Under Armour, Inc.’s UAA strategic transformation across its direct-to-consumer (DTC) model, product innovation and global expansion are driving meaningful progress toward sustainable growth and profitability. By prioritizing premium positioning, enhancing customer loyalty and leveraging data-driven retail experiences, the brand is deepening consumer engagement and strengthening its market presence.
Coupled with disciplined cost management and improved margin performance, Under Armour’s upbeat fiscal 2025 outlook underscores its momentum and long-term potential. These concerted efforts position the company well to deliver enduring value to both consumers and shareholders alike.
UAA Stock Past-Month Performance
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Under Armour’s DTC Evolution and Strategic Loyalty Program
This Zacks Rank #2 (Buy) company has made strategic shifts in its DTC approach, focusing on full-price sales to solidify its identity as a premium athletic brand. By scaling back on promotions and discounts, the company has successfully increased both average unit prices and overall order values, enhancing profitability and reinforcing its brand image. This move toward a value-driven model fosters a healthier revenue stream and further cements Under Armour’s position as a leader in high-performance sportswear.
A key success has been the expansion of its loyalty program. In the third quarter of fiscal 2025, 4 million new members joined, bringing the total number of North American members to 17 million. This growth has translated into stronger customer retention, more frequent purchases and deeper brand engagement. With a growing base of loyal consumers, Under Armour is strengthening its direct relationships and building long-term brand loyalty.
A notable aspect of this transformation is the brand’s Baltimore flagship store, which serves as an innovation hub to enhance customer experience. Insights from this location are applied across its 200 North American stores and nearly 2,000 global retail locations, ensuring a consistent and improved consumer experience. This hands-on approach is pivotal in cultivating enduring customer relationships while paving the way for sustainable growth.
Product Innovation & Global Expansion Drive UAA’s Momentum
Under Armour is enhancing its premium status through product innovation and higher-end offerings. New releases, such as the Fox 1 basketball shoe featuring Flow technology and the UA Icon Heavyweight Hoodie, have resonated with younger consumers, driving strong sell-through and margin improvement. This emphasis on high-performance, high-value products is helping Under Armour reduce reliance on discount-driven sales while strengthening its pricing power.
Simultaneously, the company is refining its marketing strategy under the leadership of brand president Eric Liedtke. The strategy includes grassroots initiatives, influencer partnerships and culturally relevant campaigns, such as the UA Next program and viral moments with Notre Dame Football. On the global front, Under Armour is expanding in key international markets, with focused efforts in EMEA and APAC to drive localized growth. These efforts are strengthening brand equity, increasing consumer engagement and setting the stage for long-term global profitability.
Under Armour's Margin Growth and Optimistic FY25 Outlook
Under Armour has made significant strides in improving its margins, with a 240-basis-point increase in the gross margin during the fiscal third quarter, reaching 47.5%. This improvement is primarily driven by reduced promotional activity, lower product and freight costs, and favorable currency exchange rates.
On its most recent earnings call, Under Armour updated its fiscal 2025 guidance with a cautiously optimistic forecast. The company expects a low-single-digit percentage decline in adjusted selling, general and administrative expenses, an improvement from its previous estimate of a mid-single-digit decrease. Additionally, Under Armour has raised its adjusted operating income forecast to a range of $185-$195 million, up from the previous estimate of $165-$185 million.
Furthermore, Under Armour has increased its adjusted earnings per share guidance to 28-30 cents compared with the prior estimate of 24-27 cents. This revised outlook underscores the company's focus on disciplined cost control, improved operational efficiency and strategic growth initiatives aimed at delivering long-term value for shareholders.
Is UAA a Value Play Stock?
From a valuation perspective, the leading designer, marketer and distributor of authentic athletic footwear, apparel and accessories is currently trading at a low price-to-sales (P/S) multiple. Its forward 12-month P/S ratio is 0.49, down from the Zacks Textile – Apparel industry and the sector’s ratios of 1.54 and 1.77, respectively. This undervaluation highlights its potential for investors seeking attractive entry points. Moreover, Under Armour’s Value Score of A underscores its value appeal.
Although the company’s shares have lost 11.3% over the past month, they have outperformed the industry’s decline of 19.4%.
UAA Looks Attractive From a Valuation Standpoint
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Other Key Picks
Some other top-ranked stocks are The Gap, Inc. GAP, Canada Goose GOOS and G-III Apparel Group, Ltd. GIII.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Gap’s fiscal 2025 earnings and revenues indicates growth of 7.7% and 1.5%, respectively, from fiscal 2024 reported levels. GAP delivered a trailing four-quarter average earnings surprise of 77.5%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and revenues implies a decline of 1.4% and 4.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 71.3%.
G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under three types of brands, licensed, owned and private label. It currently carries a Zacks Rank of 2.
The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies a decline of 4.5% and 1.2%, respectively, from the year-ago actuals. GIII delivered a trailing four-quarter average earnings surprise of 117.8%.
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