Under Armour cuts outlook as North America sales slump; Vietnam tariff adds cost
Full-year revenue outlook cut on weak North America demand Under Armour lowered its full-year revenue forecast to a mid-single-digit decline, from a slight decline, after North America sales fell 9%. Management expects a tougher consumer environment to persist, signaling the turnaround is not yet lifting sales and pressuring the stock.
This is the core new negative event that directly drove the stock down and answers what is moving UAA.
Quarterly revenue misses estimates despite profit beat Second-quarter revenue of $1.10 billion fell 3.2% and missed the $1.11 billion consensus, even though adjusted earnings per share of $0.05 doubled forecasts. Investors focused on the sales shortfall, a sign that demand remains soft and the turnaround is slow.
The revenue miss is a fresh, concrete negative that explains continued selling pressure on UAA.
Vietnam hit with 12.5% US tariff, raising UAA's sourcing costs Vietnam, a key production base for Under Armour, faces a 12.5% US tariff, higher than the 10% on Bangladesh, Cambodia, Indonesia and Malaysia, and lacks access to a new textile duty-lowering mechanism. This raises UAA's costs and puts it at a disadvantage versus rivals sourcing from lower-tariff countries.
This new tariff directly affects UAA's supply chain costs and competitiveness, a real headwind for margins.
Turnaround efforts continue but short interest stays high CEO Kevin Plank has cut 25% of product styles, reduced promotions and spent $266 million on restructuring, aiming to finish by year-end. However, short interest is nearly 24% of the float and hedge fund ownership fell, showing many investors still bet against a quick recovery.
It gives the counterweight: cost cuts and brand repositioning could help, but heavy shorting shows deep skepticism.