Under Armour (UAA) Stock Forecast & Price Target

Under Armour is experiencing positive financial momentum, as evidenced by a 12% increase in licensing revenue and a notable expansion in gross margin, which rose by approximately 70 basis points to 48.2%. The company's inventory levels increased by only 2.0% year-over-year, indicating effective inventory management amidst rising demand. Additionally, successful marketing campaigns, such as "We Are Football," have significantly improved brand awareness among younger consumers, while an 8% rise in accessories sales reflects strong performance in training and sportswear segments.

Under Armour's adjusted EPS for FY26 is projected to drop by over 50% as a result of increased debt leading to higher interest expenses and a significantly elevated tax rate compared to FY25, stemming from an unfavorable regional mix. The company’s footwear sales have experienced a notable decline of 14%, pointing to a tough demand environment compounded by product portfolio management challenges. Additionally, Under Armour's Q3 FY26 guidance fell short of expectations, reflecting soft demand and the full impact of tariffs, resulting in significant operating margin contractions across its segments.