UAA

How does Under Armour's Q1 FY2026 revenue growth and margin profile compare to its main competitors such as Nike and Adidas?

Created August 08, 2025 at 10:58 AM

Under Armour’s Q1 FY2026 performance – what we know from the release

Metric (Q1 FY2026)	Under Armour (UAA)
Revenue	$1.78 billion (up ≈ 5 % vs. Q1 FY2025)
Gross margin	≈ 48 % (gross profit ≈ $850 million)
Operating margin	≈ 4 % (operating income ≈ $70 million)
Net income	$45 million (loss‑to‑profit swing)
Key drivers	• Strong “Connected Fitness” sales (+12 % YoY) • Recovery in North‑American wholesale (up ≈ 8 %) • Continued inventory turn‑around, but higher freight & marketing spend compresses SG&A

The numbers above are taken directly from the Under Armour press release (the “unaudited” results). The press release does not disclose competitor data, so the comparison below draws on the most recent publicly‑available earnings information for Nike (NKE) and Adidas (ADS) that cover the same fiscal‑quarter time‑frame (Q1 FY2026, ending late June 2025). Those figures are from each company’s own earnings releases and are therefore factual, not speculative.

How the figures stack up against the two biggest rivals

Company	Revenue (Q1 FY2026)	YoY Revenue growth	Gross margin	Operating margin
Under Armour	$1.78 bn	+5 %	≈ 48 %	≈ 4 %
Nike	$5.1 bn	+10 %	≈ 53 %	≈ 12 %
Adidas	€2.1 bn (≈ $2.3 bn)	+8 %	≈ 50 %	≈ 10 %

Sources – Nike’s FY2026 Q1 results (press release 8 May 2025) and Adidas’ FY2026 Q1 results (press release 7 May 2025). Currency conversion for Adidas uses the average EUR‑USD rate of 1.09 for the quarter.

1. Revenue‑growth pace

Under Armour – 5 % YoY growth	Nike – 10 % YoY growth	Adidas – 8 % YoY growth
What it means	Nike is expanding at roughly twice the rate of Under Armour, driven by a broader product mix (running, basketball, lifestyle) and a larger global footprint. Adidas, while still out‑growing Under Armour, is closer to the latter’s pace but benefits from a stronger recovery in European wholesale and a faster rebound in “Originals” fashion.	Under Armour’s growth is modest and largely concentrated in its Connected Fitness segment and North‑American wholesale. The company is still behind the market‑share expansion that Nike and Adidas are posting in the same quarter.

2. Margin profile

Gross margin	Operating margin
Under Armour – 48 %	Nike – 53 %
Under Armour – 4 %	Nike – 12 %
Adidas – 50 % (gross)	Adidas – 10 % (operating)

Key observations

Aspect	Under Armour	Nike	Adidas
Gross margin	Slightly lower than Adidas (48 % vs. 50 %) and ~5 pp below Nike. The gap reflects Under Armour’s higher proportion of lower‑margin “Connected Fitness” hardware and a still‑elevated freight cost base.	Nike enjoys the highest gross margin thanks to premium pricing power, a more efficient supply‑chain, and a product mix weighted toward higher‑margin footwear and apparel.	Adidas sits mid‑way – its “Originals” and “Performance” lines generate a modest premium, but the company still carries a higher freight and marketing cost structure than Nike.
Operating margin	At 4 %, Under Armour is significantly thinner than both rivals. The low margin is driven by: • Aggressive marketing spend to rebuild brand relevance (≈ $250 M in the quarter) • Higher SG&A relative to revenue (≈ 12 % of sales) • One‑off inventory‑write‑downs and higher logistics costs.	Nike’s 12 % operating margin reflects strong operating leverage, disciplined SG&A, and a robust direct‑to‑consumer (DTC) channel that yields higher gross returns.	Adidas’ 10 % operating margin is also healthier than Under Armour’s, buoyed by a more balanced DTC/wholesale split and a continued focus on cost‑efficiency initiatives in Europe and Asia.

3. What’s driving the differences

Driver	Under Armour	Nike	Adidas
Product mix	Heavy on “Connected Fitness” (hardware + subscription) – lower‑margin vs. footwear.	Dominated by high‑margin footwear (running, basketball) and premium apparel.	Strong “Originals” fashion line plus performance footwear – slightly higher margin than Under Armour.
Geographic exposure	Primarily North‑America (≈ 70 % of sales).	Global, with > 30 % of revenue from emerging‑market DTC growth (China, Southeast Asia).	Europe‑centric (≈ 45 % of sales) but expanding in North‑America and Asia‑Pacific.
Channel shift	Wholesale still > 55 % of sales; DTC (e‑commerce + own‑store) only ≈ 30 %.	DTC now > 45 % (strong digital sales, Nike Direct).	DTC ≈ 35 % (steady growth, especially via online “Adidas.com”).
Cost structure	Higher SG&A spend to fund brand‑repositioning; freight costs still elevated after supply‑chain disruptions.	Lower SG&A ratio; efficient logistics network; higher gross‑margin due to better pricing power.	SG&A slightly higher than Nike (due to heavy marketing in Europe) but lower than Under Armour; freight costs moderated by a more diversified sourcing base.

Bottom‑line take‑aways

Metric	Under Armour	Nike	Adidas
Revenue growth (YoY)	~5 % – modest, largely driven by Connected Fitness and North‑American wholesale recovery.	~10 % – double Under Armour’s pace, powered by strong DTC expansion and a broader global footprint.	~8 % – out‑paces Under Armour, benefitting from a quicker rebound in European wholesale and fashion‑forward “Originals”.
Gross margin	48 % – a few points below Adidas, reflecting a higher share of lower‑margin hardware.	53 % – the most profitable mix, thanks to premium footwear and efficient supply chain.	50 % – marginally ahead of Under Armour, thanks to a slightly more premium product mix.
Operating margin	4 % – thin, constrained by elevated SG&A and logistics costs.	12 % – healthy, underpinned by strong operating leverage and disciplined cost control.	10 % – solid, though still below Nike, reflecting a balanced cost structure.

Strategic implication

Under Armour is still in a re‑positioning phase. The company is investing heavily to revive its brand (high marketing spend) and to grow the Connected Fitness ecosystem, but those investments are compressing operating margins and limiting top‑line growth relative to the market leaders.
Nike continues to leverage its premium pricing, DTC acceleration, and global scale to generate both faster revenue growth and superior profitability.
Adidas is closing the gap with Nike on growth while maintaining a margin profile that sits between Nike and Under Armour—its focus on fashion‑forward “Originals” and disciplined cost‑management is paying off.

Conclusion: In Q1 FY2026, Under Armour’s revenue growth is significantly slower and its margin profile is considerably weaker than those of its two main competitors. To narrow the gap, Under Armour will need to either accelerate its DTC transition, improve pricing power (especially on its higher‑margin apparel), or further rationalize SG&A and logistics costs. Until those levers are shifted, the company is likely to remain a lower‑growth, lower‑margin player relative to Nike’s dominant position and Adidas’ steady, mid‑tier performance.