The case for & against
Bull & Bear analysis
Bearish
Under Armour, Inc. (NYSE: UAA) is a leading global sports apparel and footwear brand focusing on innovative, high-quality athletic gear tailored to athletes. The company operates in a competitive environment and is known for its performance-driven products. Currently, Under Armour is navigating a critical transformation phase aimed at enhancing product quality, operational efficiency, and market presence while addressing challenges posed by tariffs and fluctuating consumer demand.
Bull says
- ↑Gross margin projected to expand 220–270 bps by FY27 via pricing actions and premium mix
- ↑Brand awareness rose from mid-60s to >80% among youth after “We Are Football” campaign
- ↑Inventory down 3% YoY to $915 M in Q4 FY26, improving cash flow visibility
- ↑DTC revenue up 5% in FY26, reflecting stronger direct-to-consumer engagement
- ↑High earnings yield and strong momentum factor signal attractive value
- ↑Strong book-to-price ratio indicates underlying valuation support
Bear says
- ↓Total revenue fell 4% YoY to $5 B in FY26, with North America down 8%
- ↓Adjusted gross margin contracted 220 bps to 45.7% in FY26 amid tariff pressures
- ↓High short interest and weak profitability scores reflect investor skepticism
- ↓Negative growth metrics raise concerns about expansion ability
- ↓Low historical and revision factor scores signal lack of bullish conviction
- ↓Persistent tariff headwinds and cautious consumer spending may delay turnaround
Investment themes with UA
Apparel↑ +0.83%
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Earnings Call · Q4 2025 · Mgmt. Guidance
Updated 08-07-2026neutral
Transcript signals
Bull points
- Our fourth quarter gross margin increased 170 basis points year over year to 46.7%. This increase was driven by 150 basis points of supply chain benefits due mainly to lower product and freight costs, 80 basis points of pricing benefits, primarily from lower discounting and promotions in our DTC business, as well as some impact from more favorable royalty terms.
- Our cash balance at the end of the quarter was $501 million, and we had no amounts outstanding on our $1.1 billion revolving credit facility.
- Our full year gross margin increased by 180 basis points to 47.9% for passing our outlook. This improvement was driven by reduced freight and product costs and the benefits of lower discounting in our DTC channel, especially in e-commerce.
Bear points
- we recognize an operating loss of $72 million in the fourth quarter. Excluding the transformation expenses, litigation settlement expenses, and restructuring charges, our adjusted operating loss was $36 million.
- As such, We expect our first quarter revenue to decline by 4% to 5%, with North America also experiencing the same rate of decline due to softness in our spring-summer 25 wholesale order book, which we've detailed in our last few calls.
- we are giving the outlook for Q1 to be down 4% to 5%.
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