Under Armour (UAA) Stock Forecast & Price Target

Under Armour reported a year-over-year increase in licensing revenue by 12%, reflecting strong growth across both North America and international markets, indicating a robust demand for its brand. The company also experienced a gross margin expansion of approximately 70 basis points, reaching 48.2%, which is a positive indicator of improved profitability. Furthermore, inventory levels rose only modestly by 2.0% year-over-year, coupled with a significant increase in brand perception and customer satisfaction, as evidenced by the impressive 18-point rise in commerce NPS scores.

Under Armour is facing significant financial challenges, as adjusted earnings per share for FY26 are projected to decline by over 50% due to rising interest expenses from greater debt and an unfavorable tax rate. The company's footwear sales are struggling with a 14% drop across all categories, indicating weak demand and necessitating a re-evaluation of their product portfolio strategy. Additionally, the company's third-quarter guidance has fallen short of expectations, highlighting ongoing issues such as soft demand and substantial operating margin contraction across various segments.