Under Armour Misses Q4, Warns of Annual Sales Decline
NEW YORK, May 12 —
Under Armour delivered Q4 2026 EPS of $0.02 against a consensus of roughly $0.03, then guided fiscal 2027 for declining annual sales below analyst expectations, sending shares down 14% on the day. The same session brought an 8-K under Item 2.05 disclosing costs tied to exit or disposal activities. Restructuring charges are still landing at the moment management needs investors to believe the reset is winding down.
- Q4 EPS of $0.02 vs. consensus of ~$0.03; shares fell 14% post-earnings
- Trailing twelve-month revenue of $4.98B, down 5.2% year-over-year
- Negative free cash flow of -$386M on a trailing twelve-month basis
The Guidance Problem
Fiscal 2027 guidance calling for declining annual sales is not a minor recalibration. Under Armour has spent years promising a return to growth. Telling the market that revenue will fall again next year confirms what skeptics have argued: the brand is still losing ground in athletic apparel, not recovering it. Trailing twelve-month revenue already stood at $4.98 billion, down 5.2% year-over-year. The new forecast extends that slide. The stock's 14% single-day drop is the market's answer to guidance it had not anticipated.
What the Cash Says
A gross margin of 46.6% is respectable for a branded apparel company. Management will lean on that number in every investor call. But gross margin is an incomplete picture when free cash flow runs at negative $386 million over the trailing twelve months. Cash generation tests business quality more honestly than margin ratios. At current revenue levels, the company is consuming capital. A declining top line paired with deeply negative free cash flow makes a near-term profit recovery harder to model. If fiscal 2027 sales fall further, the math gets worse.
The Restructuring Timing
Under Armour filed the 8-K on the same day as earnings — a choice that invites scrutiny. Disclosing exit or disposal activity charges alongside a release that already sent shares down 14% either reflects unusual communications planning or suggests the company wanted bad news absorbed in a single session. Restructuring costs mean prior organizational decisions were wrong enough to require undoing. Item 2.05 charges still appearing at this stage of a multi-year turnaround make the endpoint harder to identify than management's framing implies.
No Insider Backstop
Seven Under Armour directors received routine equity grant awards on April 1. Mohamed El-Erian received the largest, at 11,830.36 shares. Form 4 records show zero open-market purchases by insiders in the 90-day window. Routine compensation grants are noise. Open-market buying is a genuine signal. No director has put personal capital into the stock at current prices. That absence doesn't make a standalone case for selling, but it removes the one contrarian datapoint that might push back against the bearish read.
What Changes the Thesis
Shares trade at roughly $4.89 against an analyst consensus target of $7.73. That 58% gap narrows fast when guidance steps down and analysts cut their models. The forward P/E of 13.4x sounds modest, but that multiple rests on earnings estimates management just revised lower by guiding for another year of falling revenue. The stock may be cheap by historical standards. It may be cheap for a reason.
The next signal worth watching is whether fiscal 2027 quarterly results stabilize the revenue decline or extend it. A return to positive free cash flow would change the investment case more than any restructuring announcement. Until cash flow turns positive, the Item 2.05 disclosure, the negative cash generation, and the forward guidance cut are all pointing in the same direction.
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Basis Report does not hold positions in securities discussed. This is not investment advice.
Frequently Asked Questions
Why did Under Armour stock drop 14%?
Under Armour reported Q4 2026 EPS of $0.02, missing analyst consensus of roughly $0.026. The company then issued fiscal 2027 guidance calling for a decline in annual sales below analyst expectations. The earnings miss paired with a forward guidance cut drove the 14% single-session drop. An 8-K filed the same day disclosing restructuring exit charges extended the damage.
What is Under Armour's fiscal 2027 sales guidance?
Under Armour guided for declining annual sales in fiscal 2027, below analyst expectations. That guidance builds on a trailing twelve-month revenue base of $4.98 billion, already down 5.2% year-over-year. The company is projecting further revenue shrinkage from an already-contracting top line, not a recovery from a temporary dip.
Is Under Armour still restructuring in 2026?
Per an 8-K filed May 12, 2026 under Item 2.05 (Costs Associated with Exit or Disposal Activities), Under Armour is still incurring restructuring-related exit charges. Item 2.05 disclosures are triggered by new charge commitments, not a program's completion. The May 12 filing signals active, not concluded, restructuring.
What is Under Armour's free cash flow situation?
Under Armour reported negative free cash flow of $386 million on a trailing twelve-month basis. At a market capitalization of approximately $2.08 billion, that cash burn represents roughly 19% of the company's market value consumed annually. The company cannot sustain current operations indefinitely without reversing operating losses or taking balance sheet action — asset sales, equity issuance, or debt.
What is the analyst price target for UAA stock?
The consensus analyst price target for Under Armour (UAA) is $7.73, approximately 58% above the current share price of $4.885. Management is now guiding for declining annual sales in fiscal 2027. Consensus models that assumed stabilization will need to be revised downward. That revision compresses the gap between price and target — it does not close it through share price appreciation.