Good day, and welcome to the Under Armour 3rd Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal 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 1 on a touch-tone phone. To withdraw the question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Lance Olega, Senior Vice President of Finance and Capital Markets. Please go ahead.

Joining us this morning are Kevin Plank, Under Armour's President and CEO, and Dave Bergman, our CFO. Before we begin, please note that certain statements made on today's call are forward-looking as defined under federal securities laws. These statements reflect management's current expectations as of February 6, 2026, and are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed discussion of these factors, please refer to this morning's press release, our filings with the SEC, including our most recently filed Form 10-K and Form 10-Q and other public disclosures. In today's call, we may reference non-GAAP financial measures. We believe these metrics offer additional insights into the underlying trends of our business when considered along our GAAP results.

Reconciliations of these measures to their most comparable GAAP metrics are included in today's press release and can be found our investor rep website at about.underarmor.com with that thank you for being here and for your interest in Under Armour and I'll now turn the call over to Kevin thanks Lance and good morning to everyone taking the time to join us today Under Armour is a global performance brand with opportunity and relevance that is both present today and capable to significantly scale as we find our operating rhythm entering the next phase of our turnaround the focus is on execution. We're not declaring all the work finished yet, but are making real progress with a disciplined strategy, structure, and team now in place. That progress is becoming more consistent. For too long, the organization carried unnecessary complexity, too many handoffs, too many approvals, too much focus on one's individual job versus a broader brand objective we're trying to solve for. Having athletes fall in love and know why they need Under Armour. Since coming back to the CEO chair nearly two years ago, we have narrowed our focus, moved decisions earlier, and reduced friction across the system. That work has simplified the operating system. Inventory is down year over year. Assortments are tighter. Planning is more precise, and we have additional opportunity to continue to improve. The structure of the company has been addressed and is enhancing our speed to market, skew productivity, athlete insight, and especially accountability for all of the above. In the third quarter, although we had a few non-recurring impacts in our gap results that are frustrating, our adjusted results came in ahead of expectations across most line items. We modestly raised our full-year adjusted operating income outlook. This is a good proof point that our underlying business is becoming steadier and we're seeing fewer surprises and greater predictability, which is where we believe we should be at this stage of our turnaround. Looking at our journey, fiscal 25 is about assessing our greatest needs. to address our operating infrastructure and stand up the expertise necessary for our reset with a few additions from outside but primarily from within the organization for Under Armour by Under Armour. Years of consulting and rented input took us on a path that was not the unique brand position and engine that allowed UA to cut through in the first place. Fiscal 26 was about implementing that structure, including the foundation of a category-managed operating model, a renewed go-to-market, and a clearly articulated strategic business plan. We're now building on that infrastructure by changing nothing, running that same play again in fiscal 27 and beyond, becoming sharper as the kinks work through, which we are still feeling some of, but moving forward. What is new has been layering in the how, how we are running the business, the operating principles that will manifest the thematic of selling so much more of so much less at a much higher full retail price. I spent the month of January presenting these holistic principles called unleashing intentionality in dozens of individual and group settings to teammates and partners. Taking this message directly to key stakeholders, ensuring our entire offense and defense know exactly who we are, what we are building, and how we plan to execute to achieve our mid- and long-term ambitious goals. To support this next phase, we recently made targeted leadership changes to accelerate speed. Cara Trent is now Chief Merchandising Officer with end-to-end responsibility for product mix, pricing, and margin performance. Adam Peake has been named President of the Americas. Eric Littke is now Chief Marketing Officer and EVP of Strategy. And Yassin Saidi has transitioned to an external senior advisor role to ensure design continuity these changes reflect exactly where we are in the transformation moving with tighter alignment and a more decisive operating cadence this work is not done on a spreadsheet but by bringing our teams together removing slow process barriers and facilitating conversations create a much more intentional line of products across apparel footwear and accessories products that we can be famous for while highlighting the areas we already are like ua heat and cold gear The recent org changes now have all product teams in one conversation, including physically in one room sharing information to remove redundancy and increase speed. In addition to the 25% of SKUs we began eliminating in fiscal 25 that is now complete, we have additional opportunity to be even more efficient, not only with SKUs and styles, but the raw materials that support the products we make. More to come on this in the future calls, but the new structure is actively digging into this work, and the early reads are incredibly positive. Key indicators are moving in the right direction. Brand health in the U.S. continues to improve. Awareness, consideration, and engagement are trending higher, particularly among younger athletes. Visual engagement remains strong, and when product, storytelling, and distribution align, we see a positive consumer response. So let's talk about product, because product is everything. And at Under Armour, we say that product is our currency. It always has been, and the engine that will ultimately drive this turnaround. This is also the hardest part of the transformation. There was no switch to flip. We are rebuilding capability, discipline, and credibility inside the organization and in the market. That work takes time. And importantly, we're now seeing real evidence that it is working. The proof points are starting to stack up. base layer remains a steady engine for the business with heat and cold gear standing out. New styles of refreshed design language and modern colorways are driving higher ASPs and strong double-digit growth in these products. That matters because it's an early signal that intentional product thought leadership can help us rebuild pricing power. We're seeing similar momentum elsewhere. Icon Fleece is performing well and our women's Meridian franchise continues to gain traction as new silhouettes and colors attract a broader more engaged consumer base these products reflect a stronger point of view and improved execution across categories summer 26 is another meaningful step forward you will see more elevated products entering the market with a more consistent cohesive design language we're introducing an improved women's vanish elite collection alongside continued evolutions across icon sportswear and footwear In accessories, our Stealthform hat and no-way backpack continue to push the price ceiling, supported by premium performance attributes and a clean, focused product story. When design intent is strong and segmentation is disciplined, consumers respond. Sell-through for newer franchises is improving year over year. Full-price realization is trending higher, even from a lower base. Wholesale partners are engaging more positively with upcoming assortments and buying, shifting to footwear, which has been on a long, challenging recovery path. I want to be very direct about it. Year-to-date sales are down about 14%, reflecting structural issues we are actively unwinding. For multiple seasons, we tried to grow by expanding the assortment, more styles, more price points, more incremental updates, without consistent demand for the scale to support That diluted volume, pressured margins, and increased inventory risk. Each of these, we're exiting low productivity styles, reducing redundant skews, and eliminating launches that lack a defined role. A strong margin profile or scalable growth opportunity. With the primary criteria being every product must have a reason to be built by Under Armour. It must have a story. In parallel, we're tightening our price tier architecture and concentrating investment behind fewer, higher impact franchises that can win consistently. This disciplined approach sharpens our focus areas across training, running, and sports while building momentum in team sports where we are increasingly confident in both our product and our growth trajectory, all of which should drive improved returns over time. We're already seeing proof points. The Velocity Elite 3 delivers strong sell-through at launch and run specialty and sharper segmentation across the franchise is driving healthier performance at more accessible price points with Velocity Distance and Pro 2. The Assert 11, which launched in November, we talked about on the last call, continues to perform really well and is delivering a meaningfully higher ASP versus the Assert 10, as we predicted. And as we outlined last quarter, we positioned this Velocity Run-inspired redesign in a Charge Plus midsole as an outstanding $75 accessible price point offering. Throw in Los Angeles Dodgers back-to-back World Series champion Freddie Freeman as a product ambassador. We're starting to drive increased demand in a millions-of-annual units program. This reflects our strategy in action and reinforcing. This week we launched the HB Low, a $100 basketball and built for all-day comfort, carrying a premium leather upper with a cushioned court-to-street ride and a bold expression of the UA logo. The price-to-value of this shoe is off the charts and believe that it can be a gateway product for Under Armour to take share in court shoes and sportswear. Coming off our fall launch, the $120 solo model continues to build momentum. Additionally, we introduced the ARC 96 at $125, a modernized run-inspired silhouette that blends premium materials with elevated cushioning and distinctive design language. With social response and sell-through as key indicators, we're very encouraged by the evolution of these sportswear styles, all excellent examples of what's to come. While the reset of our footwear business is still underway, the actions we're taking combined with strong early signals for our innovation and design-led product give us growing confidence that we can stabilize the footwear category next year and rebuild momentum with consumers and wholesale partners. Products are becoming stronger assets, not just something we sell, but a primary driver of demand and value creation. We're building more intentional product segmentation across innovation levels, price points, and usage models. every product is gaining a defined consumer role and will have a distinct identity over time this approach will deepen consumer understanding of the brand and support more consistent pricing discipline halfway to improve demand and margin contribution it's also getting sharper we're moving up with greater purpose connecting the right products to real sports moments meeting athletes where they are and driving a higher engagement per dollar social is leading that effort, particularly on TikTok. Our influencer strategy continues to expand reach and reinforce credibility. While activations like We Are Football and Run Club events with recording artist Gunna are evolving into community-led platforms that generate authentic energy and momentum for the brand, remain a core driver of momentum and brand authority. In American football, we continue to deepen our presence through authentic on-field storytelling and partnerships, including the launch of the first overtime national high school championship at our UA Stadium here in Baltimore, and expanded collegiate relationships with Georgia Tech, the first Under Armour school to wear Under Armour in 1996, and the University of Wisconsin, a longstanding partner. This week, we launched our Spring 26 activation spotlighting women's flag football, the next era of the game, debuting just this past Wednesday on National Girls and Women in Sports Day. Click Clack, the next era, reimagines our iconic original 2006 ad in a fresh Gen Z forward way. With the sport exploding in the 28 Summer Olympics on the not-so-distant horizon, UA athletes Ashley Klam, Gianna Flores, Linnea Bryan, and Isabella Garrasi help set the pace for the sport. The message is clear, flag football is here to stay. At the highest level of the sport, our on-field credibility in the NFL continues to build spanning established athletes like Philadelphia Eagles, Devonta Smith, and rising stars such as Seattle Seahawks rookie Nick Amanowari. In his first year in the league, Nick will take the Super Bowl stage this Sunday, a powerful and energizing milestone that underscores the momentum of our athlete roster and the growing relevance of our brand at the very top of the game. We're also investing in the next generation of athletes. Our UA Next All-America Game Week showcased top high school talent across football and volleyball, broadcast on ESPN, and where we sold out the product capsule. We signed our first click-clack NIL class and continue to build our presence in track and field as we prepare to host the inaugural UA Track and Field Nationals this spring at IMG Academy in Florida. This month, UA is on the world stage. In Italy, Lindsey Vaughn, our longest-serving athlete, will compete for Team USA, and Cale McCarr will take the ice for Team Canada at the Winter Olympics. Then next month, that momentum carries as the World Baseball Classic, where many of our iconic UA Major League Baseball players will compete at the highest level on yet another global stage. In EMEA, momentum continues to build across global football. Activations, including the UA Mansory CoLab, deliver strong engagement and sell-through. In our full funnel, Be the Problem Football and unapologetic women's campaigns are outperforming benchmarks and strengthening our brand's cultural relevance. We don't see these as isolated moments. We see them as repeatable proof points that our brand is regaining momentum at scale. This authenticity enables UA to meet approximately $5 billion in annual consumer demand while rebuilding trust and deepening durable connections with athletes around the world. This is a foundation for sustained relevance, demand stability, and long-term value creation. Switching next to the Regents, North America is beginning to turn the corner. December quarter marks the bottom of the reset. Traffic, yes, remains soft, but underlying indicators are improving. We continue efforts to strengthen our premium online position, even amid a promotional environment. E-commerce conversion is up, and factory house performance is improving. Digital engagement tools such as in wholesale are focused remains on rebuilding the right partner relationships, and we're making real progress. A Q3 product campaign led by Cold gear compression with Dick's Sporting Goods delivered solid results. And as partners gain confidence in our product and storytelling, collaboration is growing. And we are encouraged by how our fall order book is shaping up. The business reigns solid and continues to be the clearest expression of our premium strategy in action. Performance is being driven by disciplined execution across the region with a more intentional approach to promotions that protects brand equity and pricing integrity. At the same time, solid wholesale performance is reinforcing the quality of our partnerships and the strength of demand in key markets. Together, these factors are delivering consistent, reliable results and underscoring the resilience of the business in the region. I spent seven days in January visiting five key cities with our teams and partners. We continue to make progress on a reset, and the region remains a critical long-term and growth opportunity. There, we're taking decisive actions to manage inventory, sharpen assortments, and elevate the retail experience. Together, these efforts are positioning APAC for stabilization over the next 12 months and more sustainable growth beyond. There are no shortcuts in a turnaround like this. Progress is earned through discipline and consistent execution. The business is simpler. Revenue volatility is stabilizing. The margin trajectory is improving. Inventory is cleaner, and Under Armour remains a brand athletes actively choose with authenticity and a competitive edge that would be difficult, if not impossible. Under Armour is unique. It just is. If there's one thing to take away from today's call, we believe that the most disruptive phase of our reset is now behind us. We're past the period of structural change and operating noise, and the organization is now focused squarely on execution and stabilization. If you look at the fundamentals, they are where we expected them to be at this point in the reset. Our operating model is in a much better place. Our business plan is well-defined and increasingly repeatable, and our go-to-market approach is more focused and disciplined. Each is making progress, and each is reinforcing the other. The strategies we're executing are strengthening our foundation and positioning Under Armour to deliver more consistent performance and long-term value creation going forward. With that, I'll turn it over to Dave to review the quarter and our outlook.

Thanks, Gavin. Turning to our third quarter performance, we met or exceeded our outlook across all major line items. This performance reflects the discipline, focus, and growing consistency in execution as the turnaround continues to progress. While there was some non-recurring noise in the reported numbers for the period, the underlying performance of the business remained solid and consistent. In that context, I'll start at the top of the P&L and walk through the details. Revenue declined 5% to $1.3 billion, slightly better than the outlook we shared in November. The outperformance relative to our plan was partially due to approximately one percentage point of growth from a timing shift of some wholesale deliveries from Q4 into Q3. Digging into the results by region, North America revenue declined 10%, primarily due to a decrease in wholesale with a a slightly smaller decline in our direct-to-consumer business. In EMEA, revenue increased 6% on a reported basis and 2% on a currency-neutral basis, with growth in both wholesale and direct-to-consumer during the quarter. APAC revenue decreased 5% on both the reported and currency-neutral basis, marking a sequential improvement from the year-of-year declines we saw in the first half of the fiscal year. The Q3 decline was driven primarily by our full-price wholesale business, while DTC revenue was down only slightly, partially offset by positive licensing growth. And in Latin America, revenue increased 20% or 13% on a currency-neutral basis, driven by balanced growth throughout the business. From a channel perspective, wholesale revenue decreased 6% due to lower full-price and third-party off-price sales, partially offset by growth in our distributor business. Direct consumer revenue decreased 4%, primarily due to a 7% decline in e-commerce revenue. Sales in our own and operated stores were down 2% in the quarter. And licensing revenue increased 14%, driven by the strength of our international licensees and modest growth in North America. By product type, apparel revenue decreased 3%, due largely to softness in train, golf, and run, while sportswear was flat for the quarter. Footwear revenue decreased 12%, reflecting declines across most categories, partially offset by growth in outdoor. Accessories revenue decreased 3%, driven largely by declines in golf, outdoor, and team sports, with a partial offset from growth in sportswear. Gross margin declined 310 basis points year-over-year to 44.4%, in line with our outlook. This decline was primarily driven by 180 basis points of supply chain headwinds, including 200 basis points of pressure from higher U.S. tariffs, 140 basis points from pricing amid a more promotional environment in North America, and a combined 40 basis points from unfavorable channel and regional mix. These headwinds were partially offset by 30 basis points of foreign currency impacts and 20 basis points from a more favorable product mix. Turning to SG&A, third quarter expenses increased 4% to $665 million, driven primarily by a $99 million litigation reserve expense related to a previously disclosed insurance carrier dispute, approximately $3 million in transformation costs related to our fiscal 2025 restructuring plan. these items, adjusted SG&A was down 7% to $563 million, mainly due to lower marketing spend, driven by timing, with a greater share of our fiscal 2025 marketing investment recognized in the second half, along with continued benefits from restructuring actions and discipline management of discretionary costs. In the third quarter, we recorded $75 million in restructuring charges and $3 million in transformation-related SG&A expenses, totaling $78 million under our Fiscal 2025 restructuring plan. Since the plan's inception, we have incurred $224 million in charges and transformation expenses, of which $89 million are cash-related and $135 million are non-cash. We continue to expect total charges and expenses under the plan to be up to $255 million, with any remaining amounts expected to be incurred by the end of fiscal 2026. Thus far, the actions we've taken under the plan to streamline our business have resulted in approximately $35 million in savings in fiscal 25 and are on track to deliver an additional $55 million in fiscal 26. Going down to P&L, we reported a third quarter operating loss of $150 million. Excluding the litigation reserve expense, transformation expenses, expenses, and restructuring charges, our adjusted operating income was $26 million, again exceeding our outlook. The bottom line, our reported diluted loss per share was $1.01. This result includes the impact of the insurance appeal decision, transformation expenses, restructuring charges, and a $247 million non-cash valuation allowance against certain U.S. federal deferred tax assets. Regarding this valuation allowance, accounting rules required us to reduce the value of our U.S. federal deferred tax assets and record a non-cash tax expense due to cumulative gap U.S. losses over the past three years. These losses have been driven largely by restructuring and impairment charges, litigation reserve expenses, and other non-operating items. Importantly, this valuation allowance has no impact on current cash flow, does not signal deterioration in the underlying business and should reverse over the next few years as US profitability improves. Including the items discussed earlier and the US Federal Deferred Tax Asset Valuation Allowance, our adjusted diluted earnings per share for the quarter was $0.09. Part of our Q3 adjusted ETS overdrive relative to our outlook was due to a favorable tax development from the IRS's approval of a tax method change that mitigated the use of our U.S. losses to offset foreign earnings under the U.S. GILTI provisions. As a result, our full year Fiscal 26 non-GAAP estimated effective tax rate is lower than originally anticipated and more reasonable. So with that, we recorded a cumulative three-quarter catch-up tax benefit in the third quarter. This tax update accounted for approximately six cents of our EPS in the quarter. Turning to the balance sheet, third quarter inventory was down 2% year-over-year to just over $1 billion. We ended the quarter with $465 million in cash and cash equivalents and $600 million in restricted investments. As a reminder, that $600 million is fully set aside and dedicated to covering all remaining principal and interest on our senior notes due in June this year. These restricted investments are not available for general use and should not be viewed as part of our operating liquidity or discretionary debt profile. Furthermore, we continued to prioritize balance sheet strength during the quarter, including repaying approximately $200 million of revolver borrowings and ending the period with no amounts outstanding under our $1.1 billion revolving credit facility. As a result, we enter the final quarter of this fiscal year with a strong liquidity position and meaningful financial flexibility with more than sufficient resources to meet all expected obligations. Moving to our Fiscal 26 outlook, with one quarter left in the fiscal year, we've updated our expectations, largely toward the high end of our previous ranges. Breaking that down further, we now expect full-year revenue to decline approximately 4%, compared with our prior expectation of a 4% to 5% decline. This reflects our expectation that North America revenue will decline approximately 8% and APAC revenue will decline approximately 6%, partially offset by growth of approximately 9% in EMEA. This implies a meaningful improvement in fourth quarter revenue trends as we continue executing our strategies and move toward the stabilization we expect in Fiscal 27. Turning to gross margin, we now expect the full-year rate to decline by approximately 190 basis points, compared with our prior outlook of a 190 to 210 basis point decline. Drilling down further, U.S. tariffs will drive most of the decline, along with unfavorable channel and regional mix and pricing headwinds. These pressures are partially offset by foreign currency tailwinds and a more favorable product We are highly focused on controlling costs and expect adjusted SG&A expenses to decline at a mid-single-digit rate, unchanged from our prior outlook, with even greater confidence in our ability to leverage given the slight improvement in the revenue outlook. This implies a considerable decline in fourth quarter SG&A expenses driven primarily by year-over-year marketing timing and lower compensation-related costs. This translates to an expected adjusted operating income of approximately $110 million at the high end of the $95 to $110 million outlook we provided in mid-November. Bottom line, we now expect adjusted diluted earnings per share of $0.10 to $0.11, driven in part by the favorable tax planning developments I noted earlier. These updates are expected to yield a full-year Fiscal 26 effective tax rate roughly in line with the Fiscal 25 rate. In closing, we are operating with focus, discipline, and growing confidence as we complete a pivotal year in Under Armour's transformation. Our third quarter performance reflects meaningful progress in simplifying the business and driving more disciplined execution, supported by a leaner, more agile operating model. The foundation continues to give us flexibility to manage near-term challenges while positioning the company for improved financial performance over time. While work remains, we believe the most disruptive phase of this reset is behind us. And with a clear strategy, disciplined capital deployment, and continued focus on cost optimization and margin expansion, we are confident these actions will better position us to drive sustainable, profitable growth and shareholder value over the long term finally before we close out today's prepared remarks this being my last call in this role I want to pause say thank you with a special thanks to Kevin our entire board and to all my teammates around the world after 21 years at Under Armour including nine as CFO I've had the privilege of working alongside extraordinary teammates who bring passion resilience and an unwavering commitment to this brand every day together we have navigated periods of growth transformation and real challenges we have done so with locked arms in the humble and hungry mentality that makes this place so special as we work through the coming CFO transition with Reza joining the brand I do so with complete confidence in our teams and in the strength of the foundation we have now established together we are reaching that crucial turning point and thus I believe Under Armour's best days are still ahead with that we'll open the call to questions operator we will now begin the question and answer session to ask a question you

may press star then one on your touch tone phone if you were using the speakerphone please pick up your handset before pressing the keys if at any time your question has been addressed and you would like to withdraw the question, please press star then 2. Our first question comes from Simon Siegel with Guggenheim. Please go ahead.

Dave, just want to say it's been great working with you. Best of luck on your next chapter.

Thank you.

Kevin, your December corridor comment is interesting and encouraging. Can you speak to what makes you confident about that the corridor is the lowest revenue decline for North America and just that the region and Under Armour Overall, we'll see stabilization in FY27. And then along those lines, just as you think about this path forward, I think you mentioned stabilization in footwear in 27. Can you elaborate a little bit on that more?

Yeah, thank you, Simeon. And let me just start with leadership. First of all, I'm becoming more and more proud, I think, of the ecosystem that we built here at UA to be able to have internal talent like Cara Trent, be able to move from merchandising role into America. because it's a similar one in Europe to heading up Europe and then having the ability to bring her back here a little more than two years ago. And I think stabilization was something that was her number one goal, and we did a care-delivered and along with an amazing team of people that just made that happen. And then I also just want to make note the credit of a 14- or 15-year Under Armour vet in Adam Peek, who we brought back to the brand about 11 months ago and have the ability to create that kind of clarity and role in succession. So I think it starts with, A, the confidence we have in giving stability to our partners. Within that, you know, structurally, I believe that we now have the right model in place. I think that we're attacking the right issues, and that, of course, begins with product. We clearly have done a really solid job in laying out our design ethos and a language that consumers can look to, expect, and begin to make more and more repeatable. As I said, we started with our concept of winning with the winners, and that's getting behind heat and cold gear. And then meanwhile, we're introducing new styles and silhouettes that, again, we're just becoming more consistent with. From a storytelling standpoint, I think you're just starting to feel the brand more. And that goes to the launch we did with the Women's Flag Football Campaign on Wednesday. And please take a chance to look at our investor relations page and, you know, see the recent spot that we just put out, which is pretty impressive. Probably the most telling thing, though, is going to be, no matter what I say, Kara walked into a pretty tough situation, and we were just looking at declines, especially from a wholesale level, which is always a great indicator of how a year is going to turn out. And I can say definitively for the first time in quite some time, we're no longer looking at significant declines. And obviously, I'm hedging my statements there, but we're at a place that we like the way the order book is shaping up right now. And that also just goes back to just pure relationships with partners, because hopefully you can hear it in our voice, and if you were watching, you could see it in our eyes. But there's just a different level of confidence, swagger, whatever you want to call it, which I think leads to the most important indicator, which is just culturally. This business is feeling it. That's exuding out. It's exuding through the desire of the number of phone calls we get of people that want to be here. And it's just a trend. It's hard to put it into words. And after, you know, 20 years public and celebrating 30 years this year as a business, I've just seen a lot. So we feel very good about what the North American position looks like. Moving on to footwear. As I said, we're not trying to hide anything here. Footwear is a billion-plus dollar business for us that we believe has the opportunity to be much larger. And as we compare ourselves to others in our space, we're seeing other partners or other brands do a lot more with a lot fewer items. That's pretty narrative to the way that I'm driving across the organization right now. It's happily just skinny up. I think I did a pretty good job covering it in my prepared remarks of let's just stop trying to chase volume through additional units. Let's get behind. Let's get clarity with the way that works from the product to the story to the distribution. And I think that our new operating model, what we spent the majority of calendar year 2025 doing, implementing and then running now for a year, I think we're going to start seeing those benefits. So I can talk about the authenticity on field, and I think we did a good job making the statement that Under Armour's authentic athletic credibility is something which is nearly impossible to recreate. And so we're going to lean there, we're going to leverage, and you're going to see, you know, really clear ideas like when we talk about things like running we have a really clear point of view of who we are and run you know we build running shoes for athletes that are running to train for their sport in addition to that we also have the ability to make Formula One race cars like the velocity three at $250 for Sharon Locati but a part of it is some of the work that our team has been digging into where we just took of the velocity family that had six shoes in its franchise ranging from 110 to 250 dollars we just went from six shoes in that franchise to four being more targeted being more deliberate with the storytelling that we're going to do and put behind it which makes it easier for a our teams to be able to build be our sales team be able to sell see the the wholesale partners be able to write orders for and most importantly the consumer to be able to make an easy purchase decision with a really clear point of view from the brand so in some instances and maybe just the last point here when I think about I mentioned sportswear and talked about three price points from 100 120 125 dollars with the sole of the HP low and the footwear that we now have in place there we're just we're getting very intentional that word is no accident on this call you'll hear it over and over and it's basically it's tattooed into anyone who walks through this building. So we're doing a good job doing that. So thank you for that question, Samin.

That's great. Your excitement is really clear.

Best luck for the rest of the year. Thank you.

Our next question comes from Jay Sol with UBS. Please go ahead.

Thank you so much. Kevin, you mentioned that North America is beginning to turn the corner and the wholesale partners are engaging. You're seeing the fall order book shaping up nicely. I'm wondering if all that progress, that operational progress in North America is also transferable to Europe and the APAC regions. You know, are you seeing progress in those regions as well? Do you expect, you know, sequential improvement as we go through, you know, calendar 26? That's the question.

Yeah, thank you, Jay. AMEA has been a strong delivery, no less, this year with about 9% growth there. So we really like the team. Again, it's the consistency that we have, A, in the team on, again, being able to move another Under Armour legacy athlete like Kevin Ross into the leadership position following Kara has been a real asset. Our relationships there have really never been stronger, and calling out specifically JD Sports and Sports Direct, the buy-in, the partnership is something that, you know, they're really getting behind the brand because we've been delivering and we've been consistent. And in places like France, where we're probably the number one underground brand in the country, we're seeing that begin to translate out. Now, at the same time, you know, EMEA is becoming more and more promotional, particularly in the U.K., which is our largest market, so it's something we have our eye on. And what we're seeing, frankly, from the other brands is there's a lot of people that are out there buying business. So we know that that does not work, and so we're really holding the line. I think we're being opportunistic where we can, or more importantly, maybe we have to in some instances. But, you know, we like what Amaea is doing. We believe it will continue to grow for us. We're not sure at what levels right now as we think and look out into the new year. But it's certainly an area of strength for us. And, again, you know, I guess I get to sit here like a bit of an old hat now, 30 years doing this, where I just look at things of progress. But, you know, that feeling from the team, I'm going to be over in Europe next week and get to see Lindsey Vonn hopefully ski and win and compete and win some gold. And I'll be visiting our office in Amsterdam, too, and delivering the unleashing intentionality directly to our team, too. So we like what's happening in Europe. Again, we're not declaring victory anywhere. But what you see is you feel a brand that's – I think we're right where we're supposed to be at this moment in our turnaround.

Got it. Thank you so much.

Our next question comes from Bob Drubel with BTIG. Please go ahead.

Good morning. I guess just, Kevin, when you think about, you know, the go forward, especially in footwear, how are you thinking about segmentation, you know, in a pretty competitive market? You know, is increased penetration and success of better and best to stabilize? Is that the key to stabilization here, or will it be good level driven? Thanks.

Yeah, we've used a vernacular of good, better, best, of really just thinking about the line. That's been critical as we've been working through this reset. As I said in the past, we've made a lot of good. We've made some better and nowhere near no best. Now, if you ask me for our druthers, we sit at $5 billion-ish in revenue. We'd love to maintain our good, of course, be opportunistic where we can, but we really like to concentrate our growth at the better and best level. And frankly, those clear lines of segmentation have not been there, and as we said, going through this premiumization as we're really focusing. And so even with things I gave the example about our Velocity franchise earlier, clear segmentation is there. And what I'll get into maybe a little bit later is as we're thinking about the way that we're approaching this is becoming more consistent for the consumer. You know, I think one thing that I'm driving very much so is our global continuity. And what's ironic is that in a brand that was founded effectively on two products, if not two fabrics, Heat Gear and Cold Gear, that if you ask today what are two most important franchises that we have, it's Heat Gear and Cold Gear. And then we make a lot of other stuff. So, number one, we want to go where the money is. We want to leverage those places where we're already currently winning. And so establishing clear, good, better, best in that compression category, that base layer category, make sure that we continue to win there. and then we're looking where we can create extensions. What we don't want to be is we're not interested in being a fashion company. We'll be fashionable, but we're looking for more continuity where today we're carrying a global commonality of a number that's somewhere in the 20s, meaning that each year or if you went to each region between APAC, Maya, and the States, you'd find about 20% commonality in stores. We're looking to drive that much higher with a much more consistent brand voice and making sure that we're lining up with the distribution that we have because I think it's a unique position of our industry is that sports brands especially, you know, we've got the ability to sell at good, and as long as we have the quality and we have the product that can compete, we can do better and best very well. So you'll see a much better and broader offering, but not unlike the example I laid out in our footwear with some of our sportswear styles, including the ARC 96, the HB Low, and the Sola. We're looking to get into that business, and we're not coming in at $160. We're being very thoughtful about the way we're approaching it because our footwear ASP, which, as you've heard, is my number one driver as I'm thinking about how we can grow the business and how we have the organization thinking about it, it's been a number that hasn't been carrying three digits. And so we're looking to start building a much stronger platform with $100 plus in footwear, which may be a good carryover from the last question, too.

Thank you. Dave, good luck. Thank you.

Our next question comes from Sam Poser with Williams Trading. Please go ahead.

Thank you for taking my questions. I have a handful. But, one, Kevin, you talked a lot about the product. You talked a bit about the storytelling. Can you discuss sort of what you're doing to create? And I just watched the ad very quickly. but what you're doing to create more of an emotional connection both with your performance product and then with your product like the HB and Sola and some of those better kinds of introductions both in footwear and apparel.

Yeah, thank you, Sam. One thing is certain is that the world does not need another capable apparel and footwear manufacturer. The world needs a hope and they need a dream, and that means that it's our job to make them feel something when they participate with our brand And whether it's that little girl, little boy that maybe strapping on their first Under Armour compression shirt and feeling like they just put on a superpower or sliding a shoe on their foot, we've got opportunity. And I don't think that we've maximized that opportunity yet. I was talking about in the sportswear categories. You can see the price to value in things like that new HB Low shoe at $100, it is extraordinary. And so that is incredibly intentional from the brand and saying we need to get them to look and if you check the sites and say There's nobody better you than doing that and find out what people are saying about it It's what do you think of this you a shoe? And then they're sort of eye-popping and saying wow, that's a hundred dollars so I think people have been critical of us and we've been critical of ourselves of improving the Price the value relationship of the products that we put out there So a the product has to be there then we have to give them a reason to wear the product our authenticity with athletes and teams and leagues all over the planet are something that gave us a global presence but as you know it's about winning here in the state so finding that credibility so we're taking a very deliberate city attack strategy making sure we get things like sportswear in there not to be lost on that the reason that people buy our sportswear is because we are authentic because we are on field and we have a great positioning but I think when you look at the levers that will drive that it's athlete credibility it's credible It's clever and inspirational imaging, and it's confidence, Sam. It's just confidence from us. I think that's the one thing that you see of us being the first ones to really drive and get behind women's flag football and show it in such an aspirational way. We think, A, we can invite new young women and inspire them and give them the confidence to participate in the game that we think will help their overall self, which is the thing that helps us show up here and go to work every day and be so passionate about what it is that we do. So brands need to make you feel something. I certainly feel that that commercial, with some of the feedback we've had in just a few days from young women that are just sending thank yous and watching the handles of some of the incredible young stars that we have featured in the commercial, like Ashley, they're just these letters that are saying, thank you so much for doing this. You've inspired me. I'm going to go take a chance, and I want to be an athlete now. So you'll see more and more of that where product attributes are important, having our naming architecture, et cetera, in place matter, but making consumers feel something is where we're focused for the brand.

Thank you. I just want to follow up. In your flagship store in Baltimore, you have all those high school, local high school teams. You have their helmets up. When I was there, you had the two high schools that – I forget what that was called, but the two high schools that are like the rivalry, I think it was. And I'm wondering if you're thinking of applying that both in other full-on stores but as well as the outlet stores. And then second – and then the other question is if somebody can break down sort of APAC by country. And three, the management realignment, especially with Yassine taking an external role, if you could talk a little bit about that, that would be great.

In North America alone, with 16,000 football-playing high schools in the country, and that just means they have a large enough budget, if you sort of want to simplify it, Under Armour has about 3,000 of those high schools right now, so our presence is significant, the opportunity we have to grow in the team sports, which has been a real bright spot for the brand consistently for us, double-digit growths that we continue to see, outfitting teams, sidelines coaches etc so that's our anchor the other thing is right the other stuff is frankly the easy things that we're supposed to be able to sell as a result of being authentic on field I don't think we've done a good enough job setting the consumer up for that giving them products that will get them to and from the field you know to and from the court but we have all the credibility in the world when it happens actually on field or on court and so opening that up which is things like you know buying into the sportswear business by offering such great value with some of those new pork-shoe offerings we have is something that hopefully will help translate a little more in driving more top and bottom line for us.

And I think, Sam, on APAC, you know, we don't normally break down by country, but, you know, obviously it's a super critical region for us. We've got some new leadership there that's really focused on the brand and rebuilding the brand, which is great. We've also got a new country leader in China who's very seasoned, and she's digging in really, really quickly, which is awesome. So we've talked about that APAC is a little bit behind as far as North America on the turnaround efforts, but that we feel like we can turn it around more quickly. It is a challenging environment there, you know, a little bit of softening consumer sentiment. It's a pretty promotional environment. But I think we've got the right leadership there now, the right intention, and the right focus. And we keep rebuilding kind of the brand voice and driving full-price sales, and that's where the focus is there. I think we could probably say the worst declines for APAC are behind us at this point, and we really start to drive forward again. So we're excited.

About Yasin and his changed role.

Yeah, so Yasin has been an incredible partner for us in just really helping to drive a consistent across the organization. So that red thread is now beginning to pull across. you know, it's when when structure follows strategy and You know the the people follow the structure as you've seen and I started talking about his role where he could be most helpful to the brand It was it was a really, you know easy decision for both of us And so he seems going back to his agency world and Under Armour is his first client And this is all in a very positive ways. He begins a new chapter with Getting remarried etc. So we're excited for you seeing and what he's gonna be doing going forward as it relates to Under Armour, this aesthetic is something that we're driving. The Unleashing Intentionality presentation that I talked about that we've been rolling out, it's about getting consistent. It's about establishing clear, good, better, best, and in categories where we have multiple styles, and you could take something as our woven pants, our unstoppable pants, as we're classically called. We've just been editing. We've just been going through and just cleaning the brand up, We're going from, you know, 10 different pants and multiple styles with, frankly, though, 10 different fabrics and 10 different drawstrings or waistbands or closures or buttons and logo applications and reducing it down to three, good, better, and best. And that simplification that we're going to do on the raw materials side of really thinking about how we can be a better supply chain company is a lot of what's driving the thinking that we're doing right now. And when we, you know, just made this shift every second to the new structure and having Kara sit in as our maestro, as the chief merchandising officer, you know, getting those five different category managers that are running 10 different categories vertically. We all sat in the same room, and we've had, you know, we've got the planners in there, and we have, you know, 15, 20 people that are just really driving, you know, cross-functional communication and what that means. And as a part of that, we need the red thread of design. And so now that we have a chief merchandising officer that's setting the tempo they're setting the music for us They're writing the sheet music then you have the category managers that are driving and really implementing What is the the consumer insights that we can do? Marketing is driving ensuring that every product we build has a story and ensuring then that design comes across in a horizontal way To drive the red thread of what actually makes it Under Armour What makes it consistent and what makes this Under Armour good level under a better level under a best level? But you should find a much more consistent, deliberate, and get ready for it, intentional Under Armour going forward. So we're excited about working with Yusine, Kara, and all the other leaders that we have in place now.

Thank you.

Our next question comes from Peter McGoldrick with CFL. Please go ahead.

Yeah, thanks for taking my question, Dave. All the best in the future. I want to dig in on the complexity reduction and opportunities for greater progress in the future. It seems like much or some of the heavy lifting from skew rationalization and organization have been made already. I was curious if you can help us think about the improvements we should expect in the coming quarters and how that would manifest in the cost structure of the business, whether it be raw materials or other items.

Yeah, thank you, Peter. Let me give this in two parts. I'll take the first, and Dave will take the back end of it. But I've used this analogy as coming back in the CEO chair in April of 2024, you know, walking and seeing our innovation head, Kyle Blakely, and having a conversation where we were talking about we might need more resources because of the number of fabrics that we're having to go to market with every season. And the number came out as we were making more than 300 fabrics. And we just came down and said, why are we making so many? Can we run the 80-20 on that? And the 80-20 is that there's actually 30 fabrics that are driving 80% of our volume, yet we're spending all that time driving nearly another 300 fabrics in development. So we're just looking at it holistically, like how do we get rid of all this stuff, become more simple, become more narrowed, and more deliberate, applying a good, better, best structure, which is what Karen's job is doing, setting the margin targets of where it sits for apparel, where it sits for footwear, setting the profitability targets, skew targets, et cetera, Being really clear at the top and then making sure that there's products that will fall out of that line So we've actually spent the last two weeks Since getting into this new cadence with as I said in the last question with our GMs and just going through line by line Product by product finding out where we can Maybe have 15 or 16 or 17 training shirts and with a business like training shirts where Under Armour has five products that sit in the NPD top top ten nine products that sit in the NPD top 25 as I've mentioned our focus here is how do we drive ASP because while we may be listed in the top ten and top 25 we're not certainly not driving anywhere near the highest ASP so we see there's opportunity a to be able to drive more volume be more consistent with our messaging to the consumer and then as well be able to get more consistent by having less fabrics having less basically inventory so we have fewer things as clear stories for the consumer that hopefully will manifest into a much clearer brand with a much brighter bottom line if Peter and I think as far as you know when you think about the go forward there's some you know different

pieces what what Kevin's getting at absolutely should be able to drive a little bit better margin as far as pricing on raw materials and actual you know production based on volumes and less skews that's that's that's clear And that's what we're going to be driving for and that'll probably benefit more You think about like back half of fiscal 27 more into fiscal 28 and beyond But I think also keep in mind, you know right now fiscal 27 would have a full year of tariff costs Assuming tariff rates don't change versus a partial year in fiscal 26 So, you know the actions that kevin speaking to will help offset that in addition to some of the pricing changes that we're driving through that you know, you'll start to see in the market more in back half of fiscal 27 as well. So there's kind of a balance there is the best way I would put it.

Appreciate that.

Our final question comes from Brooke Roach with Goldman Sachs. Please go ahead.

Good morning, Kevin and Dave. Thank you for taking our question. Can you elaborate on the channel and product category puts and takes you expect in the North America business as you drive stabilization into fiscal year 27? Are there any businesses that you expect to drive faster or slower stabilization, and are you seeing the same level of wholesale order book improvement across accounts and product lines that might over-index to premium versus the value segments of your business? Thank you.

Definitely appreciate the question, but getting into details on fiscal 27 is not something we're really at this point going to do. We're going to do that more when we get to the early May call. But I would say that, you know, we've talked a lot about all the deliberate actions that we've been taking over the last year or so, and Kara was definitely driving a lot of that in her new role. And then, obviously, now she's transitioning into the product, which is going to be awesome with the chief merchandising officer. And we've got Adam Peake stepping in, seasoned veteran, and he's going to take the reins to keep driving forward with those relationships in North America. So the wholesale discussions have been positive. I think a lot of the newer product is really resonating. So we should see that come through as we think about, you know, the full-price wholesale business next year and beyond. But it does still take some time. We've talked about that. You know, the orders that you're placing now are definitely further out in the future as far as when it comes through on the revenue side. So it is a journey. We've talked a lot about being excited about, you know, reaching that stabilization period as we drive into fiscal 27. And that's exactly what we're going to do. I think there's opportunities in each of the channels. as we go forward, but we're going to be deliberate. We're going to continue to be smart about how we deploy promotions and discounting and continue to try and step off that journey more and more and reach the sweet spot there as we continue to double down on our big partnerships on the wholesale side. So a lot of different moving pieces, and we are excited about the momentum on the product, on the brand, on the relationships, and we're excited to talk more about that when we get to the early May call.

And, Brooke, maybe I'll just give you the sort of high-end version from that answer as well, which is I said earlier about winning with the winners. Today, Under Armour is famous for base layer. We're famous for heat care and cold care. Getting a really clear segmentation within both of those categories is a massive opportunity for us, ensuring that we can be present, you know, in distribution at the appropriate price and making sure there's a real reason for a consumer to spend more for it too. So that's been a lot of the work that CARE and the team are really attacking right now, and then extrapolating that out to, you know, multiple categories and as it relates to, you know, appropriate distribution. So we're definitely in this fight, but we've got a really good, strong base to build from, and you'll see, you know, better and better from us with that.

Great. Thanks so much. Best of luck.

Thank you. Thanks, Rob.

This concludes our question and answer session. I would like to turn the conference back over to Kevin Plank for any closing remarks.

Thank you, Operator. and the listeners out there. I'd like to close with one final thought. We're thrilled to welcome Reza to UAs. He's going to be filling some very big UAs shoes as CFO for the next chapter with this brand. But I just want to start and say, Dave, thank you. 21 years at Under Armour mean you joined just before the IPO in November 2005. We've been through a lot. Your alma mater, James Madison, made it to the college football playoffs, which is just another proof point that you can do anything, and you have here. not even close to my terps joining from a great run at pwc you're an accountant who became our controller to our cfo for the last nine years but always the best teammate partner cfo and even more importantly an amazing husband father and friend you and i have been through a lot of stuff thick and thin we've had amazing times together and we've also been tested yet here we are still standing moving forward you remain a major shareholder know you'll always be a part of this team and will honor and do a great job for you and all of our stakeholders I give you my highest compliment you're a true professional thank you and on behalf of the brand thank you Dave Bourbon we appreciate everyone joining us on today's call and ask you to have a great day thank you operator thank you Kevin thank you UA the conference is now concluded thank Thank you for attending today's presentation.

You may now disconnect.