The company’s Q2 forecast fell short of expectations, causing its shares to plummet 18% on Friday. Some analysts say investors have an overtly bearish view.
Under Armour (UAA) forecast a weak quarter due to tariff pressures on Friday, causing its shares to plummet 18% and bringing them within touching distance of an all-time low. Still, some retail investors and analysts feel it is too early to dismiss a potential rebound.
Under Armour’s merchandise has been losing appeal in recent years, due to increased competition and partly because its products are seen as being a notch more expensive than rivals, for instance, like Nike (NKE).
Last year, the sportswear brand brought back its founder, Kevin Plank, as CEO and announced a major restructuring plan that includes narrowing its product selection to focus on premium products and men’s offerings.
The stock has “bottomed out at all-time low levels,” according to research firm Stifel. However, the market is discounting the company’s ability to ever return to profitable growth, which is an overly bearish view, it said.
Stifel sees Under Armour’s brand value and global reach supporting an eventual turnaround.
Truist stated that while the bar for FY26 is “materially lower,” it awaits further signs that turnaround initiatives and significant brand investments are helping to drive demand.
As for retail investors, they are bargain hunting this season. The retail sentiment for UAA on Stocktwits has remained ‘extremely bullish’ after the company’s results on Friday, from ‘bullish’ previously.
“$UAA really interesting spot. Major swing opportunity,” a user said.
Just weeks ago, Goldman Sachs initiated coverage with a ‘neutral’ rating, saying that it was mildly positive on Under Armour’s strategic changes.
On Friday, Under Armour estimated additional costs from tariffs for this fiscal year at around $100 million and stated that it is pursuing mitigation strategies, including price adjustments. The company also said it anticipates this year’s profitability to be half of what it was in 2024.
“None of this is ideal. We don’t like this, but also it won’t define our year,” Plank said on the post-earnings call. “We’ve faced bigger headwinds before, and this is simply the next one we’ll get through.”
Plank has touted a vision of transforming Under Armour into a premium brand, reducing the number of products it sells, and eliminating discounts.
The sportswear brand forecast second-quarter revenue to fall between 6% and 7%, which would mark its 10th straight quarter of declines. Analysts were expecting a 3% drop. Profit is expected to be $0.02 per share, on an adjusted basis, way below analysts’ average expectation of $0.26.
In the first quarter, the company earned $0.02 per share, on an adjusted basis, and reported over $1.13 billion in revenue, both of which were in line with estimates.
Revenue in North America slid 5%, while international revenue declined 1%. Wholesale revenue edged down 5%, and direct-to-consumer revenue fell 3%.
Under Armour shares are down 30.4% year-to-date.
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