UAA

Under Armour is in a structural unwind, not a cyclical dip. Revenue has fallen every year from $5.90B (FY2023) to $4.97B (FY2026), a -3.8% latest-year drop, and the deterioration is broad: wholesale -4.9%, footwear -10.8%, and North America — the company's largest market — down 7.9%. The bottom line is worse than the top line. FY2026 net income swung to -$496M (from -$201M), diluted EPS -$1.16, operating margin -3.3% and ROE -35%. Gross margin compressed 240bps to 45.5% as the MD&A flags tariff-driven cost pressure, with the 10-K explicitly warning that the February 2026 Supreme Court IEEPA ruling and the contested replacement tariffs will continue to pressure gross margins into Fiscal 2027.

The balance sheet is the part that pushes this from 'sell' to 'avoid.' Cash fell 38% to $309M while total liabilities jumped 24.5% and current liabilities surged 51% to $1.68B. Critically, $600M of long-term debt is now current (due within a year) against only $309M of cash, and operating cash flow was negative (-$75M) — the business is not self-funding. Retained earnings collapsed 71% to $217M and equity dropped 25% to $1.41B, lifting liabilities/equity to 2.12x. The $305M 2025 restructuring plan ($260.7M already booked, heavily concentrated in the bleeding North America segment) is a tacit admission that the cost base outgrew a shrinking brand; it is a cleanup, not yet a turnaround.