Under Armour reported a mixed start to fiscal 2027, delivering first-quarter earnings that exceeded analyst expectations even as revenue declined amid continued weakness in its core North American business. The athletic apparel company emphasized profitability improvements over top-line growth, reflecting management’s ongoing turnaround strategy designed to strengthen the brand and improve long-term financial performance.

The results come as global sportswear companies continue navigating cautious consumer spending, elevated promotional activity, and shifting demand across key markets. Investors remain focused on companies capable of protecting margins while repositioning their brands for sustainable growth.

Profitability Improves Despite Lower Revenue

Under Armour reported first-quarter revenue of approximately $1.1 billion, broadly in line with analyst expectations but representing a 3% decline from the same period last year. While sales remained under pressure, the company generated adjusted earnings per share of $0.05, comfortably ahead of the consensus estimate of $0.02.

The company also delivered adjusted operating income of $52.4 million, while gross margin expanded to 54.1%, representing an improvement of approximately 590 basis points year over year. The stronger margin performance reflects lower promotional activity, improved inventory management, and a greater focus on premium products.

Net income totaled approximately $545,000, demonstrating that profitability has stabilized despite softer sales. Meanwhile, operating cash flow reached $109.1 million, highlighting continued financial discipline during the company’s restructuring efforts.

International Growth Offsets North American Weakness

Regional performance remained mixed throughout the quarter. North American revenue declined 9% to approximately $609.8 million, reflecting weaker wholesale demand and cautious consumer spending in the company’s largest market.

In contrast, international markets continued to provide an important source of growth. Revenue in the Europe, Middle East and Africa (EMEA) region increased 12.1% to approximately $278.7 million, while Latin America recorded growth of 7.7%. Revenue in the Asia-Pacific region declined 6.6%, indicating uneven consumer demand across international markets.

The regional divergence illustrates that Under Armour’s global diversification strategy continues to reduce its reliance on North America. Sustaining international momentum will likely remain a critical component of the company’s long-term growth strategy.

Management Prioritizes Margin Expansion Over Revenue Growth

Management reaffirmed its commitment to improving profitability despite lowering its expectations for revenue growth. For fiscal 2027, Under Armour expects adjusted earnings per share between $0.08 and $0.12, broadly consistent with analyst expectations, while forecasting a mid-single-digit revenue decline for the full year.

The company also projected operating income between $140 million and $160 million and expects gross margin to improve by approximately 220 to 270 basis points. For the second quarter, however, management forecast an adjusted loss per share between $0.03 and $0.01, below analyst expectations, reflecting continued investments in the turnaround strategy.

Executives stated that the company is becoming “better positioned to protect profitability” despite updating its revenue outlook. Management also emphasized that the new leadership team is implementing initiatives aimed at strengthening brand positioning, improving operational efficiency, and enhancing long-term shareholder value.

For institutional investors in Israel and globally, Under Armour’s latest results demonstrate that the company’s turnaround remains centered on restoring profitability rather than pursuing aggressive revenue growth. Margin expansion and disciplined cost management have become increasingly important as the athletic apparel industry faces slower consumer demand and heightened competitive pressure.

Looking ahead, investors will closely monitor Under Armour’s execution of its turnaround strategy, international growth momentum, gross margin expansion, and stabilization of North American sales. Future earnings reports will provide important insight into whether the company’s operational improvements can translate into sustainable revenue growth while maintaining stronger profitability in an increasingly competitive global sportswear market.