What Happened?
Shares of athletic apparel company Under Armour (NYSE:UAA)
fell 2.6% in the afternoon session after the athletic apparel company reported second-quarter revenue that missed Wall Street's expectations, overshadowing a significant profit beat. The company posted revenue of $1.10 billion, a decline of 3.2% year-on-year, which fell slightly short of the $1.11 billion consensus estimate.
The slight miss seemed to weigh on investor sentiment, reflecting ongoing concerns about the brand's ability to generate consistent demand. On a brighter note, Under Armour demonstrated improved profitability, with an adjusted earnings per share of $0.05, more than double the $0.02 analysts had forecast. The company also reiterated its full-year earnings guidance. However, the market appeared to focus on the top-line weakness, as the results come against a backdrop of struggling sales performance over the last several years.
The shares were trading at $6.18, down 3.4% from the previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Under Armour? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Under Armour’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 22.4% on the news that the company reported second-quarter results and issued a significantly weaker-than-expected outlook for the third quarter. The sportswear maker's revenue for the second quarter came in at $1.13 billion, which met Wall Street's expectations but represented a 4.2% decline year-over-year. However, its adjusted earnings per share of $0.02 missed consensus estimates.
The main concern for investors was the bleak guidance for the upcoming quarter. Under Armour projected third-quarter revenue of $1.31 billion, falling 4.1% short of analyst forecasts. More dramatically, the company guided for adjusted earnings per share of just $0.02 at the midpoint, a stark contrast to the consensus estimate of $0.26.
Under Armour is up 16.7% since the beginning of the year, but at $6.18 per share, it is still trading 24.1% below its 52-week high of $8.14 from February 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Under Armour’s shares 5 years ago would now be looking at only $246.80.
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