Under Armour Q3 2026 Under Armour Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Under Armour Inc Earnings Call
Speaker #1: Good day, and welcome to the Under Armour third quarter 2026 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.
Operator: Good day and welcome to the Under Armour Q3 2026 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 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on a touch-tone phone. To withdraw the question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Lance Allega, Senior Vice President of Finance and Capital Markets. Please go ahead.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone.
Speaker #1: To withdraw the question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Lance Allega, Senior Vice President of Finance and Capital Markets.
Speaker #1: Please go
Speaker #1: ahead.
Speaker #2: Good
Speaker #2: morning and welcome to Under Armour's fiscal 2026 third quarter earnings call. Today's call is being recorded, and a replay will be available at our investor website shortly after it ends.
Lance Allega: Good morning and welcome to Under Armour's fiscal 2026 Q3 earnings call. Today's call is being recorded, and a replay will be available at our investor website shortly after it ends. Joining us this morning are Kevin Plank, Under Armour's President and CEO, and Dave Bergman, our CFO. Before we begin, please note that certain statements made on today's call are forward-looking, as defined under federal securities laws. These statements reflect management's current expectations as of 6 February 2026, and are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed discussion of these factors, please refer to this morning's press release, our filings with the SEC, including our most recently filed Form 10-K and Form 10-Q, and other public disclosures. In today's call, we may reference non-GAAP financial measures.
Speaker #2: Joining us this morning are Kevin Plank, Under Armour's President and CEO, and Dave Bergman, our CFO. Before we begin, please note that certain statements made on today's call are forward-looking, as defined under federal securities laws.
Speaker #2: These statements reflect management's current expectations as of February 6th, 2026, and are subject to risks and uncertainties that could cause actual results to differ materially.
Speaker #2: For detailed discussion of these factors, please refer to this morning's press release, our filings with the SEC, including our most recently filed Form 10-K and Form 10-Q, and other public disclosures.
Speaker #2: In today's call, we may reference non-GAAP financial measures. We believe these metrics offer additional insights into the underlying trends of our business when considered along our GAAP results.
Lance Allega: We believe these metrics offer additional insights into the underlying trends of our business when considered along our GAAP results. Reconciliations of these measures to their most comparable GAAP metrics are included in today's press release and can be found on our investor relations website at about.underarmour.com. With that, thank you for being here and for your interest in Under Armour, and I'll now turn the call over to Kevin.
Speaker #2: Reconciliations of these measures to their most comparable GAAP metrics are included in today's press release and can be found on our investor website at about.underarmour.com.
Speaker #2: With that, thank you for being here and for your interest in Under Armour. I'll now turn the call over to Kevin.
Speaker #3: Thanks, Lance, and good morning to everyone taking the time to join us today. Under Armour is a global performance brand with opportunity and relevance that is both present today and capable of significantly scaling as we find our operating rhythm.
Kevin Plank: Thanks, Lance, and good morning to everyone taking the time to join us today. Under Armour is a global performance brand with opportunity and relevance that is both present today and capable to significantly scale as we find our operating rhythm. Entering the next phase of our turnaround, the focus is on execution. We're not declaring all the work finished yet, but are making real progress with a disciplined strategy, structure, and team now in place. That progress is becoming more consistent. For too long, the organization carried unnecessary complexity, too many handoffs, too many approvals, too much focus on one's individual job versus a broader brand objective we're trying to solve for: having athletes fall in love and know why they need Under Armour. Since coming back to the CEO chair nearly two years ago, we have narrowed our focus, moved decisions earlier, and reduced friction across the system.
Speaker #3: Entering the next phase of our turnaround, the focus is on execution. We're not declaring all the work finished yet, but are making real progress with a disciplined strategy structure and team now in place.
Speaker #3: That progress is becoming more consistent. For too long, the organization carried unnecessary complexity, too many handoffs, too many approvals, too much focus on one's individual job versus a broader brand objective we're trying to solve for.
Speaker #3: Having athletes fall in love and know why they need Under Armour. Since coming back to the CEO chair nearly two years ago, we have narrowed our focus, moved decisions earlier, and reduced friction across the system.
Kevin Plank: That work has simplified the operating system. Inventory is down year-over-year. Assortments are tighter. Planning is more precise, and we have additional opportunity to continue to improve. The structure of the company has been addressed and is enhancing our speed to market, SKU productivity, athlete insight, and especially accountability for all the above. In Q3, although we had a few non-recurring impacts in our GAAP results that are frustrating, our adjusted results came in ahead of expectations across most line items, and we modestly raised our full-year adjusted operating income outlook. This is a good proof point that our underlying business is becoming steadier, and we're seeing fewer surprises and greater predictability, which is where we believe we should be at this stage of our turnaround.
Speaker #3: system, inventory is down year over year, assortments are tighter, planning is more precise, and we have additional opportunity to continue to improve. The structure of the company has been addressed and is enhancing our speed to market, SKU productivity, athlete insight, and especially accountability for all the above.
Speaker #3: In the third quarter, although we had a few non-recurring impacts in our GAAP results that are frustrating, our adjusted results came in ahead of expectations across most line items, and we modestly raised our full-year adjusted operating income outlook.
Speaker #3: This is a good proof point that our underlying business is becoming steadier, and we're seeing fewer surprises and greater predictability. Which is where we believe we should be at this stage of our turnaround.
Speaker #3: Looking at our journey, fiscal '25 was about assessing our greatest needs. To address our operating infrastructure, and stand up the expertise necessary for our reset.
Kevin Plank: Looking at our journey, fiscal 25 is about assessing our greatest needs to address our operating infrastructure and stand up the expertise necessary for our reset. With the few additions from outside, but primarily from within the organization, for Under Armour by Under Armour. Years of consulting and rented input took us on a path that was not the unique brand position and engine that allowed UA to cut through in the first place. Fiscal 26 was about implementing that structure, including the foundation of a category-managed operating model, a renewed go-to-market, and a clearly articulated strategic business plan. We're now building on that infrastructure by changing nothing, running that same play again in fiscal 27 and beyond, becoming sharper as the kinks work through, which we are still feeling some of, but moving forward.
Speaker #3: With the few additions from outside, but primarily from within the organization, four Under Armour by Under Armour. Years of consulting and rented input took us on a path that was not the unique brand position and engine that allowed UA to cut through in the first place.
Speaker #3: Fiscal '26 was about implementing that structure, including the foundation of a category-managed operating model, a renewed go-to-market, and a clearly articulated strategic business plan.
Speaker #3: We're now building on that infrastructure by changing nothing—running that same play again in fiscal '27 and beyond, becoming sharper as the kinks work through, which we are still feeling some of, but moving forward.
Speaker #3: What is new has been layering in the how. How we are running the business, the operating principles that will manifest the thematic of selling so much more, of so much less, at a much higher full retail price.
Kevin Plank: What is new has been layering in the how: how we are running the business, the operating principles that will manifest the thematic of selling so much more, of so much less, at a much higher full retail price. I spent the month of January presenting these holistic principles called unleashing intentionality in dozens of individual and group settings to teammates and partners, taking this message directly to key stakeholders, ensuring our entire offense and defense know exactly who we are, what we are building, and how we plan to execute to achieve our mid- and long-term ambitious goals. To support this next phase, we recently made targeted leadership changes to accelerate speed. Kara Trent is now Chief Merchandising Officer with end-to-end responsibility for product mix, pricing, and margin performance. Adam Peake has been named President of the Americas. Eric Liedtke is now Chief Marketing Officer and EVP of Strategy.
Speaker #3: I spent the month of January presenting these holistic principles called Unleashing Intentionality in dozens of individual and group settings to teammates and partners. Taking this message directly to key stakeholders, ensuring our entire offense and defense know exactly who we are, what we are building, and how we plan to execute to achieve our mid- and long-term ambitious goals.
Speaker #3: To support this next phase, we recently made targeted leadership changes to accelerate speed. Care Trent is now Chief Merchandising Officer, with end-to-end responsibility for product mix, pricing, and margin performance.
Speaker #3: Adam Peake has been named President of the Americas, Eric Glitke is now Chief Marketing Officer and EVP of Strategy. And you're seeing Saidi has transitioned to an external Senior Advisor role to ensure design continuity.
Kevin Plank: Yaseen Saidi has transitioned to an external senior advisor role to ensure design continuity. These changes reflect exactly where we are in the transformation, moving with tighter alignment and a more decisive operating cadence. This work is not done on a spreadsheet but by bringing our teams together, removing slow process barriers, and facilitating conversation to create a much more intentional line of products across apparel, footwear, and accessories, products that we can be famous for while highlighting the areas we already are, like UA Heat and Cold Gear. The recent org changes now have all product teams in one conversation, including physically in one room sharing information to remove redundancy and increase speed.
Speaker #3: These changes reflect exactly where we are in the transformation, moving with tighter alignment and a more decisive operating cadence. This work is not done on a spreadsheet, but by bringing our teams together, removing slow process barriers, and facilitating conversations to create a much more intentional line of products across apparel, footwear, and accessories.
Speaker #3: Products that we can be famous for while highlighting the areas we already are, like UA Heat and Cold Gear. The recent org changes now have all product teams in one conversation.
Speaker #3: Including physically in one room sharing information to remove redundancy and increase speed. In addition to the eliminating in fiscal '25 that is now 25% of SKUs we began complete, we have additional opportunity to be even more efficient.
Kevin Plank: In addition to the 25% of SKUs we began eliminating in fiscal 2025 that is now complete, we have additional opportunity to be even more efficient, not only with SKUs and styles but the raw materials that support the products we make. More to come on this in the future calls, but the new structure is actively digging into this work, and the early reads are incredibly positive. Looking ahead, key indicators are moving in the right direction. Brand health in the US continues to improve. Awareness, consideration, and engagement are trending higher, particularly among younger athletes. Digital engagement remains strong, and when products, storytelling, and distribution align, we see a positive consumer response. So let's talk about product because product is everything, and at Under Armour we say that product is our currency. It always has been and the engine that will ultimately drive this turnaround.
Speaker #3: Not only with SKUs and styles, but the raw materials that support the products we make. More to come on this in the future calls, but the new structure is actively digging into this work in the early reads are incredibly positive.
Speaker #3: Looking ahead, key indicators are moving in the right direction. Brand health in the US continues to improve, awareness, consideration, and engagement are trending higher.
Speaker #3: Particularly among younger athletes. Digital engagement remains strong, and when product storytelling and distribution align, we see a positive consumer response. So let's talk about product, because product is everything, and at Under Armour, we say that product is our currency.
Speaker #3: It always has been, and it's the engine that will ultimately drive this turnaround. This is also the hardest part of the transformation—there was no switch to flip. We are rebuilding capability, discipline, and credibility, inside the organization and in the market.
Kevin Plank: This is also the hardest part of the transformation. There was no switch to flip. We are rebuilding capability, discipline, and credibility inside the organization and in the market. That work takes time, and importantly, we're now seeing real evidence that it is working. Across apparel and accessories, the proof points are starting to stack up. Base layer remains a steady engine for the business, with HeatGear and ColdGear standing out. New styles, a refreshed design language, and modern colorways are driving higher ASPs and strong double-digit growth in these products. That matters because it's an early signal that intentional product thought leadership can help us rebuild pricing power. We're seeing similar momentum elsewhere. Icon Fleece is performing well, and our women's Meridian franchise continues to gain traction as new silhouettes and colors attract a broader, more engaged consumer base.
Speaker #3: That work takes time, and importantly, we're now seeing real evidence that it is working. Across apparel and accessories, the proof points are starting to stack up.
Speaker #3: Base layer remains a steady engine for the business with heat and cold gear standing out. New styles are a fresh design language and modern colorways are driving higher ASPs and strong double-digit growth in these products.
Speaker #3: That matters because it's an early signal that intentional product thought leadership can help us rebuild pricing power. We're seeing similar momentum elsewhere. Icon Fleece is performing well in our women's Meridian franchise, continues to gain traction as new silhouettes and colors attract a broader, more engaged consumer base.
Speaker #3: These products reflect a stronger point of view and improved execution across categories. Spring/Summer '26 is another meaningful step forward. You'll see more elevated products entering the market with more language.
Kevin Plank: These products reflect a stronger point of view and improved execution across categories. Spring/Summer 26 is another meaningful step forward. You will see more elevated products entering the market with a more consistent, cohesive design language. We're introducing an improved women's Vanish Elite collection alongside continued evolutions across Icon, sportswear, and footwear. And accessories, StealthForm Hat and No Weigh Backpack, continue to push the price ceiling, supported by premium performance attributes and a clean, focused product story. When design intent is strong and segmentation is disciplined, consumers respond. Sell-through for newer franchises is improving year-over-year. Full-price realization is trending higher, even from a lower base. Wholesale partners are engaging more positively with upcoming assortments and buying. A shift into footwear, which has been on a long, challenging recovery path. I want to be very direct about it.
Speaker #3: We're introducing an improved women's Vanish Elite collection, alongside continued evolutions across Icon, Sportswear, and consistent, cohesive design in Footwear. In accessories, our Stealth Form Hat and No Way Backpack continue to push the price ceiling.
Speaker #3: Supported by premium performance attributes and a clean, focused product story. When design intent is strong and segmentation is disciplined, consumers respond. Sell-through for newer franchises is improving year over year, full-price realization is trending higher, even from a lower base.
Speaker #3: Wholesale partners are engaging more positively with upcoming assortments and buying—a shift in the footwear category, which has been on a long, challenging recovery path.
Speaker #3: I want to be very direct about it. Year-to-date sales are down about 14%, reflecting structural issues we are actively unwinding. For multiple seasons, we tried to grow by expanding the assortment, more styles, more price points, more incremental updates.
Kevin Plank: Year-to-date sales are down about 14%, reflecting structural issues we are actively unwinding. For multiple seasons, we tried to grow by expanding the assortment: more styles, more price points, more incremental updates, without consistent demand or the scale to support it. That diluted volume, pressured margins, and increased inventory risk. We are addressing each of these. We are exiting low-productivity styles, reducing redundant SKUs, and eliminating launches that lack a defined role, a strong margin profile, or scalable growth opportunity, with the primary criteria being every product must have a reason to be built by Under Armour. It must have a story. In parallel, we're tightening our price tier architecture and concentrating investment behind fewer, higher-impact franchises that can win consistently.
Speaker #3: Without consistent demand or the scale to support it. That diluted volume pressured margins and increased inventory risk. We are addressing each of these. We are exiting low productivity styles, reducing redundant SKUs, and eliminating launches that lack a defined role.
Speaker #3: A strong margin profile or scalable growth opportunity. With the primary criteria being every product must have a reason to be built by Under Armour, it must have a story.
Speaker #3: In parallel, we're tightening our price tier architecture and concentrating investment behind fewer, higher-impact franchises that can win consistently. This disciplined approach sharpens our focus areas across training, running, and sportswear.
Kevin Plank: This disciplined approach sharpens our focus areas across training, running, and sportswear, while building momentum in team sports where we are increasingly confident in both our product and our growth trajectory, all of which should drive improved returns over time. We're already seeing proof points. In run, the Velociti Elite 3 delivers strong sell-through at launch and run specialty, and sharper segmentation across the franchise is driving healthier performance at more accessible price points with Velociti Distance and Pro 2. The Assert 11, which launched in November, we talked about on the last call, continues to perform really well and is delivering a meaningfully higher ASP versus the Assert 10 as we predicted. And as we outlined last quarter, we position this Velociti run-inspired redesign in a Charge Plus midsole as an outstanding $75 accessible price point offering.
Speaker #3: While building momentum in team sports, we are increasingly confident in both our product and our growth trajectory, all of which should drive improved returns over time.
Speaker #3: We're already seeing proof points. In Run, the Velocity Elite 3 delivered strong sell-through at launch and run specialty, and sharper segmentation across the franchise is driving healthier performance at more accessible price points, with Velocity Distance and Pro 2.
Speaker #3: The Asserte 11, which launched in November—we talked about it on the last call—continues to perform really well and is delivering a meaningfully higher ASP versus the Asserte 10, as we predicted.
Speaker #3: And as we outlined last quarter, we positioned this Velocity Run-inspired redesign in a Charge+ midsole as an outstanding $75 accessible price point offering. Throw in Los Angeles Dodgers' back-to-back World Series champion, Freddie Freeman, as a product ambassador, and we're starting to think of annual units program.
Kevin Plank: Throw in Los Angeles Dodgers back-to-back World Series champion Freddie Freeman as a product ambassador; we're starting to drive increased demand in a millions of annual units program. This reflects our strategy in action: simplifying the line, strengthening franchises, and reinforcing Under Armour's running credibility. In sportswear, just this week we launched the UA HB-LO, a $100 basketball-inspired silhouette built for all-day comfort, pairing a premium leather upper with a cushioned court-to-street ride and a bold expression of the UA logo. The price-to-value of this shoe is off the charts, and believe that it can be a gateway product for Under Armour to take share in court shoes and sportswear. Coming off our fall launch, the $120 UA Sola model continues to build momentum. Additionally, we introduced the UA Arc 96 at $125, a modernized run-inspired silhouette that blends premium materials with elevated cushioning and distinctive design language.
Speaker #3: This reflects our strategy in action. Simplifying the line, strengthening franchises, and reinforcing Under Armour's running credibility. In sportswear, just this week we launched the HB Low, a $100 basketball-inspired silhouette built for all-day comfort, pairing a premium leather upper with a cushioned cork-to-street ride and a bold expression of the UA logo.
Speaker #3: The price-to-value of this shoe is off the charts, and believe that it can be a gateway product for Under Armour to take share in cork shoes and sportswear.
Speaker #3: Coming off our fall launch, the $120 Solo model continues to build momentum. Additionally, we introduced the Arc 96 at $125—a modernized, run-inspired silhouette that blends premium materials with elevated cushioning and distinctive design language.
Speaker #3: With social response and sell-through as key indicators, we're very encouraged by the evolution of these sportswear styles. All excellent examples of what's to come.
Kevin Plank: With social response and sell-through as key indicators, we're very encouraged by the evolution of these sportswear styles, all excellent examples of what's to come. While the reset of our footwear business is still underway, the actions we're taking, combined with strong early signals for our innovation and design-led product, give us growing confidence that we can stabilize the footwear category next year and rebuild momentum with consumers and wholesale partners. Overall, our products are becoming stronger assets, not just something we sell but a primary driver of demand and value creation. We're building more intentional product segmentation across innovation levels, price points, and usage models. Every product is gaining a defined consumer role and will have a distinct identity. Over time, this approach will deepen consumer understanding of the brand and support more consistent pricing discipline, pathway to improved demand and margin contribution. Our storytelling is also getting sharper.
Speaker #3: While the reset of our footwear business is still underway, the actions we're taking, combined with strong, early signals for our innovation and design-led product, give us growing confidence that we can stabilize the footwear category next year and rebuild momentum with consumers and wholesale partners.
Speaker #3: Overall, our products are becoming stronger assets—not just something we sell, but a primary driver of demand and value creation. We're building more intentional product segmentation across innovation levels, price points, and usage models.
Speaker #3: Every product is gaining a defined consumer role and will have a distinct identity. Over time, this approach will deepen consumer understanding of the brand and support more consistent pricing discipline.
Speaker #3: Pathway to improved demand and margin contribution. Our storytelling is also getting sharper. We're moving up with greater purpose, connecting the right products to real sports moments, meeting athletes where they are and driving higher engagement per dollar.
Kevin Plank: We're moving up with greater purpose, connecting the right products to real sports moments, meeting athletes where they are, and driving higher engagement per dollar. Social is leading that effort, particularly on TikTok. Our influencer strategy continues to expand reach and reinforce credibility, while activations like We Are Football and Run Club events with recording artist Gunna are evolving into community-led platforms that generate authentic energy and momentum for the brand. Team sports remain a core driver of momentum and brand authority. In American football, we continue to deepen our presence through authentic on-field storytelling and partnerships, including the launch of the first Overtime national high school championship at our UA Stadium here in Baltimore, and expanded collegiate relationships with Georgia Tech, the first Under Armour school to wear Under Armour in 1996, and the University of Wisconsin, a longstanding partner.
Speaker #3: Social is leading that effort, particularly on TikTok. Our influencer strategy continues to expand reach and reinforce credibility. While activations like We Are Football and Run Club events with recording artist Gunna are evolving into community-led platforms that generate authentic energy and momentum for the brand.
Speaker #3: Team sports remain a core driver of momentum and brand authority. In American football, we continue to deepen our presence through authentic, on-field storytelling and partnerships, including the launch of the first overtime national high school championship at our UA Stadium here in Baltimore, and expanded collegiate relationships with Georgia Tech, the first Under Armour school to wear Under Armour in 1996.
Speaker #3: And the University of Wisconsin, a long-standing partner. This week, we launched our Spring '26 activation spotlighting women's flag football, the next era of the game.
Kevin Plank: This week, we launched our Spring 2026 activation, spotlighting women's flag football, the next era of the game, debuting just this past Wednesday on National Girls and Women in Sports Day. ClickClack, the next era, reimagines our iconic original 2006 ad in a fresh Gen Z-forward way. With the sport exploding and the 28th Summer Olympics on the not-so-distant horizon, UA athletes Ashlea Klam, Diana Flores, Laneah Bryan, and Isabella Geraci helped set the pace for the sport. The message is clear: flag football is here to stay. At the highest level of the sport, our on-field credibility in the NFL continues to build, spanning established athletes like Philadelphia Eagles Devonta Smith and rising stars such as Seattle Seahawks rookie Nick Emmanwori.
Speaker #3: Debuting just this past Wednesday on National Girls and Women in Sports Day. Click-clack, the next era. Reimagines our iconic original 2006 ad in a fresh, Gen Z-forward way.
Speaker #3: With the sport exploding and the 28 Summer Olympics on the not-so-distant horizon, UA athletes Ashley Klam, Deanna Flores, Linnea Bryan, and Isabella Garassi helped set the pace for the sport.
Speaker #3: The message is clear. Flag football is here to stay. At the highest level of the sport, our on-field credibility in the NFL continues to build, spanning established athletes like Philadelphia Eagles’ DeVonta Smith and rising stars such as Seattle Seahawks rookie Nick Amanahori.
Speaker #3: In his first year in the league, Nick will take the Super Bowl stage this Sunday—a powerful and energizing milestone that underscores the momentum of our athlete roster and the growing relevance of our brand at the very top of the game.
Kevin Plank: In his first year in the league, Nick will take the Super Bowl stage this Sunday, a powerful and energizing milestone that underscores the momentum of our athlete roster and the growing relevance of our brand at the very top of the game. We're also investing in the next generation of athletes. Our UA Next All-America Game Week showcased top high school talent across football and volleyball, broadcast on ESPN, and where we sold out the product capsule. We signed our first ClickClack NIL class and continue to build our presence in track and field as we prepare to host the inaugural UA Track and Field Nationals this spring at IMG Academy in Florida. This month, UA is on the world stage. In Italy, Lindsey Vonn, our longest-serving athlete, will compete for Team USA, and Cale Makar will take the ice for Team Canada at the Winter Olympics.
Speaker #3: We're also investing in the next generation of athletes. Our UA Next All-America Game week showcased top high school talent across football and volleyball. Broadcast on ESPN and where we sold out the product capsule.
Speaker #3: We signed our first Click-clack NIL class and continue to build our presence in track and field as we prepare to host the inaugural UA Track and Field Nationals this spring at IMG Academy in Florida.
Speaker #3: This month, UA is on the world stage. In Italy, Lindsey Vonn, our longest-serving athlete, will compete for Team USA, and Cale Makar will take the ice for Team Canada at the Winter Olympics.
Speaker #3: Then next month, that momentum carries as the World Baseball Classic, where many of our iconic UA Major League Baseball players will compete at the highest level on yet another global stage.
Kevin Plank: Then next month, that momentum carries into the World Baseball Classic, where many of our iconic UA Major League Baseball players will compete at the highest level on yet another global stage. In EMEA, momentum continues to build across global football. Activations, including the UA Mansory Collab, deliver strong engagement and sell-through. And our full-funnel Be the Problem Football and unapologetic women's campaigns are outperforming benchmarks and strengthening our brand's cultural relevance. We don't see these as isolated moments. We see them as repeatable proof points that our brand is regaining momentum at scale. This authenticity enables UA to meet approximately $5 billion in annual consumer demand while rebuilding trust and deepening durable connections with athletes around the world. This is a foundation for sustained relevance, demand stability, and long-term value creation. Switching next to the regions, North America is beginning to turn the corner.
Speaker #3: In EMEA, momentum continues to build across global football. Activations, including the UA Mansory collab, deliver strong engagement and sell-through. In our full-funnel Be the Problem football and unapologetic women's campaigns, we are outperforming benchmarks and strengthening our brand's cultural relevance.
Speaker #3: We don't see these as isolated moments. We see them as repeatable proof points that our brand is regaining momentum at scale. This authenticity approximately 5 billion dollars in annual consumer demand, while rebuilding trust and deepening durable connections with athletes around the world.
Speaker #3: This is a foundation for sustained relevance, demand stability, and long-term value creation. Switching next to the regions, North America is beginning to turn the corner.
Speaker #3: We believe the December quarter marks the bottom of the reset. Traffic, yes, remains soft, but underlying indicators are improving. We continue efforts to strengthen our premium online position, even amid a promotional environment.
Kevin Plank: We believe the December quarter marks the bottom of the reset. Traffic, yes, remains soft, but underlying indicators are improving. We continue efforts to strengthen our premium online position, even amid a promotional environment. E-commerce conversion is up, and factory-house performance is improving. Digital engagement tools such as SMS and TikTok Shop are delivering strong growth. In wholesale, our focus remains on rebuilding the right partner relationships, and we're making real progress. A Q3 product campaign led by ColdGear Compression with Dick's Sporting Goods delivered solid results, and as partners gain confidence in our product and storytelling, collaboration is growing. We are encouraged by how our fall order book is shaping up. In EMEA, the business remains solid and continues to be the clearest expression of our premium strategy in action.
Speaker #3: E-commerce conversion is up. In factory house performance is improving. Digital engagement tools, such as SMS and TikTok Shop, are delivering strong growth. And in wholesale, our focus remains on rebuilding the right partner relationships.
Speaker #3: We're making real progress. A Q3 product campaign led by Cold Gear Compression with Dick's Sporting Goods delivered solid results. And as partners gain confidence in our product and storytelling, collaboration is growing.
Speaker #3: And we are encouraged by how our fall order book is shaping up. In EMEA, the business remains solid and continues to be the clearest expression of our premium strategy in action.
Speaker #3: Performance is being driven by disciplined execution, across the region with a more intentional approach to promotions that protects brand equity and pricing integrity. At the same time, solid wholesale performance is reinforcing the quality of our partnerships and the strength of demand in key markets.
Kevin Plank: Performance is being driven by disciplined execution across the region with a more intentional approach to promotions that protects brand equity and pricing integrity. At the same time, solid wholesale performance is reinforcing the quality of our partnerships and the strength of demand in key markets. Together, these factors are delivering consistent, reliable results and underscoring the resilience of the business in the region. In APAC, where I spent seven days in January visiting five key cities with our teams and partners, we continue to make progress on our reset. The region remains a critical long-term growth opportunity. There, we're taking decisive actions to manage inventory, sharpen assortments, and elevate the retail experience. Together, these efforts are positioning APAC for stabilization over the next 12 months and more sustainable growth beyond. So to close, there are no shortcuts in a turnaround like this.
Speaker #3: Together, these factors are delivering consistent, reliable results and underscoring the resilience of the business in the region. I spent seven days in APAC, where I visited five key cities with our teams and partners in January. We continue to reset.
Speaker #3: to make progress on our In the region, it remains a critical long-term growth opportunity. There, we're taking decisive actions to manage inventory, sharpen assortments, and elevate the retail experience.
Speaker #3: Together, these efforts are positioning APAC for stabilization over the next 12 months and more sustainable growth beyond. So to close, there are no shortcuts in a turnaround like this.
Speaker #3: Progress is earned through discipline and consistent execution. The business is simpler. Revenue volatility is stabilizing. The margin trajectory is improving. Inventory is cleaner. And Under Armour remains a brand athletes actively choose, with authenticity and a competitive edge that would be difficult, if not impossible, to replicate.
Kevin Plank: Progress is earned through discipline and consistent execution. The business is simpler. Revenue volatility is stabilizing. The margin trajectory is improving. Inventory is cleaner. And Under Armour remains a brand athletes actively choose, with authenticity and a competitive edge that would be difficult, if not impossible, to replicate. Under Armour's unique. It just is. Now, if there's one thing to take away from today's call, we believe that the most disruptive phase of our reset is now behind us. We're past the period of structural change and operating noise, and the organization is now focused squarely on execution and stabilization. When we look at the fundamentals, they are where we expected them to be at this point in the reset. Our operating model is in a much better place. Our business plan is well-defined and increasingly repeatable, and our go-to-market approach is more focused and disciplined.
Speaker #3: Under Armour is unique. It just is. Now, if there's one thing to take away from today's call, we believe that the most disruptive phase of our reset is now behind us.
Speaker #3: We're past the period of structural change and operating noise. And the organization is now focused squarely on execution and stabilization. When we look at the fundamentals, they are where we expected them to be at this point in the reset.
Speaker #3: Our operating models are in a much better place. Our business plan is well-defined and increasingly repeatable. And our go-to-market approach is more focused and disciplined.
Speaker #3: Each is making progress, and each is reinforcing the other. The strategies we're executing are strengthening our foundation and positioning Under Armour to deliver more consistent performance and long-term value creation going forward.
Kevin Plank: Each is making progress, and each is reinforcing the other. The strategies we're executing are strengthening our foundation and positioning Under Armour to deliver more consistent performance and long-term value creation going forward. With that, I'll turn it over to Dave to review the quarter and our outlook. Thank you.
Speaker #3: With that, I'll turn it over to Dave to review the quarter and our outlook. Thank you.
Speaker #2: Thanks, Gavin. Turning to our third quarter performance, we met or exceeded our outlook across all major line items. This performance reflects the discipline, focus, and growing consistency in execution as the turnaround continues to progress.
Lance Allega: Thanks, Gavin. Turning to our third quarter performance, we met or exceeded our outlook across all major line items. This performance reflects the discipline, focus, and growing consistency in execution as the turnaround continues to progress. While there was some non-recurring noise in the reported numbers for the period, the underlying performance of the business remains solid and consistent. In that context, I'll start at the top of the P&L and walk through the details. Revenue declined 5% to $1.3 billion, slightly better than the outlook we shared in November. The outperformance relative to our plan was partially due to approximately one percentage point of growth from a timing shift of some wholesale deliveries from Q4 into Q3. Digging into the results by region, North America revenue declined 10%, primarily due to a decrease in wholesale, with a slightly smaller decline in our direct-to-consumer business.
Speaker #2: While there was some non-recurring noise in the reported numbers for the period, the underlying performance of the business remains solid and consistent. That context I'll start at the top of the P&L, walk through the details.
Speaker #2: Revenue declined 5% to $1.3 billion, slightly better than the outlook we shared in November. The outperformance relative to our plan was partially due to approximately 1 percentage point of growth from a timing shift of some wholesale deliveries from Q4 into Q3.
Speaker #2: Digging into the results by region, North America revenue declined 10%, primarily due to a decrease in wholesale, with a slightly smaller decline in our direct-to-consumer business.
Speaker #2: In EMEA, revenue increased 6% on a reported basis, and 2% on a currency-neutral basis. With growth in both wholesale and direct-to-consumer during the quarter.
Lance Allega: In EMEA, revenue increased 6% on a reported basis and 2% on a currency-neutral basis, with growth in both wholesale and direct-to-consumer during the quarter. APAC revenue decreased 5% on both a reported and currency-neutral basis, marking a sequential improvement from the year-over-year declines we saw in the first half of the fiscal year. The Q3 decline was driven primarily by our full-price wholesale business, while DTC revenue was down only slightly, partially offset by positive licensing growth. In Latin America, revenue increased 20% or 13% on a currency-neutral basis, driven by balanced growth throughout the business. From a channel perspective, wholesale revenue decreased 6% due to lower full-price, and third-party off-price sales, partially offset by growth in our distributor business. Direct-to-consumer revenue decreased 4%, primarily due to a 7% decline in e-commerce revenue. Sales in our own and operated stores were down 2% in the quarter.
Speaker #2: APAC revenue decreased 5% on both the reported and currency-neutral basis, marking a sequential improvement from the year-over-year declines we saw in the first half of the fiscal year.
Speaker #2: The Q3 decline was driven primarily by our full-price wholesale business, while DTC revenue was down only slightly. Partially offset by positive licensing growth. And in Latin America, revenue increased 20% or 13% on a currency-neutral basis.
Speaker #2: Driven by balanced growth throughout the business. From a channel perspective, wholesale revenue decreased 6% due to lower full-price and third-party off-price sales, partially offset by growth in our distributor business.
Speaker #2: Direct-to-consumer revenue decreased 4%, primarily due to a 7% decline in e-commerce revenue. Sales in our owned and operated stores were down 2% in the quarter.
Speaker #2: And licensing revenue increased 14%, driven by the strength of our international licensees and modest growth in North apparel revenue decreased 3% America. Finally, by product type, due largely to softness in train, golf, and run, while sportswear was flat for the quarter.
Lance Allega: Licensing revenue increased 14%, driven by the strength of our international licensees and modest growth in North America. Finally, by product type, apparel revenue decreased 3% due largely to softness in train, golf, and run, while sportswear was flat for the quarter. Footwear revenue decreased 12%, reflecting declines across most categories, partially offset by growth in outdoor. Accessories revenue decreased 3%, driven largely by declines in golf, outdoor, and team sports, with a partial offset from growth in sportswear. Q3 gross margin declined 310 basis points year-over-year to 44.4%, in line with our outlook. This decline was primarily driven by 180 basis points of supply chain headwinds, including 200 basis points of pressure from higher US tariffs, 140 basis points from pricing amid a more promotional environment in North America, and a combined 40 basis points from unfavorable channel and regional mix.
Speaker #2: Footwear revenue decreased 12%, reflecting declines across most categories, partially offset by growth in outdoor. And accessories revenue decreased 3%, driven largely by declines in golf, outdoor, and team in sportswear.
Speaker #2: Third quarter gross margin declined 310 basis points year-over-year to 44.4%, in line with our outlook. This decline was primarily driven by 180 basis points of supply chain headwinds, including 200 basis points of pressure from higher U.S. tariffs, 140 basis points from pricing amid a more promotional environment in North America, and a combined 40 basis points from unfavorable channel and regional mix.
Speaker #2: These headwinds were partially offset by 30 basis points of foreign currency impacts and 20 basis points from a more favorable product mix. Turning to SG&A, third quarter expenses increased 4% to $665 million, driven primarily by a $99 million litigation reserve expense related to a previously disclosed insurance carrier dispute.
Lance Allega: These headwinds were partially offset by 30 basis points of foreign currency impacts and 20 basis points from a more favorable product mix. Turning to SG&A, Q3 expenses increased 4% to $665 million, driven primarily by a $99 million litigation reserve expense related to a previously disclosed insurance carrier dispute. Within SG&A, we also recorded approximately $3 million in transformation costs related to our fiscal 2025 restructuring plan. Excluding these items, adjusted SG&A was down 7% to $563 million, mainly due to lower marketing spend driven by timing, with a greater share of our fiscal 2025 marketing investment recognized in the second half, along with continued benefits from restructuring actions, and disciplined management of discretionary costs. In Q3, we recorded $75 million in restructuring charges and $3 million in transformation-related SG&A expenses, totaling $78 million under our fiscal 2025 restructuring plan.
Speaker #2: Within SG&A, we also recorded approximately $3 million in transformation costs related to our fiscal 2025 restructuring plan. Excluding these items, adjusted SG&A was down 7% to $563 million.
Speaker #2: Mainly due to lower marketing spend, driven by timing, with a greater share of our fiscal 2025 marketing investment recognized in the second half. Along with continued benefits from restructuring actions, and discipline management of discretionary costs.
Speaker #2: In the third quarter, we recorded charges and $3 million in transformation-related SG&A expenses, totaling $78 million under our fiscal 2025 restructuring plan. Since the plan's inception, we have incurred $224 million in charges and transformation expenses.
Lance Allega: Since the plan's inception, we have incurred $224 million in charges and transformation expenses, of which $89 million are cash-related and $135 million are non-cash. We continue to expect total charges and expenses under the plan to be up to $255 million, with any remaining amounts expected to be incurred by the end of fiscal 2026. Thus far, the actions we've taken under the plan to streamline our business have resulted in approximately $35 million in savings in fiscal 2025 and are on track to deliver an additional $55 million in fiscal 2026. Moving down the P&L, we reported a third quarter operating loss of $150 million. Excluding the litigation reserve expense, transformation expenses, and restructuring charges, our adjusted operating income was $26 million, again exceeding our outlook. The bottom line, our reported diluted loss per share was $1.01.
Speaker #2: Of which, $89 million are cash-related, and $135 million are non-cash. We continue to expect total charges and expenses under the plan to be up to $255 million.
Speaker #2: With any remaining amounts expected to be incurred by the end of fiscal 2026. Thus far, the actions we've taken under the plan to streamline our business have resulted in approximately $35 million in savings in fiscal '25, and are on track to deliver an additional $55 million in fiscal '26.
Speaker #2: Moving down the P&L, we reported a third quarter operating loss of $150 million. Excluding the litigation reserve expense, transformation expenses, and restructuring charges, our adjusted operating income was $26 million, again exceeding our outlook.
Speaker #2: The bottom line, our reported diluted loss per share was $1.01. This result includes the impact of the insurance appeal decision, transformation expenses, restructuring charges, and a $247 million non-cash valuation allowance against certain U.S. federal deferred tax assets.
Lance Allega: This result includes the impact of the insurance appeal decision, transformation expenses, restructuring charges, and a $247 million non-cash valuation allowance against certain US federal deferred tax assets. Regarding this valuation allowance, accounting rules required us to reduce the value of our US federal deferred tax assets and record a non-cash tax expense due to cumulative GAAP US losses over the past three years. These losses have been driven largely by restructuring and impairment charges, litigation reserve expenses, and other non-operating items. Importantly, this valuation allowance has no impact on current cash flow, does not signal deterioration in the underlying business, and should reverse over the next few years as US profitability improves. Including the items discussed earlier and the US federal deferred tax asset valuation allowance, our adjusted diluted earnings per share for the quarter was $0.09.
Speaker #2: Regarding this valuation allowance, accounting rules required us to reduce the value of our US federal deferred tax assets and record a non-cash tax expense due to cumulative gap US losses over the past three years.
Speaker #2: These losses have been driven largely by restructuring and impairment charges, litigation reserve expenses, and other non-operating items. Importantly, this valuation allowance has no impact on current cash flow, does not signal deterioration in the underlying business, and should reverse over the next few years as U.S. profitability improves.
Speaker #2: Excluding the items discussed earlier and the US federal deferred tax asset valuation allowance, our adjusted diluted earnings per share for the quarter was $0.09.
Speaker #2: Separately, part of our Q3 adjusted EPS overdrive relative to our outlook was due to a favorable tax development from the IRS's approval of a tax method change that mitigated the use of our US losses to offset foreign earnings under the US guilty provisions.
Lance Allega: Separately, part of our Q3 adjusted EPS overdrive relative to our outlook was due to a favorable tax development from the IRS's approval of a tax method change that mitigated the use of our US losses to offset foreign earnings under the US GILTI provisions. As a result, our full-year fiscal 2026 non-GAAP estimated effective tax rate is lower than originally anticipated and more reasonable. So with that, we recorded a cumulative three-quarter catch-up tax benefit in the third quarter. This tax update accounted for approximately $0.06 of our EPS in the quarter. Now, turning to the balance sheet, third quarter inventory was down 2% year-over-year to just over $1 billion. We ended the quarter with $465 million in cash and cash equivalents and $600 million in restricted investments.
Speaker #2: As a result, our full-year fiscal '26 non-gap estimated effective tax rate is lower than originally anticipated and more reasonable. So with that, we've recorded a cumulative three-quarter catch-up tax benefit in the third quarter.
Speaker #2: This tax update accounted for approximately $0.06 of our EPS in the quarter. Now, turning to the balance sheet. Third quarter inventory was just over $1 billion.
Speaker #2: down 2% year-over-year to We ended the quarter with $465 million in cash and cash equivalents, and $600 million in restricted investments. As a reminder, that $600 million is fully set aside and dedicated to covering all remaining principal and interest on our senior notes due in June this year.
Lance Allega: As a reminder, that $600 million is fully set aside and dedicated to covering all remaining principal and interest on our senior notes due in June this year. These restricted investments are not available for general use and should not be viewed as part of our operating liquidity or discretionary debt profile. Furthermore, we continued to prioritize balance sheet strength during the quarter, including repaying approximately $200 million of revolver borrowings and ending the period with no amounts outstanding under our $1.1 billion revolving credit facility. As a result, we enter the final quarter of this fiscal year with a strong liquidity position and meaningful financial flexibility, with more than sufficient resources to meet all expected obligations. Now moving to our fiscal 2026 outlook. With one quarter left in the fiscal year, we've updated our expectations, largely toward the high end of our previous ranges.
Speaker #2: These restricted investments are not available for general use, and should not be viewed as part of our operating liquidity or discretionary debt profile. Furthermore, we continue to prioritize balance sheet strength during the quarter, including repaying approximately $200 million of revolver borrowings and ending the period with no amounts outstanding under our $1.1 billion revolving credit facility.
Speaker #2: As a result, we enter the final quarter of this fiscal year with a strong liquidity position and meaningful financial flexibility with more than sufficient resources to meet all expected obligations.
Speaker #2: Now moving to our fiscal '26 outlook. With one quarter left in the fiscal year, we've updated our expectations. Largely toward the high end of our previous ranges, breaking that down further, we now expect full-year revenue to decline approximately 4% compared with our prior expectation of a 4% to 5%
Lance Allega: Breaking that down further, we now expect full-year revenue to decline approximately 4% compared with our prior expectation of a 4% to 5% decline. This reflects our expectation that North America revenue will decline approximately 8% and APAC revenue will decline approximately 6%, partially offset by growth of approximately 9% in EMEA. This implies a meaningful improvement in fourth quarter revenue trends as we continue executing our strategies and move toward the stabilization we expect in fiscal 2027. Turning to gross margin, we now expect the full-year rate to decline by approximately 190 basis points compared with our prior outlook of a 190 to 210 basis point decline. Drilling down further, US tariffs will drive most of the decline, along with unfavorable channel and regional mix, and pricing headwinds. These pressures are partially offset by foreign currency tailwinds and a more favorable product mix.
Speaker #1: Sent . Decline .
Speaker #2: reflects This expectation that our North revenue will decline 8% approximately and APAC revenue will decline partially by will decline offset approximately 6% . approximately 6% , offset by growth of approximately 9% in EMEA .
Speaker #2: implies This a meaningful in fourth quarter revenue trends as we continue executing our strategies and move stabilization , toward the we expect in fiscal 27 .
Speaker #2: Turning to gross margin . We now expect the full year rate to decline by approximately 190 basis points compared prior with our outlook of a 190 to 210 basis point decline .
Speaker #2: Drilling down further US drive tariffs will most of the decline , along with channel and unfavorable regional mix and pricing headwinds partially pressures are foreign offset by currency and a more tailwinds favorable product .
Lance Allega: We remain highly focused on controlling costs and expect adjusted SG&A expenses to decline at a mid-single digit rate, unchanged from our prior outlook, with even greater confidence in our ability to leverage given the slight improvement in the revenue outlook. This implies a considerable decline in fourth quarter SG&A expenses driven primarily by year-over-year marketing timing and lower compensation-related costs. This translates to an expected adjusted operating income of approximately $110 million, at the high end of the $95 to $110 million outlook we provided in mid-November. The bottom line, we now expect adjusted diluted earnings per share of $0.10 to $0.11, driven in part by the favorable tax planning developments I noted earlier. These updates are expected to yield a full-year fiscal 2026 effective tax rate roughly in line with the fiscal 2025 rate.
Speaker #2: We remain highly focused on controlling costs and expect adjusted SG&A expenses to decline at a mid-single digit rate , unchanged from our prior outlook .
Speaker #2: With even greater confidence ability to in our leverage given the slight improvement in the revenue outlook . implies a This considerable decline in fourth quarter expenses , driven primarily by year over year marketing timing and lower compensation related costs .
Speaker #2: This translates to an expected adjusted operating income of approximately 110 million at the high end of the 95 to 110 million outlook , we provided in mid-November .
Speaker #2: The bottom line . We now expect adjusted diluted earnings per share of 10 to $0.11 , driven in part by the favorable planning tax developments I noted earlier .
Speaker #2: These updates are expected to a full yield fiscal 26 effective rate , roughly in tax line with the fiscal 25 rate . In closing , we are operating with focus discipline and growing confidence as we complete a year pivotal in Under Armour transformation .
Lance Allega: In closing, we are operating with focus, discipline, and growing confidence as we complete a pivotal year in Under Armour's transformation. Our Q3 performance reflects meaningful progress in simplifying the business and driving more disciplined execution, supported by a leaner, more agile operating model. The foundation continues to give us flexibility to manage near-term challenges while positioning the company for improved financial performance over time. While work remains, we believe the most disruptive phase of this reset is behind us. And with a clear strategy, disciplined capital deployment, and continued focus on cost optimization and margin expansion, we are confident these actions will better position us to drive sustainable, profitable growth and shareholder value over the long term. Finally, before we close out today's prepared remarks, this being my last call in this role, I want to pause and say thank you.
Speaker #2: Our third quarter performance reflects meaningful progress in simplifying the business driving more disciplined execution and , supported by a more leaner , agile model operating .
Speaker #2: Foundation continues to give us flexibility to manage near-term challenges while positioning the company for improved financial performance over time. While work remains,
Speaker #2: We most believe the disruptive this reset phase of behind is us and with a clear strategy disciplined capital deployment and continued focus on cost optimization and margin expansion , we are confident these actions will better position us to drive sustainable , profitable growth and shareholder value over the long .
Speaker #2: Finally close , before we out term today's remarks , prepared this being last call in this my role , I want to pause thank you and say for the special thanks to Kevin .
Lance Allega: With a special thanks to Kevin, our entire board, and to all my teammates around the world. After 21 years at Under Armour, including 9 as CFO, I have had the privilege of working alongside extraordinary teammates who bring passion, resilience, and an unwavering commitment to this brand every day. Together, we have navigated periods of growth, transformation, and real challenges, and we have done so with locked arms in the humble and hungry mentality that makes this place so special. As we work through the coming CFO transition with Reza joining the brand, I do so with complete confidence in our teams and in the strength of the foundation we have now established together. We are reaching that crucial turning point, and thus I believe Under Armour's best days are still ahead. With that, we'll open the call to questions. Operator?
Speaker #2: To our entire board, and to all my teammates around the world. After 21 years at Under Armour, including nine as CFO, I have had the privilege of working alongside extraordinary teammates whose passion, resilience, and unwavering commitment to this brand inspire me every day.
Speaker #2: Every day . Together , we have navigated growth periods of , transformation and real challenges , and we have done so with locked arms and the humble and hungry mentality that makes this place so special .
Speaker #2: As we work through the coming CFO transition with Reza joining the brand . I do so complete with confidence in our teams and in the strength of the foundation we have now established together .
Speaker #2: We are reaching that turning point crucial and believe Armour's Under best days are still ahead . that , With we'll open the call to questions .
Speaker #2: Operator .
Lance Allega: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star, then two. Our first question comes from Simeon Siegel with BMO Capital Markets. Please go ahead.
Speaker #3: We will now begin the question and answer session . To ask a question , you may press star , then one on your touch tone phone .
Speaker #3: If you are using a speakerphone , please pick up your handset before pressing the keys . If at any time your question has been addressed and you would like withdraw the question , to please press star then two .
Speaker #3: Our first question comes from Simon Siegel with Guggenheim . Please go ahead .
Kevin Plank: Thanks. Hey guys, morning. Dave, just want to say it's been great working with you. Best of luck on your next chapter.
Speaker #4: Thanks . Hey , guys . Morning . Dave , just want to say it's been great working with you . Best of luck on your next chapter .
Dave Bergman: Thank you.
Kevin Plank: Kevin, your December quarter comments are interesting and encouraging. Can you speak to what makes you confident about that the quarter was the lowest revenue decline for North America, and just that the region and Under Armour overall will see stabilization in FY27? And then along those lines, just as you think about this path forward, I think you mentioned stabilization in footwear in '27. Can you elaborate a little bit on that more? Thank you.
Speaker #4: Thank you . Kevin . You're in December . Quarter comment is interesting and encouraging . Can you speak to what makes you confident that the quarter was the lowest revenue decline for North America , and just that the region and Under Armour overall will see stabilization in FY 27 .
Speaker #4: And then along those lines , just as you think about this path forward , I think you mentioned stabilization in 27 . Can footwear in you little bit elaborate a more ?
Dave Bergman: Yeah, thank you, Simeon. And let me just start with leadership. First of all, I'm becoming more and more proud, I think, of the ecosystem that we've built here at UA to be able to have internal talent like Kara Trent be able to move from a merchandising role into Americas as a similar one in Europe to heading up Europe, and then having the ability to bring her back here a little more than two years ago. I think stabilization was something that was her number one goal, and we did achieve that and, along with an amazing team of people, that just made that happen.
Speaker #4: on that Thank you .
Speaker #5: Yeah . Thank you . Simeon . And let me just start with leadership . First of all , I'm becoming more and more I think , proud , the of ecosystem that we've built here at UA be able to have to internal talent like Kara Trent , be able move from to role into America to a similar one in Europe , to heading up Europe and then having the bring her ability to here a little more than two years ago .
Speaker #5: And I think stabilization was something that was her number one goal . And we did a care delivered . along with And team an amazing of that just people made that happen .
Dave Bergman: And then I also just want to make note of the credit of a 14- or 15-year Under Armour vet and Adam Peake, who we brought back to the brand about 11 months ago and had the ability to create that kind of clarity and role and succession. So I think it starts with, A, the confidence we have in giving stability to our partners. Within that, structurally, I believe that we now have the right model in place. I think that we're attacking the right issues, and that, of course, begins with product. We clearly have done a really solid job in laying out our design ethos and a language that consumers can look to, expect, and begin to make more and more repeatable. As I said, we started with our concept of winning with the winners, and that's getting behind HeatGear and ColdGear.
Speaker #5: And then I also just want to make note that the credit of a 14 or 15 year Under Armour vet in Adam Peak , who we brought back to the brand about 11 months ago and have the ability to create that kind of of clarity and role and succession .
Speaker #5: I think it starts with a the confidence we have in giving them stability to our partners within that , you know , believe that we now have the right structurally , I model think that in place .
Speaker #5: we're right attacking the issues . And then of course , begins with product . I clearly have We a really solid job laying out our in design ethos and a language that consumers can look to expect and begin to make more and more repeatable .
Speaker #5: As I said , we started with our concept of winning with the that's getting behind heat and gear . And then meanwhile , we're introducing new styles and silhouettes that , again , were just becoming more consistent with from storytelling standpoint .
Dave Bergman: Meanwhile, we're introducing new styles and silhouettes that, again, we're just becoming more consistent with. From a storytelling standpoint, I think you're just starting to feel the brand more. And that goes to the launch we did with the women's flag football campaign on Wednesday. Please take a chance to look at our investor relations page and see the recent spot that we just put out, which is pretty impressive. Probably the most telling thing, though, is going to be, no matter what I say, Kara walked into a pretty tough situation, and we were just looking at declines, especially from a wholesale level, which is always a great indicator of how a year is going to turn out. And I can say definitively for the first time in quite some time, we're no longer looking at significant declines.
Speaker #5: I think a it's just starting to feel the brand you're more and that goes to the launch we did with the women's flag football campaign on Wednesday .
Speaker #5: And please take a chance to look at our Relations Investor page . And , you the know , see recent spot that we just put out , which is pretty impressive .
Speaker #5: Probably the most telling thing , though , is going to be no matter what I say . Kara walked into a situation and we were just looking at declines , especially from a wholesale level , which is always a great indicator of how a year is going out to turn I can .
Speaker #5: say And definitively , for the first time in quite some time , we're no longer looking at significant declines . And obviously I'm hedging my statements .
Dave Bergman: Obviously, I'm hedging my statements there, but we're at a place that we like the way the order book is shaping up right now. And that also just goes back to just pure relationships with partners because hopefully you can hear it in our voice, and if you were watching, you could see it in our eyes. But there's just a different level of confidence, swagger, whatever you want to call it, which I think leads to the most important indicator, which is just culturally. This business is feeling it. That's exuding out. It's exuding through the desire, the number of phone calls we get of people that want to be here. And it's just a trend. It's hard to put it into words. And after 20 years public and celebrating 30 years this year as a business, I've just seen a lot.
Speaker #5: There . But we're at a place like the that we way the order book is shaping up right now , and that also just just pure goes back to relationships with partners , because hopefully you can hear it in our voice .
Speaker #5: And if you were watching , you could our see it in eyes . But there's just a different level of confidence , swagger , want to call it , which I think leads to the most important indicator , which is just this business is it .
Speaker #5: feeling That's exuding out . It's exuding through the desire of the number of phone calls we get of people that want to be here .
Speaker #5: And it's it's just a trend . It's hard to put it into words . And after , you know , 20 years public and celebrating 30 years this year as a I've business , just seen a lot .
Dave Bergman: So we feel very good about what the North America position looks like. Moving on to footwear. As I said, we're not trying to hide anything here. Footwear is a billion-plus dollar business for us that we believe has the opportunity to be much larger. As we compare ourselves to others in our space, we're seeing other partners or other brands do a lot more with a lot fewer items. That's pretty narrative to the way that I'm driving across the organization right now, is how can we just skinny up? I think I did a pretty good job covering it in my prepared remarks of, "Let's just stop trying to chase volume through additional units. Let's get behind.
Speaker #5: So we feel very good about what the North America position looks like . Moving on to footwear , as I said , we're not trying to hide anything here .
Speaker #5: Footwear is a billion plus dollar for us that we business believe has the opportunity to be much larger . And compare ourselves to as we others in our space , seeing other we're partners or other brands lot do a more with a lot fewer That's , that's items .
Speaker #5: That's pretty narrative to the way that I'm driving across the organization right now. How can we just skinny up? I think I did a pretty good job covering it in my prepared remarks of, let's just stop trying to chase volume through additional units.
Dave Bergman: Let's get clarity with the way that works from the product to the story to the distribution." I think that our new operating model, what we spent the majority of calendar year 2025 doing, implementing and then running now for a year, I think we're going to start seeing those benefits. So I can talk about the authenticity on field, and I think we did a good job making the statement that Under Armour's authentic athletic credibility is something which is nearly impossible to recreate. We're going to lean there. We're going to leverage, and you're going to see really clear ideas. Like when we talk about things like running, we have a really clear point of view of who we are and run. We build running shoes for athletes that are running to train for their sport.
Speaker #5: Let's get behind . Let's get clarity that works from the product to the story to the distribution . And I think that our new operating what we majority spent the of model , calendar year 2025 doing , implementing , now for a and then running year , I think we're going to start seeing those benefits .
Speaker #5: So talk about the I can authenticity on field . And I think we made a did a good job making the statement that Armour's authentic , athletic Under credibility is something which is impossible to recreate .
Speaker #5: And so we're going to lean there . We're going to and you're going to see , you know , really about things talk like ideas .
Speaker #5: And so we're going to lean there . We're going to and you're going to see , you know , really about things talk Like when we running , really clear we have a view of who point of we are run , you know , we build and running shoes for athletes that are running to train for their sport .
Dave Bergman: In addition to that, we also have the ability to make the Velociti Elite 3 at $250 per pair in Italy. But a part of it is some of the work that our team's been digging into, where we just took some of the Velociti family that had 6 shoes in its franchise ranging from $110 to $250. We just went from 6 shoes in that franchise to 4, being more targeted, being more deliberate with the storytelling that we're going to do and put behind it, which makes it easier for, A, our teams to be able to build, B, our sales team be able to sell, C, the wholesale partners be able to write orders for, and most importantly, the consumer to be able to make an easy purchase decision with a really clear point of view from the brand.
Speaker #5: In addition to that , we also have the ability to make cars like the velocity three at $250 per share and but a part of it is some of the work that our team has been digging into , where we just took off the velocity family that had six shoes in its franchise , ranging from 110 to $250 .
Speaker #5: We just went six shoes in from that franchise to four being more targeted , being more deliberate with the going to do and put behind storytelling that we're which makes it easier for a be able to our teams to build , be our our sales team , be able to sell , see the , the wholesale partners , be able to write orders for .
Speaker #5: And most importantly , the consumer to be able to make an easy purchase decision with a really clear point of view from the brand .
Dave Bergman: So in some instances, and maybe just the last point here, when I think about it, I mentioned sportswear and talked about three price points from $100, $120, and $125 with the Sola, the HB-LO, and the footwear that we now have in place there. We're getting very intentional. That word is no accident on this call. You'll hear it over and over, and it's basically tattooed into anyone who walks through this building. So we're doing a good job doing that. So thank you for that question, Simeon.
Speaker #5: So in some maybe instances , and just the here last point , when I think about , I mentioned about three price and talked points from 100 , 120 , sole of the HBO $125 with the and the footwear that we we we now have in there .
Speaker #5: place , just we're getting very intentional . That word is no accident on this call . You'll hear it over and over and it's basically it's tattooed into anyone through this building .
Speaker #5: So who walks we're doing a good job doing that . So thank you for that question , Simeon .
Kevin Plank: That's great. Your excitement is really clear. Best of luck for the rest of the year.
Speaker #4: That's great . Your excitement is really clear . Best luck for the rest of the year .
Dave Bergman: Thank you.
[Analyst] (BMO Capital Markets): Thank you.
Speaker #2: Thank you .
Speaker #6: Thank you .
Lance Allega: Our next question comes from Jay Sole with UBS. Please go ahead.
Speaker #3: Our next question comes from Jay Sole with UBS . Please go ahead .
[Analyst] (UBS): Thank you so much. Kevin, you mentioned that North America is beginning to turn the corner and the wholesale partners are engaging. You're seeing the fall order book shaping up nicely. I'm wondering if all that progress, that operational progress in North America is also transferable to Europe and the APAC regions. Are you seeing progress in those regions as well? Do you expect sequential improvement as we go through calendar 2026? That's the question. Thank you.
Speaker #7: Thank you so much , Kevin . You mentioned that North America is beginning to turn the corner . And the wholesale partners are engaging .
Speaker #7: You're seeing the order book up shaping nicely . I'm wondering if all that progress , that operational progress in North America is also transferable to Europe and the APAC regions .
Speaker #7: Are you seeing progress in those as well ? regions Do you expect sequential improvement as we go through 26 ? That's calendar the question .
Dave Bergman: Yeah, thank you, Jay. EMEA has been a strong suit for the company for quite some time, and delivering no less this year with about 9% growth there. So we really like the team. Again, it's the consistency that we have in the team on the ground, the leadership of, again, being able to move another Under Armour legacy athlete like Kevin Ross into the leadership position following Kara has been a real asset. Our relationships there have really never been stronger. And calling out specifically JD Sports and Sports Direct, the buy-in, the partnership is something that they're really getting behind the brand because we've been delivering and we've been consistent. And in places like France where we're probably the number one underground brand in the country, we're seeing that begin to translate out.
Speaker #7: Thank you
Speaker #7: .
Speaker #5: Thank you Yeah .
Speaker #5: Jay Anemia . has been strong a suit for the company some for quite time . And delivering no less this with year about 9% growth .
Speaker #5: There . So we really like the team again . It's a the consistency that we have a and the team on the ground .
Speaker #5: The leadership of again being able to move in another Under Armour legacy athlete like Kevin Ross into the leadership position Kara following has been a real asset.
Speaker #5: Our relationships there never been have really stronger and calling out specifically Sports and Sports Direct . The buy partnership is something that you in the know , they're they're really getting behind the brand because we've been delivering and we've been consistent .
Speaker #5: And in places like probably France where the the number one underground brand in , in , in , in the country . We're seeing that begin to translate out now at the same time , you know , Amaya is becoming a more promotional , particularly in the largest and more our UK , which is market .
Dave Bergman: Now, at the same time, EMEA is becoming more and more promotional, particularly in the UK, which is our largest market. So it's something we have our eye on. And what we're seeing, frankly, from the other brands is there's a lot of people that are out there buying business. So we know that that does not work. And so we're really holding the line, I think, for being opportunistic where we can or more importantly, maybe we have to in some instances. But we like what EMEA is doing. We believe it will continue to grow for us. We're not sure at what levels right now as we think and look out into the new year, but it's certainly an area of strength for us.
Speaker #5: something we So it's have our eye on and what we're seeing , frankly , from the other brands is there's a lot of people that are out there buying business , so we know that that does not work .
Speaker #5: And so we're really holding the think line . I we're being opportunistic where we can or more maybe we have to in some importantly , instances .
Speaker #5: But , you know , we like Amaya is what doing . We believe it will continue to grow for us . We're not sure at what levels right now , as we think and look out into the new year it's certainly an area , but of strength for us .
Dave Bergman: And again, I guess I get to sit here like a bit of an old hat now, 30 years doing this, where I just look at things of progress. But that feeling from the team, I'm going to be over in Europe next week and get to see Lindsey Vonn hopefully ski and win and compete and win some gold. And I'll be visiting our office in Amsterdam too and delivering the unleashing intentionality directly to our team too. So we like what's happening in Europe. Again, we're not declaring victory anywhere, but what you see is you feel a brand that's I think we're right where we're supposed to be at this moment in our turnaround.
Speaker #5: again , you And know , I guess I get to sit here like a old hat . bit of an Now , 30 years doing this , just look at things of progress .
Speaker #5: That feeling from the team, I'm going to be over in Europe next week and get to see Lindsey Vonn—hopefully ski and win and compete and win some gold.
Speaker #5: So and I'll be visiting our office in Amsterdam to and delivering the unleashing Intentionality delivered directly to our team to . So we like what's happening in Europe .
Speaker #5: Again , we're not declaring victory anywhere . But what you is see you feel a brand . That's it's I think we're right where we're to be at supposed in our turnaround .
Speaker #5: this moment
[Analyst] (UBS): Got it. Thank you so much.
Speaker #7: you so much Got it . Thank .
Lance Allega: Our next question comes from Bob Drbul with BTIG. Please go ahead.
Speaker #3: Our next question comes from Bob Drabble with BTIG. Please go ahead.
[Analyst] (UBS): Hi. Good morning. I guess just, Kevin, when you think about the go-forward, especially in footwear, how are you thinking about segmentation in a pretty competitive market? Is increased penetration and success of better and best to is that the key to stabilization here, or will it be good-level driven? Thanks.
Speaker #8: Hi . Good morning . I guess just you think about the go , Kevin , when forward , especially in footwear , how are you thinking about segmentation in a pretty competitive You know , is is increased penetration and success of best better and to stabilization ?
Speaker #8: key to Is that the stabilization here or or will it be good level driven ? Thanks .
Dave Bergman: Yeah, we've used a vernacular of good, better, best of really just thinking about the line that's been critical as we've been working through this reset. As I said in the past, we've made a lot of good. We've made some better and nowhere near enough best. Now, if you ask me for our druthers, we sit at $5 billion-ish in revenue. We'd love to maintain our good, of course, be opportunistic where we can. But we really like to concentrate our growth at the better and best level. And frankly, those clear lines of segmentation have not been there. And as we said, going through this premiumization as we're really focusing. And so even with things I gave the example about our Velociti franchise earlier, clear segmentation is there.
Speaker #5: Yeah . We've used the vernacular of good better best of really just thinking about the line that's been critical as we as we've been working through this , this reset , as I said in the past , we've made a we've lot of good .
Speaker #5: We've made some better . And nowhere near enough . Best . Now , if you ask me for our druthers , we sit at revenue 5 billion in .
Speaker #5: We'd maintain good our love to. Of opportunistic where we can, but we really like to growth with the better and best course, be level.
Speaker #5: And frankly , lines of those clear segmentation have not been there . And as we through this said , going premiumization , as we're really focusing and so even with things , I gave the example about our franchise velocity earlier , clear segmentation is there .
Dave Bergman: And what I'll get into maybe a little bit later is, as we're thinking about the way that we're approaching this, is becoming more consistent for the consumer. I think one thing that I'm driving very much so is our global continuity. And what's ironic is that in a brand that was founded effectively on two products, if not two fabrics, HeatGear and ColdGear, that if you ask today, "What are our two most important franchises that we have?" it's HeatGear and ColdGear. And then we make a lot of other stuff. So number one, we want to go where the money is. We want to leverage those places where we're already currently winning. And so establishing clear, good, better, best in that compression category, that base layer category, make sure that we continue to win there. And then we're looking where we can create extensions.
Speaker #5: And what I'll get into maybe a little bit later is as we're thinking about the approaching , this way that we're is becoming more consistent for the consumer .
Speaker #5: You know , I think one thing that I'm driving very much so is our global continuity . And what's ironic is that in a brand that was founded effectively on two products , if not two fabrics , heat and cold gear , that if you ask today what our two most important franchises that we have , it's heat and cold gear , and then we make a lot of other stuff .
Speaker #5: So number one , we want to go where the money is . We want to leverage those places where we're already currently winning .
Speaker #5: And so establishing clear , better , good , best in that compression category , that base category . continue layer Make sure that we to win there we're looking .
Dave Bergman: What we don't want to be is we're not interested in being a fashion company. We'll be fashionable, but we're looking for more continuity where today we're carrying a global commonality of a number that's somewhere in the 20s, meaning that each year or if you went to each region between APAC, EMEA, and the States, you'd find about 20% commonality in stores. We're looking to drive that much higher with a much more consistent brand voice and making sure that we're lining up with the distribution that we have because I think it's a unique position of our industry is that sports brands, especially, we've got the ability to sell at good. And as long as we have the quality and we have the product that can compete, we can do better and best very well. So you'll see a much better and broader offering.
Speaker #5: where we can And then extensions . What we don't want to be is interested in being a we're not fashion be company . We'll fashionable , but we're looking for more continuity where today we're carrying we're a a global of a number that somewhere in the 20s , commonality that each year or if you went to each between region APAC and the , May states , you'd find about 20% commonality in stores .
Speaker #5: We're looking to drive that much higher with a much more consistent brand voice and making sure that we're lining up with the distribution that we have , because I think it's a unique position of our industry is that brands sports , especially , you know , we've got the ability to sell at good .
Speaker #5: And as long as we have the quality and we have the product that we can do better and best very well . can So compete , you'll see a much better and broader offering .
Dave Bergman: But not unlike the example I laid out in our footwear with some of our sportswear styles, including the Arc 96, the HB-LO, and the Sola, we're looking to get into that business. And we're not coming in at $160. We're being very thoughtful about the way we're approaching it because our footwear ASP, which as you've heard is my number one driver as I'm thinking about how we can grow the business and how we have the organization thinking about it, it's been a number that hasn't been carrying three digits. And so we're looking to start building a much stronger platform with the $100-plus in footwear, which may be a good carryover from the last question too.
Speaker #5: But not unlike the example I laid out in our , our , our footwear with some of our sportswear styles , including the Arc the HP low , and the solar 96 , into that .
Speaker #5: looking to get We're and we're not at $160 . coming in We're being very thoughtful we're about the way approaching it , because our footwear ASP , which , as you've heard , is my number one driver , is I'm thinking about how we can grow the business and how we have the organization thinking about it .
Speaker #5: It's been a number that that hasn't been carrying three digits . And so looking to we're stronger with platform $100 plus in footwear , which may be a good , good carryover from the last question to .
[Analyst] (UBS): Thank you. Dave, good luck.
Dave Bergman: Thank you.
Speaker #8: Thank you, Dave. Good luck.
Speaker #6: Thank you .
Lance Allega: Our next question comes from Sam Poser with Williams Trading. Please go ahead.
Speaker #3: Our next question comes from Sam Poser with Williams Trading. Please go ahead.
[Analyst] (Williams Trading): Thank you for taking my questions. I have a handful. But one, Kevin, you talked a lot about the product. You talked a bit about the storytelling. Can you discuss sort of what you're doing to create, and I just watched the ad very quickly, but what you're doing to create more of an emotional connection both with your performance product and then with your product like the HB and Sola and some of those better kinds of introductions both in footwear and apparel?
Speaker #9: Thank you for my questions . I have a handful , but one . Kevin , you talked a lot about the product . You talked you taking bit about the storytelling .
Speaker #9: discuss sort of Can you you're doing to create ? And I just watched the ad very quickly . But what you're doing to create more of an connection , with your emotional both performance product product , like the and then and solar and HB some of that better , those better kinds of introductions , both in footwear and apparel .
Dave Bergman: Yeah. Thank you, Sam. One thing is certain is that the world does not need another capable apparel and footwear manufacturer. The world needs a hope, and they need a dream. And that means that it's our job to make them feel something when they participate with our brand. And whether it's that little girl, little boy that maybe strapping on their first Under Armour compression shirt and feeling like they just put on a superpower or sliding a shoe on their foot, we've got opportunity. And I don't think that we've maximized that opportunity yet. What I was talking about in the sportswear category is you can see is the price-to-value in things like that new HB-LO shoe at $100, it is extraordinary.
Speaker #5: Thank you . Yeah . Sam . Well , one thing is certain is that the world does not need another capable apparel and footwear manufacturer .
Speaker #5: The world needs a hope and they need a dream . And that means that it's our job to make them feel something when they participate with our brand .
Speaker #5: And whether it's that little girl , a little boy that maybe strapping on their first Under Armour compression shirt and feeling like they just put on a super , or slotting a shoe on their foot , we've got opportunity and I don't think that we've maximized that opportunity yet .
Speaker #5: I was talking about in the sportswear category , as you can see , the price to value in things like that , that new HB low shoe at $100 , it is extraordinary .
Dave Bergman: And so that is incredibly intentional from the brand in saying, "We need to get them to look." And if you check the sites and say, "there's nobody better than you at doing that," and find out what people are saying about it, it's, "What do you think of this UA shoe?" And then they're sort of eye-popping and saying, "Wow, that's $100." So I think people have been critical of us, and we've been critical of ourselves of improving the price-to-value relationship of the products that we put out there. So A, the product has to be there. Then we have to give them a reason to wear the product. Our authenticity with athletes, teams, and leagues all over the planet are something that give us a global presence. But as you know, it's about winning here in the States, and so finding that credibility.
Speaker #5: And so that is incredibly intentional from the saying need to brand we and get them to look . And if sites and Sam , there's check the nobody better at you than doing that and find out what people are saying about it .
Speaker #5: It's what do you think of this ? Shoe ? And then there's sort of eye popping and saying , wow , that's a $100 .
Speaker #5: So I think people think critical of us , and we've been critical of ourselves , of improving the price to value relationship with the products that we put out there .
Speaker #5: So, the product has to be there. Then we have to give them a reason to wear the product. Our authenticity with athletes and teams and leagues all over the planet is something that gives us a global presence.
Speaker #5: But as you know , it's about winning here in the States . And so finding that credibility . So we're taking a very deliberate city attack making sure we get things like sportswear in there not to be lost on that .
Dave Bergman: So we're taking a very deliberate city-attack strategy, making sure we get things like sportswear in there. Not to be lost on that, and the reason that people buy our sportswear is because we are authentic, because we are on field, and we have a great positioning. But I think when you look at the levers that will drive that, it's athlete credibility. It's clever and inspirational imaging. And it's confidence, Sam. It's just confidence from us. I think that's the one thing that you see of us being the first ones to really drive and get behind women's flag football and show it in such an aspirational way.
Speaker #5: And the reason that people buy our sportswear is we are because because we authentic , are on field and we have a great positioning .
Speaker #5: But I think when you look at the levers that will drive that , it's athlete credibility . It's . It's clever and inspirational .
Speaker #5: Imaging and it's confidence . Sam . It's just confidence from us . I think that's the one thing that you see of being the us really drive first ones to behind women's flag and show football it in such a aspirational way .
Dave Bergman: We think, a, we can invite new young women and inspire them and give them the confidence to participate in the game that we think will help their overall self, which is the thing that helps us show up here and go to work every day and be so passionate about what it is that we do. So brands need to make you feel something. I certainly feel that that commercial, with some of the feedback we've had in just a few days from young women that are just sending thank yous and watching the handles of some of the incredible young stars that we have featured in the commercial, like Ashley, they're just these letters that are saying, "Thank you so much for doing this. You've inspired me.
Speaker #5: We think , a we can invite new young women and inspire them and give them the confidence to participate in the game that we think will help their overall self , which is the thing that helps us show up here and go to work every day .
Speaker #5: And be so passionate about what it is that we do . So brands need to make you feel something . I certainly feel that that commercial with some of the feedback we've had in just a few days from young women that are just sending thank yous and watching the handles of some of the incredible young stars that we have featured in the commercial , like Ashley , they're just these letters that are saying , thank you so much for doing this .
Dave Bergman: I'm going to go take a chance, and I want to be an athlete now." So you'll see more and more of that where product attributes are important. Having our naming architecture, etc., in place matter. But making consumers feel something is where we're focused for the brand.
Speaker #5: You've inspired me . I'm going to go take , and I a chance want to be an athlete . Now . So you'll see more and more of that .
Speaker #5: product Where attributes are important . Having our naming architecture , etcetera in place matter , but making consumers feel something is where we're focused for the brand .
[Analyst] (Williams Trading): Thank you. I just want to follow up. In your flagship store in Baltimore, you have all those local high school teams who have their helmets up. When I was there, you had the two high schools that I forget what that was called, but the two high schools that are the rivalry, I think it was. And I'm wondering if you're thinking of applying that both in other full-line stores but as well as the outlet stores. And then the other question is if somebody can break down sort of APAC by country. And three, the management realignment, especially with Yaseen taking an external role. If you could talk a little bit about that, that would be great. Thanks.
Speaker #9: Thank you . I to follow just want in up your in your flagship in store Baltimore . You high have school , local high school all those teams .
Speaker #9: their helmets up . You have there , you had the was the two high schools that I what that was called , but the two high schools that are like rivalry , I think it the was , and I wonder if you're thinking of applying that both in other full line stores , but as well as as , as the , as the outlet stores and then second and then the other question is if somebody can break down sort of AIPAC by country and three , the management realignment , especially with Yasin taking an external role , if you could talk a little bit about that , that would be great .
Dave Bergman: Well, Sam, in North America alone, with 16,000 football-playing high schools in the country, and that just means they have a large enough budget if you sort of want to simplify it, Under Armour has about 3,000 of those high schools right now. So our presence is significant. The opportunity we have to grow in the team sports, which has been a real bright spot for the brand consistently for us, double-digit growth that we continue to see, outfitting teams, sidelines, coaches, etc. So that's our anchor. The other thing is the other stuff is, frankly, the easy things that we're supposed to be able to sell as a result of being authentic on field. I don't think we've done a good enough job setting the consumer up for that, giving them products that will get them to and from the field, to and from the court.
Speaker #9: Thanks .
Speaker #5: Well , with with in North America alone with football 16,000 playing high schools in the country and that just means they have a large enough budget .
Speaker #5: If you sort of want to simplify it . Under Armour has about 3000 of those high schools right now . So our presence is opportunity we significant .
Speaker #5: The have to grow in the team sports , which has real bright spot for the brand consistently for us , double digit growth that we continue to see outfitting teams been a coaches , etc.
Speaker #5: . So that's our anchor . The other thing is the other stuff is frankly , the easy things that we're supposed to be able to sell as a result of being authentic .
Speaker #5: On field . I don't think we've done a good enough job setting the consumer up for that , giving them products that will get them to and from the field , you know , to and from the court .
Dave Bergman: But we have all the credibility in the world when it happens actually on field or on court. And so opening that up, which is things like buying into the sportswear business by offering such great value with some of those new horseshoe offerings we have, is something that hopefully will help translate a little more in driving more top-end bottom line for us.
Speaker #5: all the But we have credibility in the world when it happens . Actually , on field or on court . And so opening that up , which is things like , you know , buying into sportswear the business by offering such great value with some of those new horseshoe offerings we have , is something that will help translate a little more .
Speaker #5: And driving more , more top and bottom line for us .
[Company Representative] (Under Armour): And I think, Sam, on APAC, we don't normally break down by country. But obviously, it's a super critical region for us. We've got some new leadership there that's really focused on the brand and rebuilding the brand, which is great. We've also got a new country leader in China who's very seasoned, and she's digging in really, really quickly, which is awesome. So we've talked about that APAC is a little bit behind as far as North America on the turnaround efforts, but that we feel like we can turn it around more quickly. It is a challenging environment there, a little bit of softening consumer sentiment. It's a pretty promotional environment. But I think we've got the right leadership there now, the right intention, and the right focus. And we keep rebuilding kind of the brand voice and driving full-price sales. And that's where the focus is there.
Speaker #2: Sam And I think
Speaker #2: on on APAC , you know , we don't normally break down by hopefully country . But you know , obviously it's a super critical region for us .
Speaker #2: We've got some new leadership there that's really focused on the brand and rebuilding the brand , which great . also got a is We've new country leader in China who's very seasoned , and she's digging in really , really quickly , which is awesome .
Speaker #2: So, talked about—we've said that APAC is a little bit behind as far as North America on the turnaround efforts, but that we feel like we can turn it around more quickly.
Speaker #2: It is a challenging environment there . You know , a little bit of softening consumer sentiment . It's pretty pretty promotional environment . But I think the right leadership there now , the right intention and the right focus .
Speaker #2: And we keep rebuilding kind of the brand voice and driving full price sales . And that's that's where the focus is . There .
[Company Representative] (Under Armour): I think we could probably say that the worst declines for APAC are behind us at this point, and we really start to drive forward again. So we're excited.
Speaker #2: I think we could probably say the worst declines for APAC are behind us at this point. And we really start to drive forward again.
Speaker #2: So we're excited .
Dave Bergman: Dan, what was your last question?
[Analyst] (Williams Trading): About Yaseen and his changed role?
Speaker #5: Sam, what was your last question?
Speaker #9: About Yacine and his changed role ?
Dave Bergman: Yeah. So Yaseen has been an incredible partner for us in just really helping to drive a consistent brand aesthetic across the organization. So that red thread is now beginning to pull across. When structure follows strategy and the people follow the structure, as Yaseen and I started talking about his role and where he could be most helpful to the brand, it was a really easy decision for both of us. And so Yaseen's going back to his agency world, and Under Armour is his first client. And this is all in a very positive way. He begins a new chapter with getting remarried, etc. So we're excited for Yaseen and what he's going to be doing going forward. As it relates to Under Armour, this aesthetic is something that we're driving. The unleashing intentionality presentation that I talked about that we've been rolling out, it's about getting consistent.
Speaker #5: Yeah, so Yassine has been an incredible partner for us and just really helping to drive a consistent brand aesthetic across the organization.
Speaker #5: So that Red thread is now beginning to pull across know , it's when when structure follows strategy and , you know , the people follow the structure as you've seen .
Speaker #5: And I started talking about his role where he could helpful be most to the brand . It was it was a really , you know , easy decision for both of us .
Speaker #5: And so Yassine is going back to his agency world and Under Armour is his first client . And this is all in a very positive way as he begins a new chapter with getting remarried , etc.
Speaker #5: . So we're excited for you seeing what he's going to be doing going forward as it relates to Under Armour , this aesthetic is something that we're driving the unleashing intentionality presentation that I talked about , that we've been rolling out .
Dave Bergman: It's about establishing clear, good, better, best. And in categories where we have multiple styles, and you could take something as our woven pants, our Unstoppable pants as they're classically called, we've just been editing. We've just been going through and just cleaning the brand up. We're going from 10 different pants in multiple styles with, frankly, though, 10 different fabrics and 10 different drawstrings, or waistbands, or closures, or buttons, and logo applications and reducing it down to three, good, better, and best. And that simplification that we're going to do on the raw materials side of really thinking about how we can be a better supply chain company is a lot of what's driving the thinking that we're doing right now.
Speaker #5: It's about getting consistent . It's about clear , good , better , best . And in categories where we have multiple styles . And you could take something as , as our our woven paint unstoppable .
Speaker #5: pants are Pants , as are classically called . We've just been editing . We've just been going through and just brand up . We're we're going from , you know , ten different pants and multiple styles frankly , though , and ten different fabrics waistbands drawstrings ten different buttons closures or or or and , and logo applications and reducing it down to three good , better and best .
Speaker #5: And that simplification that we're going to do on the raw materials side, of really thinking about how we can be a better supply chain company, is a lot of what's driving the thinking that we're doing right now.
Dave Bergman: When we just made this shift 2 February to the new structure and having Kara sit in as our maestro, as the Chief Merchandising Officer, getting those five different category managers that are running 10 different categories vertically, we all sat in the same room. We've got the planners in there, and we have 15, 20 people that are just really driving cross-functional communication and what that means. As a part of that, we need the red thread of design. So now that we have a Chief Merchandising Officer that's setting the tempo, they're setting the music for us, they're writing the sheet music, then you have the category managers that are driving and really implementing what is the consumer insights that we can do.
Speaker #5: And when we , you know , just made this shift , February 2nd to the new structure and having Kara sit in as our our maestro , as the chief merchandising officer , you know , getting those five different category managers that are running ten different categories vertically .
Speaker #5: We all sat in the same room , and we've had , you know , we've we've got the the planners in there and we have , you know , 15 , 20 people that are just really driving , you know , cross-functional communication and what that means .
Speaker #5: And as a part of that, we need the red thread of design. And so now that we have a chief officer that's setting merchandising, they're setting the tempo, setting the music for us.
Speaker #5: They're writing the sheet music . Then you have the . Category managers that are driving in really implementing what is the the consumer insights do that we can .
Dave Bergman: Marketing is driving and ensuring that every product we build has a story, and ensuring then that design comes across in a horizontal way to drive the red thread of what actually makes it Under Armour, what makes it consistent, and what makes this Under Armour good level, Under Armour better level, Under Armour best level. But you should find a much more consistent, deliberate, and get ready for it intentional Under Armour going forward. So we're excited about working with Yaseen, Kara, and all the other leaders that we have in place now.
Speaker #5: Marketing is ensuring that every product we build has a driving story, and ensuring that that design comes across in a horizontal way to drive the red thread of what actually makes it Under Armour, what makes it consistent, and what makes this Under Armour good level.
Speaker #5: Under Armour: better level, Under Armour. Best level. But you should find a much more consistent, deliberate, and get ready for it.
Speaker #5: Intentional Under Armour going forward . we're excited about working with Yacine , Kara , and all the other that we have leaders in place now .
[Analyst] (Williams Trading): Thank you.
Speaker #9: Thank you .
Lance Allega: Our next question comes from Peter McGoldrick with Stifel. Please go ahead.
Speaker #3: Our next question comes from Peter McGoldrick with Stifel. Please go ahead.
[Analyst] (Stifel): Yeah. Thanks for taking my question, Dave. All the best in the future.
Speaker #10: Yeah , thanks for taking my question , Dave . All the best in the future . I want dig the in on complexity reduction and opportunities for greater progress in the future .
Dave Bergman: Thanks.
[Analyst] (Stifel): I want to dig in on the complexity reduction and opportunities for greater progress in the future. It seems like much or some of the heavy lifting from SKU rationalization and organization have been made already. I was curious if you can help us think about the improvements we should expect in the coming quarters and how that would manifest in the cost structure of the business, whether it be raw materials or other items.
Speaker #10: seems like It or some of the much heavy skew from lifting rationalization and organization have been made already . I was curious if help us about the think you can improvements we should expect in the coming quarters and how that would manifest in the cost structure of the business , whether it be raw materials or other items .
Dave Bergman: Yeah. Thank you, Peter. Let me give this in two parts. I'll take the first, and Dave will take the back end of it. I've used this analogy as coming back in the CEO chair in April of 2024, walking and seeing our innovation head, Kyle Blakely, and having a conversation where we were talking about we might need more resources because of the number of fabrics that we're having to go to market with every season. And the number came out as we were making more than 300 fabrics. And we just came down and said, "Why are we making so many? Can we run the 80/20 on that?" And the 80/20 is that there's actually 30 fabrics that are driving 80% of our volume, yet we're spending all that time driving nearly another 300 fabrics in development.
Speaker #5: Thank you . Yeah . Peter . Let parts . I'll take the first and Dave will take the back end of it . I used this analogy as coming back in the CEO chair in April of 2020 .
Speaker #5: For walking and seeing our innovation had Kyle and Blakely having a conversation where we were talking about we might need more resources because of the number of fabrics that were having to go to market with every season .
Speaker #5: And the number came out as we were making more than 300 fabrics, and we just came down and said, why are we making so many?
Speaker #5: Can we run the 80 over 20 on that ? And the 80 over 20 is that there's actually 30 fabrics that are driving 80% of our volume , yet we're all that time driving nearly another 300 fabrics in development .
Dave Bergman: So we're just looking at it holistically, like, "How do we get rid of all this stuff, become more simple, become more narrowed, and more deliberate, applying a good, better, best structure," which is what Kara's job is doing, setting the margin targets of where it sits for apparel, where it sits for footwear, setting the profitability targets, SKU targets, etc., being really clear at the top, and then making sure that there's products that will fall out of that line. So we've actually spent the last 2 weeks since getting into this new cadence with, as I said in the last question, with our GMs and just going through line by line, product by product, finding out where we can maybe have 15 or 16 or 17 training shirts.
Speaker #5: So we're at it just looking holistically , like , how do we of all get rid this stuff , become more simple , become more narrowed , and more deliberate ?
Speaker #5: Applying a good , better , best structure , which is what Kara's job is doing , setting the margin targets of where it sits for apparel , where it sits for footwear , setting the profitability targets , skew targets , being etc.
Speaker #5: Really clear at the top, and then sure that making — there are products that will fall out of that line. So we've actually spent the last two weeks, since getting into this cadence new with, as I said in the last question, with our gems, and just through line by going line, product by product, finding out where we can maybe have 15 or 16 or 17 training shirts.
Dave Bergman: And with a business like training shirts, where Under Armour has 5 products that sit in the NPD top 10, 9 products that sit in the NPD top 25, as I've mentioned, our focus here is, "How do we drive ASP?" Because while we may be listed in the top 10 and top 25, we're certainly not driving anywhere near the highest ASP. So we see there's opportunity, A, to be able to drive more volume, be more consistent with our messaging to the consumer, and then as well be able to get more consistent by having less fabrics, having less, basically, inventory. So we have fewer things with clearer stories for the consumer that hopefully will manifest into a much clearer brand with a much brighter bottom line.
Speaker #5: And with a business like training shirts where Under Armour has five products that sit in the NPD top , top ten , nine products that sit in the NPD top 25 .
Speaker #5: As I've mentioned , our focus here is how do we drive ASP ? Because while we may be listed in the top ten and 25 , we're not top certainly not driving anywhere ASP near the highest suites either .
Speaker #5: opportunity There's able to drive A to be more volume , be more consistent with our messaging to the consumer well be , and as able to get more consistent by having less fabrics , having less , basically inventory .
Speaker #5: So, we have fewer things with clearer stories for the consumer that, hopefully, will manifest into a much clearer brand with a much brighter bottom line.
[Company Representative] (Under Armour): Yeah, Peter. And I think as far as when you think about the go-forward, there's some different pieces. What Kevin's getting at absolutely should be able to drive a little bit better margin as far as pricing on raw materials and actual production based on volumes and less SKUs. That's clear, and that's what we're going to be driving for. And that'll probably benefit more think about back half of fiscal 2027, more into fiscal 2028 and beyond. But I think also keep in mind, right now, fiscal 2027 would have a full year of tariff costs, assuming tariff rates don't change, versus a partial year in fiscal 2026. So the actions that Kevin's speaking to will help offset that in addition to some of the pricing changes that we're driving through that you'll start to see in the market more in back half of fiscal 2027 as well.
Speaker #2: Yeah , Peter , and I think as far as you know , when you think about the go forward , there's some , you know , different pieces .
Speaker #2: What Kevin's getting at—absolutely, we should be able to drive a little bit better margin as far as pricing on raw materials and actual, you know, production, based on volumes and less SKUs.
Speaker #2: That's , that's that's clear . And that's what we're going to be driving for . And that'll probably benefit more . You think about like back half of fiscal 27 more into fiscal 28 and beyond .
Speaker #2: But I keep in think also mind , you know , right now fiscal 27 would have a full year of tariff costs , assuming tariff rates don't change versus a partial year in fiscal 26 .
Speaker #2: So , you know , the actions Kevin's speaking to will help offset that . In to some of pricing changes addition driving through that , you know , you'll start to see in the market more in back half of fiscal 27 as well .
[Company Representative] (Under Armour): So there's kind of a balance there. Is the best way I would put it.
Speaker #2: So there's kind of a balance . There is the best way I would I would put it .
[Analyst] (Stifel): Appreciate that. Thank you.
Speaker #10: Appreciate that. Thank you.
Lance Allega: Our final question comes from Brooke Roach with Goldman Sachs. Please go ahead.
Speaker #3: Our final question comes from Brooke Roach with Goldman Sachs . Please go ahead .
[Analyst] (Goldman Sachs): Good morning, Kevin and Dave. Thank you for taking our question. Can you elaborate on the channel and product category puts and takes you expect in the North America business as you drive stabilization into fiscal year 2027? Are there any businesses that you expect to drive faster or slower stabilization? And are you seeing the same level of wholesale order book improvement across accounts and product lines that might over-index to premium versus the value segments of your business? Thank you.
Speaker #11: Good morning Kevin and Dave . Thank you for taking our question . Can you elaborate on the channel and product category puts and takes you expect in the North America business as you drive stabilization into fiscal year 27 ?
Speaker #11: Are there any businesses that you expect to drive faster or slower stabilization? And are you seeing the same level of wholesale order book improvement across accounts and product lines that might over-index to premium versus the value segments of your business?
[Company Representative] (Under Armour): Thanks, Brooke. Definitely appreciate the question. But getting into details on fiscal '27 is not something we're really, at this point, going to do. We're going to do that more when we get to the early May call. But I would say that we've talked a lot about all of the deliberate actions that we've been taking over the last year or so, and Kara was definitely driving a lot of that in her new role. And then obviously, now she's transitioning into the product, which is going to be awesome with the chief merchandising officer. And we've got Adam Peake stepping in, seasoned veteran, and he's going to take the reins to keep driving forward with those relationships in North America. So the wholesale discussions have been positive. I think a lot of the newer product is really resonating.
Speaker #11: Thank you .
Speaker #6: Thanks .
Speaker #2: Brooke . Definitely appreciate the question . But getting into details fiscal on 27 is not something we're we're really at this point We're going going to do .
Speaker #2: to do that more when we get to the early May to the call . But I would say that , you know , we've talked a lot about all of the deliberate actions that we've been taking over the last year or so .
Speaker #2: And Kara was definitely driving a lot of that in her new role . And then obviously now she's transitioning into product , which is going to be awesome with the chief merchandising officer .
Speaker #2: We've got Adam Peak stepping in, a seasoned veteran, and he's going to take the reins to keep driving forward with those relationships in North America.
Speaker #2: So the the wholesale discussions have been have been positive . I think a lot of the newer product is really resonating . So we should see that come through as we think about , you know , the full price wholesale business next year .
[Company Representative] (Under Armour): So we should see that come through as we think about the full-price wholesale business next year and beyond. But it does still take some time. We've talked about that. The orders that you're placing now are definitely further out in the future as far as when it comes through on the revenue side. So it is a journey. We've talked a lot about being excited about reaching that stabilization period as we drive into fiscal 2027. And that's exactly what we're going to do. I think there's opportunities in each of the channels as we go forward, but we're going to be deliberate. We're going to continue to be smart about how we deploy promotions and discounting and continue to try and step off that journey more and more and reach the sweet spot there as we continue to double down on our big partnerships on the wholesale side.
Speaker #2: And beyond . does still take some But it time . We've talked about that . You know , the orders placing now are definitely further out in the future as far as when it comes through .
Speaker #2: On the revenue side . So it is a journey . We've talked a lot about being excited about , you know , reaching that stabilization as we period drive into fiscal 27 .
Speaker #2: And that's exactly what we're going to do. I think there are opportunities in channels as we go forward, but we're going to be deliberate.
Speaker #2: going to We're continue to be smart about how we deploy promotions and discounting and and step off continue to try that journey that and reach the sweet spot more and more there .
Speaker #2: As we continue to double down on our big partnerships with our on the wholesale side . So a lot of different moving pieces and we are excited about the momentum on the product , on the brand , on the , and we're excited relationships to talk more about that when we get to the the early May call .
[Company Representative] (Under Armour): So a lot of different moving pieces. We are excited about the momentum on the product, on the brand, on the relationships. We're excited to talk more about that when we get to the early May call.
Dave Bergman: And Brooke, maybe I'll just give you the sort of high-end version from that answer as well, which is I said earlier about winning with the winners. Today, Under Armour is famous for base layer. We're famous for heat gear and cold gear. Getting a really clear segmentation within both of those categories is a massive opportunity for us, ensuring that we can be present in distribution at the appropriate price, and making sure there's a real reason for a consumer to spend more for it too. So that's been a lot of the work that Kara and the team are really attacking right now, and then extrapolating that out to multiple categories and as it relates to appropriate distribution. So we're definitely in this fight, but we got a really good, strong base to build from, and you'll see better and better from us with that.
Speaker #2: .
Speaker #5: maybe I'll And Brooke , just give you the sort of high end version from that answer as well , which is I said earlier about winning with the winners today , Under Armour is famous for base layer .
Speaker #5: We're famous for heath care and cold gear . really clear Getting segmentation within both of those categories is a massive opportunity for us , ensuring that we can present , you know , in distribution at the appropriate price and making sure there's a real reason for a consumer to spend more too .
Speaker #5: for it , So that's been a lot of the work that care and the team are attacking right now . And then extrapolating that out to , you know , multiple categories .
Speaker #5: And as it relates to , you know , appropriate distribution . So we're definitely in this fight . But we got we got a really good strong base to build from .
Speaker #5: And you'll see , you know , better and better from us with that .
[Analyst] (Goldman Sachs): Great. Thanks so much. Best of luck.
Dave Bergman: Thank you.
Speaker #11: Great . Thanks so much . Best of luck .
Lance Allega: This concludes our question and answer session. I would like to turn the conference back over to Kevin Plank for any closing remarks.
Speaker #3: This concludes our question and answer session . I would like to turn the conference back over to Kevin Plank for any closing remarks .
Dave Bergman: Thank you, operator, and the listeners out there. I'd like to close with one final thought. We're thrilled to welcome Reza to UA's. He's going to be filling some very big UA shoes as CFO for the next chapter with this brand. But I just want to start and say, Dave, thank you. 21 years at Under Armour mean you joined just before the IPO in November 2005. We've been through a lot. Your alma mater, James Madison, made it to the college football playoffs, which is just another proof point that you can do anything. And you have here, not even close to my Terps, joining from a great run at PwC. You're an accountant who became our controller to our CFO for the last 9 years, but always the best teammate, partner, CFO, and even more importantly, an amazing husband, father, and friend.
Speaker #5: Thank you . Operator . And listeners out there , I'd like to close with one final thought . We're thrilled to welcome Reza to UAS .
Speaker #5: He's going to be filling some very big shoes as CFO for the next chapter with this brand. But I just want to start and say, Dave, thank you.
Speaker #5: 21 years at Under Armour . I mean , you joined just before the IPO in November 2005 . We've been through a lot .
Speaker #5: Your alma mater , James Madison , made it to the college football playoffs , which is just another point that proof you have and do you can anything , here , not even close to terps my joining from a great PwC .
Speaker #5: You were an accountant who became controller to our CFO for the last our nine years . But always the best teammate , partner , CFO and even more importantly , an amazing husband , father and friend .
Dave Bergman: You and I have been through a lot of stuff, thick and thin. We've had amazing times together, and we've also been tested. Yet here we are, still standing, moving forward. You remain a major shareholder. No, you'll always be a part of this team and will honor and do a great job for you and all of our stakeholders. I give you my highest compliment. You're a true professional. Thank you. And on behalf of the brand, a heartfelt, overwhelming thank you, Dave Bergman. We appreciate everyone joining us on today's call and ask you to have a great day. Thank you, operator.
Speaker #5: You and I have been through a lot of stuff, thick and thin. We've had amazing times together, and we've also been tested.
Speaker #5: Yet here we are, still standing, moving forward; you remain a major shareholder. I know you'll always be a part of this team and will honor and do a great job for you and all of our stakeholders. You have my highest compliment—you're a true professional.
Speaker #5: Thank you . And on behalf of the brand , a heartfelt , overwhelming thank you . Dave Bergman . We appreciate everyone joining us on today's call and ask you to have a great day .
