Under Armour, Inc.

Good day and welcome to the Under Armour Q1 2026 earnings conference call. Today all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note that today's event is being recorded. I would now like to turn the conference over to Lance Olega, Senior Vice President, Finance and Capital Markets. Please proceed.

Thank you. Good morning, and welcome to Under Armour's first quarter fiscal 2026 earnings conference call. Today's call is being recorded and will be available for replay. Joining us on the call this morning are Under Armour President and CEO Kevin Plank and Chief Financial Officer Dave Bergman. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements that reflect Under Armour Management's current views as of August 8, 2025. These statements may include projections about our future performance and are not guarantees of future results. Actual results may differ materially due to several risks and uncertainties, which are described in this morning's press release and in our filings with the SEC, including our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. Today's discussion may also reference non-GAAP financial measures, which we believe provide useful insight into our underlying business trends. When applicable, reconciliations of these non-GAAP measures to their most comparable GAAP counterparts can be found in this morning's press release and on our investor facilitation's website at about.underarmour.com. With that, I'll turn the call over to Kevin.

Thanks, Lance, and thank you all for joining us this morning. With the first quarter complete, this is an important moment to evaluate our position and, importantly, our direction. We're undertaking a bold reinvention and rebuilding with purpose to become a sharper, more focused brand, one that blends sports, style, and innovation with financial discipline and edge. This isn't about fixing the past. It's about unlocking our full potential. Undermer started as a product in 1996, became a brand over the following two decades, and quite frankly, has spent the last eight years operating more like a company than a brand. Sixteen months back into the CEO role, my hands are firmly on the wheel. We're in the process of flipping that script, where every decision we make is focused through a brand-first lens. This in no way means retreating on operational discipline. In fact, it means being a better company with rigor in process, capital allocation, and execution. But simply requiring that every decision we do make contemplates, is this the best decision for our brand? Because if it's the best decision for the brand, then it's the best decision to create long-term shareholder value. World-class financials don't build world-class brands. It's actually the other way around. The only way we win is by creating a brand people can't ignore. Our current numbers don't yet tell the whole story, but the signs are there. Brand health is starting to gain traction. Cultural relevance is returning. And our phone is ringing from talent that wants to join us. Ameya is outperforming. North America, APAC are on paths towards better stability. And team sports are heating up. while digital engagement is increasing. We're stronger than we were six months ago, and we'll be even stronger six months from now. This transformation isn't easy and requires a lot of patience, more than any of us would like, but we're taking the right steps to build deeper, lasting connections with consumers and focused on creating mid- and long-term shareholder value. The good news, we're not starting from scratch. We have the essentials with presence in nearly 150 countries, 2,000 monobranded stores, 15,000 teammates, a new headquarters, and almost 30 years of sports credibility. Our strength is authenticity, which I don't believe we've fully embraced. And that's now changing. And yes, the environment is challenging. Limited spending, higher promotions, and a dynamic domestic tariff policy. Independent of that, our mission is clear. Stop the decline and rebuild stronger. I understand what's at stake and intend to apply a lifetime of brand building experience, 20 years of it with the same public company, and creating our best work driving this transformation. At the heart of this are bold from-to shifts, deliberate moves that redefine our brand identity and reshape our operations. Let me walk you through how we're turning that vision into reality. Over the past year, we've achieved significant progress in realigning our product engine, simplifying operations, and positioning Under Armour to better serve athletes, customers, and shareholders in the long run. We faced some tough truths. Our assortment had been too broad, our material libraries too complicated, and our design language lacked clarity. So we're simplifying, we're consolidating, we're editing, and we're laying the foundation for sharper execution and better pricing. Cutting down the product range and materials is already making us faster, leaner, and more focused. We're on track to meet our initial goal of reducing SKUs by 25%. We're discovering more ways to streamline. This focus sharpens execution and strengthens our product lineup. We've already cut our materials by 30% for our 2025 products and plan to reduce it further in 2026, lowering costs, improving sourcing, and supporting more sustainable, innovation-driven design. In effect, as our old saying goes, we plan to spend much more time writing a much shorter letter. We've certainly made progress and now aim to push even harder, especially with underperforming and low margin products, leading with math like any basic 80-20 rule, but ensuring that we are also brand informed as we make decisions. In March, we introduced a new category management operating model and go-to-market process. Both are now active and continuously being refined. Along the way, we've combined experienced UA talent with fresh leadership to inject energy and expertise where it counts most. Just last week, Eric Litke and I guided our corporate team through our five-year strategic roadmap, effectively the final and third leg of the brand foundation, to complement our operating model that rolled out in February and the go-to-market we described during our last call using the No Way Backpack as our example. These three brand foundational pillars are essential to any transformation and are what I'm most excited about from a progress standpoint since April of 24th. Key component of any strong culture is ensuring that every teammate knows exactly what's expected of them and what the definition of success is. This structure is now in place. Our team is aligned. We're set up to run. So if I had to simplify the broader strategic goal for the organization into one statement of what we aim to achieve, it is selling so much more of so much less at a much higher full retail price. That means tighter assortments. More key item safety stock. Getting better order fulfillment. Straightforward storytelling of intentional, personified products that we make famous, like our heat gear base layer. Realizing the full retail value for our product all the way out the door. It's what's essential for us to make this brand transformation happen. This is underway, and we're driving through two key levers. First, we'll continue to launch pinnacle, defining products like our heat gear OG compression mock, the Velocity Elite 3 running shoe. magnetico football boot and halo collection along with accessories such as the stealth form hat and the no way backpack products that only ua could make informed from our unique brand intersection of sports authenticity cultural style and distinct innovation all with higher asps that we are inviting the market to stretch to and they're gaining real traction secondly We're working to apply those lessons of premiumizing our brand to our top 10 volume drivers across apparel, footwear, and accessories. We're systematically redesigning our top 10 volume items for better performance, bolder designs leading to better and more full average selling price revenue. We're elevating the reason to buy UA, updated industry-leading innovative products with richer storytelling and brand confidence for our consumers. These top 10 styles represent tens of millions of units. that once driving higher average selling prices, will fall straight to our bottom line. This two lever strategy also has the benefit of being the same play we are and would run to help mitigate tariff impacts. While we cannot affect holistically in the short term, we should see this benefit coming through our P&L in coming seasons. Pulling this example all the way through, where prior to April 2nd, we'd already been planning to improve product quality for our consumers with an item like our $25 tech tee, moving that to a higher price point, justified by enhancing fabric material, design, and story. Now we're considering pushing that price point a bit further to an embedded consumer who we do have pricing power with. Effectively, we're running a very similar play to elevate the brand that we're now incorporating to mitigate tariffs. We're not, however, walking away from value-driven consumers. Sports gives us room to compete at every level. good, better, and best. We're expanding our top tiers while keeping the right products at entry price points, but moving those price points and the product's quality themselves up. That balances what built Under Armour, and it's how we'll continue to succeed by creating performance gear that is desired by consumers regardless of the price point. We're also changing how we connect with athletes, a realignment of our presence and who we serve. We're shifting from a gym-first approach to a focus on team sports, emphasizing both American and global football, basketball, baseball, and volleyball. It's a deliberate move back to performance, bringing new energy and relevance to today's game. At the same time, we're expanding beyond our Gen X foundation to connect with Gen Z and Alpha, purpose-driven athletes who value transparency, authenticity, and daily relevance. We're also shifting from primarily a professional athlete-only model to to an influencer-led network, broadening our athlete roster to include high school stars, college athletes, creators, and their communities. Through NIL partnerships, grassroots efforts, and authentic storytelling, we're building momentum from the ground up, and the energy will continue to grow. This transformation cuts across every category. We're expanding beyond just the locker room, building real sportswear credibility while continuing to deliver high-performance gear for athletes both on and off the field. We're also working to close a gap we've let sit for too long, the needs of women. Yes, we built a billion-dollar-plus women's business, but a share of our total hasn't increased. That's on us, and we're addressing it. We're integrating a women-centered approach directly into our category management model, led by longtime UA veteran Jeanette Robertson. It's a structural change, and we're working hard to get it right, not only in product, but also in how we design, market, and bring her into our brand. Next, let's talk about footwear. We know it's not where it should be. For too long, we lacked focus and consistency in a category that defines our industry. We pursued too many ideas, adopted franchise architecture late, and missed opportunities in innovation, design, and storytelling that athletes expect from Under Armour. Two years ago, we reset our footwear business under the leadership of industry veteran Yassine Saidi. We made a very intentional decision to take a step back to move forward. Streamlining the portfolio, eliminating underperforming lines and rebuilding with a sharper, more focused foundation, deeply connected to the athlete in all aspects of how they live. Running footwear is a great example where we now have two very clear pinnacle vertical silos of product, Velocity and the recently launched Halo. We'd made the decision to sunset our previous Infinite franchise, which we believe is a long-term brand right decision, but it's come at a price which you're seeing affect our near-term footwear declines. and replaced it with a broader aperture and more sports casual vertical of Halo while doubling down on our Velocity franchise and high performance run. These deliberate decisions combined with software demand are weighing on our results and we own them. However, we believe this to be near term and over the mid to long term, we anticipate harnessing our Velocity and Halo foundation to drive greater intention across our running category and a blueprint for the broader footwear business. Our immediate numbers reflect the transition, but believe that our long-term results will reflect the transformation. The goal is simple. Sharper design, stronger storytelling, reliable performance on and off the field. Early signs are promising, and we're moving in the right direction. In running, the Velocity Elite 3 is delivering six major wins this year, American records in the half and mile, and Sharon Locati's course record in Boston just this past year. This is exactly the kind of pinnacle moment we're building for. From the $250 Elite 3 with design continuity that stretches across six price points all the way down to the $75 redesigned Assert, our largest volume program. Our running collection connects with runners at every level, boosting brand momentum, earning credibility with athletes, and turning that momentum into real commercial success. In American football, the spotlight pro suede sold out at launch. In baseball, our king of diamonds and juice drops are driving momentum. In global football, Ashraf Hakimi wears Magnetico Elite on the world's biggest stage. And in basketball, flow continues to drive our iconic franchises. These wins are restoring our credibility and fueling performance growth. With new sports-style 120-plus dollar franchises like Slip Speed Echo and Apparition, along with fresh launches like Sola and Halo, we're confidently moving into the premium space. The goal isn't just to compete, but to lead with ASPs that reflect the strength of our brand and the quality of our products. From a channel perspective, we're shifting from transactional selling to a story-driven brand that consumers seek out and support. In the U.S., this involves replacing a long-standing focus on discounts with premium, athlete-centered narratives brought to life through elevated DTC experiences. These stories generate demand and improve full-price sell-through, while strengthening our loyalty memberships and driving wholesale interests. From an operational perspective, we're transforming how we work by moving from siloed functions to collaborative category-led teams driven by real-time data and shared KPIs. This modern system is built for speed, scale, and smarter decision-making, utilizing AI to help us. We're also shifting seasonal drops to an ongoing cycle of brand-led storytelling. fostering emotional connections and lasting loyalty through culturally relevant moments and timely innovation. Additionally, AI is becoming more integrated across the business, enhancing design, planning, and forecasting. After two years of data and platform development, we have over 80 automations that are streamlining workflows, reducing time to market, and improving execution, from predictive pricing to real-time inventory management. Next, let's talk about the regions, starting with North America, where we expect fiscal 26 to see challenges from higher costs due to tariffs and yet softer demand. Yet we see this as an inflection point, not a ceiling. Despite the environment, we're executing a phased plan to rebuild brand loyalty, improve revenue quality, and lay the groundwork for sustainable growth. In our largest market, we're regaining cultural relevance, beginning with American football, and expanding into team sports, creators, and cultural collaborations that connect Under Armour to the core of the athlete and culture. Our priorities are clear. Strengthen brand loyalty through top-tier sports, culture, and emotionally compelling storytelling. Stabilize to growth by increasing full-price e-commerce, boosting factory house profitability, and rebuilding wholesale partnerships. And shrink the battlefield by concentrating on key product franchises and optimized distribution to achieve more consistent wins, doing less things better. Amid this reset, we're seeing early signs of progress. In digital, we're recreating a more connected, experience-driven platform. Although results are still modest, the momentum is evident. Spotlight Suede became our top full-price footwear style, driven by organic TikTok buzz. Our SMS program, launched in June, has already gained over 100,000 subscribers. And our Instagram shop has been seen strongly growth since its relaunch this past month. Our e-commerce net promoter score has increased by 18 points year over year to nearly 70, a strong signal that our customer experience is improving and our efforts are resonating. Traffic and sell-through still have room to grow. We're tackling that with faster site performance, richer storytelling, and smarter merchandising. In our factory house business, innovation is fueling sales growth, even with this value channel. We're seeing success testing new key items at full price, including our $45 stealth form hat and our heat gear collection are both strong examples. Although traffic remains slower, improved execution is boosting conversion rates. Factory House continues to serve as a proving ground for mixed experimentation, raising ASPs, and protecting margins through smarter promotions and targeted merchandising. Wholesale remains our biggest North American growth opportunity. Reclaiming shelf space takes time, but we're approaching with discipline and optimism, and our partners are listening. Leading with innovative products like heat gear and a strong, clean footwear performance, we're reengaging customers and building trust. Each season brings new opportunities, and we're laying the groundwork now for future success. In our storytelling, we're making one thing clear. Under Armour is back. We're beginning to see it in the numbers. Brand health is improving. and our renewed narrative and full-funnel media investments are connecting with the athletes we want to reach. Our renewed NFL partnership and signings like the number one draft pick Cam Ward and Luther Burton III show our long-term commitment to performance. That momentum drives our We Are Football campaign that will be debuting in early September. Blending sports, music, and culture with athletes, creators, and stars like Justin Jefferson, recording artist Gunna, and top seven-on-seven talent, With the rapid rise of flag football, especially among youth and women, based on our gridiron credibility, we see a clear path to lead here. All in, cultural energy continues to grow. Justin Jefferson's UA Next Flight School content reached over 7 million views even before launching on YouTube. Spotlight Swage TikTok buzz demonstrates how product and storytelling can create demand. Activations like the No Way Backpack blend performance and lifestyle in a way that feels fresh and uniquely UA. especially to the 16- to 24-year-old team sports athlete. Excitement is also growing for this year's Curry Tour in China, which is a multi-day, single-city immersion that unites 30 of the top APAC basketball athletes for Curry Camp, creates one-on-one moments with Steph and his training team, engages regional media, and culminates in CurryCon, a fan-driven celebration where supporters from across APAC share memorabilia and connect deeply with Stephans. delivering a powerful brand and business opportunity through meaningful, high-impact interaction. In EMEA, our strongest performing region, we're achieving profitable brand-driven growth through sharper execution, local relevance, and financial discipline. We're not trying to be everywhere. We're focused on winning where it matters most, guided by a high-return 1-2-3-4 strategy. Let me explain. One sport, football, being on pitch with elite athletes like Ashraf Hakimi, Tony Rudiger, Pedro Porro, and so many more is how we're establishing brand authenticity in Europe. Through targeted marketing, credible athletes, and franchise-led storytelling, we're building trust from grassroots to the elite levels. Two cities, London and Paris, are driving our growth. Three countries, the UK, France, and Spain. This brings us to four categories of focus, football, sportswear, training, and running. Momentum is building, and we're unlocking EMEA's full potential. And importantly, we're applying the lessons from this success in North America and APAC. This strengthens our confidence in the path toward greater stability and eventual return to growth in these markets. In Asia Pacific, we've emerged from a reset year stronger, more focused and positioned to advance with discipline, starting with the appointment of Simon Pestridge, a 25-year industry veteran, to lead the region. With structural challenges addressed and key roadblocks removed, we're now building a premium, high-integrity marketplace that reflects Under Armour's true brand strength. Our APAC strategy is clear, reignite relevance through local storytelling and innovation, drive full price growth, and elevate the marketplace through sharper distribution, disciplined pricing, and premium partnerships. Combined with tighter inventory management, these efforts will strengthen both retail and wholesale execution. That said, fiscal 26 is about stabilizing APAC and building momentum for sustained growth. Now, before I finish, I want to address the incremental tariffs announced on July 31st and the increased pressures our business is facing this year. Following those updates, we estimate approximately $100 million in additional tariff-related costs, along with softer-than-expected demand in fiscal 26. When combined, even with mitigation efforts and disciplined SG&A management, our profitability is projected to be about half of what it was last year. None of this is ideal. We don't like this. But also, it won't define our year. There's just too much good happening with the overall shape and energy of our business. We've faced bigger headwinds before, and this is simply the next one we'll get through. Because no matter the environment, our mission remains unchanged to execute the strategy, strengthen our brand, increase average selling prices, and succeed with athletes. We're running our play, and that's exactly what we're doing. With a world-class team and a clear strategy aligned across the organization, we're advancing with clarity, agility, and accountability. Even now, before this transformation is fully realized, Under Armour is a $5 billion brand. That's a testament to our enduring relevance, strength of the brand, and a clear signal of the massive potential ahead. At our core, we're not reinventing who we are. We're reclaiming it, bold, original, and unapologetically UA. I appreciate your attention and trust this morning. And with that, I'll turn it over to Dave to discuss first quarter fiscal 26 results and the outlook we have for Q2.