UA

Under Armour is a brand-name turnaround that hasn't turned. Revenue has fallen four years running — $5.90B (FY23) → $5.70B → $5.16B → $4.97B (FY26, -3.8%) — and FY26 made it worse on the bottom line: a -$496M net loss versus -$201M a year ago, ROE of -35%, and net margin of -10.0%. Critically, the business consumed cash: operating cash flow was -$75.1M, and after $87.1M of capex free cash flow was deeply negative, while cash on hand fell 38% to $309M. That is the opposite of a self-funding turnaround. The MD&A confirms the weakness is in the core: North America (the largest market) revenue down 7.9%, footwear down 10.8%, and wholesale down 4.9% — declines in the segments that matter most.

There are real mitigants that keep this from an outright 'avoid.' Gross margin is still a healthy 45.5%, the reported operating loss of -$163M is heavily distorted by $260.7M of restructuring/related charges (the 2025 plan, now ~$305M total and expected substantially complete by Dec 31, 2026), and management is cutting hard — SG&A down 11.8% and capex nearly halved. EMEA (+8.6%) and Latin America (+8.7%) are growing. Ex-restructuring, the operating business is close to breakeven, and at a 0.5x price/sales the stock already prices in distress.