Under Armour’s gross margin expanded 590 basis points to 54.1% during its fiscal first quarter of 2027 as tariff-cost refunds provided a major benefit while the sportswear company moves toward completing a restructuring program expected to cost approximately $305 million.
The gross-margin increase was primarily driven by refunds associated with the recovery of International Emergency Economic Powers Act tariff costs that had been expensed during fiscal 2026. The improvement was partially offset by unfavorable foreign exchange, regional and channel mix, and pricing pressures.
Under Armour said approximately 150 basis points of its expected full-year gross-margin improvement will come from the recovery of IEEPA-related tariff costs realized during the first quarter. Excluding that benefit, management still expects margin improvement from pricing, reduced discounting and a more favorable channel mix.
The company has now incurred $266 million of restructuring and transformation costs under its Fiscal 2025 Restructuring Plan. That consists of approximately $116 million of cash charges and $150 million of non-cash charges. Total program costs are expected to reach approximately $305 million, with the restructuring expected to be substantially completed by December 31, 2026.
Underlying sales trends remained challenging. Fiscal Q1 revenue declined 3% to approximately $1.1 billion. North America revenue fell 9% to $610 million, while international revenue increased 5% to $490 million.
EMEA revenue increased 12%, while Latin America increased 8% and Asia-Pacific declined 7%. Wholesale revenue fell 2% to $638 million, and direct-to-consumer revenue declined 6% to $437 million. E-commerce revenue fell 12%, while footwear revenue declined 8% to $245 million.
Under Armour updated its full-year revenue outlook to a mid-single-digit percentage decline from its previous expectation of a slight decline, reflecting softer demand in North America and Asia-Pacific. The company continues to expect full-year gross margin to improve by 220 to 270 basis points.
KEY QUOTES:
“As we navigate a challenging consumer demand environment, we continue to make progress in building a more focused Under Armour, despite updating our full-year revenue outlook.”
“By simplifying the business, we are operating with greater discipline and better positioned to protect profitability, while still investing in a sharper product portfolio through clearer storytelling with the goal of driving a more premium Under Armour that will consistently earn demand at full price.”
Kevin Plank, President And Chief Executive Officer Of Under Armour
