Under Armour cuts its margin outlook as freight and Middle East costs bite: revenue down 7% to $1.2 billion

Under Armour reported a second-quarter loss of essentially zero on Friday, with revenue down 7% to $1.2 billion, and trimmed how much its gross margin will improve this year. The headline profit range survived, but it leans on a one-time tariff refund. The details are in the company's 8-K on SEC EDGAR.

Class A shares (UAA) closed at $5.28 on Friday, down about 5.2% from Thursday's $5.57, according to Yahoo Finance and Nasdaq.com data. The stock traded between $5.08 and $5.64 during the session and sits roughly 35% below its February peak.

The quarter, by the company's numbers

Cost cuts did the work. SG&A fell 4% to $557 million on lower marketing spend, which is how a company with shrinking sales still posted a positive operating income. Inventory, however, rose 4% to $1.1 billion while sales fell, and borrowings of $190 million were outstanding on its $1.1 billion revolver against $285 million of cash.

The number behind the number: the tariff refund

Under Armour's full-year adjusted operating income outlook of $140 million to $160 million is unchanged. The release says that figure includes about a $70 million benefit from refunds of prior-year IEEPA tariff costs, offset in part by about $45 million of Middle East-related headwinds, up from $35 million previously. By our arithmetic, that leaves the underlying range nearer $70 million to $90 million before the refund. The company also says about 150 basis points of this year's gross margin improvement comes from that recovery.

The gross margin outlook itself was lowered: an expected gain of 170 to 220 basis points, versus 220 to 270 before. The company blames higher fuel and freight costs, planned inventory actions and foreign exchange. Revenue is still guided down at a mid-single-digit rate.

Who it hits

Any importer that moves apparel or footwear by sea or air has the same fuel and freight line. A small retailer or distributor buying from overseas suppliers faces the cost Under Armour just described, without the scale to absorb it, and an inventory build while sales slip is the warning sign worth checking in your own stockroom. Sporting goods retailers that carry the brand are also watching a wholesale channel that is shrinking, not growing.

Next catalyst: the third-quarter report, which the company has not dated in the release. The restructuring plan is expected to be substantially complete by December 31, 2026, with about $305 million in total program costs.

Sources: Under Armour Form 8-K and Exhibit 99.1 via SEC EDGAR; quote data from Nasdaq.com and Yahoo Finance, Nov. 6, 2026. Some data may be delayed. This is market information, not investment advice. See also our markets page.