Q4 2025 Under Armour Inc Earnings Call

Operator: Welcome to the 4th Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on each of the shown phones. to withdraw your questions, please press star and then two. Please note this event is being recorded.

And welcome to the fourth quarter 2025 earnings Conference call, all participants will be in listen only mode.

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Lance Allega: I would now like to turn the conference over to Lance Allega, Senior Vice President, Finance and Capital Markets. Please go ahead.

Liam: I would now like turn the conference over to Liam.

Speaker Change: <unk> Senior Vice President Finance and capital markets. Please go ahead.

Speaker Change: Good morning, and welcome to under armour, <unk> fourth quarter and fiscal 2025 earnings Conference call. Today's call is being recorded and will be available for replay joining.

Lance Allega: Good morning and welcome to Under Armour's fourth quarter Fiscal 2025 Earnings Conference Call. Today's call is being recorded and will be available for replay.

Lance Allega: Joining us on this morning's call are Under Armour President and CEO Kevin Plank and Chief Financial Officer David Bergman. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements that reflect Under Armour management's current views as of May 13, 2025. These statements may include projections about our future performance and are not guarantees of future results. Actual results may differ materially due to several risks and uncertainties, which are described in this morning's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q.

Kevin Plank: Joining us on this morning's call are under armour, President and CEO, Kevin Plank, and Chief Financial Officer, Dave Bergman.

Kevin Plank: I would like to remind everyone that our remarks today will include forward looking statements that reflect under armour management's current views as of May 13th 2025. These.

Kevin Plank: Statements may include projections about our future performance and are not guarantees of future results actual results may differ materially due to several risks and uncertainties, which are described in this morning's press release and in our filings with the SEC, including our most recent annual report on Form 10-K, and quarterly reports on Form 10-Q.

Lance Allega: Today's discussion may also reference non-GAAP financial measures, which we believe provide useful insight into our underlying business trend. When applicable, reconciliations of these non-GAAP measures to their most comparable GAAP counterparts can be found in this morning's press release and on our investor relations website at about.underarmour.com.

Kevin Plank: Today's discussion May also reference non-GAAP financial measures, which we believe provide useful insight into our underlying business trends.

Kevin Plank: If applicable reconciliations of these non-GAAP measures to their most comparable GAAP counterparts can be found in this morning's press release and on our Investor Relations website at about Dot under armour Dot com.

Kevin Plank: With that, I'll turn the call over to Kevin. Thank you, Lance, and everyone joining us. I felt confident as we closed Fiscal 25 and began preparing for this call. Over the past year, we've built greater agility in each organization while making purposeful and strategic choices, elevating the brand through higher-quality revenue decisions, unlocking meaningful SG&A efficiencies, and advancing toward a stronger, healthier Under Armour, all while navigating top-line pressures. We had a clear and disciplined strategy tailored to the environment we faced in Fiscal Year 25 and executed it with focus and determination. Today, we are energized and optimistic about our tangible progress, recognizing, of course, that there is still much work to be done to arrest our current trajectory and drive brand affection.

Kevin Plank: I'll turn the call over to Kevin.

Kevin Plank: Thank you Lance and everyone joining us this morning.

Kevin Plank: I felt confident as we close fiscal 'twenty five and began preparing for this call over the past year, we built greater agility in the organization, while making purposeful and strategic choices elevating the brand through higher quality revenue decisions unlocking meaningful SG&A efficiencies and advancing toward a stronger healthier under armor all.

Kevin Plank: All while navigating topline pressures.

Kevin Plank: We had a clear and disciplined strategy tailored to the environment, we faced in fiscal year, 'twenty, five and executed with focus and determination.

Kevin Plank: Eight we are energized and optimistic about our tangible progress recognizing of course that there is still much work to be done to arrest, our current trajectory and drive brand affection.

Kevin Plank: As we look externally, the business environment is currently evolving, is always evolving, but so are we. Yes, the landscape is more dynamic and visibility beyond the near term is unclear. That's precisely why our work over the last 13 months to build the muscle strength of agility and focus matters. We know what it takes to win, and we're ready. Dave will cover our initial thoughts in the current trade policy environment a bit, but the main takeaway is that we're confident in our ability to manage through whatever lies ahead and stay on off the market. While we were never satisfied with declining revenue, our fourth quarter results allowed us to exceed our Fiscal 25 outlook, demonstrating some of the foundational attraction we're gaining as we reposition the Under Armour brand.

Kevin Plank: As we look externally the business environment is currently evolving is always evolving but so are we.

Kevin Plank: Yes, the landscape is more dynamic and visibility beyond the near term is unclear.

Kevin Plank: Precisely why our work over the last 13 months to build the muscle strength of agility and focus matters, we know what it takes to win and we're ready.

Kevin Plank: Dave will cover our initial thoughts in the current trade policy environment, a bit but the main takeaway is that we're confident in our ability to manage through whatever lies ahead and stay on offense.

Kevin Plank: While we are never satisfied with declining revenue our fourth quarter results allowed us to exceed our fiscal 'twenty five outlook demonstrating some of the foundational traction we're gaining as we reposition the under armour brand.

Kevin Plank: Furthermore, we either exceeded or met the initial outlook we provided last May for every line item with gross margin being our most important metric that benefited from our strategies of reducing promotions in our own DTC business. As we work to regain pricing power, which is the ability to deliver and maintain the full retail asking price. We see a significant long-term opportunity to expand gross margin by reshaping the composition of our business through a strategic refinement in our go-to-market process. By being more comprehensive, ensuring that every detail is considered from a product that only UA can make, this is our reason to exist.

Kevin Plank: Furthermore, we either exceeded or met the initial outlook. We provided last may for every line item with gross margin being our most important metric that benefited from our strategies of reducing promotions and our own DTC businesses.

Kevin Plank: As we work to regain pricing power, which is the ability to deliver and maintain a full retail asking price.

Kevin Plank: We see a significant long term opportunity to expand gross margin by reshaping the composition of our business through strategic refinement in our go to market process by being more comprehensive ensuring that every detail is considered from products that only <unk> can make this as a reason to exist innovation delivered with current or forward style second.

Kevin Plank: Innovation delivered with Kern or Ford style. Sales Force, armed with the technical knowledge of how to explain the UA difference to wholesale partners. Third, the right point of purchase expression at retail or online that tells the story. And finally, of course, social media collaborator and influencer support that provides the permission for our target consumers to engage with and buy UA. We have a great base to build from, and we'll continue to refine this competency in the coming season.

Kevin Plank: Salesforce armed with the technical knowledge of how to explain to you a difference to wholesale partners third the right point of purchase expression retailer online that tells the story and.

Kevin Plank: And finally of course, social media collaborator and Influencers support that provides a permission for our target consumers to engage with and buy UA.

Kevin Plank: We have a great base to build from and we will continue to refine this competency in the coming seasons.

Kevin Plank: Reflecting on my first year back as CEO I am proud of the progress we've made sharpening our strategy streamlining operations and establishing a stronger financial foundation.

Kevin Plank: Reflecting on my first year back as CEO, I'm proud of the progress we've made, sharpening our strategies, streamlining operations, and establishing a stronger financial foundation. Most importantly, we've confirmed our identity as a global sports house brand with undeniable authenticity on any court, pitch, or field across the world. We represent the underdog, those who weren't given all of God's gifts but had to instead work harder to achieve excellence, who had applied the rule of 10,000 hours to master their craft. We like to say that we don't innovate just so that we can run up the score, we innovate just to give our athletes a fighting chance.

Kevin Plank: Most importantly, we've confirmed our identity as a global sports House brand with undeniable authenticity on any court pitch or field across the world.

Kevin Plank: We represent the underdog, those who werent given all God's gift, but had to instead work harder to achieve excellence where to apply the rule of 10000 hours to master their craft we'd.

Kevin Plank: We like to say that we don't innovate just so that we can run up the score we innovate just to give our athletes a fighting chance.

Kevin Plank: This mindset also means continually striving for improvement. And in that spirit, we're becoming leaner and more intentional, shrinking the battlefield wherever possible, which makes challenges manageable and creates the ability for small winds to eventually add up to large ones. We're focusing on high return categories, markets, and initiatives. By simplifying the portfolio, streamlining operations, and exiting lower value activities, we're sharpening execution, boosting efficiency, and directing capital to its highest impact use. Fewer things, done better, will fuel stronger, more consistent value creation. We're working to turn complexity into clarity and clarity into action. Quick strike capabilities drive brand heat through trend led drops.

Kevin Plank: This mindset also means continually striving for improvement.

Kevin Plank: And in that spirit, we're becoming leaner and more intentional shrinking the battlefield wherever possible, which makes challenges are manageable and creates the ability for small wins to eventually add up to large ones.

Kevin Plank: We're focusing on high return categories markets and initiatives.

Kevin Plank: Well find the portfolio streamlining operations and exiting lower value activities, we're sharpening execution boosting efficiency and directing capital to its highest impact uses.

Kevin Plank: Fewer things done better will fuel stronger more consistent value creation.

Kevin Plank: We're working to turn complexity in the clarity and clarity in action Port strike capabilities drive brand heat through trend led drops while our 28 million member global loyalty program deepens engagement and drives repeat purchases at.

Kevin Plank: While our 28 million member global loyalty program deepens engagement and drives repeat purchase. At the same time, streamlining materials, reducing skews, and efforts to optimize our supply chain will help improve speed, lower costs, and unlock future growth. With sharper planning and great visibility, we're working to run a more agile, demand-led model that keeps us aligned with athletes and well-positioned to regain market share and expand margins over the long term. At our core, Under Armour was built on the belief that athletes deserve better. Today, we're fulfilling that promise with greater discipline and precision.

Kevin Plank: At the same time, streamlining materials, reducing skus and efforts to optimize our supply chain will help improve speed lower cost and unlock future growth.

Kevin Plank: With sharper planning and greater study, we're working to run a more agile demand led model that keeps us aligned with athletes and well positioned to regain market share and expand margins over the long term.

Kevin Plank: At our core under armour was built on the belief that athletes deserve better.

Kevin Plank: Hey, we're fulfilling that promise with greater discipline and precision.

Kevin Plank: As we evolve, our move toward a category management operating model represents a structural shift and a game-changer in how we serve athletes. By aligning product, marketing, and regional teams around key categories like training, running, team sports, basketball, sportswear, golf, and licensing. We aim to execute faster and create greater impact. This athlete-first model gives category teams clear ownership, with a single leader responsible for making decisions and acting with speed. At the same time, it centralizes key functions while empowering regional strategies to drive a leaner, more efficient go-to-market engine, strengthening the brand and improving returns. This disciplined approach is how we believe we will unlock value and succeed in the marketplace.

Kevin Plank: As we evolve our move toward category management operating model represents a structural shift and a game changer in how we serve athletes by aligning product marketing and regional teams around key categories like training running team sports basketball sportswear golf and licensing we aim to execute faster and create greater impact.

Kevin Plank: This athlete first model gift category teams clear ownership with a single leader responsible for making decisions and acting with speed at.

Kevin Plank: At the same time, it's centralized key functions, while empowering our regional strategies to drive a leaner more efficient go to market engine.

Kevin Plank: I think the brand and improving returns.

Kevin Plank: Disciplined approach is how we believe we will unlock value and succeed in the marketplace.

Kevin Plank: Stepping back into my current role and due to the 18 month lead times in our industry the priority was product without.

Kevin Plank: Stepping back into my current role and due to the 18 month lead times in our industry, the priority was product. Without great product, there is nothing else. Our Spring-Summer 25 collections hit retail floors with renewed confidence in the fourth quarter. Even in a challenging sales environment, key apparel wins emerged. E-Cure Base Layer, Outperformed Expectations, our Unstoppable collection delivered strong results, and Sportswear is gaining meaningful traction. At the center, we're accelerating innovation to energize athletes and elevate the brand. This quarter, we introduced the boldest slip speed yet, Echo, launched with Stephen Curry at the 2025 NBA All-Star Weekend through a collaboration with luxury car designer Mansur.

Kevin Plank: Without great product there is nothing else.

Kevin Plank: Our spring summer twenty-five collections hit retail floors with renewed confidence in the fourth quarter, even in a challenging sales environment key apparel Windsor merch each year basically our outperformed expectations. Our unstoppable collection delivered strong results and sportswear is gaining meaningful traction.

Kevin Plank: At the center, we're accelerating innovation to energize athletes and elevate the brand this quarter, we introduced the boldest slip speed yet Echo Lodge for Stephan Curry at the 2025 NBA All star weekend through a collaboration with luxury car designer Mansouri.

Kevin Plank: Looking ahead, a premium apparel collection will debut this fall, uniting performance, sport, and style. The Curry brand continues to expand its impact with the steady flow of the new Curry 12 and Dieron's Fox One colorways along with exclusive athlete designs, keeping the brand in view and culturally relevant. On the collaboration front, we've had smaller drops like our UA United Arrows collab in Japan and our partnership with recently acquired UNLESS, debuting at the Milan Design Week. Our regenerative plant-based sportswear collection of hoodies, t-shirts, and shorts, all crafted from natural fibers designed to decompose without leaving toxic residue or microplastics.

Kevin Plank: Looking ahead, our premium apparel collection will debut this fall, adding performance sport and style.

Kevin Plank: Brand continues to expand its impact to the steady flow of the new Curry 12, and Drs box, one color ways, along with exclusive athlete designs, keeping the brand and view and culturally relevant.

Kevin Plank: On the collaboration front, we've had smaller drops like our UA, United Arrows Co lab in Japan, and our partnership with recently acquired unless they're viewing at the Milan design week.

Kevin Plank: Our regenerative plant based sportswear collection of Hoodies T shirts, and shorts, all crafted from natural fibers desire to decompose without leaving toxic residue or micro plastics.

Kevin Plank: As we look towards fall winter 25, our product direction continues to sharpen and her design language is becoming more cohesive.

Kevin Plank: As we look toward Fall-Winter 25, our product direction continues to sharpen, and our design language is becoming more cohesive.

Kevin Plank: Our priorities are clear. Win in men's apparel, unlock the full potential of footwear, and strengthen our connection with women, starting with trusted essentials like bras and bottoms, and then building from there to grow her affinity for Under Armour. We're especially energized by the upcoming UA Halo collection, codenamed Aura, at our recent investor meeting, which represents a premium expansion into next-generation performance sportswear. UA Halo will debut with three distinct footwear offers. Trainer, Runner, and Erasure. Each designed to meet specific athlete needs while uniquely incorporating the UA logo into the midsole structure, adding support and, just like our logo, perfect balance.

Kevin Plank: Our priorities are clear when in men's apparel unlock the full potential of footwear and strengthen our connection with women.

Kevin Plank: Starting with trusted essentials like browse in bottoms, and then building from there to grow her affinity for under armour.

Kevin Plank: We are especially energized by the upcoming UA Halo collection Codenamed Ara at our recent Investor meeting, which represents a premium expansion into next generation performance sportswear.

Kevin Plank: Hey level debut with three distinct footwear offerings trainer runner and eraser each designed to meet specific athlete needs, while uniquely incorporating the UA logo into the mid sole structure, adding support and just like our logo perfect balance.

Kevin Plank: Complimentary footwear is a range of elevated apparel that signals a new era for the brand in both design and innovation. At the same time, we're redefining our core base layer category with Neolas, material fiber breakthrough engineered to revolutionize stretch performance and apparel while being fully sustainable. As we near the completion of our initial 25% SKU reduction over the past year, we're maintaining disciplined inventory management to create space for a stronger, more focused product architecture. Together, these steps will drive brand momentum, enhance profitability, and unlock new growth opportunities. Our ambition, put simply, is to sell so much more of so much less at a much higher full price.

Kevin Plank: Complementing the footwear is a range of elevated apparel that signals a new era for the brand in both design and innovation.

Kevin Plank: At the same time, we are redefining our core base layer category with neo less material fiber breakthrough engineered to revolutionize stretch performance in apparel, while being fully sustainable.

Kevin Plank: As we near the completion of our initial 25% SKU reduction over the past year, we're maintaining disciplined inventory management to create space for a stronger and more focused product architecture.

Kevin Plank: Together these steps will drive brand momentum enhanced profitability and unlock new growth opportunities.

Kevin Plank: Our ambition put simply is to sell so much more of so much less at a much higher full price.

Kevin Plank: And there is a Trojan horse product in the mix to a game changer disguised as a backpack that no way that's W. E. I G. H backpack launched this past Thursday, and a short term test format for us with patent pending auxetic suspension straps that flex with your body to help evenly distribute weight, creating a lighter feeling from.

Kevin Plank: And there's a Trojan horse product in the mix too, a game changer disguised as a backpack, the No Way, that's W-E-I-G-H Backpack, launched this past Thursday in a short term test format for us, with patent pending auxetic suspension straps that flex with your body to help evenly distribute weight, creating a lighter feeling from the bag, it's amazing. We're not only testing the bag, but also the $140 price point in an otherwise $40-65 market. Similar to what we did last year with our Stealth Form Uncrushable Hat, bringing innovation to a $13 to $25 market, introducing the UA performance lens and placing the opening price point at $45.

Kevin Plank: The bag it's amazing.

Kevin Plank: Not only testing the back but also the $140 price point in an otherwise 40 to $65 market.

Kevin Plank: Similar to what we did last year with our stealth for my Crushable hat, bringing innovation to a 13% to $25 market introducing the UA performance lands and placing the opening price point at $45 and that hat is working for us.

Kevin Plank: And that hat is working for us. I'm providing this level of detail about an accessory item because it's meant to serve as a broader metaphor for what we expect to do with our shirts and shoes going forward with four to six products each season for spring and fall. This example is meant to set the edge for what you can expect from our go-to-market for these key 4-6 products each season. Comprehensive go-to-market strategy that inspires consumers to want to buy UA at premium prices.

Kevin Plank: I am providing this level of detail about an accessory item because it's meant to serve as a broader metaphor. What we expect to do with our shirts and shoes going forward with four to six products each season for spring and fall.

Kevin Plank: This example is meant to set the edge for what you can expect from our go to market for these key four to six products each season.

Kevin Plank: Comprehensive go to market strategy that inspires consumers to want to buy UA at premium price points.

Kevin Plank: If you have the chance, please visit our investor page now at aboutunderarmour.com for a more complete visual of our new go-to-market approach and how we're raising the bar here at UA. This includes, as I described earlier, first and foremost, an innovative design-write product that only UA could build. It also encompasses the tools and the story of how our teams are being prescriptively trained to sell the product. Brand Right Point of Sale Execution, and finally Social and Influencer Support to Drive Buzz and Conversion. But this only happens when the product delivers the magic, and we're confident in our pipeline.

Kevin Plank: If you have a chance please visit our investor page now at about under armour Dot com for a more complete visual of our new go to market approach and how we're raising the bar here at <unk>.

Kevin Plank: This includes as I described earlier first and foremost an innovative design right product that only you acre built it also encompasses the tools and the story of how our teams are being prescriptive fully trained to sell the product.

Kevin Plank: Brand right point of sale execution, and finally, social and Influencer support to drive Buzz and conversion.

Kevin Plank: But this only happens when the product delivers the magic and we're confident in our pipeline.

Kevin Plank: We frankly have always had great innovation, but believe the largest opportunity lies in the way we holistically support the product with a story that both explains why it is special and also makes you feel something. This is brand, and great companies buy commodities and sell brand. We've not done a good job enough on the story front for some time, and that changes with the execution we just completed in launching the No Way last week in our testing protocol.

Kevin Plank: We frankly have always had great innovation, but believe the largest opportunity lies in the way we holistically support the product with a story that both explains why it is special and also makes you feel something this is brand and great companies by commodities and sell brand.

Kevin Plank: We've not done a good job enough on the story flat for some time and that changes, but the execution, we just completed and launching but no way last week and our testing protocol.

Kevin Plank: This will prepare us for when we come back with this bag in a few months for broad market distribution in the critical back-to-school period. Over the past nine months, under the leadership of brand president Eric Liedtke, we've made substantial progress in reshaping our narrative. Today, we have a distinct storytelling strategy aligned with our product vision, establishing a cohesive brand voice across all touchpoints. As our storytelling aligns with the strength of our product innovation in Fiscal 26, our objective is to enhance our brand relevance and unlock greater brand differentiation. We're particularly focused on young athletes. We're not increasing our marketing spend.

This will prepare us for when we come back with this bag in a few months for broad market distribution and the critical back to school period.

Speaker Change: Over the past nine months and the leadership of brand President Eric Litke, We've made substantial progress in reshaping our narrative today, we have a distinct storytelling strategy aligned with our product vision, establishing a cohesive brand voice across all touch points as.

Speaker Change: As our storytelling aligns with the strength of our product innovation in fiscal 'twenty six our objective is to enhance our brand relevance and unlock greater brand differentiation.

Speaker Change: We're particularly focused on young athletes, we're not increasing our marketing spend instead were making it work harder with an annual budget of roughly $500 million in some of the world's top sports athletes in assets, we're reallocating resources more intentionally to generate greater brand heat and engagement.

Kevin Plank: Instead, we're making it work harder. With an annual budget of roughly $500 million in some of the world's top sports athletes and assets, we're reallocating resources more intentionally to generate greater brand heat and engagement. Big Moments drive brand affinity, as Stephen Curry continues to break his own three-point record. The night he was set to make three-pointer number 4,000 of his career, we created an epic Dave Chappelle-narrated campaign that didn't just follow the moment, it defined it. The campaign, which ran across social media, was a cultural splash of brand relevance to put UA at the forefront of basketball fans worldwide.

Speaker Change: Big moments drive brand affinity as Stephan Curry continues to break his own three point record. The Nike was set to make three point or number of 4000 of his career, we created an epic Dave Chappelle narrated campaign that didn't just follow the moment it defined it.

Speaker Change: Campaign, which ran across social media was a cultural splash of brand relevance to put you at the forefront of basketball fans worldwide.

Speaker Change: Sure and locate these recent record breaking Boston marathon when wearing an under armour shoe was another decisive moment with a velocity elite showcasing its performance on the world stage, we backed it with a full funnel campaign celebrating her achievement and firmly positioned velocity elite as the go to choice for runners chasing greatness.

Kevin Plank: Sharon Locati's recent record-breaking Boston Marathon win wearing an Under Armour shoe was another decisive moment for the Velocity Elite. Showcasing its performance on the world stage, we backed it with a full-funnel campaign celebrating her achievement and firmly positioned Velocity Elite as the go-to choice for runners chasing greatness. Across the line-up now, from the $250 Elite that Sharon just validated, to the $160 Pro, to the $130 Speed, and the $100 Pace, Velocity meets runners at every level, driving brand and energy, and commercial opportunities. Building on this momentum, we're extending Velocity's design language into one of our highest volume footwear franchises, the $75 SIRT, which will relaunch with its updated design this fall.

Yeah.

Across the lineup now from the $250 elite that Sharon just validated to the $160 pro to the $130 speed and 100 dollar pace velocity meets runners at every level driving brand in energy and commercial opportunity.

Speaker Change: Building on this momentum we're extending velocities design language you know one of our highest volume footwear franchises, the $75 search which will relaunch with its updated design. This fall.

Kevin Plank: Further strengthening segmentation and expanding our reach across price.

Speaker Change: Further strengthening segmentation and expanding our reach across price points.

Kevin Plank: A more visual description of this product or pricing hierarchy is also outlined on our investor page. We encourage you to view this and a few other examples of what is different at UA and how we're raising the bar. Our athlete strategy is equally intentional. New signing like the NBA's Davion Mitchell, WNBA's Nika Mule, and six NIL athletes who we signed in time for this past March Madness and are part of a disciplined approach to re-architecting a future-facing roster that we will continue to new on. Meanwhile, the impact is clear. 27 U.A. teams made the NCAA Tournament, with one of our Under Armour teams from both the women's and men's bracket reaching the Final Four.

Speaker Change: More visual description of this product or pricing hierarchy. It's also outlined on our investor page and we encourage you to view. This in a few other examples of what is different at UA and how we're raising the bar.

Speaker Change: Our athletes strategy is equally intentional new signing like the Nba's day beyond initial wnba's Nico meal and six Nio athletes, who we signed in time for this past March Madness and are part of a disciplined approach to re architect in a future facing roster that we will continue to nuance.

Speaker Change: Meanwhile, the impact is clear.

Speaker Change: Seven UA teams made the Ncw tournament with one of our under armour teams from both the women's and men's bracket, reaching the final four.

Speaker Change: Okay.

Kevin Plank: In golf, we'd like to extend our heartfelt best wishes to long-time Under Armour athlete and one of the truly great people in sports, Jordan Spieth, as he competes this weekend at the PGA Championship, chasing the elusive career Grand Slam. We're all behind you, Jordan. Go get him.

Speaker Change: In golf, we'd like to extend our heartfelt best wishes to long time under armour athletes and one of the truly great people and sports Jordon speed.

Speaker Change: He competes this weekend at the PGA championship chasing the elusive career Grand Slam, where all behind you Jordan go get them.

Speaker Change: And also this fault, we're reaffirming our American football roots when under armour is back on field as an official glove and footwear provider for the NFL strengthening our performance credentials stars like just in Jefferson and Kyle Hamilton, along with this year's number one draft pick Cam Ward further enhance our status in a sports central to our identity.

Kevin Plank: And also this fall, we're reaffirming our American football roots when Under Armour is back on field as an official glove and footwear provider for the NFL, strengthening our performance credentials, stars like Justin Jefferson and Kyle Hamilton, along with this year's number one draft pick Cam Ward, further enhance our status in a sport central to our identity. Additionally, we're evolving our marketing mix to meet modern consumer behavior by emphasizing social, experiential, and digital first branding building. UA Next, which is our global youth activation platform, utilizes events like the Under Armour All-America Football and Volleyball games earlier this year, along with serialized content and grassroots activations that are gaining traction, and partnerships with creators and major colleges like Notre Dame, Wisconsin, Maryland, who help drive scalable, story-driven campaigns.

Speaker Change: Additionally.

We're evolving our marketing mix to meet modern consumer behavior by emphasizing social experiential and digital first brand new building.

Speaker Change: UA next which is our global youth activation platform utilizes events like the under armour, all American football and volleyball games earlier this year.

Speaker Change: Along with serialized content and grassroots activations that are gaining traction and partnerships with creators and major colleges like Notre Dame, Wisconsin, Maryland, who helped drive scalable story driven campaigns.

Kevin Plank: This marks a true shift in our strategy. Fewer, bolder moves, amplified by better storytelling, and smarter deployment of world-class assets. This is how we will build brand energy and win share, with athletes, partners, and shareholders. Under Armour is moving to lead in the dynamic environment among leagues, teams, co-labs, influencers, and of course, NIL, and we're making steady progress toward that goal.

Speaker Change: This marks a true shift in our strategy.

Speaker Change: Your bolder moves amplified by better storytelling and smarter deployment of World class assets. This is how we will build brand energy and win share with athletes partners and shareholders.

Speaker Change: Under armour is moving to lead in a dynamic environment. Among leagues teams co labs, Influencers and of course N I L and we're making steady progress toward that goal.

Speaker Change: Our north American transformation is well underway over the past year, we've been working to redefine our e-commerce channel to become a brand flagship destination that inspires and elevates by reducing promotional days and discounts, we prioritize brand equity and profitability over short term volume.

Kevin Plank: Our North American transformation is well underway. Over the past year, we've been working to redefine our e-commerce channel to become a brand flagship, a destination that inspires and elevates. By reducing promotional days and discounts, we've prioritized brand equity and profitability over short-term volume. Results speak for themselves, more than 10 point increase in the full price sales mix, double digit AUR growth, and a more profitable channel overall. As we enter year two of this transformation, we'll move even further beyond the outlet model to build a more dynamic, connected, and premium digital platform, applying proven lessons from our success in EMEA to accelerate progress.

Speaker Change: The results speak for themselves more than 10 point increase in our full price sales mix double digit AUR growth and a more profitable channel overall.

Speaker Change: As we enter year two of this transformation will move even further beyond the outlet model to build a more dynamic connected and premium digital platform.

Speaker Change: <unk> proven lessons from our success in EMEA to accelerate progress.

Speaker Change: We also see a clear opportunity to strengthen our value proposition in physical retail driving productivity across our formats remains a top priority.

Kevin Plank: We also see a clear opportunity to strengthen our value proposition in physical retail. Driving productivity across our formats remains a top priority. In factory house stores, our largest North American footprint, we are significantly reducing store-wide sales, events and offering 365 days a year of full price on some products too. Focusing on skew rationalization to create a more curated, premium experience that enhances consumer clarity and operational efficiency. Our brand houses represent the pinnacle of UA retail, and we're investing accordingly. Our new campus headquarters flagship store is performing ahead of expectations, and the new aesthetic is helping us shape our next retail concept to model for the more than 2,000 Under Armour-branded stores around the world.

Speaker Change: And factory House stores, our largest north American footprint, we are significantly reducing store wide sales events and offering 365 days a year of full price on some products to.

Speaker Change: Focusing on SKU rationalization to create a more curated premium experience that enhances consumer clarity and operational efficiency.

Speaker Change: Our brand houses represent the pinnacle of UA retail and were investing accordingly, our new campus headquarters flagship store is performing ahead of expectations and the new aesthetic is helping us shape. Our next retail concept to model for more than 2000 and under armour branded stores around the world allow.

Kevin Plank: Allowing for flexibility in store size to fit the specific market. Growing our store base is a future ambition as we become more deliberate with our product and the stories that sell them. Starting in Fiscal 26, we'll roll out a tiered, market-specific strategy to enhance merchandising and drive productivity across our network. Wholesale remains critical and is evolving. We owe our partners great product and a compelling story that results in great sell-through at full price. We know where we want to be and who we want to partner with, and we're using this time to strengthen those key relationships with transparency of our brand direction, underpinned by our conviction in offering fewer products with more intention that could only come from UA.

Speaker Change: Allowing for flexibility and store size to fit the specific market.

Speaker Change: Growing our store base as a future ambition as we become more deliberate with our product in the stores sell them.

Speaker Change: Starting in fiscal 'twenty, six will rollout of tiered mark specific strategy to enhance merchandising and drive productivity across our network.

Speaker Change: Wholesale remains critical and is evolving we all our partners great product and a compelling story that results in great sell through at full price.

Speaker Change: We know where we want to be and who we want to partner with and we're using this time to strengthen those key relationships with transparency of our brand direction underpinned by our conviction in offering fewer products with more intention that could only come from Yue.

Kevin Plank: Our category-led model significantly helps there, combined with a sharpened go-to-market discipline that we expect will result in greater demand for both the consumers we have today and the new ones we are inviting to engage with. In EMEA, our top performing region in Fiscal 25, we're maintaining the discipline to protect the brand strength we've built. Strong partnerships and a clear category focus will drive momentum. And Fiscal 26 will concentrate on key growth markets like France, Spain, and Germany while deepening brand advocacy across global football, running, and sportswear anchored in training.

Speaker Change: Our category led model significantly helps there combined with a sharp and go to market discipline that we expect will result in greater demand for both the consumers we have today and the new ones, we are inviting to engage with us.

Speaker Change: In EMEA, our top performing region in fiscal 'twenty, five or maintaining the discipline to protect the brand strength we built.

Speaker Change: Strong partnerships and a clear category focus will drive momentum.

Speaker Change: In fiscal 'twenty, six will concentrate on key growth markets, like France, Spain, and Germany, while deepening brand advocacy across global football running in sportswear anchored in training.

Speaker Change: In APAC, we're resetting the marketplace now to foster sustainable premium growth.

Kevin Plank: In APAC, we're resetting the marketplace now to foster sustainable premium growth. Despite a highly promotional environment, our efforts to streamline inventory, reduce discounting, and enhance sales quality are laying the groundwork for healthier expansion. Just a few months in now, though brief, early signs indicate that it's working. UA's strong performance-driven brand equity and best-in-class distribution infrastructure position us to scale with appropriate patience and pace. will continue to apply proven strategies from North America in EMEA to drive full price demand across key categories.

Speaker Change: Quite a highly promotional environment, our efforts to streamline inventory reduced discounting and enhanced sales quality are laying the groundwork for healthier expansion.

Speaker Change: Just a few months in now no brief early signs indicate that it's working you a strong performance driven brand equity and best in class distribution infrastructure position us to scale with appropriate patients and pace.

Speaker Change: We will continue to apply proven strategies from North America, and EMEA to drive full price demand across key categories.

Speaker Change: At the core of our progress as a high caliber leadership team United by our purpose and built to drive sustained performance. We haven't just added talent. We've attracted exceptional proven leaders many of whom you met at our December Investor meeting.

Kevin Plank: At the core of our progress is a high-caliber leadership team, united by purpose and built to drive sustained performance. We haven't just added talent, we've attracted exceptional, proven leaders, many of whom you met at our December Investor Meet. This represents a structural shift that signals a cultural transformation at Under Armour. A higher standard of excellence is firmly taking root, and I'm committed to ensuring the leadership strength translates into sharper execution and improved results. We're quite simply raising the bar at UA. The impact is clear, and it is our culture that stands to benefit. The move to our new headquarters has accelerated this shift, infusing the company with fresh energy and new ideas.

Speaker Change: This represents a structural shift signals a cultural transformation at under armour higher standard of excellence is firmly taking route and I'm committed to ensuring the leadership strength translates into sharper execution improved results, we're quite simply raising the bar at UA.

Speaker Change: The impact is clear and it is a culture that stands to benefit the move to our new headquarters has accelerated the shift infusing the company with fresh energy and new ideas.

Kevin Plank: While cultural change takes time, the foundation is firmly in place, and the momentum is unmistakable. We're building a more connected, agile, and performance-driven Under Armour that seems to be taking hold.

Speaker Change: Cultural change takes time its foundation is firmly in place and the momentum is unmistakable. We're building a more connected agile and performance driven under armour that seems to be taking hold.

Speaker Change: We also welcomed three new board members, Don Fitzpatrick Gene Smith, and Rob Sweeney.

Kevin Plank: We also welcome three new board members, Dawn Fitzpatrick, Gene Smith, and Rob Sweeney. Each bringing expertise in finance, operations, and sports. Their leadership directly supports our strategic priorities, accelerating financial performance, strengthening our connection with athletes, and fueling brand heat. They'll be instrumental as we unlock new growth and position UA for success.

Speaker Change: Each bringing expertise in finance operations and sports.

Speaker Change: Their leadership directly supports our strategic priorities accelerating financial performance shaping our connection with athletes and fueling brand heat.

Speaker Change: There'll be instrumental as we unlock new growth and position us for success.

Speaker Change: As we enter fiscal 'twenty six sustaining momentum across product story service and team is critical for advancing our brand transformation, we move forward with clarity conviction and discipline thoroughly attuned to the shifting global landscape and ready to navigate it with agility and resilience.

Kevin Plank: As we enter Fiscal 26, sustaining momentum across product, story, service, and team is critical for advancing our brand transformation. We move forward with clarity, conviction, and discipline, thoroughly attuned to the shifting global landscape and ready to navigate it with agility and resilience. Our ambition goes beyond a comeback, it's a reinvention. Under Armour's greatest chapters remain in front of us, a future driven by sharper focus, bolder innovation, and deeper connections with athletes. We're operating with urgency. While we may have more time than we think, we do not have as much time as we would like. So we're just getting to work.

Speaker Change: And our ambition goes beyond to come back it's a reinvention under Armours greatest chapters remain in front of us a future driven by sharper focus bolder innovation and deeper connections with athletes, we're operating with urgency. While we may have more time, and we think we do not have as much time as we would like so we're just getting to work.

Kevin Plank: With the right team in place, a clear strategic vision, and an unwavering commitment to excellence, we're not merely preparing for the future, we are determined to dictate it.

Speaker Change: With the right team in place a clear strategic vision and unwavering commitment to excellence, we're not merely preparing for the future we are determined to dictate it.

David Bergman: With that, I'll turn it over to Dave who will walk us through our fourth quarter Fiscal 25 results and provide further insight into our outlook for the first quarter. Dave, over to you. This brings us straight into our fourth quarter Fiscal 25 results, which exceeded expectations and allowed us to surpass our full year Fiscal 25 outlaw. From a revenue perspective, the fourth quarter was down 11% to $1.2 billion. The results by region are as follows. North American Revenue declined 11% primarily due to a decrease in our DTC business. This event was driven by lower e-commerce sales resulting from our ongoing efforts to limit promotional activity.

Speaker Change: And with that I'll turn it over to Dave Who'll walk us through our fourth quarter fiscal 25 results and provide further insight into our outlook for the first quarter, Dave over to you.

Dave Chappelle: Thanks, Kevin.

Dave Chappelle: Straight into our fourth quarter fiscal 25 results, which exceeded expectations and allowed us to surpass our full year fiscal 'twenty five album.

Dave Chappelle: From a revenue perspective.

Dave Chappelle: The quarter was down 11% to $1 2 billion the results by region followed.

Dave Chappelle: With American revenue declined 11%, primarily due to a decrease in our DTC business, which was driven by lower e-commerce sales, resulting from our ongoing efforts limited promotional activities.

David Bergman: Accompanied by a decline in revenue from our owned and operated stores. And in wholesale, we experienced a decrease in full price sales, which was partially offset by an increase in the timing of sales to the third-party off-price . Revenue in EMEA decreased 2%, although it remained flat on a currency-neutral basis. Furthermore, the decline in full-price wholesale was partially offset by growth in our direct consumer, distributor, and off-price. Aligned with our expectations, revenue in APAC was down 27%. or 26% when adjusted for currency fluctuations. This decrease was primarily due to the highly competitive and promotional environment, as well as our efforts to foster a healthier business.

Dave Chappelle: This was accompanied by a decline in revenue from our owned and operated stores.

Dave Chappelle: Within wholesale we experienced a decrease in full price sales, which was partially offset by an increase in the timing of sales to the third party off price channel.

Dave Chappelle: Revenue in EMEA decreased 2%, although it remained flat on a currency neutral basis. Furthermore decline in full price wholesale partially offset by growth in our direct to consumer distributor and off price businesses.

Dave Chappelle: Aligned with our expectations revenue in APAC was down 27%.

Or 26% when adjusted for currency fluctuations.

Dave Chappelle: This decrease was primarily due to the highly competitive and promotional environment as well as our efforts to foster a healthier business, including adopting some of the same strategies. We've employed in North America for our E Commerce operations.

David Bergman: Adopting some of the same strategies we've employed in North America for our e-commerce operations. Within Latin America, revenue declined 10% primarily due to unfavorable foreign exchange impacts. Without FX, currency neutral revenue rose by 3% in the quarter, driven by our distributors. For the channel perspective, wholesale revenue decreased 10% driven by lower full price sales, partially offset by growth in the off-price channel, and the timing of those sales to third party partners. Our consumer revenue is down 15%, mainly due to a 27% decrease in e-commerce sales stemming from ongoing efforts to establish a more premium online presence.

Dave Chappelle: Within Latin America revenue declined 10%, primarily due to unfavorable foreign exchange impacts without FX currency neutral revenue rose by 3% in the quarter driven by our distributor business.

Dave Chappelle: From a channel perspective wholesale revenue decreased 10% driven by lower full price sales, partially offset by growth in the off price channel and the timing of those sales to third party partners.

Dave Chappelle: Direct to consumer revenue was down 15%, mainly due to a 27% decrease in E. Commerce sales stemming from ongoing efforts to establish a more premium online presence through fewer promotions and discounts.

David Bergman: Sales at our owned and operated stores declined by 6% during the quarter. Licensing was down 15% primarily due to the decision to bring our socks business in-house. This will be the final quarter of comparing these business changes. Finally, by product type, apparel revenue was down 11%. Softens across most categories in the quarter. Partially offset by Strength and Outdoor. We're declined by 17% selecting in part our ongoing proactive portfolio management efforts as we work to optimize segmentation and assortment. And our accessories business was up 2% in the quarter. We strengthened team sports and run. category also benefited from our decision to bring SOC in-house.

Dave Chappelle: Sales at our owned and operated stores declined by 6% during the quarter.

Dave Chappelle: Licensing was down 15%, primarily due to the decision to bring our socks business in house.

Dave Chappelle: The final quarter of comparing business change.

Dave Chappelle: Finally by product type apparel revenue was down 11% with softness across most categories in the quarter, partially offset by strength in outdoor.

Dave Chappelle: Footwear declined by 17%, reflecting in part our ongoing proactive portfolio management efforts as we work to optimize segmentation and assortment.

Dave Chappelle: In our accessories business was up 2% in the quarter with strength and team sports and run.

Dave Chappelle: The category also benefited from our decision to bring stocks in house.

Dave Chappelle: Our fourth quarter gross margin increased 170 basis points year over year to 46, 7%.

David Bergman: 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 royalties. and roughly 20 basis points were gained from favorable foreign currency impacts and products. These benefits were partially offset by roughly 90 basis points of unfavorable channel . Moving to SG&A, which increased 1% to $607 million in the fourth quarter. Including roughly $16 million in transformation expenses related to our fiscal 2025 restructuring plan and around $5 million in litigation settlement expenses .

Dave Chappelle: This increase was driven by 150 basis points of supply chain benefits due mainly to lower product and freight costs.

Dave Chappelle: 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.

Dave Chappelle: And roughly 20 basis points, where gain from favorable foreign currency impacts and product mix.

Dave Chappelle: These benefits were partially offset by roughly 90 basis points of unfavorable channel and regional mix.

Dave Chappelle: Moving to SG&A, which increased 1% to $607 million in the fourth quarter excluding.

Dave Chappelle: Excluding roughly $16 million and transformation expenses related to our fiscal 2025 restructuring plan and around $5 million and litigation settlement expenses.

David Bergman: Our adjusted SG&A expense was $586 million, up 7% versus last year's adjusted number. Driven primarily by higher marketing expenses and incentive compensation. RCOF set by savings from ongoing cost management efforts, including lower consultancy. Next, during the fourth quarter, we recognize $16 million in restructuring charges. Combined with the $16 million in transformation expenses recorded in SG&A, we had approximately $32 million in restructuring charges and related expenses for the quarter. So far, under our fiscal 2025 restructuring plan, we have recognized $89 million in restructuring charges and related transformation expenses, of which $55 million is cash-related and $34 million is non-cash.

Dave Chappelle: Our adjusted SG&A expense was $586 million up 7% versus last year's adjusted number.

Dave Chappelle: This was driven primarily by higher marketing expenses and incentive compensation.

Dave Chappelle: Partially offset by savings from ongoing cost management efforts, including lower consulting expenses.

Dave Chappelle: Next during the fourth quarter, we recognized $16 million in restructuring charges and combined with the 16 million in transformation expenses recorded in SG&A, we had approximately 32 million in restructuring charges and related expenses for the quarter.

Dave Chappelle: So far under our fiscal 2025 restructuring plan, we have recognized $89 million in restructuring charges and related transformation expenses of which $55 million is cash related and 34 million is noncash.

David Bergman: Expectations for total charges and expenses under this plan remain within a range of $140 to $160 million, and we anticipate the remainder will occur by the end of fiscal 2026.

Dave Chappelle: Expectations for total charges and expenses under this plan remain within a range of $140 million to $160 million and we have.

Dave Chappelle: Dissipate the remainder will occur by the end of fiscal 2026.

Dave Chappelle: Moving down the P&L, we recognized an operating loss of $72 million in the fourth quarter.

David Bergman: Moving down to P&L. We recognize an operating loss of $72 million in the fourth quarter. Transformation Expenses, Litigation Settlement Expenses, and Restructuring Charges. Our adjusted operating loss was $36,000. The bottom line, our reported diluted loss per share was $0.16, while our adjusted diluted loss per share was $0.80. Shifting to our bounce. Inventory was down 1% year-over-year to $946 million, which aligned with our expectations to finish in line with last year's levels. 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. Additionally, we repurchased $25 million worth of our Class C stock during the fourth quarter.

Dave Chappelle: Excluding the transformation expenses litigation settlement expenses and restructuring charges, our adjusted operating loss was $36 million.

Dave Chappelle: On the bottom line, our reported diluted loss per share was <unk> 16.

Dave Chappelle: While our adjusted diluted loss per share was <unk> <unk>.

Dave Chappelle: Shifting to our balance sheet.

Dave Chappelle: Inventory was down 1% year over year to $946 million, which align with our expectations to finished in line with last year's level.

Dave Chappelle: 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.

Dave Chappelle: Additionally, we repurchased $25 million worth of our class C stock during the fourth quarter retiring $4 1 million shares.

David Bergman: Retiring 4.1 million shares So far, under our three-year, $500 million share repurchase program, Repurchased $90 million of our Class C stock, retiring 12.8 million shares.

Dave Chappelle: So far under our three year $500 million share repurchase program, we have repurchased $90 million of our class C stock retiring 12 8 million shares.

Dave Chappelle: Now ill briefly into our full year results.

David Bergman: Now, going briefly into our full-year results. Revenue declined 9% to $5.2 billion, slightly better than our expected 10% decline. American Revenue was down 11% for the year, AMEA was flat, and APAC Revenue declined 13%. 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. Full Year SG&A Expenses Rose 8% to $2.6 Billion Excluding a $266 million litigation settlement expense. Approximately $31 million in transformation expenses. 28 million impairments related to exiting our previous headquarters.

Dave Chappelle: Fiscal 'twenty five revenue declined 9% to $5 2 billion slightly better than our expected 10% decline.

Dave Chappelle: North American revenue was down 11% for the year EMEA was flat in APAC revenues declined 13%.

Dave Chappelle: Our full year growth.

Dave Chappelle: Increased by 180 basis points to 47, 9% or passing our outlook.

Dave Chappelle: This improvement was driven by reduced freight and product cost and the benefits of lower discounting in our DTC channel, especially in E Commerce.

Dave Chappelle: Full year, SG&A expenses rose, 8% to $2 6 billion.

Dave Chappelle: Excluding a $266 million litigation settlement expense.

Dave Chappelle: Approximately 31 million in transformation expenses, and a 28 million impairment related to exiting our previous headquarters adjust.

David Bergman: Adjusted SG&A expenses decreased by 2% to $2.3 billion. Client was primarily attributed to cost management initiatives, including benefits realized to date from our Fiscal 2025 Restart. Operating loss was $185 million. Transformation Expenses, Restructuring, Impairment Charges, and Litigation Settlement Expenses. The adjusted operating income was $198 million, slightly ahead of our prior outlook of $185 to $195 million. The full year diluted loss per share was $0.47 and our adjusted diluted earnings per share was $0.31. above our previous outlook of 28 to 30.

Dave Chappelle: Adjusted SG&A expenses decreased by 2% to $2 3 billion.

Dave Chappelle: This decline was primarily attributed to cost management initiatives, including benefits realized to date from our fiscal 2025 structuring plan.

Dave Chappelle: Operating loss was $185 million and excluding transformation expenses restructuring impairment charges and litigation settlement expenses.

Dave Chappelle: Adjusted operating income was $198 million slightly ahead of our prior outlook of $185 million to $195 million.

Dave Chappelle: Full year diluted loss per share was <unk> 47.

Dave Chappelle: And our adjusted diluted earnings per share was 31 cents, which was above our previous outlook of 28 to 30 FES.

Speaker Change: Moving into fiscal 'twenty six building on Kevin's remarks, it's.

David Bergman: Moving into Fiscal 26, building on Kevin's remarks. It is important to recognize the plan we established before the announcement of recent tariff changes. At the end of the second year of our turnaround, we've made measured progress across our strategic, operational, and financial objectives. for the recent changes in trade policy. Translated into an expectation of a modest top line contraction for fiscal 26 as we continue to prioritize higher quality revenue and brand strength. while driving further gross margin expansion and getting back to leveraging our SG&A cost structure. All together, driving operating income that was set to be ahead of fiscal 25 levels.

Speaker Change: It's important to recognize the plan we established before the announcement of recent recent tariff changes.

Speaker Change: As we enter the second year of our turnaround we've made measured progress across our strategic operational and financial objectives.

Before the recent changes in trade policy. This translated into an expectation of a modest top line contraction for fiscal 'twenty six as we continue to prioritize higher quality revenue and brand strength.

Speaker Change: While driving further gross margin expansion and getting back to leveraging our SG&A cost structure.

Speaker Change: Altogether driving operating income that was set to be ahead of fiscal 'twenty five levels.

Speaker Change: However, since changes in trade policy are expected to have a significant impact we are proactively evaluating a range of mitigation strategies.

David Bergman: However, since changes in trade policy are expected to have a significant impact, we are proactively evaluating a range of mitigation strategies. Exploring Potential Cost-Sharing Initiatives with Key Partners. Diversifying our sourcing footprint to minimize exposure to affected regions where feasible. and examining targeted price adjustments to protect margins in areas with unique pricing power. To provide a clearer view of our global sourcing profile, approximately 30% of our volume is sourced from Vietnam. 20% from Jordan. 15% from Indonesia. The remaining third is strategically diversified across a number of other countries. representing a low- to mid-single-digit percentage. Deliberate diversification creates a well-balanced portfolio, reducing reliance on any single market and enhancing our ability to navigate geopolitical costs and supply chain complexities from a position of strength.

Speaker Change: This includes exploring potential cost sharing initiatives with key partners.

Speaker Change: First the final sourcing footprint to minimize exposure to affected regions, where feasible and examining targeted price adjustments to protect margin and areas with unique pricing power.

Speaker Change: Provide a clearer view of our global sourcing profile approximately 30% of our volumes sourced from Vietnam 20.

Speaker Change: 20% from Jordan and 15% from Indonesia.

Speaker Change: The remaining third is strategically diversified across a number of other countries each representing a low to mid single digit percentage.

Speaker Change: This deliberate diversification creates a well balanced portfolio, reducing our reliance on any single market and enhancing our ability to navigate geopolitical off and supply chain complexities from a position of strength.

Speaker Change: We also remain focused on managing SG&A by enhancing organizational efficiency tightening discretionary spending reducing travel and third party costs and concentrating investments on initiatives directly supporting near term revenue and margin expectations.

David Bergman: We also remain focused on managing SG&A by enhancing organizational efficiency, tightening discretionary spending, reducing travel and third-party costs, and concentrating investments on initiatives directly supporting near-term revenue and margin expectations. Given the significant uncertainty that tariffs create concerning potential shifts in consumer demand and rising product costs, we believe limiting our outlook to the first quarter of Fiscal 26 is prudent. Measured Approach demonstrates our commitment to maintaining flexibility and ensuring transparency as we navigate the evolving environment. As such, we expect our first quarter revenue The United States is experiencing a 4-5% decline, with North America also experiencing the same rate of decline due to softness in our Spring-Summer 25 Wholesale Order Book.

Speaker Change: Given the significant uncertainty of tariffs create concerning potential shifts in consumer demand and rising product costs, we believe limiting our outlook to the first quarter of fiscal 'twenty is prudent.

Speaker Change: This measured approach demonstrates our commitment to maintaining flexibility and ensuring transparency as we navigate the evolving environment.

Speaker Change: 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 twenty-five wholesale order book, which we detailed in our last few calls.

David Bergman: Detailed in our last few calls. We anticipate high single-digit revenue growth in EMEA, supported by FX Tailwinds and the Easter Shift. along with a mid-team percentage decline in APAC. Continue actions to lay the groundwork towards a healthier business. Regarding gross margin, we expect an expansion of 40 to 60 basis points compared to the previous year. Includes Anticipated Benefits from a More Favorable Product Product Break Costs, and Favorable Foreign Exchange It is important to highlight, however, that changes in tariff policy are not expected to significantly impact our first quarter. For SG&A, we remain focused on cost management in the context of our expected top-line decline in the current operating environment.

Speaker Change: We anticipate high single digit revenue growth in EMEA supported by FX tailwind and the Easter shift.

Speaker Change: Along with a mid teen percentage decline in APAC as we continue actions to lay the groundwork towards a healthier business.

Speaker Change: Regarding gross margin, we expect an expansion of 40 to 60 basis points compared to the previous year. This.

Speaker Change: This includes anticipated benefits from a more favorable product mix reduced product freight costs and favorable foreign exchange rates.

Speaker Change: It is important to highlight however changes in tariff policy are not expected to significantly impact our first quarter.

Speaker Change: For SG&A, we remained focused on cost management in the context of our expected top line decline in the current operating environment.

David Bergman: including anticipated transformation expenses related to our fiscal 2025 restructuring plan. Just as you may expect, expenses are expected to leverage slightly. https://www.yassine.com Bringing this together, we expect adjusted operating income to reach $20 million to $30 million. Adjusted diluted earnings per share to be $0.01 to $0.03 in the first quarter of FY26. While the environment remains dynamic, the sharper agility and stronger processes we've embedded Transcription by Transcription Outsourcing, LLC. Most importantly, we have the right. Energized, Resilient, and Relentlessly Committed to Delivering an Authentic Brand and Business Transformation. Unwavering in our strategic priorities. Firmly believing they position us to unlock our full potential while maintaining the flexibility to adapt.

Speaker Change: Excluding anticipated transformation expenses related to our fiscal 2025 restructuring plan.

Speaker Change: Adjusted SG&A expected expenses are expected to leverage slightly compared to the prior year.

Speaker Change: Driven mainly by ongoing savings from actions taken under our restructuring plan and other spending efficiencies.

Bringing this together we expect adjusted operating income to reach 20 million to $30 million.

Speaker Change: And adjusted diluted earnings per share to be one to three in the first quarter of fiscal 'twenty six.

Speaker Change: In closing, while the environment remains dynamic.

Speaker Change: Harper agility and stronger processes, we've embedded give us confidence in our ability to manage near term challenges, while staying squarely focused on long term value creation.

Speaker Change: Most importantly, we have the right team energized.

Speaker Change: <unk> resilience and relentlessly committed to delivering an authentic brand and business transformation.

Speaker Change: We remain unwavering in our strategic priorities firmly believing they position us to unlock our full potential while maintaining the flexibility to adapt.

Operator: We are ready and built for what's next.

Speaker Change: Simply put we are ready and built for what's next.

Operator: Now we'll open the call to questions. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time, your question has been addressed and you would like to withdraw your question. Press Start and then 2. Please pause momentarily while we assemble our roster.

Speaker Change: Now, we'll open the call to questions operator.

Speaker Change: We will now begin the question and answer session. You ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two.

Speaker Change: He's pause momentarily, while we assemble our roster.

Speaker Change: The first question comes from Jay sole with UBS. Please go ahead.

Jay Sole: The first question comes from Jay Sole with UBS, please go ahead. Great, thank you so much. I'd love to ask about the North American reset.

Jay Sole: Great. Thank you so much I'd love to ask about the North American reset can you just give us a little bit more color in diving a little bit more about how it's working and how it's shaping up in fiscal 'twenty.

Jay Sole: Just give us a little bit more color and dive in a little bit more about how it's working and how it's shaping up in fiscal 26.

Speaker Change: Yeah, Hi, Jay Thank you.

Kevin Plank: Yeah, hi, Jay. Thank you.

Kevin Plank: Well, first and foremost, this always begins with leadership. And we're very fortunate to have Kara Trent, who's my our partner here. And she's also the one who ran this play for us in Europe. So she is battle ready, and has brought that now in the chair for the last 14 or so months here in North America. And so that being the playbook that we're running here, it's just it's great practice for us and to have Kara. So that kind of leadership is, is great. And I'm happy to say that we've built a team as well.

Speaker Change: Well first and foremost as always begins with leadership and we're very fortunate to have care Trent.

Speaker Change: Who is my our partner here and she is also the one who ran this play for us in Europe. So.

Speaker Change: She is battle ready and has brought that now in the chair for the last 14 or so months here in North America.

Speaker Change: So that being the playbook that we're running here.

Speaker Change: It's great practice for us.

Speaker Change: Half Kara so that kind of leadership is great and I'm happy to say that we build the team is substantially built around care as well.

Kevin Plank: We use this theme of modeling the behavior that we want to create, meaning we've gotten to work and taking ourselves out of bad situations with, you know, some of the constant discounting that I think, for too long, we were leading the conversation with consumers with, it was wishful thinking for us to get us positive. And that's why we use a metaphor of something like the backpack. You know, I think it was, it was our attempt to just try to demonstrate this is what we think excellence looks like. So trying to show you even through something like an excessive amount of work that we can do, that we can do in the industry, when we get it right, because I don't believe we've done that.

Speaker Change: We use the same of modeling the behavior that we want to create meaning we've gotten to work and taking ourselves out of bad situations with some of the constant discounting, but I think for too long, we are leading the conversation with consumers with it was wishful thinking for us to get us positive and that's why we use the metaphor of something like the backpack.

Speaker Change: I think it was it was our attempt to just try to demonstrate this is what we think excellence looks like so trying to show you even through something like an accessory when we get it right because I don't believe we've done that I think we've made great product, but I think we've been somewhat limited to walking into a store and frankly, finding close on a hanger the story for a company like under armour that.

Kevin Plank: I think we've made great product. But I think we've been somewhat limited to walking into a store and frankly, finding clothes on a hanger. The story for a company like Under Armour that spends years validating our factories, our fabrics, the products that we build, I don't believe that that story had come through. So this comprehensive, I think, metaphor of number one, you need a great product. So we use a backpack because you put it on, you're like, wow, it feels like half the weight in there. Number two, the ability for us to communicate that to our, to our sales forces, and then to understand how to sell that.

Speaker Change: <unk> years, validating our factories are fabrics.

Speaker Change: Alex that we build I don't believe that story had come through so.

Speaker Change: This comprehensive I think metaphor of number one you need a great product. So I'll use a backpack because you put it on you like while it feels like half the weight and there and number two the ability for us to communicate that to our to.

Speaker Change: Our sales forces and then to understand how to sell that and number three the appropriate in store.

Kevin Plank: Number three, the appropriate in-store POP, what it's going to look like. And then finally, again, as I said in my prepared remarks, the way that we're engaging with social media and changing away from just traditional media into things which are more relatable to that 16 to 24 year old we're looking to go to. I'm not sure we have a timeline, but what we will have is much better execution the ability for us, and I say model the behavior. If we can do that, what I described with the backpack, and you imagine laying that into something like the Halo trainers that releases our unstoppable collection, or as you'll see, we're reinventing our base layer, building on the base and core that we have, but looking forward to what else that can be, I think begins to be the opportunity that we have.

Speaker Change: It's going to look like and then finally again as I said in my prepared remarks, the way that we're engaging with social media and changing away from just traditional.

Speaker Change: Traditional media into things, which are more related to that 6% to 24, you'll be looking to go to.

Speaker Change: I'm not sure we have a timeline, but what we would do will have as much better execution the ability for us when I say model. The behavior. If we can do that what we what I described with the backpack and you imagine laying that into something like the halo trainers that releases, our unstoppable collection, whereas you'll see we're reinventing our base layer building on the base and core that we.

Speaker Change: Have but looking forward to what else that can be I think begins to be the opportunity that we have so.

Kevin Plank: So there's, you know, I feel like the, you know, prior to April 2nd, I think we had a really good line of sight. It wasn't perfect. As Dave said, we weren't ready to grow. We were still in an ability of contracting where we were right now, but we feel like we're getting on our front foot. I think that begins with the belief that we have from the team and the ability for us to know that we can move this brand to something that's much more affectionate from the consumer. So the brand momentum, it should build ahead of the revenue, but the 18 month reset that we talked about in May of 2024, we're not far from that.

Speaker Change: There is a.

Speaker Change: I feel like the.

Speaker Change: Prior to April 2nd I think we had a really good line of sight it wasn't perfect.

Speaker Change: They've said we werent.

Speaker Change: Ready to grow we were still in our ability of contracting where we were right now.

Speaker Change: But we feel like we're getting on our front foot I think that begins with the belief that we have from the team.

Speaker Change: And the ability for us to know that we can move this brand is something that's much more affectionate from the consumer so the.

Speaker Change: The brand momentum it should build ahead of the revenue, but the 18 month reset that we talked about in May of 2024, we're not we're not far from that and we're progressing as planned through the year and so we're working with our wholesale partners. We're building confidence from them and it's just one step at a time right now, but we are basically we are in a fixed bayonets.

Kevin Plank: We're progressing as planned through the year end. So we're working with our wholesale partners. We're building confidence from them and it's just one step at a time right now, but we're basically, we're in a fixed bayonets and, you know, down to hand to hand and we know what it takes and there's a lot of good competitors out there, but we feel like we've got a pretty good story and we've got a compelling brand as well.

Speaker Change: No doubt and a hand to hand, and we know what it takes and Theres a lot of good competitors out there, but we feel like we've got a pretty good story and.

Speaker Change: We've got a compelling brand as well.

Speaker Change: Got it got it.

Jay Sole: Got it. Kevin, that's great.

Kevin Plank: If I can ask one more, maybe can you share just some more details about your upcoming major brand activation? When will we be able to see it? Yeah, we told you that it was going to be a large, full-force campaign that we're going to have. But to be clear, it's embracing that underdog DNA that we've spoken about, I think, several times, including our investor meeting back in December. Eric is digging into this marketing function, so just getting our arms around that. We've also brought in a new SVP of Brand in America's Marketing in Tyler Rutshtein, who really has driving a lot of that connection that we want to the target consumer.

Speaker Change: That's great if I can ask one more maybe can you share just some more details about your upcoming major brand activation when will we be able to see it.

Speaker Change: Yes.

Speaker Change: We told you that it was going to be a large full force campaign that we're gonna have but to be clear, it's embracing that underdog DNA that we spoken about I think several times, including our investor meeting back in December.

Speaker Change: Eric is digging into this marketing functions. So just getting our arms around that we've also brought in a new SVP of branded Americans marketing entitled Rutstein, who really has driving a lot of that connection that we want to the target consumer so what you're not going to see is just a big campaign with Super Bowl ads. It is going to be smaller breakdowns of content that's relevant.

Kevin Plank: So what you're not going to see is just a big campaign with Super Bowl ads. It is going to be smaller breakdowns of content that's relevant to the channel where we're marketing. You know, the idea we have from a branding or marketing standpoint is that, you know, I think anyone would tell you, we make good product. What we need, though, is we need permission from this kid, or more importantly, the person that that kid is looking to across social media, the influencers, the NIL, the athletes, the others. And so that's where I think we're doing a better job of just telling the story of the product and making sure they understand that what the brand DNA is all about.

Speaker Change: We are into the channel, where we're marketing you know the idea we have from a branding or marketing standpoint is that.

Speaker Change: I think anyone would tell you we made good product what we need though is we need permission from this kid more importantly, the person that that Kid is looking to cross social media Influencers.

Speaker Change: All of the athletes the others and so that's where I think we're doing a better job of just telling the story of the product and making sure they understand that what the brand DNA is all about.

Kevin Plank: I can't emphasize enough a big part of this, of what's coming with this campaign, is that we're leading with story. We're not leading with a price. The activation, it'll mostly be in the back half of the year, too, Jay, but as I said, you're going to feel this in more sort of micro doses than you will as one sort of big splash, and we think that's the most effective way for us to deal with our marketing dollars right now. I also think that you'll feel the benefits of this as we get probably a little more focused with our category management structure, and that's what's going to lead us, is that each of those GMs, the five separate GMs that we have, of driving across, selecting the right influencers, making sure that we're in the culture, what NIL will do for us, and then we're going to lean on some of these, you know, intrinsic assets we have, and I don't just mean our, you know, sort of headline or banner athletes, like the Stephen Currys or the Justin Jeffersons, but it's also getting into NIL athletes.

Speaker Change: I can't emphasize enough of a big part of this and what's coming with this campaign is that we're leading with story, we're not leading with a price.

Speaker Change: The activation and it will mostly be in the back half of the year to a J, but as I said youre going to feel this and more sort of micro doses. Then you will as one sort of big Splash and we think that's the most effective way for us to deal with our marketing dollars right now.

Speaker Change: I also think that you'll you'll feel the benefits of this as we get probably a little more focus with our category management structure and that's what's going to lead us is that each of those gms by separate Gms that we have of driving across selecting the right influencers, making sure that we're in the culture, what Nio will do for US and then we're going to lean on some of these.

Speaker Change: Intrinsic.

Speaker Change: You know assets, we have and I don't just mean are sort of headline or banner athletes like Stephen curry's of adjusting Jefferson's, but it's also getting into Nio athletes. It's leaning on our UA next platform, which is we found.

Kevin Plank: It's leaning on our UA Next platform, which is, we found, you know, just as part of that, you know, a kid who hasn't engaged with Under Armour or seen us without UA Next, the NPF score is something that we believe can be significantly improved on, and if a kid has seen us or interacted with us through that, you know, our 3,000 high school base that we have, plus how that rolls up to our All-America or UA Next events, the consideration goes up considerably, you know, up into the high 50s and 60s, and so we're going to continue to build out these platforms that we've got long-term legacy in, and you'll continue to see us just spend our money a lot more thoughtfully and appropriately, so product marketing is going to be a part of this as well, I think, as we're showcasing with the backpack, because I think that's the greatest example of, well, what does this brand mean or stand for?

Speaker Change: Just as part of that.

Speaker Change: A kid who's who hasn't engaged with under.

Speaker Change: Under armour or seen us with without UA next.

Speaker Change: The NPS score is something that we believe can be significantly improved on the kid has seen us or interacting with us through that our 3000 High school base that we have plus and how that rolls up to our all America or UA next events.

Speaker Change: Consider it Asian goes up considerably up into the high Fifty's and Sixty's and so we're going to continue to build out. These platforms that we've got long term legacy and then you'll continue to see us just spend our money a lot more thoughtfully and appropriately so.

Speaker Change: Product marketing is going to be a part of this as well I think as we're showcasing with the backpack because I think that's the greatest example of what does this brand meaner stand for it gives us ability to do that ensuring that we give them a what it is b what it does and see how it is going to make you better and the whole time, allowing you to feel something that's what brands do and does I think we're in the and the profit making.

Kevin Plank: It gives us the ability to do that, ensuring that we give them the, A, what it is, B, what it does, and C, how it's going to make you better, and the whole time, allowing you to feel something. That's what brands do, and that's, I think, what we're in the process of making happen.

Speaker Change: Kevin.

Jay Sole: Got it. Sounds great. Thank you so much. Thank you, Jeff.

Speaker Change: Got it sounds great. Thank you so much.

Speaker Change: Thank you Joe.

Speaker Change: And the next question comes from Simeon Siegel with BMO capital markets. Please go ahead.

Simeon Siegel: The next question comes from Simeon Siegel with BMO Capital Markets. Please go ahead. Thanks. Hey, guys, morning.

Simeon Siegel: Thanks, Hey, guys good morning.

Simeon Siegel: Kevin, how are you thinking about the past, just normalizing e-comm specifically, maybe with the plan reduction and promo activities? Is there a specific revenue level or just some other way we can think about the timing, duration, maybe magnitude of the expected e-comm revenue declines and stabilization?

Simeon Siegel: Kevin how are you thinking about the path just normalizing E com, specifically, maybe with the planned reduction in promo activities is there a specific revenue level or just some other way we can think about the timing duration and maybe magnitude of the expected E com revenue declines and stabilization.

Kevin Plank: And then, Dave, I think you noted the cost related to the restructuring plan. Just how are you thinking about the expected savings from, and I guess, for an uncertainty tariff notwithstanding, looking a little bit longer term, how are you thinking about the ability to take SG&A expenses out of the model with this lower revenue base? Thank you. Yes, I mean, I'll kick off with EECOM. You know, we obviously we've been able to report positive traction after year and controlling the controllables, which is our own DTC businesses is great. And, you know, proof positive in the full price sales mix on our website, you know, up double digits, you know, year over year with promo and clearance down.

Speaker Change: Then Dave I think you noted the costs related to the costs related to the restructuring plan that just how you think about the expected savings from and I guess trying to uncertainty tariffs notwithstanding looking a little bit longer term. How you are thinking about the ability to take SG&A expenses out of the model with this new lower revenue base. Thank you.

Simeon Siegel: Yes, I mean, I'll kick off with E com.

Simeon Siegel: Obviously, we've been able to report positive traction after a year in controlling the controllable, which is our own DTC business is great and proved positive in the full price sales mix on our website.

Simeon Siegel: Up double digits year over year with promo and clearance down I think what we want to do is make sure that this isn't just meant to be a transactional.

Kevin Plank: I think what we want to do is make sure that this isn't just meant to be a transactional, you know, site where people go and they find the grids, but they're actually looking and they're being brand inspired. I think too many too many sites is there's a lot of efficient ways to order product from a lot of different places. But when it's on our site, they should be required to see the story. Because I think that is our differentiator. That is our moat. And I think that for too long, we've we've we've become frankly, just clothes on a hanger.

Simeon Siegel: Site, where people go when they find the grids, but theyre actually looking.

Simeon Siegel: And Theyre being branded inspired I think too many too many sites is theres a lot of efficient ways to order product from a lot of different places, but when it's on our site.

Simeon Siegel: They should be required to see the story because I think that is our differentiator that is our moat.

Simeon Siegel: That for too long.

Simeon Siegel: We become frankly, just close on a hanger.

Kevin Plank: And and also on an e commerce front point of view is incredibly important. You know, it's it's not welcome to our website or welcome to our store. Here's a bunch of stuff, what would you like to buy, but being very intentional. That's why I use that analogy of when we're getting it right, what we're showing that we did with the backpack and trying to use that metaphor. It's more about being able to have four or six expressions of that a year is imagine what that will look like when it manifests through the new halo product that we drop later this year as well.

Simeon Siegel: And also on an ecommerce front point of view is incredibly important.

Simeon Siegel: Welcome to our website are welcome to our store here's a bunch of stuff what would you like to buy but being very intentional that's why I use that analogy of when we're getting it right. What we're showing that we did with the backpack and trying to use that metaphor, it's more about being able to have four six expressions without a year's imagine what that will look like when it manifest through.

Simeon Siegel: The new Halo product that we drop later this year as well and so that'll be felt on our website you and ensuring those other pieces loyalty is also really important for us.

Kevin Plank: And so that'll be felt on our website to and ensuring those other pieces. loyalties also really important for us is it's it's, you know, we've got 18 million rewards members in the US alone 10 million over an APAC force, and active members, one thing that we found, which is a massive opportunity generate 50 plus percent more of our revenue and have double the repurchase rates. And so with loyalty over 50% of the US DTC, it's really getting a slot and getting us close and really understanding who our consumer is and how we can speak to them in a better way.

Simeon Siegel: It's.

Simeon Siegel: We've got 18 million rewards members in the U S alone $10 million over in APAC Force and active members. One thing that we found which is a massive opportunity generate about 50 plus percent more.

Simeon Siegel: Our revenue and have doubled our repurchase rates and so.

Simeon Siegel: With loyalty over 50% of the U S. DTC, it's really getting a slot and getting us close and really understanding who our consumer is and how we can speak to them in a better way.

Kevin Plank: I think also, again, the way that we showcase online, you're not just going to find a grid page with a, you know, a static picture, but using a lot more video being a lot more dynamic. So we're working on the back end infrastructure of our website as well. And that's been really important for us. Social Commerce is going to play a part in what we're looking to do as well. And Tyler and team have been really driving that down on a grassroots level. But, you know, all in all, in short, a healthier brand, right ecommerce foundation for sustainable growth is what we're looking to.

Simeon Siegel: Also again the way that we showcase online you're not just going to find a grid page with a static picture, but using a lot more video being a lot more dynamic. So we're working on the backend infrastructure of our web site as well and that's been really important for us Soc.

Simeon Siegel: Social commerce is going to play a part and what we're looking to do as well.

Simeon Siegel: Tyler and team have been really driving that down on a grassroots level, but.

Simeon Siegel: One on in short a healthier brand right E Commerce Foundation for sustainable growth is what we're looking to you and we're going to have great stories to tell and what better platform that our own channels.

Kevin Plank: And we're going to have great stories to tell. And you know, what better platform that our own channel.

David Bergman: Simeon, on the restructuring and SG&A side, you know, as we drove through the restructuring plan in 25, you know, we brought about $35 million of savings in fiscal 25 from that. When you think about the full-year run rate of those actions and then layering on the additional actions for fiscal 26, especially the closure of the Rialto DH out in California. That expected run rate savings on a full year, as we get to the end of Fiscal 26, is going to be closer to $75 million or so, which we're excited about, and then, you know, essentially a little bit higher than that as you step into Fiscal 27, and you have a full year of all the Fiscal 25 and 26 activities.

Simeon Siegel: On the restructuring and SG&A side.

Simeon Siegel: You know as we drove through the restructuring plan and 25.

Simeon Siegel: We brought about $35 million of savings in fiscal 'twenty five from that when you think about the full year run rate of those actions and then layering on the additional actions for fiscal 'twenty six, especially the closure of the Rialto D H out in California.

Simeon Siegel: Expected run rate savings on a full year as we get to the end of fiscal 'twenty six is going to be closer to $75 million or so which we're excited about and then you know essentially a little bit higher than that.

Simeon Siegel: Fiscal 'twenty seven.

Simeon Siegel: Full year of all the fiscal 'twenty five 'twenty six activity. So that's definitely helpful and a big step in the right direction for us.

David Bergman: So, that's definitely helpful and a big step in the right direction for us, and as we stepped into planning for Fiscal 26 pre-tariff, we were looking for slight leverage in our cost structure, which is, you know, a great step in the right direction as well, and we're also seeing that as we plan out just the Q1, that the outlook that we've given, you know, we do want to be mindful not to cut too deep when we think about any additional SQ&A work that we want to drive, depending on what happens from a tariff and, you know, overall demand scenario, you know, especially in brand marketing, where, you know, sustained investment's critical to the long-term breadth and health of the company.

Simeon Siegel: And as we stepped into planning for fiscal 'twenty six pre tariffs we were looking for slight leverage in our cost structure, which as you know a great step in the right direction as well.

Simeon Siegel: We're also seeing that as we plan out just the Q1 that the outlook that we've given.

Simeon Siegel: We do want to mindful not to cut too deep and when we think about any additional SG&A work that we want to drive depending on what happens from a tariff and you know overall demand scenario, especially in brand marketing.

Simeon Siegel: Sustaining investments critical to the long term breadth breadth and helpful for the company.

David Bergman: But we do manage each of our expenses pretty tightly now, we've made a lot of progress there, a lot more discipline around consulting, around CapEx spending, discretionary spending, T&E. Again, you know, as Kevin mentioned, optimizing the marketing, spending smarter, not more. And you know, we've been able to reduce the SG&A now for multiple years in a row. So we're definitely getting to a pretty good spot, and we're going to continue to manage it tightly as we drive through the year.

Speaker Change: But we do manage each of our expenses pretty tightly now we've made a lot of progress there a lot more discipline around consulting around capex spending discretionary spending TNA again, as Kevin mentioned, optimizing the marketing spending smarter not more and we've been able to reduce yes.

Speaker Change: G&A now for multiple years in a row, so we're definitely getting to a pretty good spot.

Speaker Change: And we're going to continue to manage it tightly as we drive through the year.

Speaker Change: That's great. Thanks, a lot guys best of luck for the year.

Unknown Attendee: That's great. Thanks a lot, guys. Best of luck. Good year ahead.

Simon: Thank you Simon.

Speaker Change: And the next question comes from Sam Poser with Williams trading. Please go ahead.

Sam Poser: And the next question comes from Sam Poser with Williams Trading. Please go ahead. Thanks for taking my question. Um, I guess, um, can you give us some idea? Um, it sounds like you're with about the inventory on hand units and dollars and how, like, are there a lot less units now within the inventory relative to the dollars? And how do you look at that moving over time, as well as the units and dollars in the revenue, both in fourth quarter and sort of within the guidance? Relative Growth of Eats. So, from an inventory perspective, you know, again, we feel pretty good about where we landed the year, pretty much right on what we expected.

Sam Poser: Thanks for taking my questions.

Speaker Change: Yes.

Speaker Change: Can you give us some idea it sounds like you're about the inventory on hand units and dollars and how.

Speaker Change: There are a lot less units now within the inventory relative to the dollars and how do you look at that moving over time as well as the units in dollars in the revenue both in the fourth quarter and sort of within the guidance.

Speaker Change: You know relative growth.

Speaker Change: The.

Speaker Change: So from a inventory perspective, you know again, we feel pretty good about where we landed the year pretty much right on what we expected obviously were managing this year pretty tightly as we get into fiscal 'twenty, six and a little bit of the uncertainties around demand with the current tariff environment, So we're being pretty tight with.

Sam Poser: Obviously, we're managing this year pretty tightly as we get into fiscal 26 and a little bit of the uncertainties around demand with the current tariff environment. So, we're being pretty tight with that, managing the POs. We do expect that, you know, wherever demand ultimately develops through the year, that we'll be able to manage inventory, you know, within a pretty tight range to that. Obviously, the cost per unit is going to be going up by how much, we're not sure, as obviously with each announcement, that seems to change a little bit. But we feel confident in our ability to manage it tightly.

Speaker Change: That managing the pose we do expect that.

Speaker Change: Wherever demand ultimately develops through the year that we'll be able to manage inventory within a pretty tight range to that.

Speaker Change: Obviously, the cost per unit is going to be going up by how much we're not sure as a obviously with each announcement that seems to change a little bit but.

Speaker Change: But we feel confident in our ability to manage it tightly we don't have a large percentage of old or excess inventory a lot of it is current.

David Bergman: We don't have a large percentage of old or excess inventory. A lot of it is current, and we believe that we're going to be able to use our factory houses in a really positive way to move through a lot of that. And then, obviously, still tapping the off-price channel a little bit, but staying within our kind of our operating principle where we've been keeping that to the 3% to 4% mix of revenue as we did in fiscal 25. And relative to the Q1 guide, again, you know, we're not necessarily getting into too many details for full year, but on Q1, you know, we feel pretty good about the outlook that we gave.

Speaker Change: And we believe that we're going to be able to use our factory houses and a really positive way to move through a lot of that and then obviously still tapping the off price channel a little bit, but staying within our kind of our operating principle, where we've been keeping that to the 3% to 4% mix of revenue as we did in fiscal 'twenty five.

Speaker Change: And relative to the Q1 guide.

Speaker Change: Again, you know, we're not necessarily getting into too many details for full year, but on Q1, you know we feel pretty good about the outlook that we gave there's not that much change in.

David Bergman: There's not that much change in price versus unit in the Q1 guide. More of that will probably come as pricing changes come about later in the year.

Speaker Change: Price versus unit in the Q1 guide them more of that will probably comment as pricing changes come about later in the year.

Speaker Change: Yeah, I think I may have said it wrong.

Speaker Change: Your inventory is up 18% at the end of the quarter in dollars what are the units up and then within the guidance that you provided for the first quarter with revenue down four 5% to 5% do you expect unit given that you're trying to make.

Speaker Change: Our unit is going to be down less given that you're trying to as you evolve to this more premium goal that you're aiming towards.

Speaker Change: I'm not trying to figure out if your inventories in line or not I really trying to figure out.

Sam Poser: I'm not trying to figure out if your inventory is in line or not, I'm really trying to figure out, you know, you know, are the ASPs going to steadily work their way up within the guidance and within the inventory levels, so your units will be If your inventory is down 18%, your units are down 25%, which would then mean that you're basically out of stock. Treatment. Thank you, Europe. you know, elevating your brand. Yeah, I guess, Sam, you know, the way that we're looking at is a little bit more holistically because it's going to be put some takes between the different regions.

Speaker Change: Are the asp's going to steadily work their way up within the guidance and within the inventory levels. So youre units will be.

Speaker Change: You know if your if your inventory is down 18%. Your units are down 25, which would that mean that youre basically.

Speaker Change: Thank you.

Speaker Change: Elevating your brand.

Speaker Change: Okay.

Speaker Change: Yeah, I guess, Sam the way that we're looking at it a little bit more holistically, because there's going to be puts and takes between the different regions.

Speaker Change: We did take some returns in Q4 of fiscal 'twenty five to help make sure that we were coming into this year healthy.

David Bergman: We did take some returns in Q4 of fiscal 25 to help make sure that we are coming into this year healthy. More of that was footwear driven, which has a little bit of a higher unit cost. So there's a lot of mixed items going on. I don't know that digging into it relative to the unit progression from Q4 into Q1, it's going to tell much more of a different story for us. Sam, just to be clear, inventory's down one on the quarter. Down 1%. I thought you referenced plus 18%. Oh, no, I'm sorry. I'm sorry.

Speaker Change: More of that was footwear, driven which has a little bit of a higher.

Speaker Change: Unit costs. So there's a lot of mix items going on I don't know that digging into it relative to the unit progression from Q4 into Q1, it's gonna tell them much more of a different story for us.

Speaker Change: Hey, Sam just to be clear inventories down and one on the quarter.

Speaker Change: Down 1%.

Speaker Change: I thought you referenced plus 18% Oh, no I'm, sorry, I'm, sorry down 15, I'm, sorry, I'm looking at somebody else I apologize for that inventory.

David Bergman: Down 15%. I'm sorry. I'm looking at... I'm doing it for me. I'm sorry. I apologize for that. Yeah, inventory is down. But I mean, with inventory down, with inventory down, I mean, the question is, are units down more than the dollars or less than the dollars and the percent? And then do you foresee going forward that as your inventory gets to the appropriate level, that your... as you elevate the brand, will your dollar inventory grow faster than your unit? Like, would units be less as you get more focused? I got you. What I'm looking for is, when I use the selling so much more of so much less at a much, much higher full price, you know, one of the key metrics that I track daily is average unit retail and just saying, are we...

Speaker Change: With inventory down with inventory down I mean question is are units down more than the dollars or less than that.

Speaker Change: Then the dollars as a percent and then do you foresee going forward that as your inventory gets to them.

Speaker Change: Oh, great level that you're as you elevate the brand will your dollar inventory grow faster than your unit.

Speaker Change: And it should be less as you get more.

Speaker Change: I Gotcha, well I'm looking for is when I use the selling so much more of so much less at a much much higher full price.

Speaker Change: One of the key metrics that I track Daily is average unit retail and just saying are we.

Kevin Plank: is the price that people are willing to pay for Under Armour more or less and looking at that across apparel, footwear and accessories equally. So, you know, we're highly tuned to that. But yeah, of course, our... Hopefully we're driving that in margin, we're driving that in what people feel about the But yeah, that's going to be better, more premium product, is that we're not looking to take 6% of the Lycra out of Garmin A, B, or C, and how that'll translate into us building more margin that way. Pricing power is incredibly important for any brand, and it's one of the things which we are keenly focused on.

Speaker Change: The price that people are willing to pay for under armour more or less in looking at that across apparel footwear and accessories equally so where we're highly tuned to that but yeah of course are.

Speaker Change: Hum.

Speaker Change: Hopefully, we're driving that margin were driving that what people feel about the brand, but yeah. That's gonna be better more premium product is that we're not looking to take 6% or the like or out of garmin, a b or C and how that will translate into us building more margin that way pricing power is incredibly important for any brand and it's one of the things, which we are keenly focused on and so that means.

Kevin Plank: And so that means we can't just show up with the Joneses in $10 and $15 bins selling product by the load. So we're going to be incredibly intentional and very specific with the products that we bring to market. Yeah, it'll it'll it will cost more money for sure. But we need to prove that we'll take it one step at a time. And we've got a great base to build on.

Speaker Change: We can't just show up with the Joneses.

Speaker Change: 10, and $15 bins.

Speaker Change: <unk> product by the you know by the load so what we're gonna be incredibly intentional and very specific with the products that we bring to market.

Speaker Change: It'll it'll it'll it will cost more money for sure, but we need to prove that we'll take it one step at a time and we've got a great base to build on.

Sam Poser: Thanks very much.

Speaker Change: Thanks very much.

Speaker Change: Thanks Shannon.

Speaker Change: And the next question comes from Lauren.

Lawrence Vasilescu: And the next question comes from Lawrence Vasilescu with DNC Paribas. Please go ahead. Oh, good morning. Thanks very much for taking my question.

Speaker Change: With E M E terrible. Please go ahead.

Speaker Change: Oh good morning, Thanks, very much for taking my question Kevin Dave.

Lawrence Vasilescu: Kevin, Dave, it makes sense you're not guiding for the full year, but can you possibly speak to your fall order book? How has it changed over the last few months due to the tariff noise? And should we assume a certain rate? Like, could it be slightly down for on a year over year basis? Thank you very much. Yeah, I'll jump in on that one. You know, right now, we're definitely limiting to Q1 at this point. And a lot of that, if you think about it with the tariff rates, they're pretty much temporary at this point, they may change significantly.

Speaker Change: It makes sense, you're not guiding the full year, but can you, possibly speak to your fall order book.

Speaker Change: It changed over the last few months due to the tariffs and all that noise and should we assume a certain rate like could it be slightly down on a year over year basis. Thank you very much.

Speaker Change: Yeah, I'll jump in on that one.

Speaker Change: Now, we're definitely limiting to Q1 at this point and a lot of that if you think about it what the tariff rates, they're pretty much temporary at this point. They may change significantly. So we don't feel it's prudent to give outlook that will also have to change and be adjusted kind of announcement to announcements. So we're trying to be trying to be prudent there.

David Bergman: So we don't feel it's prudent to give outlook that will also have to change and be adjusted kind of announcement to announcement. So we're trying to be trying to be prudent there. You know, so we're really only looking at Q1 covering spring, summer 25. But I would say that the product feedback has been positive. And, you know, the influence of the new product organization, I think, is clearly visible. And as momentum grows, you know, fall, winter 25 will build into spring, summer 26. And at this point, you know, even with the tariff and uncertainty, we're not seeing any key partners with cancellations.

Speaker Change: So we're really only looking at Q1 covering spring summer 'twenty five.

Speaker Change: But I would say that the product feedback has been positive and the influence of the new product organization I think is clearly visible.

Speaker Change: And as momentum grows you know fall winter of 'twenty, five we'll build into spring summer 'twenty six.

Speaker Change: At this point you know even with the tariffs and uncertainty we're not seeing any key partners with cancellations I think our partners know that they are valued and we're really focusing on that and we're giving them reasons to believe and Kevin went through a lot of those points in his prepared remarks.

David Bergman: I think our partners know that they're valued, and we're really focusing on that. And we're giving them reasons to believe and Kevin went through a lot of those points in his prepared remarks. And I think that there are clear improvements in the design and style that are being noted by our partners. So, you know, regaining shelf space takes time, if you think about back half of the year, but our focus and execution are improving, and we're seeing those results. Does it end in one cue or does it continue?

Speaker Change: And I think that there are clear improvements in the design and style that are being noted by our partners.

You know, we're gaining shelf space takes time as you think about back half of the year.

Speaker Change: But our focus and execution are improving and we're seeing those results.

Speaker Change: Very helpful and then on the gross margin again, another great quarter. Thank.

Speaker Change: Thank you called out Dave 150 bps of supply chain benefits.

Speaker Change: Due mainly from lower product and freight costs, and then 80 beds from from just lower promotions I would presume that there is.

Speaker Change: The the 80 bps continues to be a positive going forward and then how many more quarters do you have all of the 150 bed some benefits from from just lower.

Speaker Change: <unk> costs.

Speaker Change: Does it end up in <unk> does that continue and then lastly, again EMEA died at up high single digits, while for first quarter. How should we assume that is that just kind of a wonky first quarter any one time things that we should consider or is that just continued momentum for the brand in that region for the foreseeable future.

David Bergman: And then lastly, again, Ameya guided up high single digits, wow for first quarter. How should we assume that? Is that just kind of a wonky first quarter, any one-time things that we should consider? Or is that just continue momentum for the brand in that region for the foreseeable future? Thank you. Yeah, I think, you know, relative to gross margin, prior to the new tariffs, you know, we were looking for continued gross margin expansion. Q4 of 25 with the favorable supply chain impacts, product cost, freight cost, some of that will continue, but we've got a lot of that that's been recognized and worked through with our partners through Fiscal 25.

Speaker Change: Sure. Thank you.

Speaker Change: Yeah, I think relative to gross margin.

Speaker Change: Prior to the new tariffs we were looking for continued gross margin expansion due to continued product costing improvements you know ongoing work with the.

Speaker Change: Higher quality revenue, including the DTC discounting and promotion reductions and a little bit of slight expected FX headwinds.

Speaker Change: However, the new developing tariffs will create obviously some significant headwind and so we're only providing Q1 at this point the larger benefits. When you think about Q4 of 25 with the favorable supply chain impacts product cost freight costs.

Speaker Change: You know some of that will continue but we've got a lot of that that's been recognized and worked through with our partners through fiscal 'twenty, five, but I wouldnt expect or anticipate that those benefits would be at large in fiscal 'twenty six and then same thing relative to the DTC discounting favorability.

David Bergman: I wouldn't expect or anticipate that those benefits would be as large in Fiscal 26. And then same thing relative to the DTC discounting favorability, because we took such big strides in Fiscal 25, especially in Americas, we wouldn't see as much of that year-over-year benefit continuing as an incremental benefit in Fiscal 26. There's a little bit of benefit there in APAC, and we've started to do more of that as we're helping to clean up and reset APAC a little bit, but definitely not to the magnitude that we saw in Fiscal 25.

Speaker Change: We took such big strides in fiscal 'twenty, five, especially in Americas, we wouldn't see as much of that year over year benefit continuing as an incremental benefit in fiscal 'twenty six there's a little bit of benefit there and in APAC as we started to do more of that as well as we are helping to clean up and reset APAC, a little bit but definitely not to the.

Speaker Change: The magnitude that we saw in fiscal 'twenty five.

Kevin Plank: and Kevin, I don't know if you want to touch on EMEA. Yeah, let me just sort of give a global picture first, which is, you know, we recently made some leadership moves in APAC that were into about, you know, four or five months into that process and have the markets actually reporting into me and, you know, I'm heading over there in a few weeks again. As it relates to EMEA, you know, not unlike we have here in America, you heard the affection that, you know, the team really has for our leadership in CARA here. Well, we're fortunate to have A-plus leadership in EMEA as well with Kevin Ross.

Speaker Change: And then Kevin I know if you want to touch on a mail yeah. Let me just sort of give a global picture first which is we recently made some some leadership moves in APAC that we're in.

Speaker Change: About.

Speaker Change: Four or five months into that that process and have the market's actually reporting into me and you know.

Speaker Change: Heading over there in a few weeks again as it relates to EMEA not unlike we have here in America you heard the affection that the team really has for our leadership and carrier here well, we're fortunate to have a plus leadership.

Speaker Change: In EMEA as well with with Kevin Ross and so that's the kind of momentum that we've had again that began under caris watch over there on that Kevin is really just accelerated over the last 18 months or so it allows us to play offense and it feels great. It's a great.

Kevin Plank: And so the kind of momentum that we've had, again, that began under CARA's watch over there and that Kevin has really just accelerated over the last 18 months or so, it allows us to play offense and it feels great and it's a great, you know, goal that everybody can look around the world and say, this is what it feels like when you're just winning on a consistent basis. And so I think what's there is they have a really clear proposition for the consumer. So authenticated in sport, specifically football, we've got nearly 30 athletes across all of the European leagues, highlighted by winners like Ashraf Hakimi, who plays for PSG and playing in the Champions League final in Germany, I think this weekend.

Speaker Change: Goal that everybody can look around the world and say this is what it feels like when Youre, just winning on a consistent basis and so I think there is they have a really clear proposition for the consumer so authenticated and sport specifically football we've got nearly 30 athletes across all of the European leagues.

Speaker Change: Highlighted by Mike Winters like offshore for <unk>, who place for PSG and playing in the Champions League final in Germany, I think just this weekend, so and again that speaks to just what we have or we got a bit of a cultural following now thats coming out of.

Kevin Plank: So, and again, that speaks to just what we have. We've got a bit of a cultural following now that's coming out of Europe, specifically out of France and Paris and in the UK also. But we're well positioned with strong fundamentals. I think that, you know, this ambition we have, which is people seeing, you know, Under Armour's moat, which is, it's not just a cool hoodie or a nice top or a great shoe, other people know that if it's UA, it's got the performance aspects to it. And so we're really building on that. And that means rooting and authenticating ourselves in sports, in sport where we, I think we just have a great following, you know, the product that we're putting, the football boot, you know, we have athletes calling us, agents calling us, clubs calling us as well.

Speaker Change: Out of Europe, specifically out of France, and Paris.

Speaker Change: And in the U K also but where we're well positioned with strong fundamentals and I think that you know this.

Speaker Change: This ambition, we have which is people, saying you know under Armours moat, which is it's not just a cool hoodie or a nice top row, great shoe, although people know that if it's the way it's got the performance aspects to it and so we're really building on that and that means routing and authenticating ourselves in sports.

Speaker Change: And in sport, where we I think we just have a great. Following you know that the product that we're putting the football boot. We have we are athletes, calling us agents, calling us clubs, calling us as well, where our positioning there and I think that's what feeds the entire ecosystem. In addition to great relationships with sports.

Kevin Plank: We're all positioning there. And I think that's what feeds the entire ecosystem, in addition to great relationships with, you know, the Sports Directs, the JDs, Intersports, El Cortez, Ingleses, as well as our distributor shifts that we have in places like Turkey. So I think we're just doing things right there. And then as we continue to just lean on the product, as we continue to come more full force with things like some of our sportswear expressions that we have, launching Halo, there's just a lot of energy and excitement for the brand. Echo's doing really well for us there also.

Speaker Change: Sports direct J D inter sports El Cortes and glasses.

Speaker Change: As well as our distributor shifts that we have in places like Turkey. So I think we're just doing things right. There and then as we continue to just lean on the product as we continue to come more full force with things like.

Speaker Change: Some of our sportswear expressions that we have launching Halo theres, just a lot of energy and excitement for the brand Echo is doing really well for US. There also so we're learning a lot but.

Kevin Plank: So we're learning a lot, but again, it's good to be able to look at Ameya and just see what success really looks like. And so that ambition, you know, it all fosters from that playbook that we've been running there for quite some time.

Speaker Change: Again, it's going to be able to look at EMEA and just see what success really looks like and so that ambition. It all fosters from that playbook that we've been running there for quite some time.

Speaker Change: That's great to hear thank you very much for the color.

Unknown Attendee: That's great to hear.

Unknown Attendee: Thank you very much for all the color.

Speaker Change: Yeah.

Speaker Change: The next question comes from Peter Mcgoldrick with Stifel. Please go ahead.

Peter Mcgoldrick: The next question comes from Peter McGoldrick with Steeple. Please go ahead. Hey, good morning. with the ongoing Thanks for taking my question. With the ongoing evolution of the good, better, best product pyramid, I was curious if you could talk about the structural product offering influence on AUR and the underlying gross margin as we look forward. Yeah, let me let me, yeah, sorry, let me just give you a structure wise. So, you know, I think a great example or a metaphor that we have from a product standpoint of how we're thinking about the business. Today, we talked about we make a lot of good, we make some better and nowhere near enough best.

Peter Mcgoldrick: Hey, good morning.

Speaker Change: With the ongoing.

Speaker Change: Thanks for taking my question with ongoing evolution of the good better best product Pyramid I was curious if you could talk about the structural product offering influence on AUR and the underlying gross margin as we look forward.

Speaker Change: Yeah Yeah.

Speaker Change: Yeah, Let me let me let me just yeah, sorry, let me just give you a structure wise so you know.

Speaker Change: I think a great example, where a metaphor that we have from a product standpoint of how we're thinking about the business today.

Speaker Change: Today, we talked about we make a lot of good we make some better and nowhere near enough best we're.

Kevin Plank: We're looking to reshape our business with about 25% good 50% better and 25% best. So we're, we're looking to just ladder up. And what we don't want to do is we're not looking to necessarily limit the amount of good product we have, we just want to reshape this business. A great example that I think is what we use with Sharon locating the Boston Marathon. This is also on our investor page, it spells it out really simply. But when you can authenticate at the highest level, with something like the Boston Marathon to smash a course record, like Sharon did just a couple weeks ago, and the $250 elite product that we have, the Velocity Elite, it really sets the pace.

Speaker Change: We're looking to reshape our business with about 25% good 50% better than 25% that we're looking at just ladder up and what we don't want to do is we're not looking to necessarily limit the amount of good product. We have we just want to reshape. This business a great example, that I think is what we use with Sharon locating the Boston Marathon. This is also on our investor page at spells it out.

Speaker Change: It really simply but when you can authenticate at the highest level with.

Speaker Change: With something like the Boston Marathon to Smash of course record like Sharon did just a couple of weeks ago and the $250.

Speaker Change: Our lead product that we have at the velocity elite it really sets the pace and what we've done a good job I think where we've lost this as we sort of had a running execution now we're actually taking that higher he all the way down through the ecosystem, meaning you've got the $250 elite shoe that'll be in specialty run. We then have commercialized that with $160 version you will.

Kevin Plank: And what we've done a good job, I think where we've lost this is we sort of had a running execution. Now we're actually taking that hierarchy all the way down through the ecosystem. Meaning you've got the $250 elite shoe that'll be in specialty run, we then have commercialized that with $160 version, you'll find like big box sporting goods, and some run specialty as well, the $130 version, $100 version as well that we can open and bring down to the family. And then as well as that design lines roll into our $75 cert. And building this, it was the same designers that worked on the top elite from an overall aesthetic standpoint, all the way down to the $75 product.

Speaker Change: Like Big box sporting goods.

Speaker Change: And some run specialty as well the $130 version 100 dollar version as well that we can open and bring down to the family and then as well as that design lines roll into our $75 third and building. This it was the same designers that worked on the top of lead from a overall aesthetic standpoint, all the way down to the 75.

Kevin Plank: And so I think that's what we're just getting a lot more synergy with our product as it relates to one another. Apparel is no different, and we're getting it right. I think you'll see that from Halo, it is going to be a pinnacle expression from us. But it is going to be, and it also crosses us and pushes us from A, it's authentic product that's great to perform in, but also, most importantly, it also looks great as well. And of course, it has the Under Armour DNA. So fixing that is something which is really important for us.

Speaker Change: Dollar product and so I think that's what we're just getting a lot more synergy with our our product as it relates to one another apparel is no different and we're getting it right I think youll see that from Halo. It is gonna be a pinnacle expression from us.

Speaker Change: But it is going to be and it also crosses listen pushes us from a it's authentic product that's great performance, but also most importantly, it also looks great as well and of course it has the under armour DNA. So fixing that is something which is really important for us.

David Bergman: And I think, Peter, when you think about, you know, AUR and also even ASPs, too. Fiscal 25, you know, we had a pretty much lower EECOM mix. We also had a lower APAC mix. We also had a lower footwear mix. You know, all three of those contributed to a little bit lower ASPs. As we drive further into Fiscal 26 and back out of Fiscal 26, those things will probably change a little bit from a mix perspective and will help ASPs in general. And as we kind of comp the promo and discounting reductions that we've been doing, you know, that'll start to stabilize and turn more towards a positive for us.

Peter Mcgoldrick: And I think Peter when you think about you know.

Peter Mcgoldrick: Where you are and also even asps to in fiscal 'twenty. Five you know we had a pretty much lower E. Comm mix. We also had a lower APAC mix. We also had lower footwear mix in all three of those contributed to a little bit lower asp's.

Peter Mcgoldrick: We drive further into fiscal 'twenty, six and back as a fiscal 'twenty six those things will probably change a little bit from a mix perspective, and will help asps in general and as we as we kind of comp the.

Peter Mcgoldrick: Promo and discounting reductions that we've been doing.

Peter Mcgoldrick: That'll start to stabilize and turn more towards a positive for us. So we're definitely focused on that and we're going to keep driving that forward.

David Bergman: So we're definitely focused on that and we're going to keep driving that forward.

Speaker Change: Okay. Thank you and Dave I recognize and forecasting and guidance, but I was curious if you could give us a run rate gross tariff impact to Cogs given current levels of visibility.

David Bergman: Okay, thank you. And Dave, I recognize the challenge in forecasting and guidance, but I was curious if you could give us a run rate gross tariff impact to COGS given current level of visibility. Yeah, listen, I totally appreciate the question. And obviously, we're running through a lot of different scenarios at this point. And, you know, every few days, it seems like there's new information and new rumors out there. So, you know, at this point, we're going to kind of stay prudent and just just speak to Q1. And then obviously, we would hope to be able to give a lot more color on that as we get to the next call.

Speaker Change: Yeah listen I totally appreciate the question and obviously, we're running through a lot of different scenarios at this point and you know every few days it seems like there's new information and new rumors out there. So you know at this point, we're going to kind of stay prudent and just just speak to Q1.

And then obviously, we would hope to be able to give a lot more color on that as we get to the next call.

Unknown Attendee: Totally understand.

Speaker Change: Totally understand thank you.

Unknown Attendee: Thank you.

Speaker Change: Thanks Peter.

Speaker Change: And the next question comes from Paul <unk> with Citi. Please go ahead.

Kelly Crago: And the next question comes from Paul Lejuez with Citi. Please go ahead. Hi, this is Kelly on for Paul. Thanks for for taking your question. Appreciate you giving some color on how you were thinking about the business prior to the tariff announcements. Could you just help us bridge the gap between the kind of down mid single digit one key revenue guide and the the expectation again prior to tariffs for sales down slightly. You could just maybe talk about that from a geo and channel perspective. Thank you Yeah, I mean, I guess a couple things there, you know, we are giving the outlook for for Q1 to be down four to five percent, you know, we did mention that, you know, prior to the tariff announcements and a lot of the uncertainty over there, we were anticipating a full year modest revenue decline as we continue to kind of work to reset and strengthen the brand and progress on our strategic priorities.

Speaker Change: Okay.

Speaker Change: Hi, This is Kelly on for Paul Thanks for taking our question.

Speaker Change: You're giving some color on how you were thinking about the business prior Q.

Speaker Change: The tariff announcements could you just help us bridge the gap between the kind.

Speaker Change: Kind of down.

Speaker Change: Mid single digit one key revenue died and.

Speaker Change: Expectation again prior to cast for sales down slightly.

Speaker Change: Just maybe talk about that from a camera per.

Speaker Change: That does.

Speaker Change: Thank you.

Speaker Change: Yeah, I mean, I guess a couple of things. There you know we are giving the outlook for Q1 to be down 4% to 5%. We did mentioned that you know prior to the tariff announcements and a lot of the uncertainty over there we were anticipating a full year modest revenue decline as we continue to kind of work to reset and strengthen the brand and progress on our.

Speaker Change: The strategic priorities that decline that we were anticipating for full year was anticipated to be a little smaller than the decline we had in fiscal 'twenty five.

David Bergman: That decline that we were anticipating for full year was anticipated to be a little smaller than the decline we had in fiscal 25. So to kind of give a little bit of a box around that. But then also expecting some gross margin expansion, you know, due to the continued costing improvements, and also some of the continued reductions in DTC discounting and promos. And then with the SG&A, leveraging that we expect to start driving in fiscal 26 as well, landing with operating income that was going to exceed fiscal 25. So that was a lot of the work that we were driving towards.

Speaker Change: Kind of give a little bit of a box around that.

Speaker Change: But then also expecting some gross margin expansion due to the continued costing improvements and also some of the continued reductions in DTC discounting and promos and then with the SG&A leveraging.

Speaker Change: Leveraging that we expect to start driving in fiscal 'twenty six as well landing with operating income that was going to exceed fiscal 'twenty. Five so that was a lot of the work that we were driving towards and we're going to keep focused on all of those areas as we learn more about the tariffs and any potential demand impacts but.

David Bergman: And we're going to keep focused on all of those areas, as we learn more about the tariffs and any potential demand impacts. But we feel pretty good about that. And you can tell from the outlook in Q1 that would basically, you know, back you into originally thinking our back half was going to be slightly better than our front half. Again, we'll have to see how things develop now with the tariffs and the uncertainty that are out there. But that's originally what we were saying. Yeah, again, we're not going to give a lot of detail on full year, but what I would say is that as we move towards the back half of fiscal 26, we would have made a lot of those steps and finishing those plays from a DTC and health perspective in North America.

Speaker Change: But we feel pretty good about that and you can tell from from the outlook in Q1 that would basically you know back you into originally thinking our back half was going to be slightly better than our front half again, we'll have to see how things develop now with the tariffs and the uncertainty that are out there, but that's originally what we were seeing.

Speaker Change: Alright, and just one more from us.

Speaker Change: Sort of the North American <unk>.

Speaker Change: ATC channel, where you had been seeing some weakness during Q2.

Speaker Change: Going back on your time, and you're starting to lap those promos I mean should we expect.

Speaker Change: DTC channel growth in in 'twenty, six obviously outside of some of the tariff stuff.

Speaker Change: Or is what's happening with the rationalization in the factory outlets.

Speaker Change: Thanks.

Speaker Change: Yeah again, we're not going to give a lot of detail on full year, but what I would say is that as we move towards the back half of fiscal 'twenty six we would've made a lot of those steps and finishing those plays from a DTC and health perspective in North America. So.

David Bergman: So, you know, the pressures that we've had in DTC North America, because of a lot of those strategic decisions should be much more minimized in the back half of fiscal 26.

Speaker Change: You know the pressures that we've had in DTC North America because of a lot of those strategic decisions should be much more minimized in the back half of fiscal 'twenty six and so we feel pretty good about that and obviously stepping into fiscal 'twenty seven again tracking the demand situation here with with tariff uncertainties, but that was where we were heading.

Speaker Change: And Kelly I'll drop a little color on the model that you're working on too because as Dave's talking through some of the technicals that we're working through we're just looking to drive brand affection right now so as we're thinking about fiscal 'twenty six there's always a silver lining and everything and so we're using the smell of an opportunity just to make sure that were really clean we are delivering ourselves and showing up at retail with our wholesale partners that we want.

Unknown Attendee: Transcripts by Transcription Outsourcing, LLC. Got it, thanks for the color, rough to box.

Speaker Change: To be seen and we're modeling that behavior by by demonstrating that our own E com and our own stores as well so it'll it'll be a full funnel approach for us for sure.

Speaker Change: Got it thanks for the color best of luck. Thank.

Speaker Change: Thank you.

Speaker Change: Next question comes from John Kernan with T. D. Cowen. Please go ahead.

John Kernan: Next question comes from John Kernan with TD Cowens. Please go ahead. Good morning. This is Krista on for John. Two questions for us. First, in terms of the broader picture for North America, kind of in relation to the broad initiatives that are underway with this reset, kind of what do you see as a normalization or long term opportunity for segment margin recovery in North America, as you kind of move along this strategic reset? And I have one follow up. Thank you. Yeah, let me just start with some of the basics there, which is, to be clear, we don't necessarily love where we are right now, but we certainly love where we're going, you know, culture is going to be a big part of this and instilling that belief across the organization, across our partners at every touch level, you know, suppliers, retailers, distributors, franchisees, and especially our own team.

Chris: Good morning. This is Chris on for John two questions for US first in terms of sort.

Chris: So if a broader picture for North America kind of in relation to the broad initiatives that are underway with this reset kind of what do you see as the normalization of our long term opportunity for segment margin recovery in North America, and as you kind of move along this strategic reset.

Chris: I have one follow up thank you.

Chris: Yeah, Let me just start with some of the basics, there which is to be clear, we don't necessarily love, where we are right now, but we certainly love where we're going you know culture is going to be a big part of this and instilling that belief across the organization across our partners at every touch levers level suppliers retailers distributors franchisees and especially.

Chris: Actually our own team.

Kevin Plank: You know, this, you know, where we are in this reset, when as I use in my prepared remarks, the reinvention for the brand, you know, it's, it starts with our team. And so I think that, for me, the last 13 months have been really, you know, constructive in that approach. As I said, we don't need any excuses, meaning that it's not just about us transactioning or trading on price, which I feel like we've done for a bit too long. And we just really need to drive that affection from that 16 to 24 year old athlete, as well as the consumer that we have today, which includes some 16 to 24, but we think we can drive that more.

Chris: This.

Chris: Where we are in this reset and then as I used in my prepared remarks, the reinvention for the brand.

Chris: It starts with our team.

Chris: So I think that's it for me the last 13 months have been really constructive and that approach as I said, we don't need any excuses mean.

Meaning that it's not just about us transaction or trading on price, which I feel like we've done for a bit too long and.

Chris: And we just really need to drive satisfaction from that 16 to 24 year old athlete as well as the consumer that we have today, which includes from 16 to 24, but we think we can drive that more product story service and team is the foundation that we've talked about often throughout our history of the fundamentals, we need to get right with them and as we say product as our everything and number one the best product, we should make or Manny.

Kevin Plank: Product, story, service, and team is this foundation that we've talked about often throughout our history of the fundamentals we need to get right with. And as we say, product is our everything, and number one, the best product we should make or manufacture should be our story. The rest of the team is falling in on all those other pieces that we have of making sure we have the right products, the right place, the right time. And so we're really just driving, you know, down to the fundamentals. And as I said, you know, when we're getting this right during this reset, and we're moving ourselves, especially here in North America, from welcome to Under Armour, what would you like to buy, to here's four very specific ideas that we have for you that we think that you'll love.

Chris: Factor should be our story the rest of the team is falling and in all those other pieces that we have of making sure. We have the right products. The right place the right time, and so we're really just driving down to the fundamentals and as I said you know when we're getting this right. During this reset and we're moving ourselves, especially here in North America from walk in a normal what would you like to buy too here.

Chris: For very specific ideas that we have for you that we think that you'll love.

Kevin Plank: That's when I think that we'll be, you know, really enshrined. So we've got work to do, but we're making this manifest across every channel touchpoint from, you know, e-com to our outlet stores, to our factory houses, all the way to our full price brand houses as well, and especially in our retail partners. So they're waiting to see us win. There's competition from a lot of different places, but I like our positioning. I know that this team can pull together and excited about what it means in the short, mid and long term.

Chris: That's what I think that will be really in stride and so we've got work to do but we're making this manifest across every channel touch points from E com to our outlet stores to or factory houses all the way to our full price brand houses as well and especially in our retail partner. So they're waiting to see is when there's competition from a lot of different places, but I like our positioning and I know that this team.

Chris: Can pull together and excited about what it means in the short mid and long term.

Speaker Change: Terrific. Thank you for that and then just how should we think about the category mix within the context of a.

David Bergman: Terrific. Thank you for that. And then just how should we think about the category mix within the context of apparel and footwear in your Q1 Revenue Guide? And is there anything that you can talk to you about the margin differential between those two categories currently and kind of where you see that longer term? Thanks so much. Yeah, I'll jump in on that real quick. You know, when we think about Q1, we we do anticipate that footwear will have a little bit more pressure than apparel and accessories for Q1. And that's something that we've been talking about over the last year as well.

Speaker Change: Apparel and footwear in your Q1 revenue guide and is there anything that you can talk to you about the margin differential between those two categories currently and kind of where you see that longer term. Thanks. So much.

Speaker Change: Okay.

Speaker Change: Yeah I'll jump in on that real quick you know.

Speaker Change: When we think about Q1, we do anticipate that footwear will have a little bit more pressure.

Speaker Change: Then apparel and accessories for Q1, and that's something that we've been talking about over the last year as well.

David Bergman: And from a margin perspective, you know, that actually does help us a little bit because our footwear is a little bit lower gross margin than our apparel. That gap is something that we've been decreasing a little bit each year as we continue to, you know, design our footwear differently and continue to improve relative to price points there. So, it is something that, you know, we're cognizant of relative to the mix. We're looking forward to continuing to drive up footwear longer term. We understand that that can create a little bit of a gross margin headwind for us longer term.

Speaker Change: And from a margin perspective, you know that actually does help us a little bit because footwear is a little bit lower gross margin than our apparel.

Speaker Change: That gap is something that we've been decreasing a little bit each year as we continue to designer footwear differently and continuing to improve relative to price points. There. So it is something that you know, we're cognizant off relative to the mix and we're looking forward to continuing to drive up footwear longer term.

Speaker Change: We understand that that can create a little bit of a gross margin headwind for us longer term, but that's something that we can plan for navigate and are looking forward to that.

David Bergman: But that's something that we can plan for and navigate and are looking forward to.

Speaker Change: Thanks, very much best of luck.

Unknown Attendee: Thanks very much, Beth.

Unknown Attendee: Thank you.

Speaker Change: Thank you. Thank you. Thank you.

Speaker Change: This concludes our question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: This concludes our question and answer session.

Operator: The conference has now concluded.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.

Speaker Change: Yes.

Speaker Change: [music].