Under Armour 2Q26 Immediate Call Postmortem
Kevin is talking more about innovation this quarter than we have heard in quite a long time. Of course, he had to bring up the backpack again but this time around he added a lot of other products and even started talking about the NEOLAST technology they have had a partnership with for past year (lead times). Showcasing it with upcoming HeatGear Elite. The $75 Assert shoe launched this week – we have been waiting for this one as they apparently put their best designers on it. Apparently its built to be a full price business so going forward we should be highly cognizant if we ever see it on sale.
Fall/Winter 25 is when it all starts to show a bold new design. Evident across training, running, sportswear. I guess we are back to pumping up that season so that’s kinda good sign. Spring/Summer 26 only gets stronger and also filled with innovation. Guidance aligns with a sequential improvement from 3Q to 4Q but the problem here is they expect a sequential deceleration from 2Q to 3Q (even after adjusting for 1pt timing shift). McGoldrick was all over this in Q&A and they tried to brush it off and say no big changes to their outlook from 90 days ago.
“Conversation with major wholesale partners has moved from caution to collaboration. From hesitation to optimism.” Partners are doing this because Under Armour is consistently beating plan. Plan might not be in excess of what it was last year but Under Armour is beating it. In certain categories seeing replenishment orders coming in and that’s driving confidence when partners are writing fall 2026 orders. Creating multi-year plans to bring US wholesale back to growth, aiming for stabilization in FY27.
“We now have a stable order book where in the past there were cancellations and a lot of returns.” Partners are seeing a more consistent Under Armour. Beating plan they have in 25.
“Don’t have a product issue. Innovation and design strong. Don’t have a brand issue. Do have a storytelling opportunity.” If there is one person that knows how to tell a story, its Kevin Plank… They put a shoe like the Assert out there but never told anyone why they should buy it, rather just relied on brand heat. Hate to tell Kevin this but they haven’t had brand heat in a really long time.
They recognize the disconnect between $5 billion in revenue and current market cap. I certainly hope so as the rest of us have noticed it for quite a long time.
Apparel revenue was down 1% which just continues the multi-year decline trend. But the consistency is somewhat encouraging here as they had growth in train and sportswear.
Velocity Elite 3 gives them a lot of credibility in running. Taking the credibility of that $250 shoe all the way down into $160, $130, $75 price points. Feel like investors don’t give the Under Armour brand enough credit for its ability to sell at that wide range of price points (unlike On that is at the high end or Sketchers at the low end).
Kevin stopped everything during Q&A to talk about the meaningful decline in footwear. Under Armour is a footwear brand. They are committed to it. Moving forward from a business that just sells “foot coverings” under $100.
Am I the only person that immediately thought about Dumb and Dumber when Kevin announced that Reza came from Samsonite?
*These are our unabridged quick thoughts and notes from the call. We get them out as soon as possible after the call ends. Management has given some topics to dig deeper into and will circle back afterwards with much more in depth work on what was mentioned. You can find that work (and more on Under Armour and other retail/consumer research) at the website here: M Squared Capital
Originally posted on X and Substack.