Under Armour (NYSE: UA) reported Q1 EPS of ($0.03), $0.01 worse than the analyst estimate of ($0.02). Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.17 billion.

Compared with fiscal 2026, key highlights of the company\'s fiscal 2027 outlook include:

Revenue is expected to decline slightly year over year, with a low single-digit decrease in North America partially offset by low single-digit growth in EMEA and Asia-Pacific.
Gross Margin is expected to increase 220 to 270 basis points versus last year\'s gross margin. Approximately 150 basis points of this improvement is driven by an assumed reversal of International Emergency Economic Powers Act (\"IEEPA\") tariff costs expensed in fiscal 2026. Excluding this benefit, gross margin improvement reflects pricing actions and a more favorable channel mix, partially offset by higher tariff rates currently in place, along with supply chain headwinds related to the Middle East conflict.
Including the additional transformation expenses related to the Fiscal 2025 Restructuring Plan, SG&A expenses are expected to decrease at a low single-digit rate. Excluding the transformation expenses, adjusted SG&A is expected to increase at a low single-digit rate. This increase reflects normalization of reduced prior year incentive compensation and benefit costs as part of the company\'s tariff mitigation strategy, as well as incremental marketing investment to strengthen the brand as the business stabilizes, while maintaining disciplined cost control.
Operating income is expected to be in the range of $96 million to $116 million. Excluding expected transformation expenses and restructuring charges, adjusted operating income is anticipated to be $140 million to $160 million. This adjusted operating income includes an approximate $70 million benefit from the assumption that refunds from prior year IEEPA tariff expenses are realized, approximately $35 million of headwinds from the conflict in the Middle East, and approximately $30 million of incremental marketing investments.
Diluted loss per share is expected to range from breakeven to $0.04. Excluding anticipated transformation expenses and restructuring charges, adjusted diluted earnings per share is expected to range from $0.08 to $0.12, reflecting continued investment and external cost pressures, partially offset by the benefit of tariff-related refunds. This also incorporates an anticipated effective tax rate considerably higher than the prior year, due to unfavorable regional mix and profitability.

For earnings history and earnings-related data on Under Armour (UA) click here.