Shares of Under Armour plummeted in early trading on Tuesday, May 12, 2026, after the athletic-gear maker announced a wider-than-expected loss for its fiscal fourth quarter and issued a cautious profit outlook. The company's financial performance was significantly impacted by rising operational costs, including increased tariffs and product-price inflation, leading to a substantial decline in its stock value.
Cost Pressures Squeeze Profitability
The athletic apparel company's results were adversely affected by a confluence of higher expenses. Notably, Under Armour incurred greater-than-anticipated costs associated with its two-year-old restructuring plan. Following a comprehensive review, the company has decided to extend this plan through at least the end of 2026, increasing the projected cost to approximately $305 million, a rise from the previously estimated $255 million. This extended restructuring effort, coupled with broader inflationary pressures on goods and services, has put considerable strain on the company's bottom line.
Revenue Growth Stalls Amidst Margin Compression
For the quarter ending March 31, 2026, Under Armour's revenue saw a slight decrease of 0.8% year-over-year, totaling $1.171 billion. This figure narrowly surpassed the average analyst estimate compiled by FactSet, which stood at $1.167 billion. However, the company's gross margin, a key indicator of profitability on sales, experienced a significant contraction, dropping 2.2 percentage points to 45.5%. This decline was driven by a 7.8% increase in the cost of goods sold. Furthermore, Under Armour reported $36 million in restructuring-related charges during the quarter, which contributed to a net loss of $43.4 million.
Excluding these non-recurring items, the adjusted per-share loss narrowed to 3 cents, an improvement from the previous year's 8 cents per share. Nevertheless, this adjusted loss was still wider than the FactSet consensus estimate of a 2-cent loss per share. The stock experienced a sharp decline of 14.2% in premarket trading, indicating it was on track to open at its lowest price of the year and suffer its most significant one-day loss in nine months.
Downbeat Outlook Fuels Investor Concern
Looking ahead, Under Armour provided a fiscal 2027 adjusted earnings per share guidance of 8 cents to 12 cents. This forecast falls considerably short of the current FactSet consensus estimate of 23 cents per share. The company attributed this conservative outlook to ongoing external cost pressures, which it anticipates will be partially offset by tariff refunds. The market's reaction underscores investor concern over the company's ability to navigate the challenging cost environment and achieve its growth targets. The extended restructuring and the persistent inflationary headwinds present significant hurdles for Under Armour as it seeks to regain its footing and improve profitability in the coming fiscal years.