Q1 2027 Under Armour Inc Earnings Call Transcript
Key Points
- Adjusted operating income exceeded expectations in Q1, demonstrating improved cost discipline and operational agility.
- Gross margin expanded significantly by 590 basis points year-over-year, driven by tariff refunds and supply chain benefits.
- Successful product innovation with the Bouncy Tee, which sold at full price and exceeded expectations, showcasing the brand's ability to command premium pricing.
- Strong performance in EMEA and Latin America, with revenue growth of 12% and 8% respectively, indicating resilience in international markets.
- Inventory levels are well-managed, down 3% year-over-year and in line with revenue, with a clean aging profile and no excess stock issues.
- Revenue declined 3% in Q1, with softer consumer demand and traffic trends, particularly in North America and Asia Pacific, leading to a lowered full-year revenue outlook.
- North America revenue decreased 9%, with significant pressure in wholesale and DTC channels due to a promotional retail environment and traffic headwinds.
- Asia Pacific revenue fell 7%, impacted by softness in China and Southeast Asia, including stock-outs and demand cannibalization from licensee discounting.
- The company is reducing its marketing spend as a percentage of revenue, which may limit brand-building efforts in the near term despite claims of improved efficiency.
- The promotional environment and competitive discounting, especially in Europe and the UK, are pressuring margins and requiring disciplined management to avoid chasing volume.
Good day, and welcome to the Under Armour first-quarter 2027 earnings conference call. (Operator Instructions) Please note, this event is being recorded.
I would like now to turn the conference over to Lance Allega, Senior Vice President, Finance and Capital Markets. Please go ahead.
Good morning, and welcome to Under Armour's Fiscal 2027 first quarter earnings call. Today's call is being recorded, and a replay will be available on our Investor Relations website shortly after the call concludes. Joining us this morning are Kevin Plank, President and CEO; and Reza Taleghani, Chief Financial Officer.
Before we begin, please note that certain statements made on today's call are forward-looking statements within the meaning of federal securities laws. These statements reflect management's current expectations as of August 7, 2026, and are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these results
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