30, with sales in its key North American market down nine per cent. Wholesale revenue declined two per cent and direct-to-consumer sales fell six per cent, including a 12 per cent drop in e-commerce. Investors were not pleased, with Under Armour’s stock price falling 6.1 per cent in midday trading on August 10. Shares traded as low as US$5.69, down from US$6.11. For the time being, Under Armour’s game plan appears to be improving quality rather than increasing quantity, while getting customers accustomed to buying products at full price. In other words, CEO Kevin Plank is betting that some short-term pain is necessary to create a stronger business over the longer term. “A few years ago, we were too often managing for quantity, more products, more complexity and volume that did not always strengthen the brand,” Plank said on an investor call. “Today, we’re managing for quality. Fewer products with greater purpose, tighter execution and a clear reason to buy. That means simplifying the business, tightening the product portfolio and reducing its reliance on promotions, even if doing so comes at the expense of some sales. “By simplifying the business, we are operating with greater discipline and better positioned to protect profitability, while still investing in a sharper product portfolio through clearer storytelling with the goal of driving a more premium Under Armour that will consistently earn demand at full price.” For the full 2027 fiscal year, Under Armour now anticipates revenue will decline at a mid-single-digit percentage rate, below the company’s previous forecast. What experts have to say about Under Armour’s results Neil Saunders, GlobalData’s managing director, said Under Armour’s decision to reduce promotions and discounting partly explains its declining sales, as the company deliberately strips out lower-quality revenue. But he believes the bigger problem is weakening demand for the brand itself. “As much as we recognise that the company is trying to be more disciplined with its assortment and distribution, we still find the offer to be somewhat jumbled and confused,” Saunders told Inside Retail. GlobalData’s research suggests brand affinity has waned in recent quarters, contributing to significant market-share losses. Saunders said Under Armour is trying to compete across too many categories, from underwear and everyday apparel to technical athletic gear, without establishing a sufficiently strong position in any of them. In technical products, particularly sneakers, he argued that newer competitors are delivering more compelling innovation. At the casual end of the market, meanwhile, Under Armour lacks both the “brand heat” of Gymshark and the “aesthetic sensibility” of Vuori. “As a result, it doesn’t win in either arena and simply ends up confusing the customer,” Saunders said. That weakness is particularly apparent among younger shoppers. With the back-to-school season already underway, Saunders said Under Armour’s numbers are below the same period last year, reflecting its struggle to connect with younger consumers. There are, nevertheless, signs of progress. Saunders pointed to Under Armour’s efforts to tighten distribution and increase full-price sales, which should ultimately support stronger margins and profitability. “None of this is to say that Under Armour has been completely inert,” he said. “It has been trying to sharpen distribution and full-price sales.” The latest quarter appeared to offer some evidence that strategy was working, with higher gross margins and a small net profit. But Saunders cautioned that the improvement was driven by a tariff refund. Without it, gross margins would have been lower than the previous year and the small net profit would instead have been another net loss. Too much, too soon Echoing Saunders’ remarks, Frankie Margotta, strategy director at consulting firm Triptk, noted that Under Armour has stretched itself thin by trying to tap into too many product categories at once. “Scale is challenging enough when you’re simply trying to get what you already do well into more doors and onto more shelves,” he said. “Extending into new product lines and categories can be even harder because the credibility and permission you’ve built in one area don’t always translate; sometimes they even need to be built from zero. Trying to do both at once is incredibly difficult.” Under Armour had built considerable equity and credibility in training apparel, as well as some in footwear, but it wasn’t enough to go head-on with legacy players like Nike and Adidas. Margotta explained that Under Armour’s early success was based on the brand’s ability to speak clearly to a particular mindset and type of athlete. What followed was a pattern the retail industry has seen before: the company chased growth and expansion, operationalised the business, but didn’t meaningfully bring the brand along. “As SKUs expanded, lines extended and doors multiplied, it became less clear who Under Armour was for and what it stood behind. It stopped being best-in-class at something and became okay at a lot of things, which then eroded the quality associations and brand value it built. Then discounting entered the equation, further weakening perceived value and creating a difficult cycle to reverse. Add a sportswear category that has become far more saturated with smaller, more focused brands owning different communities and corners of sport and lifestyle, and it’s really not hard to understand why Under Armour has struggled to regain momentum.” Margotta believes Under Armour is now moving in the right direction by stepping away from promotions and discounts and returning to the idea of being great at something specific rather than trying to be good at too many things at once. One opportunity, Margotta observed, is to follow the lead of brands such as French outdoor and lifestyle label Salomon. Rather than chasing lifestyle trends, Under Armour needs to get serious about catering to athletic consumers with performance-enhancing, technically designed gear. “The operational strategy is trending in the right direction. Now comes the harder part of not only making sure the business runs, but the brand resonates.” Where does Under Armour go from here? Under Armour also needs to win back its cultural relevance if it is to get back on track, according to Barney Stacher, CEO of consultancy Retail OCD. “Years of expanding the assortment, leaning on promotions and pursuing distribution without always creating genuine brand heat blurred its performance-first identity,” said Stacher. “The latest results – particularly the 9 per cent decline in North America – suggest that operational improvements alone will not produce the comeback. Under Armour must again give consumers a compelling reason to choose it over Nike, Adidas and fast-growing brands such as Hoka and On.” Stacher recommended that the brand’s turnaround begin with fewer, more distinctive products rooted in Under Armour’s core authority: training, team sports and performance innovation. But reducing the assortment is only the starting point. Product, storytelling, pricing, partnerships and retail presentation must work together to express one sharp brand promise. “Internationally, Under Armour also needs to distinguish distribution from true market development. A product may be globally consistent, but its relevance must be translated locally – without diluting what makes the brand Under Armour. That requires strong local leadership with meaningful influence over merchandising, channels, partnerships and consumer engagement. “The encouraging part is that improved margins and reduced promotional activity can create a healthier foundation. But a turnaround becomes a comeback only when financial discipline produces products people actively want – not merely cleaner numbers around products they can live without.” Further reading: Under Armour launches sportswear range exclusive to Australia