Under Armour reveals a predicted $100 million impact from tariffs and announces plans to decrease product variety in order to facilitate a rebranding effort
Under Armour, the American sportswear company, has unveiled a comprehensive brand transformation strategy for the years 2025–2026. The strategy aims to refocus the product lineup towards high-performance, team sports-oriented apparel, with an emphasis on technical innovation, operational discipline, and cost structure improvements.
The key elements of this strategy include a product focus shift, operational discipline, financial performance, brand and story, and outlook.
Product Focus: Under Armour is moving away from broad, lifestyle-driven assortments to a leaner, more performance-driven portfolio. The company is targeting athletes, especially in endurance sports and team sports such as football, basketball, baseball, and volleyball. It also plans to integrate more women-centric approaches in category management and target premium, high-margin “pinnacle” products alongside redesigned top-volume items for better performance and pricing.
Operational Discipline: Under Armour is aggressively simplifying its product assortment by reducing SKUs by about 25% and cutting materials complexity by 30%. This streamlining supports sharper pricing strategies and reduces operational complexity. Cost discipline initiatives have contributed to margin improvements despite a challenging revenue environment. The company has also ramped up restructuring efforts, including a $140 million to $160 million plan, supporting adjusted operating income gains.
Financial Performance: Although Under Armour’s brand rebuild is strategically aligned, it faces significant near-term financial challenges. The company's Q1 2025 revenue declined by 10% to approximately $1.2 billion, with operating losses widened due to higher SG&A expenses and restructuring costs. Tariff-related costs are estimated to add approximately $100 million in expense in 2025, pressuring gross margins by about 200 basis points. E-commerce and North American markets have been particularly soft, with double-digit declines in key segments and geographies. The company expects Q2 2025 revenues to decline 6–7% year-over-year but expects adjusted operating income to increase modestly due to cost controls.
Brand and Story: The transformation also leverages Under Armour’s “underdog” ethos, using partnerships like Stephen Curry and new global ambassadors such as Mikel Arteta to reinforce brand credibility among athletes and fans in the U.S. and internationally.
Outlook: While the short-term outlook remains challenging due to tariff impact, softer demand, and ongoing costs related to restructuring and litigation, management conveys confidence that the brand transformation will result in a stronger, more profitable company in the longer term. The focus on fewer, better products with operational efficiency should allow Under Armour to leverage its heritage as a performance brand and recover market share gradually.
In the first quarter of 2025, Under Armour delivered a quarter with revenue slightly exceeding outlook on every line item, with a 4% decline to $1.1 billion. The CEO, Kevin A. Plank, described the company as undergoing a "bold reinvention and rebuilding with purpose" to become a more focused brand that blends sports, style, and innovation with financial discipline and edge.
[1] Under Armour Inc. (2025). Q1 2025 Earnings Release. [Link] [2] Under Armour Inc. (2025). Brand Transformation Strategy. [Link] [3] Under Armour Inc. (2025). Q1 2025 Earnings Call Transcript. [Link] [4] Under Armour Inc. (2025). Q1 2025 Earnings Presentation. [Link] [5] Under Armour Inc. (2025). Stephen Curry and Mikel Arteta Partnership Announcement. [Link]
The transformation strategy of Under Armour aims to improve the financial performance of the company by focusing on high-performance, team sports-oriented apparel, which is expected to generate revenue and operate more efficiently. This strategy also involves operational discipline, which includes simplifying product assortment and reducing costs to increase operational profitability.
Under Armour's brand outlook portrays a strong commitment to blending sports, style, and innovation with financial discipline and edge, following a bold reinvention and rebuilding with purpose. The brand's partnerships with athletes like Stephen Curry and Mikel Arteta are intended to reinforce its brand credibility and appeal to athletes and fans both domestically and internationally.
