: monitor the quarterly gross margin trend against the company's guidance for the next two quarters.

Risk Factors

You're looking at Under Armour, Inc. (UA) because you see the potential for a turnaround, but honestly, the near-term path is still littered with execution risks and fierce competition. The company is actively trying to pivot to a premium brand, which is the right strategic move, but it's a high-stakes, multi-year effort that will keep volatility high.

The biggest internal risk right now is the sheer scale of the 2025 restructuring plan. This is a massive operational reset, not a minor tweak. As of November 2025, the total estimated pre-tax restructuring and related charges have ballooned to up to $255 million, up from earlier estimates. This includes about $107 million in cash-related charges for severance and transformation initiatives, plus up to $148 million in non-cash charges, primarily for contract terminations and asset impairments. That's a significant financial drag, and any disruption in the supply chain or IT systems during this overhaul could hit revenue hard.

Here's the quick math on the operational challenges: Fiscal Year 2025 (FY2025) saw total net revenues decrease by 9.4%, with North America revenue dropping a steeper 11.4%. You can't ignore that kind of top-line decline. The company is fighting for shelf space in a crowded market.

• Competitive Moat: Under Armour, Inc. (UA) is still struggling to establish a sustainable competitive advantage (a moat) against giants like Nike and Lululemon.
• Geographic Weakness: The Asia-Pacific (APAC) region remains a tough spot, facing competitive dynamics and macroeconomic pressures.
• Financial Headwinds: The business is highly vulnerable to rising trade costs, like tariffs, which could force further price hikes and risk consumer backlash.

The company is making smart moves to mitigate these risks, but it will take time to see sustained results. Their strategy is to shift from a discounting model to a premium, performance-driven entity. This focus helped lift the FY2025 gross margin to 47.9%, an improvement of 180 basis points, mainly due to less discounting and lower freight costs. They are also cutting product SKUs by about 25% to tighten the portfolio.

A key strategic risk is the separation of the Curry Brand, which was announced as part of the expanded restructuring. While management doesn't anticipate a significant effect on consolidated financial results, the global basketball business, including the Curry Brand, is projected to approximate $100 million to $120 million in revenue for fiscal 2026. Losing control of a key athlete-led brand is a gamble, even if it streamlines the core business.

To be fair, the management team is showing discipline, increasing the adjusted operating income guidance for FY2025 to a range of $185 million to $195 million, signaling a focus on profitability over pure volume. Still, execution risk is defintely the one to watch. If you want to understand the foundation of their turnaround, start with their core philosophy: Mission Statement, Vision, & Core Values of Under Armour, Inc. (UA).

Growth Opportunities

You're looking for the path forward for Under Armour, Inc. (UA), and the truth is, the near-term is a strategic reset, not a growth sprint. The company is deliberately contracting to build a stronger foundation, but the long-term picture is where the real potential lies.

The core of the strategy, led by returning CEO Kevin Plank, is a pivot to premium and a clear focus on performance. This means accepting a revenue decline in fiscal year 2025 to clean up the brand's image and distribution. Here's the quick math: the company expects revenue to decline at a low double-digit percentage rate for the full fiscal year 2025, driven by a significant 14% to 16% decline in North America as they pull back on heavy discounting and non-premium channels.

Strategic Pillars and Product Innovation

Under Armour's future growth is mapped out across four pillars: Product, Story, Service, and Team. The most critical driver is Product, which is where they are making decisive, actionable changes. They are streamlining their creation engine and product assortment, which already resulted in a 25% reduction in Stock Keeping Units (SKUs) by May 2024.

This focus on efficiency and quality is designed to improve margins, not just top-line sales. The company anticipates a gross margin increase of 125 to 150 basis points for fiscal year 2025, a direct result of lower product costs and less discounting. The big bet is the significantly strengthened product lineup slated for a major launch in Fall 2025, aiming to re-establish their performance credibility.

• Streamline product line for focus and quality.
• Launch major, high-impact product activation in Fall 2025.
• Reduce discounting to elevate brand status.

Market Expansion and Earnings Outlook

While North America is in a reset phase, international markets offer a clearer growth opportunity. The international business is expected to see only a low-single-digit decline in FY2025, with the EMEA (Europe, Middle East, and Africa) region expected to be flat. They are actively expanding their presence in countries like France, Germany, and Spain by building on their success in the UK. Plus, the Latin America region showed a strong revenue increase of 16% in the first quarter of fiscal 2025, proving the brand still resonates in developing markets.

The turnaround is showing early signs of profitability improvement. Following stronger results, the company raised its annual profit forecast, now expecting full-year fiscal 2025 operating income to be between $185 million and $195 million. This is a crucial metric: they are trading volume for better profitability. Looking beyond 2025, analysts forecast a substantial earnings per share (EPS) growth of roughly 62.5% per annum over the next three years, with revenue growing by 2.3% per annum. That's a defintely aggressive earnings turnaround projection.

Competitive Advantages and Strategic Partnerships

Under Armour's competitive edge has historically been its focus on innovative performance gear, like the original sweat-wicking base layers, and its 'underdog' brand positioning. They are doubling down on this, aiming to reset the brand as a premium performance house, not a mass-market discounter. The acquisition of UNLESS Collective for $10.3 million in August 2024 is a small but telling move, bringing in expertise to accelerate brand identity and growth.

The biggest challenge remains building a sustainable competitive moat against giants like Nike and Adidas. The strategy is to leverage their strong position in team sports and the brand's grit-infused storytelling to connect with the next generation of athletes. For a deeper look at what drives their long-term vision, you can review their foundational principles: Mission Statement, Vision, & Core Values of Under Armour, Inc. (UA).