Struggling Stock: Under Armour Experiences Downturn with Dropping Shares

Under Armour Faces Challenges as Q1 2025 Results Disappoint

Under Armour Inc., the American sportswear company, has reported its Q1 2025 results, revealing a mixed bag of performance. The revenue declined by 4.2 percent year-over-year to $1.13 billion, missing market expectations [1][4].

The company's earnings per share (EPS) were two cents, slightly missing market expectations but above last year's one cent [1]. North America revenue fell 5.5 percent, while EMEA grew 9.6 percent and Asia-Pacific declined 10 percent [1][4]. Under Armour forecasts a revenue decline of six to seven percent for the second quarter, much worse than the previously expected three percent [1].

Following the earnings release, Under Armour’s stock dropped significantly — about 17.5 percent immediately and reaching trading levels near a 52-week low around $5.11-$5.25 [1][2][4]. The stock has dropped over 37 percent in 2025, underperforming peers like Nike [5].

Analysts have expressed caution about the company's prospects, citing brand-specific issues, difficult consumer trends, tariffs, and fierce competition [6]. Major firms like Goldman Sachs have reaffirmed a “hold” rating with a $5 price target, while others like Truist and JPMorgan have lowered price targets to around $5-$6 due to disappointing guidance, weak innovation progress, and profitability concerns [1][2][4].

Despite revenue declines, Under Armour improved gross margins slightly (to about 48.2%) and maintains a moderate debt-to-equity ratio (~0.69) and a fair financial health rating, but the Altman Z-Score of 2.29 indicates moderate bankruptcy risk [1][3].

The CEO has expressed concerns about the negative effect of Trump-era tariffs on profits, which has pressured margins and contributed to the stock’s underperformance relative to competitors [5]. Analysts like William Blair note that the long-term potential of the desired shift towards a premium brand for Under Armour is there, but it will take time and is being further hindered by tariffs [6].

Bloomberg Intelligence sees a clear sign of growing macroeconomic risks and tariff problems in Under Armour's outlook [7]. Overall, the outlook for Under Armour is cautious with expected revenue declines and a challenging retail environment, compounded by tariff-related cost pressures and investor concerns about future growth and innovation. Analysts generally advise holding or neutral positions with low price targets reflecting these risks [1][2][4][5].

Key points:

Q1 2025 performance: Under Armour missed EPS and revenue forecasts, with revenue declining 4% year-over-year to about $1.1 billion. North America revenue fell 5%, while EMEA grew 10%, and Asia-Pacific declined 10% [1][4]. The company expects full-year 2026 revenue to decline 6-7% [1].
Market reaction: Following the earnings release, Under Armour’s stock dropped significantly — about 17.5% immediately and reaching trading levels near a 52-week low around $5.11-$5.25 [1][2][4]. The stock has dropped over 37% in 2025, underperforming peers like Nike [5].
Analyst sentiment: Major firms like Goldman Sachs reaffirmed a “hold” rating with a $5 price target, while others like Truist and JPMorgan lowered price targets to around $5-$6 due to disappointing guidance, weak innovation progress, and profitability concerns [1][2][4].
Financial health: Despite revenue declines, Under Armour improved gross margins slightly (to about 48.2%) and maintains a moderate debt-to-equity ratio (~0.69) and a fair financial health rating, but the Altman Z-Score of 2.29 indicates moderate bankruptcy risk [1][3].
Impact of tariffs: The CEO has expressed concerns about the negative effect of Trump-era tariffs on profits, which has pressured margins and contributed to the stock’s underperformance relative to competitors [5].
Sector performance: Under Armour's stock has dropped over 37 percent in 2025, underperforming peers like Nike [5].
Analyst concerns: Analysts are skeptical about Under Armour's prospects, citing brand-specific issues, difficult consumer trends, tariffs, and fierce competition [6].
Long-term potential: Analysts like William Blair note that the long-term potential of the desired shift towards a premium brand for Under Armour is there, but it will take time and is being further hindered by tariffs [6].
Macroeconomic risks: Bloomberg Intelligence sees a clear sign of growing macroeconomic risks and tariff problems in Under Armour's outlook [7].

[1] Under Armour Q1 2025 Earnings Release [2] CNBC: Under Armour stock plummets after earnings miss [3] Yahoo Finance: Under Armour Q1 2025 Earnings Call Transcript [4] Seeking Alpha: Under Armour Q1 2025 Earnings Call Transcript [5] MarketWatch: Under Armour stock has dropped 37% in 2025, underperforming peers like Nike [6] Bloomberg: Analysts Skeptical About Under Armour's Prospects [7] Bloomberg Intelligence: Under Armour's Outlook Signals Growing Macroeconomic Risks and Tariff Problems

The disappointing Q1 2025 results, including a revenue decline and earnings per share miss, have negatively impacted Under Armour's stock, causing it to drop significantly and underperform competitors.
The company's financial health remains moderate, but tariffs, brand-specific issues, difficult consumer trends, and fierce competition have raised concerns among analysts, leading to a cautious outlook and low price targets for Under Armour's stock.