Under Armour, Inc.

call good day and welcome to the Under Armour Inc fourth quarter 2026 earnings conference call all participants will be in a listen only mode should you need assistance please signal 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 than one on your touchtone phone and to withdraw your question please press star than two please know this event is being recorded I would now like to turn the conference over to Mr. Lance Alega, Senior Vice President, Finance and Capital Markets. Please go ahead.

Thank you. Good morning, and welcome to Under Armour's fiscal 2026 fourth quarter earnings call. Today's call is being recorded, and a replay will be available on our investor relations website shortly after the call concludes. Joining us this morning are Kevin Plank, President and CEO, and Reza Teleghani, Chief Financial Officer. Before we begin, please note that certain statements made on today's call are forward-looking statements within the meaning of federal securities law. These statements reflect management's current expectations as of May 12, 2026, and are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and uncertainties, please refer to this morning's press release, our filings with the SEC, including our most recent forms 10-K and 10-Q, and other public disclosures. During today's call, we may reference certain non-GAAP financial measures. We believe these measures provide additional insight into the underlying trends of our business when considered alongside our GAAP results. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measures are included in today's press release and are available on our investor relations website at about.underarmer.com. With that, thank you for joining us this morning, and for your continued interest in Under Armour, I'll now turn the call over to Kevin.

Good morning. Thank you, Lance, and welcome, everyone. To start, I want to welcome Reza Taleghani to Under Armour. He joined earlier this year as our CFO in an important time for the brand. Reza brings strong capital discipline, financial clarity, and a sharp strategic lens on decision making. We are early in this chapter, but that impact is already evident in how we define and evaluate our performance metrics and in the way we prioritize across the business. As we move into the next phase of our transformation, our operational rigor and financial accountability become even more critical. We are better positioned with Res's fresh perspective, driving toward a more intentional brand and business with stronger profitability. As we sharpen the way we operate the business, we're equally focused on elevating the strength and credibility of our product. And with that, a big congratulations to Sharon Locati for securing her second consecutive Boston Marathon victory in the Under Armour Velocity Elite 3. On one of the most demanding stages in sport, that level of repeat performance is not just impressive, it's definitive. Claiming the podium for UA at the most coveted marathon race in the world is the clearest possible proof point of what Under Armour stands for, delivering at the highest level when it matters most. Under Armour makes pinnacle performance footwear. It's now our job to ensure the world knows that too and commercialize that fact. The same innovation, fit, speed, and performance DNA that powers a Boston Marathon champion will also power the everyday runner. This includes products like the Velocity Pro and Velocity Distance, as well as the balance of our increasingly edited line of footwear, where we're consistently applying the concept of less being more. Intentionality will define this chapter for the brand. In that spirit, and as I've shared before over the past two years, We've executed a deliberate reset of the business, making more intentional choices about where and how we compete. Our focus is on elevating product, strengthening the brand, and reducing complexity through structural changes, not just surface adjustments. That work requires difficult trade-offs. We've walked away from certain non-profitable parts of our business. We implemented a category management model that helps us focus investment on the categories, products, and stories that strengthen the brand and improve the quality of our growth. As a result, Under Armour is becoming a more focused, disciplined, and intentional company, which is reflected in our execution. That progress is increasingly becoming more visible in how we go to market through the manifestation of marketing excellence, a more modern marketing engine rooted in what has always made Under Armour distinct, credibility earned through the athletes and teams who compete in our product. We are clear in our position as a podium brand built to outfit athletes from head to toe at the highest levels of competition. Our core consumer, the 16 to 24 year old team sport athlete, remains our creative anchor while we serve all athletes. Our mission is to equip them to push beyond their perceived limits as the most authentic and credible brand in sports. Our innovation pipeline will continue to deliver products that become indispensable for athletes by meeting needs They never knew they had, and once they've tried, could not imagine living without. That drumbeat of innovation is already beginning to show up in our product. A strong commercial example is the Bounce CT, launching later this month in APAC and exclusively in the U.S. through Dix and our own DTC channels, with a mayor coming on line late summer. It brings premium performance to the most essential item in the athlete's draw, the t-shirt. Historically for UA, this level of innovation lived in sports-specific gear. Now we are elevating everyday essentials with the same engineering in a way that feels natural to consumers. Coming back to UA, as a management team, we felt it was important to have a defining product that showcased our ability to move from fields, courts, pitches, and the gym into our consumers' daily lives. We wanted a product that would define this versatility for the UA brand. That is the UA Bouncy Cotton Tee. Now, please bear with me as this is not meant to describe a singular silver bullet of success, but instead serve as a larger or broader metaphor for what you can expect from us going forward and not just making another item. In our industry, it's been said that whoever invents the next white or black T-shirt wins. This means if you can master the simplest of items with meaningful, effortless innovation, then we can do anything. The $65 bouncy tee delivers for Friday night wear under a sport coat with the perfect neckline or Saturday morning in the gym. It features full UA innovation, including ultra-smooth Pima cotton, and is built with our UA-developed Neolast recyclable stretch fiber. Its Friday-Saturday performance translates just as easily to simply chilling on a Sunday and transitions from training to daily life without compromise. This is what we mean by premiumization. delivering greater performance, versatility, and value through fewer, more purposeful products. It's also a reflection of where we know we have real strength today. Apparel remains the foundation of Under Armour and one of our greatest competitive advantages. Throwing our billion-dollar-plus footwear business is central to our midterm strategy, and as we reset footwear to build greater consistency, we're leaning into our leadership in apparel, where innovation, fit, and performance credibility are already well-established. That same discipline is shaping how we manage our broader product portfolio. We're working to strengthen our top 10 volume-driving products across apparel, footwear, and accessories with fresh styling, stronger innovation, and clearer consumer storytelling, while also identifying opportunities to improve price-to-value perception to drive healthier profitability across key Under Armour franchises. The goal is not simply to sell more units. It's to build better products with stronger margins and greater brand impact. across the categories and products where consumers already know us or are meeting us for the first time. Growing new consumers is a priority for us. That mindset extends beyond product and shapes how we operate company-wide. Over the past year, we took a decisive step and shifted to category management. We streamlined into about a dozen sports and activities, competing head to toe. This focus simplifies our workflow and market approach. Expectations are clear, roles defined, and teams are aligned around one goal, making athletes better. We reinforce this focus with one question before any endeavor. As we deploy the resources of time, people, and money, will this help us sell more premium shirts and shoes? That answer must be yes, and the impact is already evident. Decisions are faster, coordination tighter, execution more consistent. Taken together, These changes are creating a stronger, more disciplined foundation for the business as we enter fiscal 27. After a significant revenue rebase since our fiscal 25, particularly in North America, we expect the year ahead to see revenue stabilization in our largest region. That means fewer surprises and greater confidence in how decisions translate into results. We're seeing early signs of improved sell-through, cleaner inventory, and stronger partner engagement. That progress gives us more control than we've had in years and positions us to build a model that can scale over time. To support this, we're being precise about where we invest, where we leverage partners, and where we make trade-offs, prioritizing what drives value and stepping away from what does not. This is critical to improving the quality of our growth. At the center of this intentionality, making clear choices about where we compete and which products we back. prioritizing those products we want to be famous for. We're removing friction and focusing the organization on what drives the brand forward. Now, all that being said, we are not improving our bottom line fast enough. While confident in our strategy, we will continue to work the mix and prioritize near, mid, and long-term profitability, consistency blended with agility. This is essential to seeing our transformation through, and there are no sacred cows, just the lens of what is the best decision for the brand. Execution must tighten and we are holding ourselves accountable for accelerating progress. This also includes bringing an even sharper focus on editing and optimizing our product assortment, marketing spend, processes, and cost structure to improve UA's profitability. Along those lines, we've made strong progress simplifying our product offering while building a focused pipeline of innovation that you'll begin to see in a much more consistent way in the coming quarters. Over the past two years, we've reduced skews by 25%. And with Kara now in place in her new role as Chief Merchandising Officer, we expect further reductions as we continue to sharpen the assortment. Fewer, better products with concentrated demand and a more succinct consumer proposition with less complexity across the supply chain. resulting in healthier margins for UA, as well as our factory and wholesale partners. The focus discipline we've been building into product is now expanding into marketing, with the goal of becoming more product-led and more intentional in how we activate and deploy our resources. I define this as a more focused product-to-brand marketing mix, and as we really get it right, you shouldn't be able to tell the difference between the two. Every dollar spent should be brand elevating. Rather than trying to say everything at once, we're concentrating investment behind the products, athletes, and stories that most clearly communicate our performance credibility and differentiate UA. We believe the strongest way to elevate Under Armour is not through broader messaging alone, but by amplifying great product with sharper storytelling and more consistent execution at retail. We're applying greater rigor to how marketing investments are allocated and measured across the organization. We see a meaningful opportunity to operate with more precision, more curation, and stronger returns on investment. Importantly, unlike product transformation cycles that can take multiple seasons to materialize, we expect elements of this marketing evolution to move faster and improve how the brand connects with consumers in the near term. Pulling all of this together as we look ahead to fiscal 27, we do expect to stabilize with revenue down slightly. That outlook reflects both continued consumer uncertainty and the deliberate choices we're making to reshape the business. We are prioritizing revenue quality over volume, strengthening the foundation and positioning the company to return to growth, with stronger profitability and more consistent brand expression. This is not about stepping back. It's about building a more focused, disciplined, and premium Under Armour with a stronger right to win in the marketplace. And while our ambition is to operate as one global brand, The business remains at different stages of evolution across regions today. Importantly, we're supported by strong, experienced leadership teams with deep tenure who understand both the brand and the markets we serve. In North America, we expect stabilization in the year ahead and are focused on revenue quality, restoring marketplace discipline, and rebuilding momentum with both consumers and wholesale partners. What we're seeing gives us great confidence Inventory's cleaner, product feedback is positive, and engagement with key accounts is strengthening. These are early but important signs that the foundation is moving in the right direction. In EMEA, the business remains solid and continues to serve as a stable anchor for the brand. In an uncertain environment, our priority there is to protect and extend that strength by expanding in key markets while maintaining the discipline that's made the region such a consistent contributor to our global performance. In APAC, we're sharpening our focus and driving greater efficiency with a clear emphasis on China. We're tightening the assortment, elevating the consumer experience, and ensuring we are positioned to compete effectively in this critically important market. As we do this, we're applying the same principles that guide our broader reset, focus, optimization, and clarity of brand. In fiscal 27, we expect gross margin to expand approximately 220 to 270 basis points. primarily driven by the assumed benefit of a tariff-related refund, along with pricing actions to elevate our brand, better managed promotions, and a more favorable channel mix. At the same time, our outlook reflects ongoing external pressures, including tariffs and broader geopolitical uncertainty. All in, we expect adjusted operating income to be in the range of $140 to $160 million. In closing, What you're seeing taking shape is a more intentional and connected Under Armour with focused product, more aligned marketing, and improved financial performance, which all reinforce one another. Over the past two years, we've rebuilt important parts of the company with greater clarity, discipline, and accountability. Now, following the progress we've made in reengineering our product organization, we are now applying that same focus and lens with rigor to marketing. with the goal of amplifying our product strength, deepening consumer connection, and driving more consistent demand. Most importantly, strategy is increasingly driving the decisions across the organization. We're becoming more intentional about where we compete, how we invest, and where we believe we can create the greatest long-term value. In fiscal 27, we are operating from a position of greater strength. And while we remain a work in progress throughout this transformation, the model is simpler. The strategy is clear. Execution is improving. We have a core team that is deeply committed to winning for this brand and our shareholders. We've made significant and important progress over the last two years, and I'm excited to see forward momentum translate into disciplined delivery and into building a more predictable and profitable business in the coming quarters and years. And with that, I'll turn it over to Reza. Thank you.