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DATE

Thursday, November 6, 2025, at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chairman, President, and Chief Executive Officer — Kevin A. Plank
  • Chief Financial Officer — David E. Bergman

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RISKS

  • Gross Margin Pressure — Dave Bergman noted, "Our second-quarter gross margin declined 250 points year over year to 47.3%," primarily due to 275 basis points of supply chain headwinds, primarily from higher U.S. tariffs, in Q2 FY2026.
  • APAC Regional Decline — APAC revenue declined 14% on a currency-neutral basis, with structural challenges being called out by management as active headwinds in the turnaround.
  • Footwear Weakness — Dave Bergman reported, "Footwear revenue declined 16% this quarter, reflecting ongoing pressure from a challenging consumer demand environment and our deliberate efforts to recalibrate key parts of the footwear portfolio."
  • Interest and Tax Headwinds — Other expenses below operating income are projected to be higher for FY2026, "Mainly driven by interest expense from increased debt levels as well as a significantly higher tax rate in fiscal 2026."

TAKEAWAYS

  • Revenue -- $1.3 billion, down 5%, aided by a one-point benefit from shipment timing shifting revenue from Q3 into Q2.
  • North America Revenue -- Decreased 8% due to full-price wholesale declines and softer e-commerce performance.
  • EMEA Revenue -- Increased 12% (7% currency-neutral), attributed to full-price wholesale strength and direct-to-consumer growth.
  • APAC Revenue -- Declined 14%, with wholesale declines the main driver and ongoing structural challenges noted by management.
  • Latin America Revenue -- Rose 15% (14% currency-neutral), with solid gains across wholesale and DTC channels.
  • Wholesale Revenue -- Wholesale revenue fell 6%, as full-price sales declines were partially offset by off-price and distributor channel improvements.
  • Direct-to-Consumer (DTC) Revenue -- Down 2%, with an 8% decline in e-commerce offset by flat owned retail stores.
  • Apparel Revenue -- Declined 1%, with softness in run, outdoor, and golf categories, partially offset by growth in train and sportswear.
  • Footwear Revenue -- Down 16% for the quarter, impacted by both market demand and internal recalibration of the portfolio.
  • Accessories Revenue -- Declined 3%, with decreases across most categories, partially offset by growth in sportswear, especially headwear.
  • Gross Margin -- Fell 250 basis points to 47.3%; higher U.S. tariffs accounted for 275 basis points of the decline in gross margin.
  • SG&A Expenses -- Increased 12% to $582 million; after adjusting for transformation-related and insurance items, adjusted SG&A rose 9%.
  • Restructuring & Transformation Charges -- $36 million in the quarter, with cumulative charges under the fiscal 2025 restructuring plan totaling $147 million to date and $160 million expected by fiscal 2026.
  • Operating Income -- Reported at $17 million in the quarter; adjusted operating income of $53 million after excluding restructuring and transformation expenses.
  • Diluted EPS -- Reported and adjusted diluted loss per share at $0.04.
  • Inventory -- Ended the quarter at $1 billion, down 6% year over year.
  • Cash Balance -- $396 million at quarter end, after refinancing $600 million in maturing senior notes during the quarter.
  • Revolving Credit Facility -- $200 million outstanding on a $1.1 billion facility at quarter end.
  • Full-Year Revenue Outlook (FY26) -- Projected to decline 4%-5% in fiscal 2026, an improvement from the 9% decline in fiscal 2025, with EMEA projected to grow at a high single-digit rate in fiscal 2026 and both North America and APAC expected to decline at a high single-digit rate in fiscal 2026.
  • Gross Margin Outlook -- Anticipated to decline by 190-210 basis points in fiscal 2026, mainly from US tariffs.
  • Adjusted SG&A Outlook -- Expected to decrease at a mid-single-digit rate year over year in fiscal 2026.
  • Adjusted Operating Income Outlook -- Adjusted operating income in fiscal 2026 is expected to be between $90 million and $105 million.
  • Full-Year Adjusted EPS Outlook -- Adjusted diluted EPS for fiscal 2026 is forecast in the range of $0.03 to $0.05, reflecting higher interest and tax expense.
  • Q3 Revenue Guide -- Revenue projected to decline 6%-7% in the third quarter of fiscal 2026, with a full-quarter impact of tariff costs in the third quarter and North America expected to fall by low double digits in the third quarter of fiscal 2026.
  • Q3 Gross Margin Guide -- Anticipated 310-330 basis points decline, almost entirely attributed to tariffs in the third quarter.
  • Q3 Adjusted Operating Income Guide -- Adjusted operating income in the third quarter of fiscal 2026 is expected to range from a $5 million profit to a $5 million loss, or an adjusted loss per share of $0.02-$0.03 in the third quarter.
  • Leadership Transition -- Announcement that Reza Telghani will replace David E. Bergman as CFO in February 2026; Bergman will support transition through 2027.
  • Product Strategy Execution -- Management highlighted a 25% reduction in SKUs, innovation through proprietary Neolast fiber, and a focus on premium pricing supported by athlete endorsements.
  • Brand Momentum -- The "We Are Football" campaign generated substantial engagement, including increased awareness among 18- to 34-year-olds and a surge in social media activity and sales for related product categories.
  • Regional Outlook for FY27 -- The company anticipates stabilization in North America and APAC during fiscal 2027 with multiyear plans underway to support growth beyond that point.

SUMMARY

Management reaffirmed rigorous cost controls and disciplined SG&A reduction initiatives to address tariff-related margin pressure and channel softness in fiscal 2026. Executives emphasized a category-led product innovation pipeline featuring proprietary technologies such as Neolast and showcased their intention to support improved average selling prices via storytelling and selective athlete partnerships. The company confirmed stabilization in wholesale partner relationships, citing a shift from high return rates and order cancellations to greater reorder consistency. Finally, Under Armour (UAA 2.28%)’s leadership underscored confidence in returning both the North America and APAC businesses to stability and potential growth by fiscal 2027 based on tangible channel, product, and operating milestones.

  • Kevin Plank stated, "Awareness among 18 to 34-year-olds has increased from the mid-sixties just six months ago to over eighty percent today," citing the effectiveness of the "We Are Football" campaign.
  • The restructuring plan executed since inception has incurred $147 million in charges, with $45 million of additional savings projected for FY2026.
  • Plank said, "stabilization for us, first of all, it means we see getting the business to where it's a plus one or two or plus or minus one or two. So in that healthy version. So we're pointing toward that," articulating a clear definition for future financial targets in North America.
  • Management highlighted that the quarter benefited from a one-point revenue timing shift from Q3.

INDUSTRY GLOSSARY

  • Neolast: A proprietary, sustainable fiber developed by Under Armour in partnership with NC State and Celanese, designed to replace Lycra in performance apparel.
  • APAC: Abbreviation for Asia-Pacific region, a key geographic segment for revenue reporting and strategy monitoring at Under Armour.
  • SKU: Stock Keeping Unit, used here to describe assortment or product count reductions as part of portfolio rationalization.
  • EMEA: Abbreviation for Europe, Middle East, and Africa region, referenced extensively as a high-growth area in the company’s segment reporting.

Full Conference Call Transcript

Kevin Plank: Thanks, Lance, and thank you all for joining us this morning. Before we get started, I want to take a moment to reflect on some important news we shared this morning regarding a leadership transition. I want to express my deep gratitude to Dave Bergman for more than two decades of extraordinary service to Under Armour. For 21 years, Dave has been so much more than our teammate, finance expert, and CFO. He's been a true partner, a steady hand, and a trusted voice. His discipline, integrity, and unwavering commitment to doing what's right for our brand, our teammates, and our shareholders have shaped who we are today.

This impact can be felt in every corner of the company, from the strength of our business to the culture that defines us. His leadership has built a foundation that will support Under Armour for years to come. As Dave transitions from his role and continues with us through 2027 to ensure a seamless handoff, I want to sincerely thank him. Not just for what he's accomplished, but for the person he's been to all of us. His legacy here will be lasting and deeply felt. Thank you, Dave. Now at the same time, we're excited to welcome Reza Telghani as our next Executive Vice President and Chief Financial Officer, who will join in February 2026.

Reza brings more than 25 years of global finance leadership across corporate, operational, and investment banking roles. He joins Under Armour from Samsonite Group, where he served as EVP and CFO since 2018, leading financial and operational transformations that significantly improved profitability and efficiency. His prior experience includes senior roles at Star Corp, JPMorgan, and Sterling Airlines. I have every confidence that Reza's extensive experience and strategic mindset will help drive our brand and business forward, and we welcome him to the Under Armour team.

Now speaking of the team, over the past few months, I've had the privilege of meeting our closest stakeholders across Shanghai, Hong Kong, Amsterdam, New York, and Portland. The energy has been undeniable everywhere I went. The message remained consistent. Under Armour has the strategy, talent, and brand power to succeed. Our partners are fully committed. Our teams are focused, and our brand continues to inspire athletes worldwide. With nearly 2,000 UA-branded stores showcasing our global reach, the road ahead is vast. Now is the time to harness the momentum, align our priorities, ignite our entrepreneurial spirit, and turn potential into tangible results.

Like the athletes we serve, we know when to push, when to pivot, and when to lock in. This turnaround won't happen through force alone. It's about balance and precision. Staying focused is critical because credibility and trust are lost quickly but regained slowly. Or as we say at UA, trust is built in drops and lost in buckets. And we have been busy. Depositing one drop, one relationship, one product, one story at a time. Every decision, action, and result shapes how our brand is perceived. Our category management model is sharpening our edge, aligning more closely with athlete needs, and boosting precision and speed across the business.

We will maintain high standards, staying disciplined, accountable, and continue to earn trust through performance. Anchored by our long-term strategy, this model keeps us focused on what matters most. Winning with young athletes and making Under Armour the most trusted authentic performance brand everywhere we do business. This strategy is now global, echoed in every region and market around the world with our clear category focus of training, running, and sportswear. Then authenticated through the key team sport in each region from American football, basketball, diamond sports, and volleyball here in the US. To football in Europe and football, basketball, and volleyball in Asia. We deliver performance and build connection wherever athletes play.

One of the clearest signs our strategy is working is in product. A heartbeat of this brand. When I returned to the CEO role, I made it my priority as product has long 18-month lead times, and to reignite the Under Armour Edge, that's where we had to start. We streamlined assortments by cutting 25% of our SKUs, refocused our materials library by prioritizing fabrics we can be famous for, and constantly raising the bar on design. Working to bring innovation and style back to the center of what we do, which are all ingredients that made Under Armour globally famous to begin with. Fall winter 2025 is when it all starts to show.

A bold new design language is evident across training, running, and sportswear. Confident, consistent, and unmistakably UA. Core apparel collections including heat and cold gear. Unstoppable, vanish, meridian, and icon. Are driving momentum and beginning to drive demand with key specialty and sporting goods partners.

In footwear, we've addressed our contraction. By refining our strategy, sharpening our aesthetic, we are not accepting the current state of the business. Our plan is straightforward. Build on the franchises that are already successful and return to growth in the upcoming seasons. We're leveraging our momentum. The record-breaking Velocity Elite 3 highlighted by Sharon Locates recent New York City Marathon podium this past Sunday, demonstrates our performance leadership is resonating. FlipSpeed Echo and Nova extensions along with our solo sportswear models are creating buzz. Increasing sell-through, improving that UA can generate real demand performance meets style.

Accessories, we're gaining renewed energy. Breakout hits like the $45 Stealthform hat and $140 No Way backpack, driving growth across wholesale and DTC by inventing new products, as well as significantly higher price points. Validated by UA innovation, which reassures us that where and when we innovate, we will succeed. Spring summer 2026 only gets stronger. It's also filled with innovation. The $160 velocity distance run shoe, which builds on the Velocity 3 franchise. Next-generation Shadow and Magnetico football boots, the DRI Pro clone golf shoe featured on Jordan Spieth, and the new No Way Duffle, all of which build on UA franchises.

Especially our Heat Gear Elite base layer, featuring our new UA built Neolast fiber technology, which replaces Lycra stretch with a more durable and groundbreaking sustainable option for athletes and the planet. There'll also be another extension in Neolask. We will launch in the spring that we only tease with the clue of an industry quote that drives us. Whoever invents the next white or black t-shirt wins. Meaning, master performance and elegance through something as simple as a T-shirt. It's the best expression of UA. And believe we have that coming in the New Year. This is what UA does best consumer relatable innovation where we can drive positive perception and volume.

So speaking of volume, we're working to elevate our top 10 largest unit products. By enhancing quality and design. Aiming to increase price points through innovation and style that help athletes perform better. Every product detail must justify its place by providing confidence, comfort, and performance that set us apart.

Well, higher average selling prices over the long term are a fundamental goal, our progress will be about more than just numbers. It's about building trust and instilling pride in athletes when they wear UA as a symbol of performance and purpose. Strong example, the $75 Assert 11 running shoe, which launched just this week with a complete velocity run inspired redesign, it demonstrates how far we've advanced, turning one of our most accessible models into a true performance shoe with a story instead of just price. The charge plus midsole technology and Velocity 3 inspired design lines, plus the addition of Los Angeles Dodgers back-to-back World Series champion Freddie Freeman, to support our point of sale visuals.

Ensure that we can maintain a higher average selling price for this program that pushes millions of units annually ultimately bringing more profit to the bottom line. We look to do this across our top 10 high volume styles, where each product will reflect our commitment to premium quality at every price point so every athlete at any level can see and feel the UA difference. These launches embody everything Under Armour represents. Athlete-driven innovation, bold design, and performance you can truly feel. The difference now is the energy. You can sense it across the teams. Fueled by belief and a shared commitment to win. We're not just back in the game.

We're now setting our own pace, demonstrating that performance, style, a premium experience can coexist and thrive at every level. Evolution of our products reflects the transformation happening across our business worldwide. With focus and disciplined marketplace management in each region driving progress. EMEA is experiencing healthy, profitable growth. APAC is rebuilding back to growth. Over the next twelve months. And North America is a proof point we are decidedly getting behind. To redirect our global trajectory and believe we have a positive line of sight. Focusing on North America, and recognizing that it's not fully reflected in our financials yet, our brand heat is increasing. Which is an important milestone in our turnaround.

As our product strategy accelerates, our storytelling is gaining clarity.

By blending creativity with instincts, we're enhancing our cultural edge while staying dedicated to performance. From TikTok to the sidelines, we're showing up where it matters. And it's working. Awareness among 18 to 34-year-olds has increased from the mid-sixties just six months ago to over eighty percent today. Driven by our We Are Football campaign. And activations, which we have also delivered a significant surge in social engagement for UA. From the star-powered main film featuring NFL star Justin Jefferson. Number one draft pick Cam Ward, a host of young high school NIL talent, all the way to recording artist, Gunna, who also performed at the Video Music Awards. These have all contributed to related base layer sales.

We are football wasn't just an activation. It's been a revival for us here in The States. Redefining how athletes see us, not just as a performance brand, but as an inspiring, aspirational one. Returning to the field this year through our NFL partnership, as an official supplier of gloves and footwear has been a key part of this reset. Reminding the world exactly what UA represents. Performance, energy, and an authentic cultural connection with the next generation of athletes. And it's delivered big with more than 300 million impressions and a 100 million video views.

A number two share of voice among competitors on 90% positive sentiment, and awareness among eighteen to thirty-four-year-olds at its highest level since 2022, now sitting in the eighties. Besides generating buzz, it also boosted sales. Organic engagements surpassed expectations by promoting our heat cure base layer story, and increasing its share of ua.com franchise visits from 6% to 31%. This led to double-digit growth in sales for the category. The VMA's activation with Gunna also caused a fivefold rise in social media mentions. And a notable increase in purchase consideration among young athletes. At Under Armour, our current is product and our voice is amazing story articulated through powerful imagery and film where we bring our brand to life.

For a deeper look at the momentum behind our transformation, please visit our investor relations page today to explore recent product and storytelling highlights that demonstrate how our brand is growing stronger every day. I think this is incredibly effective and recommended strongly. The combination of sharper products, stronger storytelling, a renewed sense of purpose is revitalizing confidence in Under Armour and redefining how athletes perceive us. We're rebuilding conviction and cultural relevance with the next generation. Regaining trust and energy across the marketplace. So what's different? We're connecting more deeply than ever. We're adding attitude and personality to everything we create. Applying a brand lens to every product, touchpoint, and story.

Our products need to perform and speak reflecting the mindset of today's athlete, relentless, confident, and ready to compete. That's what we mean when we say our products personify performance. Every fabric fit and finish must convey our unique DNA. When athletes put on UA, they're not just wearing gear. Underscoring belief. That's the connection we're creating. Bring product and emotion, brand and identity. You'll continue to see us get sharper with personifying our product giving them individual personality and trust with athletes like our cold beer moc has done when it gets cold. That builds a relationship with our consumer. Become familiar with and recommend as well as repeat purchase from us season after season.

This is our industry's version of recurring revenue. And it is top of mind here at UA. Consistency, and confidence. Within our North American direct-to-consumer business, we continue balancing pricing discipline with a dynamic consumer environment while making further progress in enhancing our shopping experience. Our new content management system for e-commerce improves flexibility and supports modern tools like TikTok, shoppable reels, and product compare. Although sector demand remains tempered due to a very promotional market, our units per transaction are up nicely.

And despite traffic headwinds across our sector, in our retail stores, conversion rates are increasing as we improve the shopping experience and boost productivity. Factory house placements of full-price products also continue to exceed expectations.

Now our North American wholesale business is undergoing a disciplined rebuild, we are encouraged. The focus on top-to-top relationship building at our most important retailers has been key and effective. Good news is that we're seeing positive momentum with many of these accounts in some of our core programs as we continue to sharpen our focus on stronger partnerships more targeted assortments, elevated merchandising, and a premium retail brand experience. All of this, of course, is centered on one goal, reigniting Under Armour's potential in the marketplace.

While this part of our business remains challenged in the near term from an order standpoint, the tone has shifted as we have seen replenishment demand with the brand heat from our We Are Football campaign, and even more recently, with the weather turning cold.

Conversations with our major wholesale partners have moved from caution to collaboration. And from hesitation to optimism. The message is clear. They see the progress. They feel the energy, and they want to be part of our next chapter. In ongoing discussions with these key partners, we're creating multiyear plans to bring U.S. Wholesale back to growth aiming for stabilization during fiscal 2027. And paving the way for expansion beyond. That's exactly it. This is a rebuild and reset with purpose. Putting UA back on offense in North America as the brand's green shoots are becoming more consistent.

So in EMEA, we're driving real momentum and doing so with style. The team continues to deliver strong results quarter after quarter. Driven by a clear strategy and effective execution. Our focus on creating culturally relevant brand moments is making a significant impact. Prime example is our collaboration with Mansory, which generated 38 million organic views and strengthened our premium positioning with younger, dial-conscious consumers, even seeing sell-out online.

That's brand heat in action. We're carrying that momentum into fall winter 2025 with our new Be a Problem football campaign led by global ambassador and arsenal head coach Michele Orteta, along with a roster of top UA athletes. Major activations in London and Paris strengthened our connection with the Mayo's most passionate communities. Highlighting how our brand and cultural intersect to inspire and create credibility. It's a powerful reminder of the opportunities ahead across run. Train, and sportswear. Validated by regional sport authenticity through football. Behind these results is smart disciplined growth. We're seeing wholesale strength in key cities and steady gains across direct-to-consumer. All while maintaining full-price discipline and tailoring our approach to each local market.

Mansory and team sports stood out this quarter boosting both energy and profitability. This consistent performance builds confidence that our focused strategy will keep igniting relevance fueling continued healthy growth and maintaining the Under Armour brand's momentum through the second half of the year in EMEA.

So in APAC, after spending eight days on the ground with stakeholders just a few weeks ago, the takeaway is clear. In today's print of down fourteen, does not reflect the real progress that's underway. Structural challenges are being addressed. Legacy roadblocks are coming down, we're rebuilding a premium high integrity marketplace that aligns with Under Armour's true brand strength. Our priority is to stabilize the business and set a clear path to growth in fiscal 2027 and beyond. The plan is in motion. The right leadership in place. We're reducing inventory through tighter buys and faster in-season decisions. Strengthening purchasing discipline, and managing the marketplace with greater precision to protect price and margin.

To support this, we're simplifying assortments sharpening consumer storytelling, and driving full-price sell-through with disciplined distribution and premium partners. APAC also holds a structural advantage. As our second smallest region with a strong base of mono-branded stores, we can move faster than larger markets. Beginning in the fourth quarter, we'll be testing a new digital retail store concept with a highly immersive experience environment that brings our performance story to life. In short, APAC is on a path to regaining momentum and have every confidence in the team we've built to construct a cleaner, more premium marketplace positioning the region as a proving ground for what will scale globally.

Also, the creative edge we build in APAC won't stay in APAC. It will make Under Armour stronger everywhere we play.

In closing, here's my perspective on our progress in this turnaround. We don't have a product issue. Our innovation design is strong, and as you'll see in the coming seasons how we've addressed this. And we don't have a brand issue. Consumers aren't mad or rejecting Under Armour. They just haven't heard from us in a while. What we do have is a storytelling opportunity. That's exactly where we're concentrating because consistent. Compelling storytelling that personifies our brand turns great products into icons. Athletes into advocates, and moments into momentum.

This month marks twenty years since Under Armour went public. Twenty years of grit, lessons, humility, and ambition. I want to thank everyone who has contributed to this double-decade journey.

Not long ago, our leadership focused solely on stability. That operational discipline was essential for Under Armour to rebuild its foundation. Today, that foundation is solid, and our focus is on finding balance and pursuing growth. We're combining that same operational excellence with a brand-first approach because our next chapter is about unlocking the full potential of what Under Armour can become. Making the most of all of our assets and resources. With the wisdom gained from twenty years as a public company. We recognize a disconnect between our $5 billion in revenue and our current market cap. And that gap drives our sense of urgency.

At the center, we have the right team, the right strategy, a clear focus on strengthening the brand. Through better storytelling, products, marketplace management, and customer experience. True transformation happens when product and story come together. Product fuels story and story elevates product. Together, they build lasting platforms, lead franchises, and deepen consumer connection with the brand. And while there's still work to do, momentum is real. We're seeing progress in North America, early evidence that our balance between performance and purpose discipline and storytelling, is starting to take hold. This is the next chapter of Under Armour. Confident, focused, and ready to rise.

With that, I'll hand it over to Dave to walk through our second-quarter results and outlook for fiscal 2026. Dave?

Dave Bergman: Thanks, Kevin. Before I get into the financials, I want to take a moment to share some thoughts about my upcoming transition. After 21 incredible years at Under Armour, and nearly nine as CFO, it feels like the right time for something new. New for me, and new for Under Armour. Kevin and I have been discussing this for some time now, and we agreed that if we could identify and secure a great next CFO for Under Armour, I'd step down and pass the baton in a well-planned and thoughtful way. With Reza joining the team, we're now ready to do just that. And to be clear, I absolutely believe in this brand and its future.

I'm proud to be Under Armour's second-largest internal shareholder. But more than that, I'm proud of the people, and the purpose that make this company so special. My main focus now is helping UA and my team onboard Reza and get him fully up to speed to ensure UA can continue to thrive for years to come.

Now let's get into our second-quarter fiscal 2026 results. Where we again delivered a quarter that met or exceeded our outlook on every item. As we continue to execute our turnaround. Revenue declined 5% to $1.3 billion, slightly better than the outlook we shared in August. This result includes a one-point benefit from timing shifts, that moved some shipments from Q3 into Q2. Which will normalize in the back half of the year. Regional results were as follows. North America revenue decreased 8% primarily due to a decline in our full-price wholesale business, and lower e-commerce sales. In EMEA, revenue increased 12% or 7% on a currency-neutral basis. Continuing the healthy growth trend in the region.

Driven primarily by our full-price wholesale business coupled with strong growth in our DTC channel during the quarter. Revenue in APAC declined 14% on both and currency-neutral basis. Mainly driven by our wholesale.

While DTC decreased modestly in the second quarter. In Latin America's revenue increased 15% or 14% on a currency-neutral basis, with strong growth across wholesale, and DTC. From a channel perspective, wholesale revenue declined 6% due to lower full-price sales partly offset by growth in the off-price channel driven by the timing of sales to third-party partners. As well as an increase in distributor sales. Direct-to-consumer revenue declined 2% primarily due to an 8% decrease in e-commerce sales driven in part by efforts to more strategically manage discounts in a more promotional North American environment. Sales within our owned and operated stores remained flat in the quarter. And licensing revenues increased 17% driven by strength in our international business.

Finally, by product type, apparel revenue declined 1% the softness in run outdoor and golf partially offset by growth in train, and sportswear. Footwear revenue declined 16% this quarter, reflecting ongoing pressure from a challenging consumer demand environment and our deliberate efforts to recalibrate key parts of the footwear portfolio. We believe these steps will help us improve efficiency, strengthen brand value, and maximize the impact of several high-potential launches planned for upcoming seasons. Accessories revenue declined 3% this quarter, with decreases across most categories partially offset by growth in sportswear. Especially in headwear.

Our second-quarter gross margin declined 250 points year over year to 47.3%. This decline was mainly caused by 275 basis points of supply chain headwinds primarily due to higher U.S. tariffs. And 100 basis points of combined unfavorable channel and regional mix. This was partly offset by 50 basis points of foreign currency headwinds or tailwinds, I'm sorry, 50 basis points of pricing benefits, and 25 basis points from a favorable product mix. Gross margin for the second quarter came in better than our expectation. Thanks to less supply chain pressures including slightly better product costs and inventory return impacts.

Shifting to SG&A, which increased 12% to $582 million in the second quarter. Excluding approximately $4 million of transformation expenses related to our fiscal 2025 restructuring plan, adjusted SG&A expenses were $577 million a 9% increase compared to the prior year. Last year's Q2 SG&A benefited from a $27 million insurance recovery which explains about five points of the year-over-year increase. The rest reflects higher marketing driven by timing shifts that occurred in the back half of last year. On a normalized basis, adjusted SG&A was down slightly year over year.

In the second quarter, we recorded $32 million in restructuring charges, along with $4 million in transformation-related SG&A expenses. Totaling approximately $36 million in expenses and charges under our fiscal 2025 restructuring plan. Since the plan's inception, we have incurred $147 million in charges and transformation expenses. Of which $82 million are cash-related and $65 million are non-cash. We expect total charges and expenses for the plan to be up $160 million which will be recognized by the end of fiscal 2026. The actions executed under our plan have already delivered approximately $35 million in savings in fiscal 2025, and are on track to generate an additional $45 million in fiscal 2026.

Moving down the P&L, we reported operating income of $17 million in the second quarter, excluding transformation expenses and restructuring charges, our adjusted operating income was $53 million outperforming our outlook. Looking at the bottom line, our reported diluted loss per share was $0.04 while our adjusted diluted earnings per share was also $0.04 in the quarter.

Regarding our balance sheet, inventory at the end of Q2 was $1 billion a 6% decrease compared to the same period last year. And our cash balance was $396 million at the end of the period. Additionally, during the second quarter, we used the net proceeds from the issuance of the senior notes due 2030 along with the borrowings from our revolving credit facility and cash on hand to satisfy and discharge our $600 million in senior notes due in June 2026. Funds were placed in a restricted investment account to cover all remaining principal and interest payments on those notes.

At the end of the second quarter, we had $200 million in outstanding borrowings under our $1.1 billion revolving credit facility.

Next, looking ahead to outlook. We expect full-year revenue to decline 4% to 5% in fiscal 2026 an improvement compared to fiscal 2025's 9% decline. This incorporates our expectation that North America and APAC revenues will decrease by high single-digit percentages. While business in EMEA is projected to grow by a high single-digit percentage. For gross margin, we expect the full-year rate to decline by 190 to 210 basis points mainly due to higher US tariffs. These headwinds should be partly offset by foreign currency gains a more favorable product mix, and slight pricing benefits. Amid these headwinds, remain focused on improving SG&A efficiency.

For fiscal 2026, we expect adjusted SG&A to be down at a mid-single-digit rate with a goal of leveraging. As such, will continue to reduce discretionary spending and sharpen our marketing investments. Ensuring that we protect and build on the brand momentum that is beginning to take hold. This translates to an expected adjusted operating income of $90 to $105 million and when taken to the bottom line, we expect adjusted diluted earnings per share for fiscal 2026 in the range of $0.03 to $0.05. This outlook accounts for higher projected other expenses below operating income. Mainly driven by interest expense from increased debt levels as well as a significantly higher tax rate in fiscal 2026.

Primarily due to the interplay of an unfavorable regional mix and decreased profitability.

Next, our outlook for the '26. We expect revenue to decline 6% to 7%. As noted earlier, this includes approximately one point of revenue that shifted from Q3 into Q2 due to shipment timing. North America, we anticipate a low double-digit decline driven by continued wholesale softness, especially in footwear. We expect EMEA to grow at a high single-digit rate while APAC is projected to decline by a high single-digit rate. An improvement from Q2. Important to note that our Q3 revenue outlook suggests a moderately smaller revenue decline in Q4, as we regain momentum toward a potential inflection point in fiscal 2027 as Kevin noted. Moving on to gross margin.

We anticipate a decline of 310 to 330 basis points in the third quarter. Due to a full quarter impact of new U.S. Tariff costs. Adjusted SG&A is expected to decline by a mid-single-digit percentage in the third quarter. As it compares against last year when our marketing spend was distorted for the second half of the year. Additionally, we continue to focus on cost management in the current environment, supported by the increasing benefits of restructuring actions we have undertaken. This results in a third-quarter adjusted operating income expectation that ranges from a $5 million profit to a $5 million loss. Which translates to approximately 2 to 3¢ of adjusted loss per share.

In closing, we're entering this next phase with focus and discipline. Executing a strategic transformation that unites sport, performance, and style with the financial and operational rigor required to reignite top-line growth. Our innovation pipeline is strong, and our opportunity lies in converting that strength into brand and financial momentum. Sharper storytelling, better marketplace execution, and disciplined capital deployment. We're grounding every decision in data, optimizing cost, and prioritizing investments that drive margin expansion. Operating leverage, and sustainable returns. With a clear roadmap and the right team in place, we intend to close the gap between our brand strength and financial performance. Resetting UA to deliver consistent profitable growth and long-term shareholder value. Now, we'll open the call to questions.

Operator?

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Jay Sole from UBS. Please go ahead.

Jay Sole: Great. Thank you so much. Kevin, a lot of great information insight in the prepared remarks. I want to ask you about North America. What makes you confident? That North America will see stabilization before the '7? And what is your definition of stabilized for North America?

Kevin Plank: Thank you. Yeah. Thank you, Jay. We spent a lot of time thinking about this in the outlook that we provided. So stabilization for us, first of all, it means we see getting the business to where it's a plus one or two or plus or minus one or two. So in that healthy version. So we're pointing toward that. The way we think about what makes that reality is there's five basic points, and I'll start with structural, which is having the right team, the right operating model business plan, go to market in place. Time for us to let those things cook, and let it really play out.

And I think that's where our twenty years of public company experience really will begin to shine through. From a product standpoint, I think there has been an incredible overall elevation that we've had in design and the deliverable innovation, meaning innovation that we can actually monetize and drive volume with. It means we've used this term driving pricing power for us. And that means first start by leaning on the winners. The heat and cold gear is unstoppable. Pant collection vanish and the products that you've heard of. It's also the two-part approach that we set to premiumize in this brand.

Which is our Trojan horse new innovations and things like the velocity Elite three, the credibility that gives us from Sharon Luchetti just hitting another podium in that shoe it really opens the door there. As well as innovation like a $45 hat or a $140 backpack. We're demonstrating that the consumer is open for innovation. More importantly, they're open for innovation and higher price points from Under Armour. When we deliver that.

At the same time, we've got a lot of legacy programs and things like our top 10 volume drivers that we're focused on ASP, the Assert 11 example I get with not just the price point, $75, but assigning an athlete in a face like Freddie Freeman to that, as well as talking about the technology with the, charge plus and inside.

From a number three would be storytelling. As I said, we don't we don't have a brand problem. Just haven't we haven't talked to the consumer in a while. And we don't believe we have a product problem. You'll see that coming through in the evolution of what the brands and how we show up at retail. But we certainly have a story opportunity. We haven't connected those things. We put a shoe out there like the Assert. We just never told anybody why they should buy it. We simply relied on brand heat, and that's something that can be it wanes with the market. But the good news, it's fixable.

So when we say that our currency is product and our voice is amazing story, this will be a highlight for us and why I encourage people to check out the website that we put together that just shows the content put up since our last call which is pretty incredible. And that We Are Football is a great example of it that actually takes us from the subjective of, hey. We believe this is gonna happen into know, we can drive that through data. As I said, our awareness scores at 18 to 34-year-olds prior to the campaign were down in the sixties about six months ago.

Since running that and getting the activation, not just one major film, but all the four or five pieces of content we built around it. Drove awareness nearly 20 points from one campaign. That is not normal. It just shows that the brand is there. It's just ready to be unleashed for us. Gives us an opportunity four, I would say, our partner belief from our wholesalers. We've had more top-to-tops in the last eighteen months than we probably had in the previous three or four years. And that means we've been rebuilding relationships, and these conversations we're having from them over that last eighteen months have moved from cautious, as I said, to collaborative.

And they're doing that because we've been consistently beating plan now. As we're moving forward. And plan in some cases is not in excess of where we were last year, but it's doing more than we said we were gonna do. So we're earning this one drop at a time. Fifth and probably most importantly is just culturally. Our teammates have this renewed sense of energy and the metaphor of moving in this new headquarters of little less than a year ago is, is great action toward that. It feels like a new chapter for the brand to start.

What that new chapter is that, yes, we'll make sure that we double down on the discipline we have as a company. But it's driving it with a brand-first lens on every decision that we make. That is how we'll judge how we're doing and how we're growing as a company. Is our commitment in making sure that we show up with something that makes somebody buy more shirts and shoes from Under Armour and believe that when they do, they're wearing a superpower. So I've got the benefit of having been around the world and being able to touch a number of our teammates in the last month or so.

And I can tell you the team's hungry, motivated, and ready to win.

Jay Sole: Got it. Well, I mean, that's super helpful. I mean, it's pretty clear that you know, the North America brand here is increasing. There's a lot of great things happening. You know, product storytelling. I'll pass it on, but just wanna ask one quick one.

You mentioned Neolast, and it was just a quick mention. But it sounds like you're excited about what you have and what you have coming. Just keep just tell us a little bit what it is, what makes it special? I know it's a little bit obscure, but I wanna just ask that question before I pass it on. Thank you so much.

Kevin Plank: Yeah. Thank you. NeoLaf is a fiber. We spent more than five years in partnership with NC State Celanese and Under Armour. And the three-way partnerships are not easy to do. From it, we've built a three-story machine that from the output of that, is a fiber that is completely sustainable that effectively replaces Lycra. So it gives us Lycra stretch, which is a great product, but we've built something that's actually better than it. So it's not just sustainable, but it's actually a better product. And we're showcasing that with some of our upcoming heat care elite and o g, and you'll see us start incorporating Neolast as we get the fiber up and running.

You know, throughout the majority of Under Armour products, and that's gonna take a little bit of time. But meanwhile, we'll put it in our compression gear, which as we all know to the broader population, probably you know, five or six or 7% people can walk down the street in a compression t-shirt. But as I mentioned, we also are gonna be showing this product that we think can be incredibly beautiful, including a product, a shirt that we have coming out in the spring that'll feature Neolast and I think really be important for the consumer. So, we're excited about what this innovation means.

Jay Sole: Got it. Thank you so much.

Kevin Plank: Thank you very much.

Operator: The next question comes from Sam Poser from William Trading. Please go ahead.

Sam Poser: Good morning. Thanks for taking my questions. I have two. One, I've been hearing a lot of really good things about what's going on, what you guys are doing in and field, and some of that seems to be manifesting itself in running in the results in New York Marathon and so on. But you're not you're you're you know, you talk a lot about football, but I would think the track and field slash running is a much bigger addressable market.

And I'm just wondering, you know, when you're increasing your voice, what you're gonna do there because I from what I understand, you're one of few brands out there that sort of covers off every sport and track and field. And I would think that the number of long-term athletes more are doing that abundance of those various sports going up. Then are playing football while I understand football's in your you know, it's it's is in your DNA. So I'm wondering, you know, what you what you're doing there to sort of have the voice match or exceed the pro you know, the products that appear to be out there.

Kevin Plank: Sure, Sam. I think it's a great unlock for us. You know, run as a category, you know, we talk about the progression that we try to get through. In footwear, and running is certainly a category that we can win. There's nothing like having the credibility of a Sharon Locati who is a former New York City marathon winner, the reigning champion of the Boston Marathon, and then just pulling another podium in New York this past weekend. That Velocity Elite 3 is something that gives us enormous credibility in running. Again, we say running, there's a $250 expressions like we have in the Velocity 3.

But if you go to the website as well that on investor relations, you'll see as we've been driving this story is that it's not just the $250, but we've taken that design aesthetic. We're taking it all the way down 160, $230, and $75 price points. And so, yes, we believe that it drives our credibility and with the 430 colleges that Under Armour outfits here in The United States, the nearly 3,000 high schools. It's certainly an opportunity for our track-specific product.

But all this is about leveraging us into using this as a marketing vehicle to tell the story that when you wear Under Armour, there's a superpower included inside, and it'll allow you to maybe someday, if you dream, to win the Boston Marathon. But I don't know. That might be an all ambition for some of us.

Sam Poser: Well, okay. I have one more, but I wanna follow-up on this. I'm really talking about the marketing voice. I know you're doing a lot of stuff, but, like, you know, you're not running that big you know, we are football campaign against that. You're you're doing so how do you let this broader base know? You know, you talked about increasing your voice. So that's number one. And number two, you talked about the improvement in The US business or the North American business.

Could you talk a little bit about the sell-through rates and the velocity that you're seeing at full price, let's say, compared to a year ago, now understand, you know, so more of on a rate basis, where and you know, how that's you know, why that's giving you confidence or some specific data to that confidence?

Kevin Plank: Yeah. So first of all, as we said, our global strategy is clear. It's training, it's running, it's sportswear, but they're authentic you know, in each market where it gets local. So, a recent deal we did here in The US, for instance, with BSN Sports, which has more than 1,400 road reps that are covering high schools and things. That's something that allows us to sell, as you say, our full complement we have for track and field. From discus to spike to weightlifting. You know, we do a good job covering that gamut.

And again, we wanna be authentic there, but the volume is for us is getting the specialty run, authenticating ourselves there, allow that to be the pool that puts us into sporting goods and specialty mall retail as well. So the way we're thinking about it in an organized way. The growth that we see is, you know let me move to sell-throughs. I think that the great news we have now and why we're pushing people until we don't have orders hand and we're saying, you know, we're pointing towards stabilization the way that we see fiscal '27. We'll be a lot smarter in February. But meanwhile, we're having really good success at retail right now.

And, again, that's not showcasing the numbers. We get what that means. And what I mean is we're beating our plans. And in certain categories, we're seeing replenishment orders coming in and a lot more driving from a lot more confidence from our key retail partners. The good news about that is that they're thinking about writing their fall 2026 orders. They're seeing some of the success we're having in fall 2025. So everything that we're just having, unfortunately, to say to you, they'll get to see that in a little more of a realistic way. So driving better gross margins with our accounts. We're not taking as many returns or at all.

And we just we like the trajectory of the business. So there's nothing hopeful or wishful I think, about our tone today. I think it's very pragmatic, very thoughtful. Something that just gives us great confidence for how we're thinking about the next chapter.

Sam Poser: Thanks very much. Good luck.

Kevin Plank: Thank you, Sam. Thanks, Sam.

Operator: The next question comes from Bob Drbul from BTIG. Please go ahead.

Bob Drbul: Thanks. Good morning. And Dave, you know, congratulations, and thanks for all the help. Over the last twenty years. Best of luck to you. Thanks, Bob. I guess welcome. Thanks. And two questions, really. I think the first one is, in terms of the you know, the sports marketing portfolio, you got a really good portfolio. You've made some changes to it. Can you just expand a bit just how that can work better in your storytelling approach? And then the second question is just a bit more general.

But when you look at the footwear business overall, you know, some of the challenges that you're seeing, can you just expand a bit more how you're approaching the changes that you need to make, you know, in that category? Thanks.

Kevin Plank: Yeah. Let me jump on that, Bob. First of all, you're right. Is that, you know, our sports marketing staple is something that always be dynamic and we're constantly evaluating and reevaluating. Today's day of NIL and sort of the hyper-focus that we have with, even high school NIL kids. You know, I think we did a good job in our campaign that's out and it's still running and we're not even you know, a little more than half of the way through, this campaign that you'll continue to see and hear from us.

But we didn't just put Justin Jefferson or reporting gun in there is that we had, you know, five NIL athletes you know, three of them are five stars, the number one player in the country, the number one quarterback in the country. So we're thinking about how we can access talent like that. As well as being thoughtful about the way that we approach, you know, anybody in our portfolio. And that's the balance between, is it about an athlete? Is it about a team? Is it about a league? So I'd say it's constantly moving. I like our portfolio right now. I think there's always work to be done, and we'll always make sure we're being thoughtful.

Let me address footwear because I do. I look at this number, and I realize the street's staring at minus 16, and I want everybody I wanna make sure we put this in perspective and context is that Under Armour is a footwear brand. We are committed to it. We are incredibly disappointed about where it sits right now, but and we find the results unacceptable. But, we're moving as a business. I guess, this as part of our redirect. We're moving of moving going from selling just foot coverings below a $100 to a forward stance in footwear. And this has come with some pain that you see in that minus 16.

But that meant we've relied on brand heat to sell shoes, and that's not how it works. We need to create the aspiration. We need to do that above a $100, understanding that a bulk of the is gonna be done below a $100, which is why we talk about things like the Assert 11, as a $75 shoe, but we're gonna make sure that we can anchor that and hold that full price with that average selling price closer to $75 we're asking for. Incredibly important for us. But we see Under Armour as what's our position because there's a number of good running brands out there, but there's a number of good, you know, footwear brands.

Under Armour, I think, is meant to be the equipment for your feet. You know, this you know, we enter. We have the right to play here. Because of the credible performance apparel that we have. It's our reason to be in footwear. And that starts with us as entering the consumer's mindset with cleated. So on field, on court, on pitch. I'm talking about the Magnetico football I talk about, you know, some of the things we have with American football. You look at what we're doing again with Velocity in the franchise that's running there. Plea to gets us in the door and it gets us a training footwear, which is pretty small.

But something where we have between our rain four product as well as our new Halo trainer that we just launched is important. Probably one of the big unlocks is running where I don't think we've taken enough advantage of the podiums that Sharon Locati and the success we've seen with the Velocity 3. Gives us a much bigger business, and that's what leads you into picking up some easier dollars like the slide business where we think we have opportunity to exploit if you get all these things right, you'll be able to sell sportswear footwear, which gets them to and from the field.

The good news about this is we're not starting from zero, so we're in more of an edit mode of how do we get clear, how do we get more focused on what we're doing. I think about where we have opportunity. I mean, you can take a category like basketball that's roughly a $100 million globally for us all in. And we think to ourselves, it's incredible for a $5 billion company that can't exploit that. In a bigger, better way. So being underscaled relative to the potential we have and the opportunity that we have to grow it.

So we're approaching that positioning as to where do we have the right to play, the right to win, we think we can just do a little better.

Bob Drbul: Thank you.

Operator: The next question comes from Laurent Vasilescu from BNP Paribas. Please go ahead.

Laurent Vasilescu: Good morning. Thank you very much for taking my question. Dave, thank you again for all your help over the years. And that leads us to the questions here. I think on the first question here is, around pricing elasticity. How do we how should we think about pricing for spring summer 2026 product? Should we assume something like mid-single digits to offset the tariff impact? And what are you seeing in terms of elasticity of demand for your consumers right now? And then the second question, I think Dave, you were very helpful in parsing out the tariff impact for 2Q. I think you mentioned 275 basis points.

Any way we should think about that number for 3Q and for the full year? Thank you very much.

Dave Bergman: Yeah, Owen. This is Dave. Relative to pricing, you know, it is one of the different mitigation strategies that we're driving through relative to the tariff implications. So in the short term, year, we're really focused a lot more on kind of managing the SG&A and protecting the bottom line that way. You know, there's a little bit of vendor cost sharing we can drive through where reasonable. Also, working on some production shifts where reasonable. Those can't be done overnight, though. And to your point, you know, we are pursuing some selected price increases. They're partially dependent though on competitor actions and sentiment as well, you know, based on where we stand.

And we're definitely gonna be strategic in those. We don't expect, much of that to be real visible until fiscal 2027 and beyond to your point. But it'll definitely help us as we offset, you know, of a full year impact next year on the tariff side. I don't think it's going to come across as dramatic and I don't know that we're in a position to be able to go dramatic. Relative to what other brands might be doing. So but we're gonna be in there, and we think there's a lot of great product that have the right price to value that could warrant some of those increases.

But we're gonna be very prudent and strategic in how we do that. But then there's also a couple other things that we're driving through to help offset as well. Being a lot smarter and more data-driven in how we look at SKU by SKU profitability. And make tougher decisions about what SKUs we're gonna get behind versus what ones we might wane back a little bit based on the profitability of that SKU. And just some more diligence around that to be careful as we try and navigate some of those cost pressures. But longer term, I think we're gonna be in a really good spot there.

Relative to Q3 and Q4, yeah, you know, Q3, we're seeing down 310, 330 basis points. And that is almost entirely driven by tariffs. You know, that number in the tariff range is probably around 300, 330 basis points. So other minor puts and takes that are going on within that. But that's really the lion's share for Q3. Q4, just based on the mix of product, and the sourcing countries that it's coming through, the tariff impact will be a little bit less. In Q4, but it's still gonna be the primary driver of the Q4 headwind as well.

Laurent Vasilescu: Very helpful. Thank you very much, and best of luck with the holiday season.

Dave Bergman: Thanks.

Kevin Plank: Thank you.

Operator: The next question comes from Peter McGoldrick from Stifel. Please go ahead.

Peter McGoldrick: Thanks for taking my question. I was curious about the shape of the guidance. Previously, the commentary pointed to the second quarter as the deepest declines of the year. I recognize there's a one percentage point shift, but now with, the outlook for the fiscal third quarter, that looks like that could be the deepest decline. And I was curious about the progression. What has changed over the last ninety days? And how should we think of the pathway towards stabilization in fiscal 2027?

Dave Bergman: Yeah. I mean, to be honest, there's not a lot of big developments from ninety days back. You know, there is, you know, maybe 10 to 15 million of movement relative to Q2 and Q3. These are mainly wholesale shipments in North America and EMEA. That were originally planned to go out in early Q3, and we actually had the product and the customer wanted it, and we were able to get it out in late Q2. So that was a little bit of a change versus our expectation. But outside of that, no real big changes. I think when you think about Q4, we do see that the Q4 decline will be less versus Q3.

And, you know, if you look at the math in our outlook, it does back into a pretty broad range for Q4 and one of the points within that range is flat, and that stabilization that we've been talking about. So you drill down into that, you know, we continue to see solid growth in EMEA, which is awesome. You know, APAC is likely to actually be up a little bit with Q4, but that's mainly, to be honest, relative to comping a really challenged Q4 of last fiscal year. In APAC, so that's something to keep in mind.

And then all the points that Kevin went through on North America, coming to fruition, and therefore, you know, less pressure on North America in Q4 than previous quarters. So again, you know, it's the focus on stabilizing and resetting APAC. Stabilizing and turning around North America. And continuing to fuel the growth in EMEA, and that's what we're driving against.

Peter McGoldrick: Appreciate that. And perhaps, just a follow-up on the pricing. You pointed to embedded assumptions for the higher engineered pricing on your largest products. So curious if you could talk about your approach to the balance of your product portfolio and how you're planning, pricing there.

Dave Bergman: Yeah. I mean, we are looking at it in a lot of different ways. There's some very specific, new launches that we're gonna be addressing pricing on, a couple of the resets, but then also even on some of our core you know, we do feel there's an opportunity on the kind of better and best product a little bit more than the good level product. We wanna be a little bit more careful with that consumer. But as Kevin can probably touch on, there's also a lot of exciting stuff we're doing relative to some of the new product launches that are in that good and better best level. That could have better prices associated with them.

Kevin Plank: Yeah. I think just the overall elevation for the brand. This comes back with the static. This comes from just because it's an opening price point doesn't mean it can't be designed beautifully and performed for the consumer. So when we talk about things like our tech program and how we're looking to enhance that with a $25 opening price point and be moving some price there, but more importantly, we're introducing a $35 improved version that we think we'll be able to take some of that volume and walk the consumer up a bit. But innovation is the answer, in the way that we're gonna win with the athletes.

So that perception needs to come across in everything Under does.

Peter McGoldrick: Thank you very much. Thank you.

Dave Bergman: Thanks, Bill.

Operator: The next question comes from Brooke Roach from Goldman Sachs. Please go ahead.

Brooke Roach: Kevin, Dave, I was hoping to dive a little bit deeper into the trends that you're seeing in the APAC business. And the drivers and cadence of the path that you see ahead to drive some stabilization there? Thank you.

Kevin Plank: Yeah. Thank you. I know this is a head-turner when you look at it and say, does it mean in the minus 14? It's difficult for us to read. Again, we do not accept it, and I feel like I've said that too many times today. But we're in the midst of a turnaround, and this is what it looks like. And so, we like where we're going. You know, as I said, I've had the ability to spend eight days in the market visiting stores and meeting with our teams.

Franchisees, distributors, manufacturers, and doing town halls and getting our point of view and then sitting down one by one and doing an hour with each of the key stakeholders we had, sharing our forward strategy and spending time with our team. Simon Pestridge, who's been awesome. He joined about a year ago, and we named him to this job about three or four months ago. We're new in that process. Simon also announced that a veteran pro who used to run a new head to run specifically China for us who is a Converse in the region as well in running China. So he is building out a rock-solid team.

But not unlike The US, we don't believe that we have a brand problem. Under Armour's effectively known as a professional brand in China. It's once again, it's a story issue, and this is just where we haven't done a great job of just tying together a personifying the product and then just storytelling at retail when it's a t-shirt just standing next to a price tag that says, you know, 24 or $30 or whatever the local currency is. Not very compelling. And that's when you're just relying on brand heat. So as that has slowed the we felt sort of across the region.

The good news is that when we look at a market like China is that it can sort of the fastest retail markets in the world, if not the fastest, and it gives us the ability to move, we think, pretty quickly. So the same formula and some of the lessons learned from EMEA and that we implemented here in The US, pulling back on promoting beginning with our own sites, which helps the partner sites as well. And then allowing us to just, look forward. So the good news is that Simon and team is that we're viewing stabilization, as we're talking about. We believe we can point towards stabilization more specifics to come in the February call.

But in fiscal 2027 as well. So we think this is a reset year for us to get us back to growth and moving and moving pretty quickly. So we think the worst is behind us and it's now for us repurpose. This new store that we're unveiling in January too or hopefully at some point there around is gonna be incredibly exciting and will help feed the more than 700 doors we have in China specifically in the thousand over in APAC.

Brooke Roach: Great. Thanks so much. And, Dave, best of luck in your next chapter.

Kevin Plank: Thank you. Thank you, Brooke.

Operator: Please go ahead.

Kelly: Hi, guys. This is Kelly on for Paul. Thanks for squeezing us in here. I just wanted to follow-up on some of the North America wholesale commentary. I guess you're seeing improving sell-through rates this fall, do you have an opportunity to potentially see upside from stronger reorder demand in the holiday quarter? And then just in terms of the order book, you're pointing to more of a stabilization in wholesale. In North America in the fourth quarter. Is that reflected in your order books? And then should we think about know, given you've seen improved sales through this fall that maybe the hope at least is that you know, for fall 2026, you'd see, you know, order booked up.

Any just color there would be great. Thanks.

Kevin Plank: Yeah. Thank you. We say stronger demand, so we're coming from we haven't had the strongest hands. So we're basically stabilizing. I think probably the best way for me to qualify this is that we now we have a stable order book. Where in the past, we've seen a lot more returns, we've seen a lot more cancellations, we're not seeing that right now. This isn't just cold weather either. It's some of the brand heat, I believe, that we've been driving here, you know, in The US specifically.

The brand inconsistency, I think, is one thing is that we hadn't really come with story, and that's where I believe that the most important thing is the key relationships that we have with the key partners is they're seeing a more consistent Under Armour. They're seeing us now tying story to it. They're seeing us personify product and the premiumization that we're taking at UA is something that's just resonating with them. The I call it success, but I'll say the beating plan.

The beating plan that we have in fall 2025, and, again, understanding that we're not thrilled about this math, but it definitely sets us up, and one thing we think we want the core message to be, is that the key business that we have today the $5 billion business we have today, we can see line of sight to the ability for us stabilize and hold this business, and begin to move forward. And that's not just building more good level product. We like the amount of good level product, but we wanna focus on better and best.

And that's what'll help us premiumize the brand and help us frankly, drive some of the more of the sell-through, at all three levels wherever the consumer sees us.

Dave Bergman: And Kelly, think just, you know, pointing out too that Q3 is a very high mix of direct-to-consumer. It's a little bit lower mix of wholesale. So even though we are seeing some favorability on replenishment orders, which is great and really points towards the future, it doesn't necessarily create, you know, a significant upside potential for Q3 or Q4. But obviously, we're gonna keep driving and fueling. And, you know, we're excited about where those conversations are heading.

Kevin Plank: Alright. Thank you. Thank you all. Appreciate it.

Dave Bergman: Thank you.

Operator: This concludes our question and answer session, and the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.