Under Armour makes performance clothing, shoes, and accessories for athletes and active people around the world. It earns money in two main ways: selling products through big retailers like sporting goods chains (called the wholesale channel), and selling directly to shoppers through its own stores and website (called direct-to-consumer). Apparel brings in the most money, making up about 68% of sales in the most recent fiscal year, with footwear at 22% and accessories at 8%. A small slice comes from licensing, where other companies pay Under Armour to use its brand name on their products. North America is the biggest market, accounting for about 58% of total revenue. The diagram below traces where the money goes.

Five years of financial data tell a story of a business that has been slowly shrinking. Revenue peaked at $5.9 billion in fiscal 2023, then fell each year after that. By fiscal 2026, total revenue had dropped to $5.0 billion. That is a meaningful decline for a company that once seemed to be on an unstoppable growth path.

The revenue drop is only part of the picture. Gross margin, which is how much money is left after paying to make the products, has also been moving in the wrong direction. In fiscal 2021, Under Armour kept about 50 cents of every dollar in revenue as gross profit. By fiscal 2026, that had fallen to about 45.5 cents. Tariffs on imported goods played a big role in that decline, directly increasing how much it costs to make products.

Cash flow tells an even sharper story. In fiscal 2021, Under Armour generated $0.7 billion in operating cash flow and $0.6 billion in free cash flow, meaning money left over after spending on equipment and facilities. By fiscal 2026, operating cash flow had turned negative at minus $0.1 billion, and free cash flow was also negative at minus $0.2 billion. The company is now spending more cash than it is bringing in from operations. Net debt, which was negative in fiscal 2021 meaning the company held more cash than it owed, has flipped to positive $0.9 billion in fiscal 2026, meaning it now owes more than it holds.

The company is in the middle of a restructuring plan approved by its board. The total plan is expected to cost around $305 million, covering job cuts, contract terminations, and facility closures. One notable piece was the separation of the Curry Brand, a basketball line built around NBA star Stephen Curry, which triggered roughly $69.7 million in contract termination costs alone. The company sold its MapMyFitness digital platform during fiscal 2025 as well, pulling back from a digital health strategy it had pursued for years.

The risks facing Under Armour are specific and well-documented, not just general concerns. Tariffs are at the top of the list. U.S. courts have repeatedly changed tariff rules, and the company says it expects more legal battles in fiscal 2027. Those tariffs directly raise product costs and make it hard to set prices or plan inventory. A second major risk is customer concentration. Wholesale accounts represent 57% of total revenue, and the biggest customers have no long-term contracts. If a major retail partner cuts orders or closes stores, Under Armour could lose a large chunk of revenue with very little warning.

Supply chain concentration adds to those concerns. Ten manufacturers produce about 69% of Under Armour's clothing and accessories. Seven manufacturers make almost all of its shoes. None of them are locked into long-term agreements. Beyond that, raw material costs tied to oil prices and cotton availability can swing unpredictably, and conflicts in the Middle East have already pushed up shipping and fuel costs, squeezing margins further.

The company is also fighting competition from much larger rivals. Nike, Adidas, Puma, and Lululemon all compete for the same shelf space at retailers and the same consumer attention. Many of the performance fabrics Under Armour uses are not unique to the company. Larger competitors can spread price cuts across a much bigger range of products, making it harder for Under Armour to compete on price without damaging its own margins.