Under Armour, Inc. (NYSE:UAA) (NYSE:UA) stock surged Friday after an earnings beat and raised outlook collided with one of the market’s heaviest short positions.
Under Armour reported unaudited third-quarter fiscal 2026 results that exceeded analyst expectations for both revenue and adjusted EPS.
Revenue declined 5% YoY to $1.327 billion, surpassing the $1.313 billion estimate. Diluted loss per share was $1.01, while adjusted diluted EPS came in at 9 cents, beating the expected loss of 2 cents.
Gross margin decreased by 310 basis points to 44.4%, primarily due to higher tariffs, pricing pressures, and an unfavorable channel and regional mix.
Restructuring charges were $75 million. The company reported an operating loss of $150 million, while adjusted operating income was $26 million.
Net loss was $431 million, including a $247 million valuation allowance on U.S. federal deferred tax assets. Adjusted net income was $37 million.
CEO Commentary
“Our third quarter adjusted operating results exceeded expectations, and despite a few unfortunate, non-recurring impacts, we’re encouraged by the progress we’re making in the business to reignite brand momentum,” said Under Armour President and CEO Kevin Plank.
“In North America, we believe the December quarter marked the most challenging phase of our business reset, and we expect greater stability ahead as we build on this progress globally.”
Segment and Category Performance
North America revenue fell 10% to $757 million. International revenue rose 3% to $577 million, with EMEA up 6%, Asia-Pacific down 5%, and Latin America up 20%.
Wholesale revenue decreased 6% to $660 million, and direct-to-consumer revenue declined 4% to $647 million. eCommerce revenue fell 7% and accounted for 38% of DTC revenue.
Apparel revenue decreased 3% to $934 million, footwear declined 12% to $265 million, and accessories decreased 3% to $108 million.
Liquidity and Cash Flow
Inventory declined 2% to $1.1 billion. Cash and cash equivalents totaled $465 million. The company held $600 million in restricted investments to repay senior notes due in June 2026 and had no borrowings under its $1.1 billion revolving credit facility.
Net cash provided by operating activities for the nine months was $257 million.
Outlook
For fiscal 2026, Under Armour raised its adjusted EPS guidance to 10 cents to 11 cents, up from the prior range of 3 cents to 5 cents, and above the 5-cent consensus estimate.
The company also widened its GAAP EPS outlook to a loss of $1.25 to $1.24, compared with its previous forecast of a loss of 17 cents to 15 cents and versus the 15-cent loss estimate.
Under Armour also lifted its sales guidance, now expecting revenue of about $4.96 billion, up from the earlier range of $4.91 billion to $4.96 billion, and slightly above the $4.95 billion Street estimate.
Revenue is still projected to decline roughly 4%, while gross margin is expected to fall about 190 basis points, mainly due to higher U.S. tariffs.
Elevated Short Interest
The company has a short float of 66.03 million shares, representing 41.22% of its publicly traded float, indicating an exceptionally high level of short interest, with a large portion of investors positioned for downside or a potential short-covering move if sentiment shifts.
UAA Price Action: Under Armour shares were up 11.46% at $7.00 at the time of publication on Friday, according to Benzinga Pro data.
Photo by Urban Images via Shutterstock
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