Under Armour, Inc. 4Q Miss w/ FY27 EPS Set Below Consensus; Remain Underweight, Withdrawing Price Target

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Under Armour, Inc. 4Q Miss w/ FY27 EPS Set Below Consensus; Remain Underweight, Withdrawing Price Target

ising the Budget to ~11% of Sales: Representing

an inflection relative to FY26 adj. SG&A expenses down 5% YOY, management is guiding

for FY27 SG&A expenses to increase +low-single-digits Y/Y% reflecting normalization of

reduced prior year incentive compensation and benefit costs as part of the company's tariff

mitigation strategy, as well as a planned $30M YOY incremental marketing investment

to strengthen the brand. This translates to marketing as a % of sales increasing to ~11.1% of

sales on our estimates (vs. ~10.5% in FY26 on our estimates), which management citing

Marketing as a key priority to strength the business results moving forward (albeit with the

marketing budget for UAA already 250bps above our Global Brands coverage average

at 8.5% of sales).

(4) Restructuring Cost Outlook Raised w/ Debt Leverage Exiting FY26 Over 5x: Worth

noting on the balance sheet, UAA exited FY26 with gross debt/EBITDA leverage of 5.5x

with FCF burn of $162M negatively impacted by restructuring charges and settlement

payments. To that point, management now expects ~$305M in Restructuring charges (w/

~$261M realized through 3/31), or ~$50M above the prior $255M expectation driven by

higher employee severance and benefit costs($49M vs prior $34M), higher transformational

initiatives ($93M vs. prior $73M) and higher contract terminations, facility, software, and

other asset-related charges and impairments ($159M vs. prior $141M) with the restructuring

plan to be complete Dec ’26 end. Despite this, mgmt cited expectations for positive FCF

generation in FY27 relative to FY26 -$162M (w/ normalized YOY capex) driven by both the