As the restructuring deadline approaches, Under Armour is still "searching for the bottom"

The restructuring plan is entering the countdown, and Under Armour's growth engine has not yet fully restarted.

As of the second quarter of fiscal year 2026 ending September 30, Under Armour achieved revenue of $1.3 billion, a year-on-year decline of 5%.

Affected by tariff pressures and supply chain fluctuations, the gross margin decreased by 250 basis points year-on-year to 47.3%; the net loss reached $19 million, with an adjusted net profit of $15 million.

In the core North American market, revenue fell 8% year-on-year to $790 million, mainly dragged down by the contraction of full-price wholesale business and weak e-commerce sales.

Currently, Under Armour is actively promoting a recovery in the North American wholesale channel.

Under Armour stated that through continuous negotiations with core partners, it has begun to formulate a multi-year plan aimed at stabilizing the business by fiscal year 2027, laying the foundation for subsequent growth.

During the same period, the Asia-Pacific market, where the Chinese market is located, generated revenue of $179 million, a year-on-year decline of 14%.

However, management pointed out that this data does not fully reflect the actual improvement progress in the Asia-Pacific market, and structural adjustments are gradually taking effect.

Starting from the fourth quarter, Under Armour will pilot a new digital retail store concept to create deeply immersive consumer experiences.

"Consumers are not disappointed or rejecting Under Armour; they have just temporarily forgotten us," emphasized Kevin Plank, President and CEO of Under Armour, at the earnings conference.

Kevin Plank also stated that the promotion of brand activities such as "We Are Football" has significantly increased Under Armour's brand awareness among the 18 to 34 age group from about 60% six months ago to over 80% currently.

Looking ahead to fiscal year 2026, Under Armour expects full-year revenue to decline by 4% to 5% year-on-year, narrowing from a 9% decline in fiscal year 2025.

North America and the Asia-Pacific region are expected to see high single-digit declines, while Europe, the Middle East, and Africa (EMEA) are expected to achieve high single-digit growth.

Management emphasized that the current priority is to stabilize the business fundamentals and clarify the path for sustainable growth planning for fiscal year 2027 and beyond.

In the future, Under Armour will continue to reduce inventory levels while maintaining price and profit margins through stricter procurement controls, accelerating seasonal decision-making efficiency, strengthening procurement discipline, and more precise market operations.

The 18-month restructuring plan initiated by Under Armour is nearing completion.

The plan began in June 2024 when founder Kevin Plank returned to the company and led the initiative, with expected restructuring-related costs between $70 million and $90 million.

As of September 30 this year, the plan has already incurred $103 million in restructuring and impairment costs, as well as $44 million in other transformation-related expenses.

The core strategy of the restructuring covers multi-dimensional business adjustments: tightening promotional mechanisms to improve average transaction value and overall profitability; focusing on the core men's apparel business; and restarting the Flow technology to replicate the Curry series sneakers Currently, Under Armour has placed the Asia-Pacific market, particularly the Chinese market which contributes nearly half of the revenue in this region, at the strategic core.

Since the beginning of this year, there have been frequent activities in the Chinese market. In June, Under Armour signed a contract to become the equipment partner of the Chinese flag football national team and the men's rugby sevens national team, providing professional technical support.

In August, it launched the 2025 CURRY brand tour in Chongqing, introducing the "CURRY CON" sports gathering and "CURRY CAMP" training camp IPs for the first time in Asia.

In November, it officially announced an important personnel appointment: Carol Chen will serve as the Vice President and General Manager for the China region, fully responsible for the strategic and operational management of the Chinese market.

She previously served as the Vice President of Sales for Greater China at Nike and held the position of Vice President and General Manager for the Asia region at Converse.

However, among the various initiatives, the most noteworthy for the market is the rapid establishment of "Under Armour Explor."

This brand is co-created by Under Armour and its Chinese agent "Youlv Outdoor Products (Shanghai) Co., Ltd." Under Armour has licensed the trademark to the partner, which enjoys a high degree of autonomy in product development, store expansion, and channel management.

As of now, Under Armour Explor has entered 22 provinces and municipalities across the country and opened its first flagship store in China at Shanghai Xintiandi in September.

From a brand tradition perspective, Under Armour has long focused on basketball, rugby, and fitness training. Now, with the launch of "Under Armour Explor" in the currently booming outdoor sector, whether this strategic shift can truly open up new opportunities remains to be tested by the market.

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