Under Armour (UAA) Stock Forecast & Price Target

Under Armour's financial outlook appears positive, primarily due to an expansion in gross margin, which increased by 240 basis points year-over-year, contributing to earnings per share (EPS) upside that exceeded guidance. The company also anticipates continuous EBIT margin expansion of 200-250 basis points over the next two fiscal years, driven by improved gross margins and increased sales growth expectations, particularly in North America. Additionally, despite a rise in SG&A expenses, the strategic reinvestment in brand initiatives and operational enhancements suggests a proactive approach to sustaining long-term growth.

Under Armour is facing a significant decline in revenue, with projections indicating a 9.9% decrease to $5.14 billion for FY25, primarily due to a 13% decline in North American sales. The company's North American business experienced an 8% drop in Q3, largely attributed to decreased direct-to-consumer sales and proactive measures to limit promotions, amidst ongoing challenges in managing previous promotional strategies and wholesale execution. Moreover, the forecast suggests that consolidated revenues may continue to decline in FY26 and remain flat in FY27, indicating persistent operational difficulties and adverse market conditions.