Why is Under Armour stock tumbling today?

Under Armour stock slid 11.3% in pre-open trading after the athletic apparel maker cut its annual gross margin growth target, offseting the quarterly results that beat estimates.

The sportswear maker lowered its annual gross margin growth target, citing higher fuel and freight costs and warning of a bigger hit to its operating income from the conflict in the Middle East

It forecasts annual gross margin to increase 170 basis points to 220 basis points, down from previous expectation of 220 basis points to 270 basis points

Adjusted EPS came in at $0.00, edging past the consensus estimate of -$0.01, and revenue of approximately $1.24 billion narrowly topped the $1.23 billion forecast — yet the top line still contracted nearly 7% year over year, with declines across every major product category and in both North America and international markets.

Under Armour maintained its full-year fiscal 2027 guidance for a mid-single-digit revenue decline, but the midpoint of its adjusted EPS guidance range of $0.08–$0.12 fell short of the broader analyst consensus.

Notably, approximately $70 million of the full-year operating income outlook depends on refunds of prior-year tariff expenses, raising questions about the quality of underlying earnings.

CEO Kevin Plank noted the company "delivered against our revenue expectation and exceeded our operating income outlook," but the market’s reaction suggested that execution alone was not enough to satisfy investors seeking clearer evidence of a demand recovery.

The pre-earnings backdrop had already been cautious: UBS maintained a Buy rating on the stock but lowered its price target from $9 to $8 in late October, while Telsey Advisory Group held a Market Perform, expecting no further guidance cut but flagging industry-wide headwinds including heavy discounting and inflation-pressured consumers.

The broader market offered no cover for the selloff, with the S&P 500 edging up 0.2% and the NASDAQ gaining 1.4%, underscoring that today’s pressure is entirely company-specific.