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

You're looking at Under Armour, Inc. (UAA) and seeing a company in the middle of a painful, but strategic, reset, and the numbers from the 2025 fiscal year tell a clear story of that transition. On one hand, the top line took a hit, with full-year revenue declining 9% to approximately $5.2 billion, driven by an 11% drop in the critical North American market to $3.1 billion, a direct consequence of tightening distribution and cutting back on promotions to build a more premium brand image. But here's the quick math on the opportunity: the gross margin actually expanded by 180 basis points to a strong 47.9%, showing their pricing power and supply chain discipline are defintely improving. Still, the GAAP operating loss of $185 million-a sharp reversal from the prior year-is the near-term risk you can't ignore, so the question for investors isn't about past growth, but whether the improved profitability metrics can overcome the revenue contraction and translate that adjusted net income of $135 million into sustainable, long-term shareholder value.

Revenue Analysis

You need to know if Under Armour, Inc. (UAA)'s strategic reset is working, and the fiscal year 2025 (FY2025) revenue numbers tell a clear story of deliberate contraction. The company's total revenue for the fiscal year ending March 31, 2025, was approximately $5.16 billion, representing a year-over-year decline of about 9.43%. This isn't a surprise; it's a direct result of their 'Sell Less, Earn More' strategy, which prioritizes brand integrity and profit margin over top-line sales growth. It's a painful but necessary trade-off for long-term health.

Revenue Streams: Product and Channel Mix

The primary revenue source remains apparel, but the company is seeing a shift in which channels are feeling the heat most. The overall revenue decline is not uniform, which is important. For the full FY2025, the wholesale channel-selling to retailers-was down about 10%, and the direct-to-consumer (DTC) channel was down approximately 15%. Here's the quick math on the product mix based on the fourth quarter of FY2025, which shows where the pressure is:

• Apparel revenue: Declined 11% to $780 million.
• Footwear revenue: Declined 17% to $282 million.
• Accessories revenue: Increased 2% to $92 million.

The biggest change is in e-commerce, which is a key part of the DTC channel. Due to planned reductions in promotional activities-fewer site-wide sales and deep discounts-eCommerce revenue dropped sharply, falling 27% in the fourth quarter of FY2025. This is the cost of trying to rebuild a premium brand image. You have to cut the promotional addiction, and that defintely hits sales hard.

Regional Revenue Contribution and Trends

When you break down the revenue geographically, the North American market is the main anchor dragging down the overall results. For the full fiscal year 2025, North America revenue decreased 11% to $3.1 billion. The international business, while also down, showed more resilience, falling 6% to $2.1 billion. This is a critical divergence.

The international segment is where you see the most varied performance, which signals different stages of the brand reset globally. Here is the full FY2025 regional breakdown:

The flat revenue in EMEA is a relative win, showing that in some markets, the brand is holding its ground. But the double-digit decline in Asia-Pacific is a significant headwind, compounded by macroeconomic pressures. The biggest risk here is that the North American decline is not yet fully stabilized. If you want to dig deeper into who is betting on this turnaround, you should check out Exploring Under Armour, Inc. (UAA) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking for a clear picture of how Under Armour, Inc. (UAA) actually makes money, and honestly, the profitability story for fiscal year 2025 is a classic turnaround narrative: messy on the surface, but with some solid operational wins underneath. The headline is that the company posted a GAAP (Generally Accepted Accounting Principles) net loss, but its strategic cost-cutting efforts are starting to show up in the gross margin.

For the full fiscal year 2025, which ended March 31, 2025, Under Armour reported total revenue of $5.16 billion, a 9% decline from the previous year. This top-line pressure, combined with significant restructuring charges, is what drove the negative GAAP profit numbers. The company is defintely still in a transition phase.

Gross, Operating, and Net Profit Margins (FY2025)

When you break down the margins, you see the impact of the strategic reset. The Gross Profit Margin improved, which is a great sign for core product health, but the Operating and Net Margins reflect the heavy lifting of the restructuring.

Here's the quick math on the adjusted figures: the GAAP operating loss of $185.22 million converts to an adjusted operating income of $198 million once you exclude transformation, restructuring, and litigation charges. This shows the underlying business model is profitable, but the turnaround costs are still a major drag on reported earnings.

Operational Efficiency and Cost Management

The biggest positive trend is the improvement in operational efficiency. Under Armour's focus on cost management and supply chain optimization is paying dividends right where it matters: the Gross Margin. That 47.9% gross margin for FY2025 is a full 180 basis point increase year-over-year. This jump was largely driven by two clear actions:

• Lower freight and product costs from supply chain efficiencies.
• Reduced direct-to-consumer (DTC) discounting.

The company's restructuring plan has already generated $35 million in savings in FY2025, with more expected in the next fiscal year. They're cutting SKUs (Stock Keeping Units) by 25% to simplify operations, which should further improve sourcing and lower costs. Cutting the product line is a tough but necessary step.

Benchmarking Against the Industry

To put Under Armour's performance in context, you need to compare it to the broader apparel industry. For a healthy apparel business in 2025, industry benchmarks for profitability are significantly higher than UAA's reported GAAP numbers, but the adjusted Gross Margin is competitive.

• Industry Gross Margin: 50-60% is the solid benchmark. Under Armour's 47.9% is close, but still trails.
• Industry Operating Margin: 10-15% is the target range. UAA's adjusted 3.84% is far below this.
• Industry Net Margin: 10% is considered solid and sustainable. UAA's adjusted 2.62% shows a major gap.

What this comparison tells you is that while Under Armour, Inc. is successfully managing its cost of goods sold (COGS) to hold its own on the gross margin, its Selling, General, and Administrative (SG&A) expenses, even adjusted for one-time charges, are still too high relative to its revenue base. The company needs to close that 6 to 11 percentage point gap in operating margin to reach industry parity. If you want a deeper look at the stakeholders betting on this turnaround, you should check out Exploring Under Armour, Inc. (UAA) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

When you look at how Under Armour, Inc. (UAA) funds its operations and growth, you're essentially asking: how much of the company is built on borrowed money (debt) versus shareholder capital (equity)? The quick answer is that Under Armour runs a relatively conservative balance sheet compared to many peers, relying more on equity than debt for its capital structure.

As of the 2025 fiscal year, Under Armour's total debt stood at approximately $1.30 billion. This debt is strategically balanced between short-term obligations and longer-term financing, which is a key consideration for liquidity. Here's the quick math on how that debt breaks down:

• Long-term Debt: $1.17 billion
• Short-term Debt: $130.05 million

The company's reliance on debt is best measured by its debt-to-equity (D/E) ratio, which tells you how much debt is used to finance assets relative to the value of shareholder equity. For the 2025 fiscal year, Under Armour's D/E ratio was approximately 0.69, or 69%. To be fair, this is a healthy figure. For context, the broader Apparel and Accessory Stores industry median D/E ratio was closer to 1.88 in 2024. Compared to competitors like Nike, Inc. (NKE) with a D/E ratio of 0.77, Under Armour is defintely managing its leverage well.

This low D/E ratio signals that the company has a strong equity cushion, meaning it can absorb operational setbacks without immediate solvency risk. It's a sign of financial stability, but it also raises the question of whether they could be using more debt to fuel faster growth, especially since the cost of equity is often higher than the cost of debt.

The biggest story in 2025 for Under Armour's debt profile was the strategic refinancing move executed in the middle of the year. In June 2025, the company issued $400 million of new 7.25% Senior Notes due 2030. The primary goal was to retire a larger, near-term debt obligation: $600 million of the company's 3.25% Senior Notes due 2026.

This was a classic trade-off: higher cost for extended maturity. They essentially paid a premium-an estimated $16 million increase in annual interest expense-to push the maturity wall out four years. This buys management crucial time to execute their turnaround plan without the pressure of a major debt repayment looming in 2026. The remaining $200 million of the retired notes was covered by cash reserves and available credit facilities.

The move shows a clear focus on long-term stability over short-term interest savings, a pragmatic choice given the current operating environment. For a deeper dive into who holds this equity and debt, you might want to check out Exploring Under Armour, Inc. (UAA) Investor Profile: Who's Buying and Why?

Here is a summary of the core components of Under Armour's capital structure and the recent refinancing action:

The company is clearly prioritizing financial flexibility and a stable maturity schedule over minimizing interest expense, which is a smart defensive play in a period of operational restructuring.

Liquidity and Solvency

You need to know if Under Armour, Inc. (UAA) has enough cash and liquid assets to cover its near-term bills, and the 2025 fiscal year data gives us a clear but mixed picture. The company's liquidity position is adequate, but the cash flow trends show a clear need for careful management as they navigate a restructuring.

The core liquidity metrics, the current and quick ratios, tell the story. As of November 2025, Under Armour, Inc.'s Current Ratio is 1.53 and its Quick Ratio is 0.93. Here's the quick math: A current ratio of 1.53 means the company has $1.53 in total current assets (like cash, receivables, and inventory) for every $1.00 in current liabilities (bills due within a year). That's defintely healthy, showing they can cover short-term debt with all their liquid assets.

But, the Quick Ratio, which excludes inventory because it's less liquid, sits just under the key 1.0 threshold at 0.93. This means that without selling any of their inventory, they have only $0.93 in highly liquid assets for every $1.00 of short-term debt. For an apparel company, inventory is a huge part of current assets, so this isn't a red flag, but it does signal that they are reliant on moving product to meet all obligations. It's a tight spot, but not a crisis.

Working Capital and Cash Flow Trends

Working capital trends further reflect this tight management. For the latest annual reporting period, the annual change in working capital was a decrease of -$37.266 million. This reduction was partly driven by a planned $12.66 million decrease in Inventory, which is a good sign of inventory discipline but also contributes to the lower Quick Ratio. The company is intentionally reducing its working capital requirement, which can be a sign of efficiency but also of a conservative stance on growth.

The cash flow statement for the full fiscal year 2025 (ending March 31, 2025) shows where the cash went, and it's a critical area for investors to watch. All three primary cash flow categories were negative, which is a major concern for a mature company:

• Cash Flow from Operating Activities (CFO): -$59.32 million. This is the cash generated (or, in this case, used) from the core business. A negative number here means the day-to-day operations are consuming cash, not generating it.
• Cash Flow from Investing Activities (CFI): -$126.35 million. This outflow is mainly capital expenditures (CapEx) and is expected, but it adds to the total cash burn.
• Cash Flow from Financing Activities (CFF): -$180.81 million. This outflow includes the repurchase of $90 million of stock, which is a return to shareholders but also a drain on cash reserves.

The total Free Cash Flow (FCF) for the fiscal year 2025 was a significant drain at -$228.00 million. This is the cash left over after CapEx, and the negative figure underscores the cash-consuming nature of the current restructuring and sales decline. Still, the company ended the fiscal year with a cash and cash equivalents balance of $501 million and, importantly, had no borrowings outstanding on its $1.1 billion revolving credit facility. That undrawn credit line is the primary liquidity strength. You can read more about this in our full analysis: Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors.

The core strength is the balance sheet's ability to absorb this cash burn, but the core risk is the negative operating cash flow. The company has a liquidity cushion, but they must turn that CFO number positive soon. Finance: Track the quarterly operating cash flow against the full-year target immediately.

Valuation Analysis

You're looking at Under Armour, Inc. (UAA) and wondering if the stock's steep decline has created a buying opportunity, or if the market is accurately pricing in risk. The quick answer is that while analysts see the stock as technically undervalued, the valuation multiples tell a story of operational stress. As of November 2025, the stock trades around $4.29 per share, but the consensus analyst price target sits much higher at $6.58, suggesting a potential upside of over 53% over the next twelve months.

This disconnect is the key risk/opportunity. Analysts are betting on the company's turnaround plan-the focus on premiumization and tighter inventory-to work, but the market is still punishing the stock for its recent performance. Honestly, you need to look past the simple price target and dig into the ratios to see the full picture.

Stock Price Trend and Analyst Sentiment

The near-term trend for Under Armour, Inc. has been brutal. Over the last 12 months, the stock has posted a total shareholder return loss of roughly 54%, with the price trading near its 52-week low of $4.13 in November 2025, down from a high of $10.53. The year-to-date return is a painful minus 44%. This steep drop reflects investor concern over persistent margin pressures and restructuring costs, like the up to $255 million in charges related to the expanded fiscal 2025 restructuring plan.

Despite this, the Wall Street consensus rating is a cautious 'Hold' or 'Reduce,' not a 'Strong Sell.' The average price target of $6.58 from 25 analysts signals they believe the company's fair value is defintely higher than the current trading price. The most popular narrative suggests the stock is undervalued by about 25.9% based on discounted future cash flows (DCF) estimates.

Key Valuation Multiples for Fiscal 2025

When we look at the core valuation multiples, the picture gets complicated fast. A quick glance at the Price-to-Earnings (P/E) ratio shows Under Armour, Inc. trading at approximately 19.3x earnings as of November 2025, which is higher than the peer average of 11.9x but in line with the broader US Luxury industry. This suggests the stock is expensive relative to direct competitors, but the Forward P/E of 36.81 implies a significant expected jump in earnings next year.

Here's the quick math on the other key metrics:

• Price-to-Book (P/B) Ratio: The current P/B ratio is around 0.95. A P/B below 1.0 is often a sign of undervaluation, meaning the stock is trading for less than the book value of its assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): The trailing twelve-month (TTM) EV/EBITDA is an extremely high 408.98. This number is distorted because the TTM Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is very low at just $8.56 million due to recent poor operational performance and restructuring charges. High EV/EBITDA is a red flag, but in this case, it's a symptom of depressed earnings, not necessarily an overvalued stock price.

What this estimate hides is the operational drag. The high EV/EBITDA ratio confirms that recent profitability is near zero, making the stock a bet on the successful execution of the turnaround plan. For more on the operational side, check out Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors.

Dividend Policy and Payout

For income-focused investors, Under Armour, Inc. is not a play. The company does not currently pay a dividend, so the dividend yield and payout ratio are effectively zero. This is typical for a company in a turnaround phase that needs to preserve cash for its restructuring efforts and to fund future growth initiatives. They are prioritizing cash flow for operations and share repurchases, with $90 million spent on buybacks through March 31, 2025, as part of a $500 million program.

Next step: Review the company's liquidity and debt covenants to gauge their ability to weather the ongoing restructuring without needing to raise capital.

Risk Factors

You're looking at Under Armour, Inc. (UAA) and seeing a brand in the middle of a major overhaul, and honestly, that means you need to map the risks as closely as the opportunities. The core takeaway here is that while the company is tightening its operational ship, the top-line revenue pressure is real, especially in the US market.

The biggest near-term financial risk is the restructuring itself. Under Armour updated its plan, and now expects to incur pre-tax restructuring and related charges of approximately $140 million to $160 million across fiscal years 2025 and 2026. That's a significant cash drain, plus it's a distraction. For the full fiscal year 2025, the company reported a GAAP operating loss of $185 million and a net loss of $201 million, so they are bleeding cash while they rebuild.

Here's the quick math on their core market problem: North American revenue fell 11% to $3.1 billion in fiscal 2025. That's the engine room, and it's stalling. The strategic risk is simple: Can they regain brand relevance and market share against giants like Nike and Adidas? Their direct-to-consumer (DTC) revenue also dropped by 11% for the year, which is a major red flag for a premium brand trying to control its own narrative and pricing.

• Competition: Intense pressure from established rivals and newer, trend-driven athleisure brands.
• North America Decline: Revenue fell 11%, signaling a deep-seated relevance issue.
• Restructuring Cost: Up to $160 million in charges adds financial strain.
• Macroeconomic Headwinds: Evolving trade policies and tariffs create cost uncertainty.

To be fair, the company is fighting back hard. They are mitigating these risks with a clear strategic reset. They've managed to improve their gross margin by 180 basis points to 47.9% for the full fiscal year 2025, largely by reducing promotional discounting and cutting product/freight costs. This shows a focus on regaining pricing power, which is defintely a good sign for long-term brand health.

Their mitigation strategies are centered on operational discipline and brand focus. They are refining their wholesale strategy to focus on fewer, better products and strengthening key partnerships. They've also shifted to a category-led operating model, aiming to streamline decision-making. Also, in a world where data security is paramount, they maintain a robust cybersecurity program, including third-party testing and a data incident response plan, to manage that critical operational risk.

For a deeper dive into the numbers behind this turnaround effort, you should check out the full post: Breaking Down Under Armour, Inc. (UAA) Financial Health: Key Insights for Investors.

The external risks are mostly out of their hands, like the uncertainty surrounding evolving trade policies and the macroeconomic environment, which could impact demand and costs from tariffs. Asia-Pacific, for example, saw a revenue decline of 13% in fiscal 2025 due to these external pressures. You can't fix a global slowdown, but you can focus on what you control.

Here is a snapshot of the core financial risks and the company's counter-moves:

The path to sustainable growth is a marathon, not a sprint, and Under Armour is still in the early, painful stages of the race.

Growth Opportunities

You're looking for a clear path forward on Under Armour, Inc. (UAA), and the truth is the near-term is about a strategic reset, not a growth surge. The company is trading short-term revenue for long-term brand health. Your focus should be on their execution of the four-pillar strategy, especially the Fall 2025 product lineup.

Under Armour's future growth is hinged on a fundamental shift: moving away from discount-driven sales and back to its roots as a premium, performance-focused brand. This is a tough pivot, but it's the right one. The financial outlook for the current fiscal year (FY2025) reflects this pain, with the company expecting revenue to decline at a low double-digit percentage rate. Here's the quick math on what analysts are seeing for the full fiscal year:

The gross margin expansion is the key positive signal here; it shows the shift to less discounting is working, even if it cuts into sales volume. They are getting more profit from each item sold.

Strategic Initiatives and Growth Drivers

The company's growth plan is built on four core pillars: Product, Story, Service, and Team. It's a comprehensive plan, but the main engine is innovation and market discipline. The most concrete growth driver is the Fall 2025 product lineup, which CEO Kevin Plank has called a significantly strengthened offering. This launch is paired with their largest-ever marketing activation to amplify brand awareness.

A major strategic move is the announced separation from the Curry Brand in November 2025. This partnership was generating an estimated $60 million to $75 million in sales, or about 1% of total revenue. While it's a loss of a star athlete, it allows Under Armour to simplify its focus and redirect resources entirely to the core brand's performance apparel and footwear. That's a clean one-liner: Cut the distraction, focus on the core.

• Product Innovation: Streamlining the product assortment to focus on performance and improved design language.
• Market Expansion: Targeting expansion in key EMEA markets like France, Germany, and Spain.
• Operational Efficiency: The restructuring program, which delivered $35 million in savings in FY2025, is helping fund the brand reset.

For a deeper dive into the company's long-term vision, you should review their Mission Statement, Vision, & Core Values of Under Armour, Inc. (UAA).

Competitive Position and Future Risks

Under Armour's competitive advantage (or lack thereof) is a constant debate. Their strengths include a powerful brand name in performance apparel and a growing Direct-to-Consumer (DTC) channel, which includes over 400 stores globally. Still, some analysts defintely view the company as lacking a true economic moat (a sustainable competitive edge) against giants like Nike and Adidas. The key is whether their product innovation in Fall 2025 will be disruptive enough to justify a higher price point and truly elevate the brand.

The biggest risk is that the North American reset-a projected 14% to 16% revenue decline-doesn't stabilize quickly, or that the new product lineup underperforms. The opportunity is clear: they have the brand equity and the operational savings to reinvest. If they can successfully execute the shift to premium positioning and reduce promotional activity, the 125 to 150 basis point gross margin improvement will translate into significant profitability gains down the road. It all comes down to product execution and brand storytelling.