MW Under Armour turns a surprise profit, even as turnaround plan costs keep rising

By Tomi Kilgore

Athletic gear's stock rises as sales still fall, but less than expected, and the full-year earnings outlook more than doubles

Under Armour's stock rallies toward a six-month high, after the athletic gear seller reported a surprise quarterly profit and raised its full-year outlook.

Shares of Under Armour got a lift in early Friday trading, after the athletic gear maker turned a surprise quarterly profit and raised its full-year earnings guidance to more than double what it was just three months ago.

And while sales continue to fall from a year ago, they extended their streak of beat expectations, to suggest the turnaround plan announced nearly two years ago may be taking hold.

It should, because the cost of the plan keeps rising. The company $(UAA)$ $(UA)$ said it now expects the plan to cost $255 million, up from its estimate in November of $160 million. When the plan was announced on May 16, 2024, said it expected to incur charges of $70 million to $90 million.

The stock rose 6.6% in premarket trading, to put it on track to open at a six-month high. Prior to that rally, the stock had gained 26.4% this year, following a four-year losing streak in which the stock plummeted 76.5%.

With the higher costs, the company swung to a fiscal third-quarter net loss of $430.8 million, from net income of $1.2 million in the same period a year ago. But excluding nonrecurring items, such as restructuring charges and litigation expenses, adjusted net income was $37 million, and earnings per share were 9 cents. The average analyst estimate compiled by FactSet was a per-share loss of 1 cent.

"Our third-quarter adjusted operating results exceeded expectations, and despite a few unfortunate, nonrecurring impacts, we're encouraged by the progress we're making in the business to reignite brand momentum," CEO Kevin Plank said in a statement.

Revenue for the quarter to Dec. 31 fell 5.2% to $1.33 billion, above the FactSet consensus of $1.31 billion. While that marked the 11th straight quarter of year-over-year revenue declines, it was also the eighth straight quarter or beating expectations, according to FactSet data.

The company made less money on each dollar of sales, as gross margin fell to 44.4% from 47.5%. The company said the primary blame for the lower profitability was higher tariffs.

Still, given the strong third-quarter results, the company boosted its full-year adjusted EPS guidance range to 10 cents from 11 cents from the outlook of 3 cents to 5 cents provided in November.

And revenue for the year is now expected to decline 4% from the prior year, versus previous guidance for a 4% to 5% decline.

-Tomi Kilgore

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February 06, 2026 08:30 ET (13:30 GMT)

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