Under Armour (UAA) Stock Forecast & Price Target

Under Armour's gross margin expansion of 240 basis points year-over-year, alongside lower supply chain costs and favorable foreign exchange effects, positions the company favorably for earnings per share (EPS) upside, reinforcing a positive outlook for the brand. With an anticipated EBIT margin expansion of 200-250 basis points over the next two fiscal years, driven by enhanced gross margins and positive sales growth, the company is strategically investing in brand-building initiatives and operational improvements. Additionally, expectations for a return to growth in North America in FY26 and FY27 further support the company's long-term financial stability and performance.

Under Armour is facing a challenging financial outlook, with a projected revenue decline of 9.9% for FY25, driven primarily by a significant 13% drop in its North American market. The direct-to-consumer sales in North America have been adversely affected by lower e-commerce sales and ongoing efforts to reduce promotions, contributing to an operating margin contraction of approximately 170 basis points to around 3.7%. Additionally, while gross margins improved due to lesser promotions, the overall sales decreased by 5.7%, indicating persistent difficulties in executing its growth strategy and the potential for continued revenue challenges in the coming years.