Feb 6 (Reuters) - Under Armour posted a smaller-than-expected drop in third-quarter revenue on Friday, as turnaround efforts by the sportswear maker to simplify product assortment helped stabilize demand during the key holiday season.
The Baltimore-based retailer has deepened its restructuring push over the last year to revive sales through streamlined operations and cost-cutting measures, while expanding its premium segment portfolio.
Under Armour has been lowering discounts and plans to cut about
25% of its product lines and focus on higher‑priced items in categories such as training, running and team sports, its executives have said.
Meanwhile, higher U.S. tariffs, particularly on goods from key manufacturing hubs such as Vietnam and Indonesia, are expected to drive about $100 million in additional tariff‑related costs for the company this fiscal year.
It forecast a 190‑basis‑point contraction in gross margin for fiscal 2026, largely tied to tariff costs. For the quarter, gross margin fell 310 basis points to 44.4%.
North America revenue fell 10%, while steady demand in Europe helped lift international sales 3% amid softer trends in Asia.
Wholesale revenue fell 6% as retailers placed fewer orders amid macroeconomic uncertainty and more cautious consumer spending.
The company logged a 5% decline in revenue to $1.33 billion for the quarter ended December 31, compared to analysts' estimate of a 6.3% drop to $1.31 billion, according to data compiled by LSEG.
Shares of the company, which lost about 40% of their value last year, rose about 2% before the bell.
It now expects fiscal 2026 adjusted profit per share of 10 cents to 11 cents, compared to its prior target of 3 to 5 cents.
It projects annual revenue to drop 4%, compared to its prior forecast of a 4% to 5% decline. Analysts expected a 4.2% drop to $4.95 billion.
(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)
