Under Armour, Inc. — Call Transcript 2026

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 then one on your touchtone phone and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Lance Allega, 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 Taleghani, 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 12th, 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.underarmour.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 at 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, 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 will become even more critical. We are better positioned with Reza'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. With that, a big congratulations to Sharon Lokedi for securing her second consecutive Boston Marathon victory in the Under Armour Velociti 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 Velociti Pro and Velociti Distance, as well as the balance of our increasingly elevated 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 clearer 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 16-24-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 Bouncy Tee, launching later this month in APAC and exclusively in the U.S. through Dick's and our own DTC channels, with a major coming online 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 in 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, 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 T 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. Growing our $1 billion-plus footwear business is central to our midterm strategy. 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 2027. After a significant revenue rebase since our fiscal 2025, 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. 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. There are no sacred cows, just the lens of what is the best decision for the brand. Execution must tighten. 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 SKUs by 25%. 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 focused 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. 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 2027, 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 a 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. 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 is 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 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, organization, and clarity of brand. In fiscal 2027, we expect gross margin to expand approximately 220 basis points-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 million-$160 million. In closing, what you're seeing taking shape is a more intentional and connected Under Armour with focused products, 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. Following the progress we've made in re-engineering our product organization, we are now applying that same focus and lens with rigor to marketing, with the goal of amplifying our product strengths, 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 2027, we are operating from a position of greater strength. 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, 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. With that, I'll turn it over to Reza. Thank you. Thank you. Good morning, everyone. I'll start by thanking Kevin and the board for the opportunity to join Under Armour at such an important time for the brand. It's a company I've long admired. I'm excited to step into this role as we move into the next phase of the transformation. I also want to take a moment to recognize Dave Bergman for his leadership and partnership during this transition. His 21 years with the company and the foundation he's helped build have positioned us well for what comes next. Over the past few months, what has stood out most is the alignment across the organization. The strategy is clear. Priorities are well-defined. There's a strong sense of ownership and accountability across teams. Just as important, there's a clear connection between the strategic choices we are making and how they translate into performance. As Kevin outlined, we've spent the past two years executing a reset, simplifying the model, strengthening the brand, and improving execution across the organization. From my perspective, that work is creating a more focused, more controlled, and ultimately more predictable company. My role is to build on that foundation by driving greater financial clarity, consistency, and accountability as we move forward. This is a brand that has been navigating tariffs, softer consumer demand, and supply chain disruption. At the same time, there's a strong sense of control across the organization. I'm excited to strengthen that momentum. As Kevin outlined, in fiscal 2026, we focused on building structure and discipline, and our performance reflects that progress. While we're still early in stabilization, we're beginning to see more consistent execution. With that context, let me turn to our results. Fiscal 2026 brought its share of external pressures, particularly from tariffs. Revenue declined 4% to $5 billion. By region, North America was down 8%, EMEA was up 9%, and APAC declined 5%. Adjusted gross margin declined 220 basis points to 45.7%, primarily driven by higher U.S. tariffs, along with a more promotional second half, partially offset by favorable FX and product mix. Adjusted SG&A decreased 5% to $2.2 billion. Adjusted operating income was $107 million. Adjusted diluted EPS was $0.12. Turning to our fourth quarter results, revenue was down 1% to $1.2 billion. By region, North America revenue declined 7%, primarily due to a decrease in wholesale with a slight decline in our direct-to-consumer business. In EMEA, revenue increased 7% with about 3 points of negative impact coming from shipment timing that shifted from Q4 into Q1. Quarter's results included growth across both wholesale and direct-to-consumer channels. Revenue in EMEA was down 1% constant currency. APAC revenue increased 13% and 8% constant currency with growth in both DTC and wholesale channels. In Latin America, revenue increased 22% or 8% constant currency with strong double-digit growth across both wholesale and direct-to-consumer businesses. From a channel perspective, wholesale revenue declined 3%, driven by a decrease in full price sales, partially offset by distributor growth. Direct-to-consumer revenue increased 5% in the quarter, with 8% growth in our owned and operated stores and flat e-commerce revenue. Licensing revenue increased 11%, driven by strength in our international business. By product type, apparel revenue was flat with growth in train, outdoor, and sportswear, offset by softness in run, team sports, and golf. Footwear revenue was also flat with strength in run and team sports, offset by softness in other categories. Accessories revenues increased 2%, driven largely by strength in sportswear and train. Gross margin declined 470 basis points year-over-year to 42% in the fourth quarter. Excluding restructuring efforts, adjusted gross margin declined 360 basis points to 43.1%. This decline was driven by 315 basis points of supply chain headwinds, including roughly 260 basis points of pressure from U.S. tariffs. 90 basis points from increased promotional pressure, particularly in direct-to-consumer as we managed through softer traffic and took proactive steps on inventory. 20 basis points of unfavorable regional mix. These headwinds were partially offset by 65 basis points of favorable foreign currency and channel mix impact. Moving to SG&A expenses, which decreased 15% to $518 million in the fourth quarter, primarily driven by lower marketing spend due to timing shifts, as most of last year's spend was weighted towards the second half. We also saw benefits from lower incentive compensation as well as declines in several other cost areas as we continue to focus on expense management. Excluding $15 million in transformation costs, adjusted SG&A declined 14% to $503 million. Over the past few months, we've conducted a comprehensive review of the business to ensure we are fully capturing the intended benefits. To complete the remaining work, we're initiating a targeted expansion of the plan. This includes incremental costs necessary to deliver the full value of this effort, bringing the total anticipated cost to approximately $305 million. We now expect the plan to be substantially complete by December 31st. Moving down the P&L, we reported a fourth quarter operating loss of $34 million. Excluding transformation expenses and restructuring charges, our adjusted operating income was $3 million. To the bottom line, our diluted loss per share was $0.10. Excluding transformation and restructuring charges, our adjusted diluted loss per share in the fourth quarter was $0.03. On the balance sheet, we ended the year with $915 million in inventory, down 3% year-over-year, reflecting continued discipline as we reshape the business. This includes deliberate actions in the fourth quarter to further reduce inventory, accelerating the reset and positioning us well for fiscal 2027. Importantly, this is not just lower inventory, but better inventory with improved quality driven by tighter buys, a more focused assortment, and stronger alignment with demand. We closed the year with $309 million in cash and $605 million in restricted investments, which are set aside to fully cover the principal and interest on our senior notes due this June. With that obligation coming off the books by the end of the quarter, this marks a meaningful step forward in strengthening our balance sheet. We also ended the year with $200 million in borrowings under our revolving credit facility. Looking ahead to our fiscal 2027 outlook, we expect revenue to be down slightly. This includes approximately 1 point of impact from the Curry Brand exit, meaning we would have been roughly flat absent that. This outlook includes a low single-digit decline in North America, partially offset by low single-digit growth in EMEA and APAC. As Kevin mentioned, this reflects both the dynamic retail environment and deliberate choices we are making to strengthen and protect the brand, including tightening assortments and stepping away from lower value opportunities. Some of these actions may impact near-term volume, they are intentional and aligned with our focus on driving a more profitable, higher quality business over time. For gross margin, we expect expansion of approximately 220 basis points-270 basis points versus last year's gross margin. This outlook assumes a potential refund related to IEEPA tariffs expensed through the P&L in fiscal 2026. This positive impact is expected to contribute roughly 150 basis points, with most of the benefit recognized in the first quarter. Excluding this gross margin improvement reflects pricing actions as we continue to elevate our brand, reduce discounting, and a more favorable channel mix, partially offset by supply chain headwinds related to the Middle East conflict. It also includes an assumption that the current 10% incremental tariffs through July remain at the same level for the rest of fiscal 2027. We expect our adjusted SG&A expenses to increase at a low single-digit rate versus the prior year. This is driven primarily by about 2 points of higher compensation related costs. We normalize against actions we took last year to offset tariff pressures, which resulted in reduced incentive compensation, lower merit increases, and changes in employee benefits. There's also about 1 point from additional marketing investments that we'll be making this year. We'll still be within the 10%-12% of revenue that we've kept to historically. Balance this out as we dig in further on the year ahead, we anticipate that we will find other opportunities for operational improvements. Putting that together and excluding anticipated transformation expenses and restructuring charges, we expect adjusted operating income for fiscal 2027 to be in the range of $140 million-$160 million. This assumes approximately $70 million of benefit from the refund of IEEPA tariffs expensed through the P&L in fiscal 2026. That tariff benefit absorbs approximately $35 million of headwinds that we're seeing related to the Middle East conflict, as well as $30 million in strategic marketing investments to strengthen our brand momentum as we begin to stabilize. Below the operating line, we expect an unusually high GAAP effective tax rate for the year. This is primarily driven by restructuring expenses, which will increase losses in the U.S. and certain international markets where accounting valuation allowances prevent the recognition of related tax benefits. For non-GAAP, we also expect a higher than normal effective tax rate, primarily due to the geographic mix of earnings. We expect taxable profits in most international markets, with losses in some others, which are subject to valuation allowances that negate the related tax benefits. Both GAAP and non-GAAP tax rates are also being impacted by our current level of profitability, where even a modest tax expense can result in higher effective tax rate. As profitability improves in the U.S., we would expect tax rates to normalize over time. All in, this results in full-year adjusted diluted EPS in the range of $0.08-$0.12. Turning to some color for our first quarter, we expect revenue to decline 2%-3%, driven by an anticipated high single-digit decline in North America, reflecting a challenging retail environment and recent and reset in seasonal wholesale ordering. This will be partially offset by a low teen percentage increase in EMEA, which includes a 3-point benefit from a shift in shipment timing from Q4 into Q1. APAC revenue is expected to be roughly flat. Overall, we expect the first quarter to represent the weakest revenue performance of the year, with growth rates improving progressively through the balance of fiscal 2027. Gross margin for the first quarter is expected to increase by 610 basis points-630 basis points, largely due to the assumption of a benefit from IEEPA tariff refunds associated with the expenses that hit the P&L in fiscal 2026, which should contribute about 600 basis points. Excluding this benefit, favorable channel and product mix are expected to offset higher tariff rates currently in effect, supply chain headwinds related to the Middle East conflict, and unfavorable FX and regional mix. Adjusted SG&A expenses in the quarter are expected to increase at a high single-digit rate compared to last year's adjusted SG&A, driven by higher marketing expenses, which should result in first quarter adjusted operating income of $30 million-$40 million on an adjusted diluted EPS of breakeven $0.02. In closing, our focus is on continuing to build a more disciplined and predictable financial model grounded in clear priorities and consistent execution. We are aligning our financial framework tightly with our strategy, focusing on improving the quality of revenue, expanding margins, and driving more efficient capital allocation. That includes maintaining strong marketplace discipline, being intentional in where we invest, and ensuring that every dollar supports long-term brand strength and profitability. The opportunity before us is ultimately about building a more focused, higher quality business, one where product, marketing, and financial performance are aligned and where we are better positioned to translate strategy into repeatable results. We've made meaningful progress strengthening the foundation, and while there is more work ahead, we are moving forward with greater clarity, discipline, and control. With that, we'll open the call for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at anytime your question has been addressed, and you would like to withdraw your question, please press star then two. Our first question for today will come from Jay Sole with UBS. Please go ahead. Great. Thank you so much. Kevin, a question for you. You called for stabilization in fiscal 2027, and your outlook calls for another year of revenue contraction. How are you thinking about a return to top-line growth? Thanks, Jay. Let me let Reza jump in and sort of break in a little bit here with some tactics, and then let me come on the backside of that. Thanks, Kevin and Jay. Fiscal 2027, it includes a 1-point reduction from the Curry exit that we talked about. We're looking at really the underlying being closer to flat. Recall that stabilization for us is roughly defined as ±1% to 2%. We are in that range. North America, we are expecting down low single digits. EMEA, we're expecting to be up low single digits, and APAC up low single digits. The international markets should be continuing to perform. If I'm looking at it for the first quarter specifically, North America is expected to be down about 7%-8%, whereas EMEA is going to be up in the low teens. Some of that is that shift that we talked about from Q4 into Q1, still strong performance overall for EMEA in the quarter. APAC is expected to be roughly flat. Overall for Q1, we're expecting revenues to be down about 2%-3%. Kevin, I'll turn it over to you for the color. Yeah. Jay, thanks for the question, and I think it's important for us to ground ourselves in the numbers. I do just wanna mark the fact that we've been targeting after, especially North America, -12% traction and then two years ago to -8%. Looking at that roughly stabilization is something that I think our team has worked incredibly hard for and something that we look to build on. I wanna emphasize that we're focusing and prioritizing the quality of our revenue over the volume, making really deliberate decisions, particularly about our growth and our margins. We expect to accomplish all this by doing much less things, much better. I've said that a few times, and I hope that theme of intentionality is something that really comes through for the call. By removing this amount of volume from the system, we're reducing the amount of work that our teams have to deal with, our consumers have to digest, our customers have to place in their stores. It's all coming with a very heavy lens of, will this deployment of time, people, or money help us sell more shirts and shoes? We do believe that the inflection point is upon us in fiscal 2027. This is turnaround. We also recognize consistency matters. Our operating model, our go-to-market, none of these things are massively changing. We're also keeping our head on a swivel. Sorry for the sports terms, you know, doing things like implementing a chief merchant and having Kara there who can edit as aggressively as the business calls for. We're now looking to take that same sort of rigor that we've applied across the 25% reduction. We're going deeper than that through the seasons and upcoming seasons that we have in front of us. Applying that rigor to marketing is the next focus that we have. The good news, we have a large nominator, nearly $500 million of marketing dollars in how we think about deploying that money. This is something we believe is an important time of inflection for us to invest for greater sales for the brand. That greater sales will bring greater profitability for us. We, we are certainly, again, we are bottom-line focused, but we think it's important we have our storytelling capability and driving behind things 'cause we're not sitting here flat-footed. We have a incredible innovation pipeline coming from things like the Bouncy T I mentioned in my prepared remarks to what we have coming back with fleece and the support we're getting from our partners there, and of course, base layer compression business that we have. The good news about all of this is that we're seeing greater buy-in from our key strategic partners across the world really, in Europe and the JDs and SDIs and El Corte Inglés glasses to right here at home with, you know, the biggest partners that you of course know and are aware of. We do believe this is an inflection for us, and we look to grow forward from here. Got it. Sounds great. Thank you so much. Thank you, Jay. Your next question will come from Simeon Siegel with Guggenheim. Please go ahead. Thanks. Hey, guys. Morning. Kevin, just to follow up on that a little bit. Maybe can you help give us some context around the declines in North America revenue that we're seeing now? Just any call outs in specific categories, partners, price points, broad base, just maybe framing how much of the current declines are the intentional healthier pullbacks versus external. Then just to the point of what we can see in terms of healthier sales, maybe you guys can quantify the gross margin drivers a bit more for 4Q and the specific drivers for 2027 outside of tariffs. Just help us think through costing, pricing, general health metrics that we can see. Then, sorry for wrapping up the already long question, just any help on what all of that should lead for long-term gross margin levels. Thank you. Thank you. Let me kick off and then I'll have Reza kick in. What we're seeing right now is when we talk about stabilization, we recognize Q1 is gonna be the trough force and not the trend, it's a bit of an outlier. The decline that we see reflects some of the softer carryover we had from spring, summer 2026 order books and frankly, a bit of a cautious retail environment. There is a stronger foundation now in place. I mentioned Kara taking over as Chief Merchant and Adam stepping in and filling her shoes with a long time Under Armour vet. We've got zero real transition value with those two experts. The partner confidence that we're getting, I just wanna emphasize that. We're beginning to see that show up with better reaction in our fall 2026 order books. I can't emphasize enough, particularly here in North America, the trend that we're on, which again was -12%, -8%, and now we're calling flattish. While we are seeing some modesty there, the quality of that revenue, the way they're expecting us, their openness to bringing in new innovations from us is something which is really important. The better products that we have, I think we've made this point on a few calls, which is focusing on our top 10 volume drivers, full price sell-throughs. The good news is we are seeing the trend. We talk about the trough, I think it's a good way to think about sort of where we've been at this moment, is that looking for the opportunity for us to grow up from here because we're watching awareness grow positively, consideration grow positively. The metrics are also heading in our ways, but we wanna see that translate into full price sales. We wanna see that into growth. We wanna see that into bottom line profitability. While 2027 is a deliberate stabilization year with improving trends beyond just the first quarter, we believe we're positioned really well for sustainable growth in fiscal 2028 and beyond. Let me just step in on the gross margin points that you asked as well. For fiscal 2027, we're guiding around 220 basis points-270 basis points increase or benefit to gross margin. If you back out the fiscal 2026 tariff refund that I talked about, the 150 basis points, that gets you to about +70 basis points to +120 basis points versus 2026. For Q1, you're really gonna see it in Q1, where we're basically looking at 610 basis points-630 basis points versus last year. Gross margin going up. If you back out tariff, that's about 600 basis points of that as well. I think the message around gross margin really is as we're looking at 2027, we're definitely expecting gross margins to not only stabilize, but to improve. Even if you back out the tariff benefits, we're expecting that the strategy around improving, but taking the products that we have and selling them at a full price, some of the channel mix that we have should lead to a benefit in terms of overall gross margins for the brand. Great. Thanks a lot, guys. Best of luck for the year. Thank you. Your next question will come from Peter McGoldrick with Stifel. Please go ahead. Hey, thanks, guys. I was hoping you could give us more clarity in the quality of sales commentary you shared today. Is this an extension of an evergreen process or have you stepped away from new business specifically for the coming year? If so, can you help us think about how that's embedded in the outlook? Yeah. I wanna take it Kevin, and then you can add obviously, so there's a general theme that we're looking at in terms of the quality of sales. It's one of the things that we saw in Q4. We strategically were looking at basically resetting the year. We talked about reducing the inventory in Q4 on purpose as we started the balance of fiscal 2027. There is a brand elevation strategy that we're pursuing here. As you look at product, you know, Kevin and the team have spent the last couple of years really resetting on the product side, and we have some good product introductions that are coming. If you go to any of our stores, you'll see an elevated product offering already. We are expecting that that will result in benefits as it relates to just pricing. It's not pricing for pricing's sake. It's that you have new product that's coming out that is at an elevated price point. That also fits into the distribution strategy that we have, be it wholesale or in our own direct-to-consumer channels as well. There is, as we talk about gross margin improvement, part of that is related to expecting that we're moving more and more to a more elevated product offering that enjoys a higher price point. I think we've been talking about this for the last 12 or 14 months, that the thing about tariffs, it actually fits in line with our premiumization for the brand. We'd be doing this anyway. Where we've been aggressive is in some of our top tens that we have replacing, you know, our number 1 apparel item, the Tech Tee, with new innovation will be coming out later this year. Introducing some pinnacle North Star products like Bouncy T that can come in. Again, emphasizing and building around where we already have permission with the consumer to win, things like our base layer and our compression. We're being thoughtful. We don't feel like we're being opportunistic. We feel like we're being prudent with what the business calls for, and frankly, just getting confident with where we know that we can win and we can excel, and the ability for us to extend from there. We're taking baby steps towards that of having the right product that moves, of course, locking down on field, on pitch, on court, in the gym, first and foremost, and then finding natural ways that this brand can extend beyond those places where the consumer sees us today. Excellent. Just a follow-up on that. On DTC quality of sales improvement, that's been a focus for some time. Finally moving in the right direction. Are we now reaching a more normalized promotional environment? On a consolidated basis, how should we think of promotions embedded in the gross margin outlook for fiscal 2027? Yeah, I think as it relates to e-com, that's something that we constantly look at. You know, we recently had a marketing summit, one of the proofs we came back with was that if we can improve and grow our e-commerce traffic, it'll take care of everything else in the business. I do think it's a good canary in the coal mine for what's happening out there. Traffic is certainly not brilliant today, it's something that we're, as I say, work the mix. We're looking at different ways that we can really consolidate our line, the offering that we have, and make it get more intentional so the consumer isn't walking into an environment of, "Welcome to Under Armour. We sell a bunch of stuff. What would you like to buy?" Versus, "Here's three great things that you couldn't live without and that only Under Armour could make." Leaning and driving on that. It is the consumer is something that we're watching closely including consumer confidence right now. Thank you. The next question will come from Sam Poser with Williams Trading. Please go ahead. Thank you for taking my questions. I have some technical stuff, and then I have also, I wanted to first start with the brand direction. Like, you guys are one of the few brands out there that support, like, every track and field sport. Can you talk about the sports that you're focusing on, especially after, you know, the victories, the two victories at Boston, and how sort of the reach, you know, how you're thinking about the reach by sport, both individual sport and team sports, and what you're doing across all that? Sam, let me take the first part of that question. Our sports focus, as I said, we've limited and really culled things down, focusing on the leadership, the decision makers we have in the building so we can be more deliberate, more intentional. I'll probably wear you out with that word, but it's something that we're driving across the business, ensuring that every dollar is driving an ROI return for what we put into it. The 12 categories that we have are the ones that you know, it's, we basically list them out as training, running, and sportswear being our major growth opportunities, all of that underpinned and supported by team sports. You've seen the initiatives we have from a marketing standpoint around flag football, particularly with women as being the articulation of that voice and something that we're driving back toward making sure that authenticity and credibility is something that always screams from Under Armour. You're right, Sharon Lokedi's win is something which is defining for the brand. As I said in my prepared remarks, it's not just a moment, but when you can do that twice, it tells the consumer that in the largest market that we have to compete in from a footwear standpoint, that Under Armour can not only compete, but we can absolutely win. Doing it back-to-back is significant. Sharon, though, is you're not gonna sell a lot of $250 running shorts that we have. We have the greatest opportunity for us to be able to build, I think, something more extraordinary for as we bring that out to our Velociti Distance, our Velociti Pro, and get into commercial price points, where we can actually sell and activate with the consumer. The two largest places where the consumer is participating today is we hear you on track and field, and we do support the majority of those sports as helping and supporting some of the 3,000 colleges that Under Armour or sorry, 400+ colleges we have and 3,000+ high schools that we have around the country. These are things that all feed into it. We believe that running is a place that we have permission to win. We just need to tell the consumer about that and do it in a more articulated way. Thank you. You mentioned that the tax rate is gonna be elevated. Can you give us idea of exactly, you know, what that looks like? You know, what tax rate we're looking at? Also, the interest expense line after you pay down the debt, can you give us some idea of what you're assuming there as well, please? Yep, sure thing. On the tax rate, we're not guiding to a specific ETR number, but I think what you need to know is and what we mentioned on the call, it's basically both on a GAAP and non-GAAP basis. It's really the geography of where the earnings are coming from and the ability to use your deductions against that. While I would tell you if North America starts to return to growth, we're very well positioned in terms of our tax structure. When you have basically certain jurisdictions like China and other areas where you have to pay taxes, you're not able to basically use the losses to offset what you have because some of the restructuring expenses that we've taken, it results in a elevated effective tax rate. You know, in under normalized instances, we would be in the high twenties. You know, mid to high twenties is where we would be, but that's not what we're looking at currently. In terms of the interest expense, think of it as basically our debt, once we get past the June payoff and everything. We have basically $400 million of senior notes, and we have $200 million currently drawn under the revolver. The revolver balances will obviously fluctuate over the course of the year. On a blended basis, you're looking at around 6.5%-6.6% interest expense against that. For modeling purposes, that's where we would guide you. You know, our revolver is priced at SOFR plus 150 basis points. So that's how it comes out on a blended basis. Thanks. I mean, just I mean, then we could assume that your tax rate in the probably in the first two quarters will be the highest because of the I mean, that's just what it sounds like based on the way. I think that's. especially in the first quarter, the way you're guiding. I think that's a fair assumption. Okay. it can be lumpy over the as well. Yep. All right. Thank you very much. Thank you, Sam. The next question will come from Bob Drbul with BTIG. Please go ahead. Good morning. You know, Reza, congratulations and welcome. I guess the question for you is what are your first impressions as you settle in at Under Armour? I guess the second question I'd like to ask is just, can you guys give some more color on the increased spend in marketing and sort of how your strategy is evolving there? Thanks. Thank you so much. It's a great question and one that Kevin actually asked me last week when we had a senior leadership meeting that I basically went through this. I'll just give you some inside baseball and what I shared with the management team as well. The first thing that I'll start with is the management team is really impressive. I'm not just saying that because my boss is in the room, but honestly from every layer, whether it's the senior management to the levels below my finance team, I think it's very, very clear in terms of what everybody is focused on. I would tell you and everybody on this call, rest assured that things that are controllable are being controlled. We have a clear strategy. We have a clear way forward. Obviously, I have a partner in Kevin who has 30 years of experience in this industry and knows this company intimately. We are mid-journey in turning around the company. Just to overly simplify it, I would tell you guys know that I come from a consumer products background as well, very simplistically, you gotta look at it as revenues are driven. It's product plus brand times marketing equals revenues. The biggest surprise for me is really on product. The product truly is phenomenal. I'm just gonna share with you an example of my daughter, who's literally one of our, you know, aspirational/target consumers, who's 23. When I started here, for those of you who haven't been here, we have a phenomenal campus store that's in our headquarters building here in Baltimore. I went down, and obviously I did some shopping for myself, and I did some shopping for my family, and I bought my daughter a Meridian top. If you don't know Meridian, I highly recommend buying some. The Meridian top that I got her, to be fully transparent with you, she was not an Under Armour consumer previously. My son has always been, she wasn't. She tries this top on, again, she is very honest. She basically said, "This is one of the best tops I've ever had. Like, why don't you sell this?" That really comes down to the point here is we really have brand and product. For brand, people want us to win. I can't tell you how many people have reached out and said like, you know, "We really liked Under Armour. We want it to win." Like they I feel like there's really good affinity towards the brand. The product is great. The issue is marketing. I'm looking at that as an example of, you know, you have somebody who looks at something, it wouldn't even think to have gone and purchased that product. I'll just touch on one other thing, and then I'll segue over to Kevin for more detail on the marketing side. The other thing is, as I come into this role, obviously I bring a fresh perspective. You should just know that we have a huge focus on profitability, like driving profitability. We're scrubbing the cost structure. We're looking at the revenue realities of where we are. We're right-sizing the company for those revenue realities. There's a huge focus and clear strategy in terms of navigating this dynamic environment that we're in right now. Let me turn it over to Kevin to talk about the marketing point. Yeah. Thank you, Reza. Absolutely, getting your daughter to know that what we make and how great it is critical. Bob, thank you for the question 'cause this is something's been highly discussed, talked through, contemplated, frankly deliberately decided of what we believe is the right thing for us to take for our business. Let me just take a minute here and sort of go through marketing. We recently did a structural review to identify, you know, how we can drive greater marketing spend synergy because we found ourselves really running three smaller companies with a $3 billion-ish one in America and a $1.2 billion-ish one in Europe and a south of a $1 billion one in APAC that we're looking to grow. We believe that we can get and drive, I think just more competency with the way that we're cutting through to our consumer. At Under Armour, we like to say that our currency is product, but our voice is overwhelming storytelling, and I don't feel like we've been living up to that. I believe that there's more efficiency in our current, you know, nearly $500 million marketing budget. We align this year though to deploy and spend that additional $30 million, which is, we know something that would be highly scrutinized. To be honest with you, this isn't just us throwing money at something. We believe that this will actually help us drive more efficiency. We wanna better ensure that we can move back to growth in fiscal 2028, and so we think it's an important time for us to do it. There's two places that we're looking to deploy those dollars. Number one, this isn't about acquiring, you know, new products or new properties. This is about celebrating the product that we already have. As I mentioned Bouncy, our women's bra program, which is something which is extraordinary with new innovations coming out. HeatGear, ColdGear, Fleece, and making sure the products we have are actually selling through. We have several launches coming later this year as well, as I've said, emphasizing that our innovation pipeline is full, so we wanna make sure that we're not missing that opportunity. I don't believe that we've been as clear as we could be in the past. Secondly, we also wanna make sure that we're paying off the assets where we have spent money. Things like our new partnership with the NFL, the collegiate partnerships and the, you know, 9+ figures that we spend on sports marketing, making sure that we're doing a better job activating that. Where we are now is that we're focused on effectiveness. Doing fewer but better impactful activations, clearer messaging, things that'll help us, frankly, sell more premium shirts and shoes. Everything going through that lens, that discipline. Also being more data-driven with the allocation of every marketing dollar spent and that we're going through and driving a serious ROI as to does this investment make sense to us. As I said, I like this construct of, you know, when we're doing it right, we're mostly talking and describing the benefits of what our brand, of what our product does, but through a brand lens of something that matters. This is going to be a targeted investment to strengthen the brand. It'll position our business. As Reza said, it sticks within our current 10%-11%. We agree. We want to focus on SG&A. We want to get SG&A down. We're hyper-aware of that. We're a bit at this moment where we do think it's an inflection. I believe that what you've seen us be able to action so far on the product side, which at this point is mostly just words for you as it begins to come through. That 25% that we've taken out, the additional cuts that we're making to SKUs, just taking simply volume out of the system, will leave our team in a much, much better place. Maybe I could just leave you as we think about marketing too, is just how we're thinking about the business and, you know, we had recently a two-week summit I described loosely earlier. After that, we brought all of our marketing leaders from APAC, from EMEA, together, and we spent, you know, three or four days here in Baltimore in an on-site, off-site, and we aligned on these four proofs. The first one I've said is, you know, if we can drive more consumer traffic to our website, the overall business will grow. Secondly was this heightened focus that we have on new consumers. I mentioned that in my prepared remarks. Third is the need that we have for the focus on that product to brand marketing. Again, when we're doing it right, you should not be able to tell the difference between the two, and that's what's the brilliance or the cleverness that hopefully you'll be seeing as our marketing. Fourth and finally is aligning on the pooling of more of our marketing dollars together that we're leveraging and creating content here from a global base to say that having to be done exclusively in the regions. Of course, allowing them to translate and make it region or market appropriate, but having just a greater strength here from headquarters as well with a stronger point of view. This brand knows who it is. We know who a consumer that we're hunting for is as well, and we have incredible empathy for the products that they will choose and desire. Thank you very much, Kevin and Reza. Thank you. Thank you. Your next question will come from Laurent Vasilescu with BNP Paribas. Please go ahead. Hi, good morning. This is William Dossett on for Laurent. Thanks for taking our question and also congrats, Reza, on the new role. Thank you. My two questions were with respect to channel and regional performance. In North America, in fiscal 2027, guidance for down low single digits, how should we think about the trajectory of wholesale versus DTC, especially considering that the wholesale partnerships have become increasingly collaborative in recent quarters? On Asia, within the guidance for low single digit growth, can you give us an update on what you're seeing on the ground there, especially in China? Back in February, it was mentioned that there was a stabilization in Asia expected within 12 months. Is that still the base case or are you ahead of that target? Why don't I start with that, Kevin, and then you can pick up from maybe the Asia point. The overall in terms of North America, the direct to consumer channels that we're looking at, if I'm thinking about DTC, and really our Factory House stores is what's driving a lot of that, are expected to continue to outperform. In terms of wholesale, we're seeing decent sell-through currently. I think as we're in the sell-in for the further seasons, the early indications are that it is an improving trend. Which is what you're seeing in the numbers that are coming out. If we're looking at it overall, you know, I gave indications around the overall wholesale, not necessarily broken out by region. Our expectation is that wholesale in this year is going to be up, slightly. It'll be flat to up slightly. If I'm looking at direct to consumer specifically, we expect that the Factory House will perform. Let me turn that over to Kevin to talk about the China trends. Yeah. Laurent, thank you. Let me just back up a little bit on some of that wholesale because we are seeing incredible partnership, where I think some of what, you know, wholesale is seeing from us. DTC plays out real time. Wholesale gets to see some of the trends of where we're going. We are exploring right now deeper partnership, deeper collaboration. And I say collaboration, I mean, literally collabs, with things that will help us premiumize and elevate the brand. Our wholesale must grow, though. It's 60% of our business, something that we're focused on. We know that we have to win there. This is a total execution from A, the right product, B, the right storytelling for the customer on the sell-in to see the way it executes at retail or online in their stores too. We are focused on that full end-to-end throughput that we have as our product goes to market. As it relates to China, Under Armour is in a pretty unique place. We've got a terrific leader across APAC in Simon Pestridge, who is a brand first leader. Simon took on this commercial role probably 18 or 20 months ago. What he's done is basically helped us perform a bit of a flip, where we were incredibly promotional, incredibly discounted, and we did a really great job, so far as we're watching to turn the inflection of that business from, you know, down in the teens where we were a little more than a year ago, to something where we're looking at flattish to, you know, even positive there. The market is not great, meaning the consumer is tough everywhere. You're not having sort of any places where you get a free lunch or an easy ride. I think what we're doing right now is brand right marketing. We've exited or exiting performance marketing, reducing it significantly as we can flip that into brand right marketing. That's actually driving and selling a product versus selling a price savings or a discount. We also have a terrific pro there named Carol Chen, who runs the business for us, who is an industry vet, who knows the partners, who knows our franchisees, and is someone who's been critical and a real staple for Simon there as we look in market. For us, you know, we're testing new retail concepts. We're trying new things and working the merchandising mix. I think, you know, China, I don't know if I could compare it to the U.S. I guess I could just say broadly that I don't think there's, as I said, there's no free rides that you get in any market around the world right now. It's more competitive, especially with some of the local options they have there in China. Under Armour is certainly holding its own, and we have a great plan for growth there. Thank you very much. Best of luck. The next question will come from Paul Lejuez with Citigroup. Please go ahead. Thank you. It's Tracy Kogan filling in for Paul. I was hoping you could tell us what your CapEx expectations were for this year, and free cash flow. Then secondly, I was wondering if you've built any benefit from the World Cup into your guidance. Thank you. With regards to CapEx, I think it'll, it will be similar to what you've seen last year. We're, we're past building our campus here in Baltimore, so that's kind of a more normalized level going forward, I think. In terms of free cash flow, we're expecting free cash flow generation in the year. The expectations are both the core operations as well, as well as some working capital benefit, building in terms of the free cash flow that we'll see this year. We did have some one-timers last year in terms of free cash flow, which you're well aware of in terms of some settlement payments and things like that. Yeah, I mean, I think we expect it to be a good year in terms of overall free cash flow generation, even after CapEx investments. What was the second part of the question? Sorry. If you've built any benefit from the World Cup into your guidance. Not anything that's of particular note. Obviously, we have some assets that we plan to activate during the course of the World Cup, but there isn't anything that would be a one-time that wouldn't be recurring in future years that's outsized. Yeah. From a pure market standpoint there, we're gonna have, I think 10 to a dozen players that'll be participating in the World Cup here in the U.S. You know, it's gonna be a period of time. It's one where it's incredibly expensive to get in. Basically, the majority, if not all of our marketing in Europe is built around football. Bringing the beautiful game here to the U.S. is something we're gonna celebrate with a number of our players, like Fermín López and the range that we have, which is extraordinary. We wanna make sure we're supporting some of the players we'll have on the Spanish national team and some of the other national teams. As far as a major play in World Cup, it's something that we wanna make sure that we're understood and played in football, but we wanna definitely take our time and not try to outspend in some place where we think it may be a bit uphill for us. We have a position to win. We're gonna continue to do that through our language in Europe, especially. Great. Thank you. We'll take our last question from Rick Patel with Raymond James. Please go ahead. Thanks. Good morning. Congrats, Reza, on the new role. Thanks, Rick. You talked about the e-commerce channel and how if things can do well there, they bode well for the overall business. Can you double-click on the levers you can pull to improve traffic there and what guidance assumes as the year moves forward? As a follow-on, you know, with product, with the product assortment evolving towards brand elevation, how are you thinking about segmentation of newness across D2C versus wholesale channels? Why don't I start with the numbers side of it, and then Kevin can talk to some of the macro points as well. Look, e-commerce is stabilizing after 2026. We are expecting it to improve as the year goes on. There is a bit of a reset that's happening in e-commerce. One of the focuses that Kevin touched on is how we're trying to basically be much more intentional in the way that we present ourselves in the e-commerce channel because that really is the best reflection of the brand. There are changes that you're gonna be seeing, particularly in North America, in terms of how that is. We do expect that to take some time to bear fruit. There is. You're absolutely right. Traffic is challenged in terms of e-commerce overall. What we're cognizant of is not over-investing marketing dollars on performance because to drive unqualified traffic. I don't think that'll have much of a benefit. We wanna make sure that we're executing the brand elevation play we have in e-commerce. To do that, you're gonna start to see from a marketing perspective, a greater mix in terms of what we're doing, both at the brand level, as well as performance to try to do that. I think the bigger point is really from a macro perspective, strategically resetting the presence that we have on e-commerce to make it more brand elevating and to drive higher price points and ASPs. Kevin, I don't know if you wanna add to that. I think it's good coverage. Good coverage. Thank you. Thanks very much. Thanks, Rick. This will conclude our question and answer session, as well as our conference call for today. Thank you for attending today's presentation. You may now disconnect.

Speaker 5: 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 then one on your touchtone phone and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Lance Allega, Senior Vice President, Finance and Capital Markets. Please go ahead. Good day, and welcome to the Under Armour, Inc fourth quarter 2026 earnings conference 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 then one on your touchtone phone and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Lance Allega, Senior Vice President, Finance and Capital Markets. 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 then one on your touchtone phone and to withdraw your question, please press star then two. please note this event is being recorded. i would now like to turn the conference over to mr lance allega senior vice president finance and capital markets Please go ahead. please go ahead

Speaker 4: 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 Taleghani, 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 12th, 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. Thank you. thank you Good morning, and welcome to Under Armour's fiscal 2026 fourth quarter earnings call. 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. 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 Taleghani, Chief Financial Officer. joining us this morning are kevin plank president and ceo and reza taleghani 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. 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 12th, 2026, and are subject to risks and uncertainties that could cause actual results to differ materially. these statements reflect management's current expectations as of may 12th 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. 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. 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.underarmour.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. We believe these measures provide additional insight into the underlying trends of our business when considered alongside our GAAP results. 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.underarmour.com. 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.underarmour.com With that, thank you for joining us this morning and for your continued interest in Under Armour. 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. i'll now turn the call over to kevin

Speaker 3: 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 at 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, 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 will become even more critical. We are better positioned with Reza'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. Good morning. good morning Thank you, Lance, and welcome everyone. thank you lance and welcome everyone To start, I want to welcome Reza Taleghani to Under Armour. to start i want to welcome reza taleghani to under armour He joined earlier this year as our CFO at an important time for the brand. he joined earlier this year as our cfo at an important time for the brand Reza brings strong capital discipline, financial clarity, and a sharp strategic lens on decision-making. reza brings strong capital discipline financial clarity and a sharp strategic lens on decision-making We are early in this chapter, that impact is already evident in how we define and evaluate our performance metrics and in the way we prioritize across the business. we are early in this chapter 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 will become even more critical. as we move into the next phase of our transformation our operational rigor and financial accountability will become even more critical We are better positioned with Reza's fresh perspective, driving toward a more intentional brand and business with stronger profitability. we are better positioned with reza'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. as we sharpen the way we operate the business we're equally focused on elevating the strength and credibility of our product With that, a big congratulations to Sharon Lokedi for securing her second consecutive Boston Marathon victory in the Under Armour Velociti 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. With that, a big congratulations to Sharon Lokedi for securing her second consecutive Boston Marathon victory in the Under Armour Velociti Elite 3. with that a big congratulations to sharon lokedi for securing her second consecutive boston marathon victory in the under armour velociti elite 3 On one of the most demanding stages in sport, that level of repeat performance is not just impressive, it's definitive. 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. 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. under armour makes pinnacle performance footwear It's now our job to ensure the world knows that too and commercialize that fact. 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. 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 Velociti Pro and Velociti Distance, as well as the balance of our increasingly elevated 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. This includes products like the Velociti Pro and Velociti Distance, as well as the balance of our increasingly elevated line of footwear, where we're consistently applying the concept of less being more. this includes products like the velociti pro and velociti distance as well as the balance of our increasingly elevated line of footwear where we're consistently applying the concept of less being more Intentionality will define this chapter for the brand. 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. 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. 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. that work requires difficult trade-offs We've walked away from certain non-profitable parts of our business. 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. 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 clearer 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 16-24-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. As a result, Under Armour is becoming a more focused, disciplined, and intentional company, which is reflected in our execution. 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. 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 clearer in our position as a podium brand built to outfit athletes from head to toe at the highest levels of competition. we are clearer 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 16-24-year-old team sport athlete, remains our creative anchor while we serve all athletes. our core consumer the 16-24-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 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 Bouncy Tee, launching later this month in APAC and exclusively in the U.S. through Dick's and our own DTC channels, with a major coming online 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. 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. 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. that drumbeat of innovation is already beginning to show up in our product A strong commercial example is the Bouncy Tee, launching later this month in APAC and exclusively in the U.S. through Dick's and our own DTC channels, with a major coming online late summer. a strong commercial example is the bouncy tee launching later this month in apac and exclusively in the u.s through dick's and our own dtc channels with a major coming online late summer It brings premium performance to the most essential item in the athlete's draw, the T-shirt. 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. 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. 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 in 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, 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. 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 in the gym into our consumers' daily lives. 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 in the gym into our consumers' daily lives We wanted a product that would define this versatility for the UA brand. 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, broader metaphor for what you can expect from us going forward and not just making another item. 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 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. 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. this means if you can master the simplest of items with meaningful effortless innovation then we can do anything The $65 Bouncy T 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. Growing our $1 billion-plus footwear business is central to our midterm strategy. 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. The $65 Bouncy T delivers for Friday night wear under a sport coat with the perfect neckline or Saturday morning in the gym. the $65 bouncy t 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. 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. 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. 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. 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. apparel remains the foundation of under armour and one of our greatest competitive advantages Growing our $1 billion-plus footwear business is central to our midterm strategy. growing our $1 billion-plus footwear business is central to our midterm strategy 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. 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. That same discipline is shaping how we manage our broader product portfolio. 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. 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. 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. 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. growing new consumers is a priority for us That mindset extends beyond product and shapes how we operate company-wide. 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. 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. we streamlined into about a dozen sports and activities competing head to toe This focus simplifies our workflow and market approach. 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 2027. After a significant revenue rebase since our fiscal 2025, 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. Expectations are clear, roles defined, and teams are aligned around one goal, making athletes better. 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. 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? 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. that answer must be yes and the impact is already evident Decisions are faster, coordination tighter, execution more consistent. 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 2027. taken together these changes are creating a stronger more disciplined foundation for the business as we enter fiscal 2027 After a significant revenue rebase since our fiscal 2025, particularly in North America, we expect the year ahead to see revenue stabilization in our largest region. after a significant revenue rebase since our fiscal 2025 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. 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. 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. 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. That progress gives us more control than we've had in years and positions us to build a model that can scale over time. 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. 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. 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. 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. we're removing friction and focusing the organization on what drives the brand forward All that being said, we are not improving our bottom line fast enough. 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. while confident in our strategy we will continue to work the mix and prioritize near mid and long-term profitability Consistency blended with agility. consistency blended with agility This is essential to seeing our transformation through. There are no sacred cows, just the lens of what is the best decision for the brand. Execution must tighten. 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 SKUs by 25%. With Kara now in place in her new role as Chief Merchandising Officer, we expect further reductions as we continue to sharpen the assortment. This is essential to seeing our transformation through. this is essential to seeing our transformation through There are no sacred cows, just the lens of what is the best decision for the brand. there are no sacred cows just the lens of what is the best decision for the brand Execution must tighten. execution must tighten We are holding ourselves accountable for accelerating progress. 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. 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. 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 SKUs by 25%. over the past two years we've reduced skus by 25% With Kara now in place in her new role as Chief Merchandising Officer, we expect further reductions as we continue to sharpen the assortment. 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 focused 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. 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. 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. 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 focused 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. the focused 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. i define this as a more focused product-to-brand marketing mix As we really get it right, you shouldn't be able to tell the difference between the two. 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. 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'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 2027, 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 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 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. 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. 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 2027, we do expect to stabilize with revenue down slightly. pulling all of this together as we look ahead to fiscal 2027 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. 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 a 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. 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 is cleaner, product feedback is positive, and engagement with key accounts is strengthening. We are prioritizing revenue quality over volume, strengthening the foundation and positioning the company to return to growth with stronger profitability and a more consistent brand expression. we are prioritizing revenue quality over volume strengthening the foundation and positioning the company to return to growth with stronger profitability and a more consistent brand expression This is not about stepping back. 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. it's about building a more focused disciplined and premium under armour with a stronger right to win in the marketplace While our ambition is to operate as one global brand, the business remains at different stages of evolution across regions today. 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. 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. 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. what we're seeing gives us great confidence Inventory is cleaner, product feedback is positive, and engagement with key accounts is strengthening. inventory is 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 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, organization, and clarity of brand. These are early but important signs that the foundation is moving in the right direction. 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 emea the business remains solid and continues to serve as a stable anchor for the brand In an uncertain environment, our priority there is 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 an uncertain environment our priority there is 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. 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. 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, organization, and clarity of brand. as we do this we're applying the same principles that guide our broader reset focus organization and clarity of brand In fiscal 2027, we expect gross margin to expand approximately 220 basis points-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 million-$160 million. In closing, what you're seeing taking shape is a more intentional and connected Under Armour with focused products, 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. In fiscal 2027, we expect gross margin to expand approximately 220 basis points- 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. in fiscal 2027 we expect gross margin to expand approximately 220 basis points- 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. 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 million-$160 million. all in we expect adjusted operating income to be in the range of $140 million-$160 million In closing, what you're seeing taking shape is a more intentional and connected Under Armour with focused products, more aligned marketing, and improved financial performance, which all reinforce one another. in closing what you're seeing taking shape is a more intentional and connected under armour with focused products 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. over the past two years we've rebuilt important parts of the company with greater clarity discipline and accountability Following the progress we've made in re-engineering our product organization, we are now applying that same focus and lens with rigor to marketing, with the goal of amplifying our product strengths, 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 2027, we are operating from a position of greater strength. 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. Following the progress we've made in re-engineering our product organization, we are now applying that same focus and lens with rigor to marketing, with the goal of amplifying our product strengths, deepening consumer connection, and driving more consistent demand. following the progress we've made in re-engineering our product organization we are now applying that same focus and lens with rigor to marketing with the goal of amplifying our product strengths deepening consumer connection and driving more consistent demand Most importantly, strategy is increasingly driving the decisions across the organization. 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. 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 2027, we are operating from a position of greater strength. in fiscal 2027 we are operating from a position of greater strength 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. 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, 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. With that, I'll turn it over to Reza. Thank you. We've made significant and important progress over the last two years, 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. we've made significant and important progress over the last two years 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 With that, I'll turn it over to Reza. with that i'll turn it over to reza Thank you. thank you

Speaker 7: Thank you. Good morning, everyone. I'll start by thanking Kevin and the board for the opportunity to join Under Armour at such an important time for the brand. It's a company I've long admired. I'm excited to step into this role as we move into the next phase of the transformation. I also want to take a moment to recognize Dave Bergman for his leadership and partnership during this transition. His 21 years with the company and the foundation he's helped build have positioned us well for what comes next. Over the past few months, what has stood out most is the alignment across the organization. The strategy is clear. Priorities are well-defined. There's a strong sense of ownership and accountability across teams. Just as important, there's a clear connection between the strategic choices we are making and how they translate into performance. Thank you. thank you Good morning, everyone. good morning everyone I'll start by thanking Kevin and the board for the opportunity to join Under Armour at such an important time for the brand. i'll start by thanking kevin and the board for the opportunity to join under armour at such an important time for the brand It's a company I've long admired. it's a company i've long admired I'm excited to step into this role as we move into the next phase of the transformation. i'm excited to step into this role as we move into the next phase of the transformation I also want to take a moment to recognize Dave Bergman for his leadership and partnership during this transition. i also want to take a moment to recognize dave bergman for his leadership and partnership during this transition His 21 years with the company and the foundation he's helped build have positioned us well for what comes next. his 21 years with the company and the foundation he's helped build have positioned us well for what comes next Over the past few months, what has stood out most is the alignment across the organization. over the past few months what has stood out most is the alignment across the organization The strategy is clear. the strategy is clear Priorities are well-defined. priorities are well-defined There's a strong sense of ownership and accountability across teams. there's a strong sense of ownership and accountability across teams Just as important, there's a clear connection between the strategic choices we are making and how they translate into performance. just as important there's a clear connection between the strategic choices we are making and how they translate into performance As Kevin outlined, we've spent the past two years executing a reset, simplifying the model, strengthening the brand, and improving execution across the organization. From my perspective, that work is creating a more focused, more controlled, and ultimately more predictable company. My role is to build on that foundation by driving greater financial clarity, consistency, and accountability as we move forward. This is a brand that has been navigating tariffs, softer consumer demand, and supply chain disruption. At the same time, there's a strong sense of control across the organization. I'm excited to strengthen that momentum. As Kevin outlined, in fiscal 2026, we focused on building structure and discipline, and our performance reflects that progress. While we're still early in stabilization, we're beginning to see more consistent execution. With that context, let me turn to our results. Fiscal 2026 brought its share of external pressures, particularly from tariffs. As Kevin outlined, we've spent the past two years executing a reset, simplifying the model, strengthening the brand, and improving execution across the organization. as kevin outlined we've spent the past two years executing a reset simplifying the model strengthening the brand and improving execution across the organization From my perspective, that work is creating a more focused, more controlled, and ultimately more predictable company. from my perspective that work is creating a more focused more controlled and ultimately more predictable company My role is to build on that foundation by driving greater financial clarity, consistency, and accountability as we move forward. my role is to build on that foundation by driving greater financial clarity consistency and accountability as we move forward This is a brand that has been navigating tariffs, softer consumer demand, and supply chain disruption. this is a brand that has been navigating tariffs softer consumer demand and supply chain disruption At the same time, there's a strong sense of control across the organization. at the same time there's a strong sense of control across the organization I'm excited to strengthen that momentum. i'm excited to strengthen that momentum As Kevin outlined, in fiscal 2026, we focused on building structure and discipline, and our performance reflects that progress. as kevin outlined in fiscal 2026 we focused on building structure and discipline and our performance reflects that progress While we're still early in stabilization, we're beginning to see more consistent execution. while we're still early in stabilization we're beginning to see more consistent execution With that context, let me turn to our results. with that context let me turn to our results Fiscal 2026 brought its share of external pressures, particularly from tariffs. fiscal 2026 brought its share of external pressures particularly from tariffs Revenue declined 4% to $5 billion. By region, North America was down 8%, EMEA was up 9%, and APAC declined 5%. Adjusted gross margin declined 220 basis points to 45.7%, primarily driven by higher U.S. tariffs, along with a more promotional second half, partially offset by favorable FX and product mix. Adjusted SG&A decreased 5% to $2.2 billion. Adjusted operating income was $107 million. Adjusted diluted EPS was $0.12. Turning to our fourth quarter results, revenue was down 1% to $1.2 billion. By region, North America revenue declined 7%, primarily due to a decrease in wholesale with a slight decline in our direct-to-consumer business. Revenue declined 4% to $5 billion. revenue declined 4% to $5 billion By region, North America was down 8%, EMEA was up 9%, and APAC declined 5%. by region north america was down 8% emea was up 9% and apac declined 5% Adjusted gross margin declined 220 basis points to 45.7%, primarily driven by higher U.S. tariffs, along with a more promotional second half, partially offset by favorable FX and product mix. Adjusted SG&A decreased 5% to $2.2 billion. adjusted gross margin declined 220 basis points to 45.7% primarily driven by higher u.s tariffs along with a more promotional second half partially offset by favorable fx and product mix. adjusted sg&a decreased 5% to $2.2 billion Adjusted operating income was $107 million. adjusted operating income was $107 million Adjusted diluted EPS was $0.12. adjusted diluted eps was $0.12 Turning to our fourth quarter results, revenue was down 1% to $1.2 billion. turning to our fourth quarter results revenue was down 1% to $1.2 billion By region, North America revenue declined 7%, primarily due to a decrease in wholesale with a slight decline in our direct-to-consumer business. by region north america revenue declined 7% primarily due to a decrease in wholesale with a slight decline in our direct-to-consumer business In EMEA, revenue increased 7% with about 3 points of negative impact coming from shipment timing that shifted from Q4 into Q1. Quarter's results included growth across both wholesale and direct-to-consumer channels. Revenue in EMEA was down 1% constant currency. APAC revenue increased 13% and 8% constant currency with growth in both DTC and wholesale channels. In Latin America, revenue increased 22% or 8% constant currency with strong double-digit growth across both wholesale and direct-to-consumer businesses. From a channel perspective, wholesale revenue declined 3%, driven by a decrease in full price sales, partially offset by distributor growth. Direct-to-consumer revenue increased 5% in the quarter, with 8% growth in our owned and operated stores and flat e-commerce revenue. Licensing revenue increased 11%, driven by strength in our international business. In EMEA, revenue increased 7% with about 3 points of negative impact coming from shipment timing that shifted from Q4 into Q1. in emea revenue increased 7% with about 3 points of negative impact coming from shipment timing that shifted from q4 into q1 Quarter's results included growth across both wholesale and direct-to-consumer channels. quarter's results included growth across both wholesale and direct-to-consumer channels Revenue in EMEA was down 1% constant currency. revenue in emea was down 1% constant currency APAC revenue increased 13% and 8% constant currency with growth in both DTC and wholesale channels. apac revenue increased 13% and 8% constant currency with growth in both dtc and wholesale channels In Latin America, revenue increased 22% or 8% constant currency with strong double-digit growth across both wholesale and direct-to-consumer businesses. in latin america revenue increased 22% or 8% constant currency with strong double-digit growth across both wholesale and direct-to-consumer businesses From a channel perspective, wholesale revenue declined 3%, driven by a decrease in full price sales, partially offset by distributor growth. from a channel perspective wholesale revenue declined 3% driven by a decrease in full price sales partially offset by distributor growth Direct-to-consumer revenue increased 5% in the quarter, with 8% growth in our owned and operated stores and flat e-commerce revenue. direct-to-consumer revenue increased 5% in the quarter with 8% growth in our owned and operated stores and flat e-commerce revenue Licensing revenue increased 11%, driven by strength in our international business. licensing revenue increased 11% driven by strength in our international business By product type, apparel revenue was flat with growth in train, outdoor, and sportswear, offset by softness in run, team sports, and golf. Footwear revenue was also flat with strength in run and team sports, offset by softness in other categories. Accessories revenues increased 2%, driven largely by strength in sportswear and train. Gross margin declined 470 basis points year-over-year to 42% in the fourth quarter. Excluding restructuring efforts, adjusted gross margin declined 360 basis points to 43.1%. This decline was driven by 315 basis points of supply chain headwinds, including roughly 260 basis points of pressure from U.S. tariffs. 90 basis points from increased promotional pressure, particularly in direct-to-consumer as we managed through softer traffic and took proactive steps on inventory. 20 basis points of unfavorable regional mix. By product type, apparel revenue was flat with growth in train, outdoor, and sportswear, offset by softness in run, team sports, and golf. by product type apparel revenue was flat with growth in train outdoor and sportswear offset by softness in run team sports and golf Footwear revenue was also flat with strength in run and team sports, offset by softness in other categories. footwear revenue was also flat with strength in run and team sports offset by softness in other categories Accessories revenues increased 2%, driven largely by strength in sportswear and train. accessories revenues increased 2% driven largely by strength in sportswear and train Gross margin declined 470 basis points year-over-year to 42% in the fourth quarter. gross margin declined 470 basis points year-over-year to 42% in the fourth quarter Excluding restructuring efforts, adjusted gross margin declined 360 basis points to 43.1%. excluding restructuring efforts adjusted gross margin declined 360 basis points to 43.1% This decline was driven by 315 basis points of supply chain headwinds, including roughly 260 basis points of pressure from U.S. tariffs. 90 basis points from increased promotional pressure, particularly in direct-to-consumer as we managed through softer traffic and took proactive steps on inventory. 20 basis points of unfavorable regional mix. this decline was driven by 315 basis points of supply chain headwinds including roughly 260 basis points of pressure from u.s tariffs 90 basis points from increased promotional pressure particularly in direct-to-consumer as we managed through softer traffic and took proactive steps on inventory 20 basis points of unfavorable regional mix These headwinds were partially offset by 65 basis points of favorable foreign currency and channel mix impact. Moving to SG&A expenses, which decreased 15% to $518 million in the fourth quarter, primarily driven by lower marketing spend due to timing shifts, as most of last year's spend was weighted towards the second half. We also saw benefits from lower incentive compensation as well as declines in several other cost areas as we continue to focus on expense management. Excluding $15 million in transformation costs, adjusted SG&A declined 14% to $503 million. Over the past few months, we've conducted a comprehensive review of the business to ensure we are fully capturing the intended benefits. To complete the remaining work, we're initiating a targeted expansion of the plan. These headwinds were partially offset by 65 basis points of favorable foreign currency and channel mix impact. these headwinds were partially offset by 65 basis points of favorable foreign currency and channel mix impact Moving to SG&A expenses, which decreased 15% to $518 million in the fourth quarter, primarily driven by lower marketing spend due to timing shifts, as most of last year's spend was weighted towards the second half. moving to sg&a expenses which decreased 15% to $518 million in the fourth quarter primarily driven by lower marketing spend due to timing shifts as most of last year's spend was weighted towards the second half We also saw benefits from lower incentive compensation as well as declines in several other cost areas as we continue to focus on expense management. we also saw benefits from lower incentive compensation as well as declines in several other cost areas as we continue to focus on expense management Excluding $15 million in transformation costs, adjusted SG&A declined 14% to $503 million. excluding $15 million in transformation costs adjusted sg&a declined 14% to $503 million Over the past few months, we've conducted a comprehensive review of the business to ensure we are fully capturing the intended benefits. over the past few months we've conducted a comprehensive review of the business to ensure we are fully capturing the intended benefits To complete the remaining work, we're initiating a targeted expansion of the plan. to complete the remaining work we're initiating a targeted expansion of the plan This includes incremental costs necessary to deliver the full value of this effort, bringing the total anticipated cost to approximately $305 million. We now expect the plan to be substantially complete by December 31st. Moving down the P&L, we reported a fourth quarter operating loss of $34 million. Excluding transformation expenses and restructuring charges, our adjusted operating income was $3 million. To the bottom line, our diluted loss per share was $0.10. Excluding transformation and restructuring charges, our adjusted diluted loss per share in the fourth quarter was $0.03. On the balance sheet, we ended the year with $915 million in inventory, down 3% year-over-year, reflecting continued discipline as we reshape the business. This includes deliberate actions in the fourth quarter to further reduce inventory, accelerating the reset and positioning us well for fiscal 2027. This includes incremental costs necessary to deliver the full value of this effort, bringing the total anticipated cost to approximately $305 million. this includes incremental costs necessary to deliver the full value of this effort bringing the total anticipated cost to approximately $305 million We now expect the plan to be substantially complete by December 31st. we now expect the plan to be substantially complete by december 31st Moving down the P&L, we reported a fourth quarter operating loss of $34 million. moving down the p&l we reported a fourth quarter operating loss of $34 million Excluding transformation expenses and restructuring charges, our adjusted operating income was $3 million. excluding transformation expenses and restructuring charges our adjusted operating income was $3 million To the bottom line, our diluted loss per share was $0.10. to the bottom line our diluted loss per share was $0.10 Excluding transformation and restructuring charges, our adjusted diluted loss per share in the fourth quarter was $0.03. excluding transformation and restructuring charges our adjusted diluted loss per share in the fourth quarter was $0.03 On the balance sheet, we ended the year with $915 million in inventory, down 3% year-over-year, reflecting continued discipline as we reshape the business. on the balance sheet we ended the year with $915 million in inventory down 3% year-over-year reflecting continued discipline as we reshape the business This includes deliberate actions in the fourth quarter to further reduce inventory, accelerating the reset and positioning us well for fiscal 2027. this includes deliberate actions in the fourth quarter to further reduce inventory accelerating the reset and positioning us well for fiscal 2027 Importantly, this is not just lower inventory, but better inventory with improved quality driven by tighter buys, a more focused assortment, and stronger alignment with demand. We closed the year with $309 million in cash and $605 million in restricted investments, which are set aside to fully cover the principal and interest on our senior notes due this June. With that obligation coming off the books by the end of the quarter, this marks a meaningful step forward in strengthening our balance sheet. We also ended the year with $200 million in borrowings under our revolving credit facility. Looking ahead to our fiscal 2027 outlook, we expect revenue to be down slightly. This includes approximately 1 point of impact from the Curry Brand exit, meaning we would have been roughly flat absent that. Importantly, this is not just lower inventory, but better inventory with improved quality driven by tighter buys, a more focused assortment, and stronger alignment with demand. importantly this is not just lower inventory but better inventory with improved quality driven by tighter buys a more focused assortment and stronger alignment with demand We closed the year with $309 million in cash and $605 million in restricted investments, which are set aside to fully cover the principal and interest on our senior notes due this June. we closed the year with $309 million in cash and $605 million in restricted investments which are set aside to fully cover the principal and interest on our senior notes due this june With that obligation coming off the books by the end of the quarter, this marks a meaningful step forward in strengthening our balance sheet. with that obligation coming off the books by the end of the quarter this marks a meaningful step forward in strengthening our balance sheet We also ended the year with $200 million in borrowings under our revolving credit facility. we also ended the year with $200 million in borrowings under our revolving credit facility Looking ahead to our fiscal 2027 outlook, we expect revenue to be down slightly. looking ahead to our fiscal 2027 outlook we expect revenue to be down slightly This includes approximately 1 point of impact from the Curry Brand exit, meaning we would have been roughly flat absent that. this includes approximately 1 point of impact from the curry brand exit meaning we would have been roughly flat absent that This outlook includes a low single-digit decline in North America, partially offset by low single-digit growth in EMEA and APAC. As Kevin mentioned, this reflects both the dynamic retail environment and deliberate choices we are making to strengthen and protect the brand, including tightening assortments and stepping away from lower value opportunities. Some of these actions may impact near-term volume, they are intentional and aligned with our focus on driving a more profitable, higher quality business over time. For gross margin, we expect expansion of approximately 220 basis points-270 basis points versus last year's gross margin. This outlook assumes a potential refund related to IEEPA tariffs expensed through the P&L in fiscal 2026. This positive impact is expected to contribute roughly 150 basis points, with most of the benefit recognized in the first quarter. This outlook includes a low single-digit decline in North America, partially offset by low single-digit growth in EMEA and APAC. this outlook includes a low single-digit decline in north america partially offset by low single-digit growth in emea and apac As Kevin mentioned, this reflects both the dynamic retail environment and deliberate choices we are making to strengthen and protect the brand, including tightening assortments and stepping away from lower value opportunities. as kevin mentioned this reflects both the dynamic retail environment and deliberate choices we are making to strengthen and protect the brand including tightening assortments and stepping away from lower value opportunities Some of these actions may impact near-term volume, they are intentional and aligned with our focus on driving a more profitable, higher quality business over time. some of these actions may impact near-term volume they are intentional and aligned with our focus on driving a more profitable higher quality business over time For gross margin, we expect expansion of approximately 220 basis points- 270 basis points versus last year's gross margin. for gross margin we expect expansion of approximately 220 basis points- 270 basis points versus last year's gross margin This outlook assumes a potential refund related to IEEPA tariffs expensed through the P&L in fiscal 2026. this outlook assumes a potential refund related to ieepa tariffs expensed through the p&l in fiscal 2026 This positive impact is expected to contribute roughly 150 basis points, with most of the benefit recognized in the first quarter. this positive impact is expected to contribute roughly 150 basis points with most of the benefit recognized in the first quarter Excluding this gross margin improvement reflects pricing actions as we continue to elevate our brand, reduce discounting, and a more favorable channel mix, partially offset by supply chain headwinds related to the Middle East conflict. It also includes an assumption that the current 10% incremental tariffs through July remain at the same level for the rest of fiscal 2027. We expect our adjusted SG&A expenses to increase at a low single-digit rate versus the prior year. This is driven primarily by about 2 points of higher compensation related costs. We normalize against actions we took last year to offset tariff pressures, which resulted in reduced incentive compensation, lower merit increases, and changes in employee benefits. There's also about 1 point from additional marketing investments that we'll be making this year. We'll still be within the 10%-12% of revenue that we've kept to historically. Excluding this gross margin improvement reflects pricing actions as we continue to elevate our brand, reduce discounting, and a more favorable channel mix, partially offset by supply chain headwinds related to the Middle East conflict. excluding this gross margin improvement reflects pricing actions as we continue to elevate our brand reduce discounting and a more favorable channel mix partially offset by supply chain headwinds related to the middle east conflict It also includes an assumption that the current 10% incremental tariffs through July remain at the same level for the rest of fiscal 2027. it also includes an assumption that the current 10% incremental tariffs through july remain at the same level for the rest of fiscal 2027 We expect our adjusted SG&A expenses to increase at a low single-digit rate versus the prior year. we expect our adjusted sg&a expenses to increase at a low single-digit rate versus the prior year This is driven primarily by about 2 points of higher compensation related costs. this is driven primarily by about 2 points of higher compensation related costs We normalize against actions we took last year to offset tariff pressures, which resulted in reduced incentive compensation, lower merit increases, and changes in employee benefits. we normalize against actions we took last year to offset tariff pressures which resulted in reduced incentive compensation lower merit increases and changes in employee benefits There's also about 1 point from additional marketing investments that we'll be making this year. there's also about 1 point from additional marketing investments that we'll be making this year We'll still be within the 10%-12% of revenue that we've kept to historically. we'll still be within the 10%-12% of revenue that we've kept to historically Balance this out as we dig in further on the year ahead, we anticipate that we will find other opportunities for operational improvements. Putting that together and excluding anticipated transformation expenses and restructuring charges, we expect adjusted operating income for fiscal 2027 to be in the range of $140 million-$160 million. This assumes approximately $70 million of benefit from the refund of IEEPA tariffs expensed through the P&L in fiscal 2026. That tariff benefit absorbs approximately $35 million of headwinds that we're seeing related to the Middle East conflict, as well as $30 million in strategic marketing investments to strengthen our brand momentum as we begin to stabilize. Below the operating line, we expect an unusually high GAAP effective tax rate for the year. Balance this out as we dig in further on the year ahead, we anticipate that we will find other opportunities for operational improvements. balance this out as we dig in further on the year ahead we anticipate that we will find other opportunities for operational improvements Putting that together and excluding anticipated transformation expenses and restructuring charges, we expect adjusted operating income for fiscal 2027 to be in the range of $140 million-$160 million. putting that together and excluding anticipated transformation expenses and restructuring charges we expect adjusted operating income for fiscal 2027 to be in the range of $140 million-$160 million This assumes approximately $70 million of benefit from the refund of IEEPA tariffs expensed through the P&L in fiscal 2026. this assumes approximately $70 million of benefit from the refund of ieepa tariffs expensed through the p&l in fiscal 2026 That tariff benefit absorbs approximately $35 million of headwinds that we're seeing related to the Middle East conflict, as well as $30 million in strategic marketing investments to strengthen our brand momentum as we begin to stabilize. that tariff benefit absorbs approximately $35 million of headwinds that we're seeing related to the middle east conflict as well as $30 million in strategic marketing investments to strengthen our brand momentum as we begin to stabilize Below the operating line, we expect an unusually high GAAP effective tax rate for the year. below the operating line we expect an unusually high gaap effective tax rate for the year This is primarily driven by restructuring expenses, which will increase losses in the U.S. and certain international markets where accounting valuation allowances prevent the recognition of related tax benefits. For non-GAAP, we also expect a higher than normal effective tax rate, primarily due to the geographic mix of earnings. We expect taxable profits in most international markets, with losses in some others, which are subject to valuation allowances that negate the related tax benefits. Both GAAP and non-GAAP tax rates are also being impacted by our current level of profitability, where even a modest tax expense can result in higher effective tax rate. As profitability improves in the U.S., we would expect tax rates to normalize over time. All in, this results in full-year adjusted diluted EPS in the range of $0.08-$0.12. This is primarily driven by restructuring expenses, which will increase losses in the U.S. and certain international markets where accounting valuation allowances prevent the recognition of related tax benefits. this is primarily driven by restructuring expenses which will increase losses in the u.s and certain international markets where accounting valuation allowances prevent the recognition of related tax benefits For non-GAAP, we also expect a higher than normal effective tax rate, primarily due to the geographic mix of earnings. for non-gaap we also expect a higher than normal effective tax rate primarily due to the geographic mix of earnings We expect taxable profits in most international markets, with losses in some others, which are subject to valuation allowances that negate the related tax benefits. we expect taxable profits in most international markets with losses in some others which are subject to valuation allowances that negate the related tax benefits Both GAAP and non-GAAP tax rates are also being impacted by our current level of profitability, where even a modest tax expense can result in higher effective tax rate. both gaap and non-gaap tax rates are also being impacted by our current level of profitability where even a modest tax expense can result in higher effective tax rate As profitability improves in the U.S., we would expect tax rates to normalize over time. as profitability improves in the u.s we would expect tax rates to normalize over time All in, this results in full-year adjusted diluted EPS in the range of $0.08-$0.12. all in this results in full-year adjusted diluted eps in the range of $0.08-$0.12 Turning to some color for our first quarter, we expect revenue to decline 2%-3%, driven by an anticipated high single-digit decline in North America, reflecting a challenging retail environment and recent and reset in seasonal wholesale ordering. This will be partially offset by a low teen percentage increase in EMEA, which includes a 3-point benefit from a shift in shipment timing from Q4 into Q1. APAC revenue is expected to be roughly flat. Overall, we expect the first quarter to represent the weakest revenue performance of the year, with growth rates improving progressively through the balance of fiscal 2027. Turning to some color for our first quarter, we expect revenue to decline 2%- 3%, driven by an anticipated high single-digit decline in North America, reflecting a challenging retail environment and recent and reset in seasonal wholesale ordering. turning to some color for our first quarter we expect revenue to decline 2%- 3% driven by an anticipated high single-digit decline in north america reflecting a challenging retail environment and recent and reset in seasonal wholesale ordering This will be partially offset by a low teen percentage increase in EMEA, which includes a 3-point benefit from a shift in shipment timing from Q4 into Q1. this will be partially offset by a low teen percentage increase in emea which includes a 3-point benefit from a shift in shipment timing from q4 into q1 APAC revenue is expected to be roughly flat. apac revenue is expected to be roughly flat Overall, we expect the first quarter to represent the weakest revenue performance of the year, with growth rates improving progressively through the balance of fiscal 2027. overall we expect the first quarter to represent the weakest revenue performance of the year with growth rates improving progressively through the balance of fiscal 2027 Gross margin for the first quarter is expected to increase by 610 basis points-630 basis points, largely due to the assumption of a benefit from IEEPA tariff refunds associated with the expenses that hit the P&L in fiscal 2026, which should contribute about 600 basis points. Excluding this benefit, favorable channel and product mix are expected to offset higher tariff rates currently in effect, supply chain headwinds related to the Middle East conflict, and unfavorable FX and regional mix. Adjusted SG&A expenses in the quarter are expected to increase at a high single-digit rate compared to last year's adjusted SG&A, driven by higher marketing expenses, which should result in first quarter adjusted operating income of $30 million-$40 million on an adjusted diluted EPS of breakeven $0.02. Gross margin for the first quarter is expected to increase by 610 basis points- 630 basis points, largely due to the assumption of a benefit from IEEPA tariff refunds associated with the expenses that hit the P&L in fiscal 2026, which should contribute about 600 basis points. gross margin for the first quarter is expected to increase by 610 basis points- 630 basis points largely due to the assumption of a benefit from ieepa tariff refunds associated with the expenses that hit the p&l in fiscal 2026 which should contribute about 600 basis points Excluding this benefit, favorable channel and product mix are expected to offset higher tariff rates currently in effect, supply chain headwinds related to the Middle East conflict, and unfavorable FX and regional mix. excluding this benefit favorable channel and product mix are expected to offset higher tariff rates currently in effect supply chain headwinds related to the middle east conflict and unfavorable fx and regional mix Adjusted SG&A expenses in the quarter are expected to increase at a high single-digit rate compared to last year's adjusted SG&A, driven by higher marketing expenses, which should result in first quarter adjusted operating income of $30 million- $40 million on an adjusted diluted EPS of breakeven $0.02. adjusted sg&a expenses in the quarter are expected to increase at a high single-digit rate compared to last year's adjusted sg&a driven by higher marketing expenses which should result in first quarter adjusted operating income of $30 million- $40 million on an adjusted diluted eps of breakeven $0.02 In closing, our focus is on continuing to build a more disciplined and predictable financial model grounded in clear priorities and consistent execution. We are aligning our financial framework tightly with our strategy, focusing on improving the quality of revenue, expanding margins, and driving more efficient capital allocation. That includes maintaining strong marketplace discipline, being intentional in where we invest, and ensuring that every dollar supports long-term brand strength and profitability. The opportunity before us is ultimately about building a more focused, higher quality business, one where product, marketing, and financial performance are aligned and where we are better positioned to translate strategy into repeatable results. We've made meaningful progress strengthening the foundation, and while there is more work ahead, we are moving forward with greater clarity, discipline, and control. With that, we'll open the call for questions. In closing, our focus is on continuing to build a more disciplined and predictable financial model grounded in clear priorities and consistent execution. in closing our focus is on continuing to build a more disciplined and predictable financial model grounded in clear priorities and consistent execution We are aligning our financial framework tightly with our strategy, focusing on improving the quality of revenue, expanding margins, and driving more efficient capital allocation. we are aligning our financial framework tightly with our strategy focusing on improving the quality of revenue expanding margins and driving more efficient capital allocation That includes maintaining strong marketplace discipline, being intentional in where we invest, and ensuring that every dollar supports long-term brand strength and profitability. that includes maintaining strong marketplace discipline being intentional in where we invest and ensuring that every dollar supports long-term brand strength and profitability The opportunity before us is ultimately about building a more focused, higher quality business, one where product, marketing, and financial performance are aligned and where we are better positioned to translate strategy into repeatable results. the opportunity before us is ultimately about building a more focused higher quality business one where product marketing and financial performance are aligned and where we are better positioned to translate strategy into repeatable results We've made meaningful progress strengthening the foundation, and while there is more work ahead, we are moving forward with greater clarity, discipline, and control. we've made meaningful progress strengthening the foundation and while there is more work ahead we are moving forward with greater clarity discipline and control With that, we'll open the call for questions. with that we'll open the call for questions

Speaker 5: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at anytime your question has been addressed, and you would like to withdraw your question, please press star then two. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at anytime your question has been addressed, and you would like to withdraw your question, please press star then two. we will now begin the question and answer session. to ask a question, you may press star then one on your touchtone phone. if you are using a speakerphone, please pick up your handset before pressing the keys. if at anytime your question has been addressed, and you would like to withdraw your question, please press star then two Our first question for today will come from Jay Sole with UBS. Please go ahead. Our first question for today will come from Jay Sole with UBS. our first question for today will come from jay sole with ubs Please go ahead. please go ahead

Speaker 2: Great. Thank you so much. Kevin, a question for you. You called for stabilization in fiscal 2027, and your outlook calls for another year of revenue contraction. How are you thinking about a return to top-line growth? Great. great Thank you so much. thank you so much Kevin, a question for you. kevin a question for you You called for stabilization in fiscal 2027, and your outlook calls for another year of revenue contraction. you called for stabilization in fiscal 2027 and your outlook calls for another year of revenue contraction How are you thinking about a return to top-line growth? how are you thinking about a return to top-line growth

Speaker 3: Thanks, Jay. Let me let Reza jump in and sort of break in a little bit here with some tactics, and then let me come on the backside of that. Thanks, Jay. thanks jay Let me let Reza jump in and sort of break in a little bit here with some tactics, and then let me come on the backside of that. let me let reza jump in and sort of break in a little bit here with some tactics and then let me come on the backside of that

Speaker 7: Thanks, Kevin and Jay. Fiscal 2027, it includes a 1-point reduction from the Curry exit that we talked about. We're looking at really the underlying being closer to flat. Recall that stabilization for us is roughly defined as ±1% to 2%. We are in that range. North America, we are expecting down low single digits. EMEA, we're expecting to be up low single digits, and APAC up low single digits. The international markets should be continuing to perform. Thanks, Kevin and Jay. thanks kevin and jay Fiscal 2027, it includes a 1-point reduction from the Curry exit that we talked about. fiscal 2027 it includes a 1-point reduction from the curry exit that we talked about We're looking at really the underlying being closer to flat. we're looking at really the underlying being closer to flat Recall that stabilization for us is roughly defined as ±1% to 2%. recall that stabilization for us is roughly defined as ±1% to 2% We are in that range. we are in that range North America, we are expecting down low single digits. north america we are expecting down low single digits EMEA, we're expecting to be up low single digits, and APAC up low single digits. emea we're expecting to be up low single digits and apac up low single digits The international markets should be continuing to perform. the international markets should be continuing to perform If I'm looking at it for the first quarter specifically, North America is expected to be down about 7%-8%, whereas EMEA is going to be up in the low teens. Some of that is that shift that we talked about from Q4 into Q1, still strong performance overall for EMEA in the quarter. APAC is expected to be roughly flat. Overall for Q1, we're expecting revenues to be down about 2%-3%. Kevin, I'll turn it over to you for the color. If I'm looking at it for the first quarter specifically, North America is expected to be down about 7%-8%, whereas EMEA is going to be up in the low teens. if i'm looking at it for the first quarter specifically north america is expected to be down about 7%-8% whereas emea is going to be up in the low teens Some of that is that shift that we talked about from Q4 into Q1, still strong performance overall for EMEA in the quarter. some of that is that shift that we talked about from q4 into q1 still strong performance overall for emea in the quarter APAC is expected to be roughly flat. apac is expected to be roughly flat Overall for Q1, we're expecting revenues to be down about 2%-3%. overall for q1 we're expecting revenues to be down about 2%-3% Kevin, I'll turn it over to you for the color. kevin i'll turn it over to you for the color

Speaker 3: Yeah. Jay, thanks for the question, and I think it's important for us to ground ourselves in the numbers. I do just wanna mark the fact that we've been targeting after, especially North America, -12% traction and then two years ago to -8%. Looking at that roughly stabilization is something that I think our team has worked incredibly hard for and something that we look to build on. I wanna emphasize that we're focusing and prioritizing the quality of our revenue over the volume, making really deliberate decisions, particularly about our growth and our margins. We expect to accomplish all this by doing much less things, much better. Yeah. yeah Jay, thanks for the question, and I think it's important for us to ground ourselves in the numbers. jay thanks for the question and i think it's important for us to ground ourselves in the numbers I do just wanna mark the fact that we've been targeting after, especially North America, -12% traction and then two years ago to -8%. i do just wanna mark the fact that we've been targeting after especially north america -12% traction and then two years ago to -8% Looking at that roughly stabilization is something that I think our team has worked incredibly hard for and something that we look to build on. looking at that roughly stabilization is something that i think our team has worked incredibly hard for and something that we look to build on I wanna emphasize that we're focusing and prioritizing the quality of our revenue over the volume, making really deliberate decisions, particularly about our growth and our margins. i wanna emphasize that we're focusing and prioritizing the quality of our revenue over the volume making really deliberate decisions particularly about our growth and our margins We expect to accomplish all this by doing m uch less things, much better. we expect to accomplish all this by doing m uch less things much better I've said that a few times, and I hope that theme of intentionality is something that really comes through for the call. By removing this amount of volume from the system, we're reducing the amount of work that our teams have to deal with, our consumers have to digest, our customers have to place in their stores. It's all coming with a very heavy lens of, will this deployment of time, people, or money help us sell more shirts and shoes? We do believe that the inflection point is upon us in fiscal 2027. This is turnaround. We also recognize consistency matters. Our operating model, our go-to-market, none of these things are massively changing. We're also keeping our head on a swivel. I've said that a few times, and I hope that theme of intentionality is something that really comes through for the call. i've said that a few times and i hope that theme of intentionality is something that really comes through for the call By removing this amount of volume from the system, we're reducing the amount of work that our teams have to deal with, our consumers have to digest, our customers have to place in their stores. by removing this amount of volume from the system we're reducing the amount of work that our teams have to deal with our consumers have to digest our customers have to place in their stores It's all coming with a very heavy lens of, will this deployment of time, people, or money help us sell more shirts and shoes? it's all coming with a very heavy lens of will this deployment of time people or money help us sell more shirts and shoes We do believe that the inflection point is upon us in fiscal 2027. we do believe that the inflection point is upon us in fiscal 2027 This is turnaround. this is turnaround We also recognize consistency matters. we also recognize consistency matters Our operating model, our go-to-market, none of these things are massively changing. our operating model our go-to-market none of these things are massively changing We're also keeping our head on a swivel. we're also keeping our head on a swivel Sorry for the sports terms, you know, doing things like implementing a chief merchant and having Kara there who can edit as aggressively as the business calls for. We're now looking to take that same sort of rigor that we've applied across the 25% reduction. We're going deeper than that through the seasons and upcoming seasons that we have in front of us. Applying that rigor to marketing is the next focus that we have. The good news, we have a large nominator, nearly $500 million of marketing dollars in how we think about deploying that money. This is something we believe is an important time of inflection for us to invest for greater sales for the brand. That greater sales will bring greater profitability for us. Sorry for the sports terms, you know, doing things like implementing a chief merchant and having Kara there who can edit as aggressively as the business calls for. sorry for the sports terms you know doing things like implementing a chief merchant and having kara there who can edit as aggressively as the business calls for We're now looking to take that same sort of rigor that we've applied across the 25% reduction. we're now looking to take that same sort of rigor that we've applied across the 25% reduction We're going deeper than that through the seasons and upcoming seasons that we have in front of us. we're going deeper than that through the seasons and upcoming seasons that we have in front of us Applying that rigor to marketing is the next focus that we have. applying that rigor to marketing is the next focus that we have The good news, we have a large nominator, nearly $500 million of marketing dollars in how we think about deploying that money. the good news we have a large nominator nearly $500 million of marketing dollars in how we think about deploying that money This is something we believe is an important time of inflection for us to invest for greater sales for the brand. this is something we believe is an important time of inflection for us to invest for greater sales for the brand That greater sales will bring greater profitability for us. that greater sales will bring greater profitability for us We, we are certainly, again, we are bottom-line focused, but we think it's important we have our storytelling capability and driving behind things 'cause we're not sitting here flat-footed. We have a incredible innovation pipeline coming from things like the Bouncy T I mentioned in my prepared remarks to what we have coming back with fleece and the support we're getting from our partners there, and of course, base layer compression business that we have. The good news about all of this is that we're seeing greater buy-in from our key strategic partners across the world really, in Europe and the JDs and SDIs and El Corte Inglés glasses to right here at home with, you know, the biggest partners that you of course know and are aware of. We, we are certainly, again, we are bottom-line focused, but we think it's important we have our storytelling capability and driving behind things 'cause we're not sitting here flat-footed. we we are certainly again we are bottom-line focused but we think it's important we have our storytelling capability and driving behind things 'cause we're not sitting here flat-footed We have a incredible innovation pipeline coming from things like the Bouncy T I mentioned in my prepared remarks to what we have coming back with fleece and the support we're getting from our partners there, and of course, base layer compression business that we have. we have a incredible innovation pipeline coming from things like the bouncy t i mentioned in my prepared remarks to what we have coming back with fleece and the support we're getting from our partners there and of course base layer compression business that we have The good news about all of this is that we're seeing greater buy-in from our key strategic partners across the world really, in Europe and the JDs and SDIs and El Corte Inglés g lasses to right here at home with, you know, the biggest partners that you of course know and are aware of. the good news about all of this is that we're seeing greater buy-in from our key strategic partners across the world really in europe and the jds and sdis and el corte inglés g lasses to right here at home with you know the biggest partners that you of course know and are aware of We do believe this is an inflection for us, and we look to grow forward from here. We do believe this is an inflection for us, and we look to grow forward from here. we do believe this is an inflection for us and we look to grow forward from here

Speaker 2: Got it. Sounds great. Thank you so much. Got it. got it Sounds great. sounds great Thank you so much. thank you so much

Speaker 3: Thank you, Jay. Thank you, Jay. thank you jay

Speaker 5: Your next question will come from Simeon Siegel with Guggenheim. Please go ahead. Your next question will come from Simeon Siegel with Guggenheim. your next question will come from simeon siegel with guggenheim Please go ahead. please go ahead

Speaker 10: Thanks. Hey, guys. Morning. Kevin, just to follow up on that a little bit. Maybe can you help give us some context around the declines in North America revenue that we're seeing now? Just any call outs in specific categories, partners, price points, broad base, just maybe framing how much of the current declines are the intentional healthier pullbacks versus external. Then just to the point of what we can see in terms of healthier sales, maybe you guys can quantify the gross margin drivers a bit more for 4Q and the specific drivers for 2027 outside of tariffs. Just help us think through costing, pricing, general health metrics that we can see. Then, sorry for wrapping up the already long question, just any help on what all of that should lead for long-term gross margin levels. Thank you. Thanks. thanks Hey, guys. hey guys Morning. morning Kevin, just to follow up on that a little bit. kevin just to follow up on that a little bit Maybe can you help give us some context around the declines in North America revenue that we're seeing now? maybe can you help give us some context around the declines in north america revenue that we're seeing now Just any call outs in specific categories, partners, price points, broad base, just maybe framing how much of the current declines are the intentional healthier pullbacks versus external. just any call outs in specific categories partners price points broad base just maybe framing how much of the current declines are the intentional healthier pullbacks versus external Then just to the point of what we can see in terms of healthier sales, maybe you guys can quantify the gross margin drivers a bit more for 4Q and the specific drivers for 2027 outside of tariffs. then just to the point of what we can see in terms of healthier sales maybe you guys can quantify the gross margin drivers a bit more for 4q and the specific drivers for 2027 outside of tariffs Just help us think through costing, pricing, general health metrics that we can see. just help us think through costing pricing general health metrics that we can see Then, sorry for wrapping up the already long question, just any help on what all of that should lead for long-term gross margin levels. then sorry for wrapping up the already long question just any help on what all of that should lead for long-term gross margin levels Thank you. thank you

Speaker 3: Thank you. Let me kick off and then I'll have Reza kick in. What we're seeing right now is when we talk about stabilization, we recognize Q1 is gonna be the trough force and not the trend, it's a bit of an outlier. The decline that we see reflects some of the softer carryover we had from spring, summer 2026 order books and frankly, a bit of a cautious retail environment. There is a stronger foundation now in place. I mentioned Kara taking over as Chief Merchant and Adam stepping in and filling her shoes with a long time Under Armour vet. We've got zero real transition value with those two experts. Thank you. thank you Let me kick off and then I'll have Reza kick in. let me kick off and then i'll have reza kick in What we're seeing right now is when we talk about stabilization, we recognize Q1 is gonna be the trough force and not the trend, it's a bit of an outlier. what we're seeing right now is when we talk about stabilization we recognize q1 is gonna be the trough force and not the trend it's a bit of an outlier The decline that we see reflects some of the softer carryover we had from spring, summer 2026 order books and frankly, a bit of a cautious retail environment. the decline that we see reflects some of the softer carryover we had from spring summer 2026 order books and frankly a bit of a cautious retail environment There is a stronger foundation now in place. there is a stronger foundation now in place I mentioned Kara taking over as Chief Merchant and Adam stepping in and filling her shoes with a long time Under Armour vet. i mentioned kara taking over as chief merchant and adam stepping in and filling her shoes with a long time under armour vet We've got zero real transition value with those two experts. we've got zero real transition value with those two experts The partner confidence that we're getting, I just wanna emphasize that. We're beginning to see that show up with better reaction in our fall 2026 order books. I can't emphasize enough, particularly here in North America, the trend that we're on, which again was -12%, -8%, and now we're calling flattish. While we are seeing some modesty there, the quality of that revenue, the way they're expecting us, their openness to bringing in new innovations from us is something which is really important. The better products that we have, I think we've made this point on a few calls, which is focusing on our top 10 volume drivers, full price sell-throughs. The good news is we are seeing the trend. The partner confidence that we're getting, I just wanna emphasize that. the partner confidence that we're getting i just wanna emphasize that We're beginning to see that show up with better reaction in our fall 2026 order books. we're beginning to see that show up with better reaction in our fall 2026 order books I can't emphasize enough, particularly here in North America, the trend that we're on, which again was -12%, -8%, and now we're calling flattish. i can't emphasize enough particularly here in north america the trend that we're on which again was -12% -8% and now we're calling flattish While we are seeing some modesty there, the quality of that revenue, the way they're expecting us, their openness to bringing in new innovations from us is something which is really important. while we are seeing some modesty there the quality of that revenue the way they're expecting us their openness to bringing in new innovations from us is something which is really important The better products that we have, I think we've made this point on a few calls, which is focusing on our top 10 volume drivers, full price sell-throughs. the better products that we have i think we've made this point on a few calls which is focusing on our top 10 volume drivers full price sell-throughs The good news is we are seeing the trend. the good news is we are seeing the trend We talk about the trough, I think it's a good way to think about sort of where we've been at this moment, is that looking for the opportunity for us to grow up from here because we're watching awareness grow positively, consideration grow positively. The metrics are also heading in our ways, but we wanna see that translate into full price sales. We wanna see that into growth. We wanna see that into bottom line profitability. While 2027 is a deliberate stabilization year with improving trends beyond just the first quarter, we believe we're positioned really well for sustainable growth in fiscal 2028 and beyond. We talk about the trough, I think it's a good way to think about sort of where we've been at this moment, is that looking for the opportunity for us to grow up from here because we're watching awareness grow positively, consideration grow positively. we talk about the trough i think it's a good way to think about sort of where we've been at this moment is that looking for the opportunity for us to grow up from here because we're watching awareness grow positively consideration grow positively The metrics are also heading in our ways, but we wanna see that translate into full price sales. the metrics are also heading in our ways but we wanna see that translate into full price sales We wanna see that into growth. we wanna see that into growth We wanna see that into bottom line profitability. we wanna see that into bottom line profitability While 2027 is a deliberate stabilization year with improving trends beyond just the first quarter, we believe we're positioned really well for sustainable growth in fiscal 2028 and beyond. while 2027 is a deliberate stabilization year with improving trends beyond just the first quarter we believe we're positioned really well for sustainable growth in fiscal 2028 and beyond

Speaker 7: Let me just step in on the gross margin points that you asked as well. For fiscal 2027, we're guiding around 220 basis points-270 basis points increase or benefit to gross margin. If you back out the fiscal 2026 tariff refund that I talked about, the 150 basis points, that gets you to about +70 basis points to +120 basis points versus 2026. For Q1, you're really gonna see it in Q1, where we're basically looking at 610 basis points-630 basis points versus last year. Gross margin going up. If you back out tariff, that's about 600 basis points of that as well. Let me just step in on the gross margin points that you asked as well. let me just step in on the gross margin points that you asked as well For fiscal 2027, we're guiding around 220 basis points-270 basis points increase or benefit to gross margin. for fiscal 2027 we're guiding around 220 basis points-270 basis points increase or benefit to gross margin If you back out the fiscal 2026 tariff refund that I talked about, the 150 basis points, that gets you to about +70 basis points to +120 basis points versus 2026. if you back out the fiscal 2026 tariff refund that i talked about the 150 basis points that gets you to about +70 basis points to +120 basis points versus 2026 For Q1, you're really gonna see it in Q1, where we're basically looking at 610 basis points-630 basis points versus last year. for q1 you're really gonna see it in q1 where we're basically looking at 610 basis points-630 basis points versus last year Gross margin going up. gross margin going up If you back out tariff, that's about 600 basis points of that as well. if you back out tariff that's about 600 basis points of that as well I think the message around gross margin really is as we're looking at 2027, we're definitely expecting gross margins to not only stabilize, but to improve. Even if you back out the tariff benefits, we're expecting that the strategy around improving, but taking the products that we have and selling them at a full price, some of the channel mix that we have should lead to a benefit in terms of overall gross margins for the brand. I think the message around gross margin really is as we're looking at 2027, we're definitely expecting gross margins to not only stabilize, but to improve. i think the message around gross margin really is as we're looking at 2027 we're definitely expecting gross margins to not only stabilize but to improve Even if you back out the tariff benefits, we're expecting that the strategy around improving, but taking the products that we have and selling them at a full price, some of the channel mix that we have should lead to a benefit in terms of overall gross margins for the brand. even if you back out the tariff benefits we're expecting that the strategy around improving but taking the products that we have and selling them at a full price some of the channel mix that we have should lead to a benefit in terms of overall gross margins for the brand

Speaker 10: Great. Thanks a lot, guys. Best of luck for the year. Great. great Thanks a lot, guys. thanks a lot guys Best of luck for the year. best of luck for the year

Speaker 3: Thank you. Thank you. thank you

Speaker 5: Your next question will come from Peter McGoldrick with Stifel. Please go ahead. Your next question will come from Peter McGoldrick with Stifel. your next question will come from peter mcgoldrick with stifel Please go ahead. please go ahead

Speaker 6: Hey, thanks, guys. I was hoping you could give us more clarity in the quality of sales commentary you shared today. Is this an extension of an evergreen process or have you stepped away from new business specifically for the coming year? If so, can you help us think about how that's embedded in the outlook? Hey, thanks, guys. hey thanks guys I was hoping you could give us more clarity in the quality of sales commentary you shared today. i was hoping you could give us more clarity in the quality of sales commentary you shared today Is this an extension of an evergreen process or have you stepped away from new business specifically for the coming year? is this an extension of an evergreen process or have you stepped away from new business specifically for the coming year If so, can you help us think about how that's embedded in the outlook? if so can you help us think about how that's embedded in the outlook

Speaker 7: Yeah. I wanna take it Kevin, and then you can add obviously, so there's a general theme that we're looking at in terms of the quality of sales. It's one of the things that we saw in Q4. We strategically were looking at basically resetting the year. We talked about reducing the inventory in Q4 on purpose as we started the balance of fiscal 2027. There is a brand elevation strategy that we're pursuing here. As you look at product, you know, Kevin and the team have spent the last couple of years really resetting on the product side, and we have some good product introductions that are coming. If you go to any of our stores, you'll see an elevated product offering already. We are expecting that that will result in benefits as it relates to just pricing. Yeah. I wanna take it Kevin, and then you can add obviously, so there's a general theme that we're looking at in terms of the quality of sales. yeah. i wanna take it kevin, and then you can add obviously, so there's a general theme that we're looking at in terms of the quality of sales It's one of the things that we saw in Q4. it's one of the things that we saw in q4 We strategically were looking at basically resetting the year. we strategically were looking at basically resetting the year We talked about reducing the inventory in Q4 on purpose as we started the balance of fiscal 2027. we talked about reducing the inventory in q4 on purpose as we started the balance of fiscal 2027 There is a brand elevation strategy that we're pursuing here. there is a brand elevation strategy that we're pursuing here As you look at product, you know, Kevin and the team have spent the last couple of years really resetting on the product side, and we have some good product introductions that are coming. as you look at product you know kevin and the team have spent the last couple of years really resetting on the product side and we have some good product introductions that are coming If you go to any of our stores, you'll see an elevated product offering already. if you go to any of our stores you'll see an elevated product offering already We are expecting that that will result in benefits as it relates to just pricing. we are expecting that that will result in benefits as it relates to just pricing It's not pricing for pricing's sake. It's that you have new product that's coming out that is at an elevated price point. That also fits into the distribution strategy that we have, be it wholesale or in our own direct-to-consumer channels as well. There is, as we talk about gross margin improvement, part of that is related to expecting that we're moving more and more to a more elevated product offering that enjoys a higher price point. It's not pricing for pricing's sake. it's not pricing for pricing's sake It's that you have new product that's coming out that is at an elevated price point. it's that you have new product that's coming out that is at an elevated price point That also fits into the distribution strategy that we have, be it wholesale or in our own direct-to-consumer channels as well. that also fits into the distribution strategy that we have be it wholesale or in our own direct-to-consumer channels as well There is, as we talk about gross margin improvement, part of that is related to expecting that we're moving more and more to a more elevated product offering that enjoys a higher price point. there is as we talk about gross margin improvement part of that is related to expecting that we're moving more and more to a more elevated product offering that enjoys a higher price point

Speaker 3: I think we've been talking about this for the last 12 or 14 months, that the thing about tariffs, it actually fits in line with our premiumization for the brand. We'd be doing this anyway. Where we've been aggressive is in some of our top tens that we have replacing, you know, our number 1 apparel item, the Tech Tee, with new innovation will be coming out later this year. Introducing some pinnacle North Star products like Bouncy T that can come in. Again, emphasizing and building around where we already have permission with the consumer to win, things like our base layer and our compression. We're being thoughtful. We don't feel like we're being opportunistic. I think we've been talking about this for the last 12 or 14 months, that the thing about tariffs, it actually fits in line with our premiumization for the brand. i think we've been talking about this for the last 12 or 14 months that the thing about tariffs it actually fits in line with our premiumization for the brand We'd be doing this anyway. we'd be doing this anyway Where we've been aggressive is in some of our top tens that we have replacing, you know, our number 1 apparel item, the Tech Tee, with new innovation will be coming out later this year. where we've been aggressive is in some of our top tens that we have replacing you know our number 1 apparel item the tech tee with new innovation will be coming out later this year Introducing some pinnacle North Star products like Bouncy T that can come in. introducing some pinnacle north star products like bouncy t that can come in Again, emphasizing and building around where we already have permission with the consumer to win, things like our base layer and our compression. again emphasizing and building around where we already have permission with the consumer to win things like our base layer and our compression We're being thoughtful. we're being thoughtful We don't feel like we're being opportunistic. we don't feel like we're being opportunistic We feel like we're being prudent with what the business calls for, and frankly, just getting confident with where we know that we can win and we can excel, and the ability for us to extend from there. We're taking baby steps towards that of having the right product that moves, of course, locking down on field, on pitch, on court, in the gym, first and foremost, and then finding natural ways that this brand can extend beyond those places where the consumer sees us today. We feel like we're being prudent with what the business calls for, and frankly, just getting confident with where we know that we can win and we can excel, and the ability for us to extend from there. we feel like we're being prudent with what the business calls for and frankly just getting confident with where we know that we can win and we can excel and the ability for us to extend from there We're taking baby steps towards that of having the right product that moves, of course, locking down on field, on pitch, on court, in the gym, first and foremost, and then finding natural ways that this brand can extend beyond those places where the consumer sees us today. we're taking baby steps towards that of having the right product that moves of course locking down on field on pitch on court in the gym first and foremost and then finding natural ways that this brand can extend beyond those places where the consumer sees us today

Speaker 6: Excellent. Just a follow-up on that. On DTC quality of sales improvement, that's been a focus for some time. Finally moving in the right direction. Are we now reaching a more normalized promotional environment? On a consolidated basis, how should we think of promotions embedded in the gross margin outlook for fiscal 2027? Excellent. excellent Just a follow-up on that. just a follow-up on that On DTC quality of sales improvement, that's been a focus for some time. on dtc quality of sales improvement that's been a focus for some time Finally moving in the right direction. finally moving in the right direction Are we now reaching a more normalized promotional environment? are we now reaching a more normalized promotional environment On a consolidated basis, how should we think of promotions embedded in the gross margin outlook for fiscal 2027? on a consolidated basis how should we think of promotions embedded in the gross margin outlook for fiscal 2027

Speaker 3: Yeah, I think as it relates to e-com, that's something that we constantly look at. You know, we recently had a marketing summit, one of the proofs we came back with was that if we can improve and grow our e-commerce traffic, it'll take care of everything else in the business. I do think it's a good canary in the coal mine for what's happening out there. Traffic is certainly not brilliant today, it's something that we're, as I say, work the mix. We're looking at different ways that we can really consolidate our line, the offering that we have, and make it get more intentional so the consumer isn't walking into an environment of, "Welcome to Under Armour. We sell a bunch of stuff. Yeah, I think as it relates to e-com, that's something that we constantly look at. yeah i think as it relates to e-com that's something that we constantly look at You know, we recently had a marketing summit, one of the proofs we came back with was that if we can improve and grow our e-commerce traffic, it'll take care of everything else in the business. you know we recently had a marketing summit one of the proofs we came back with was that if we can improve and grow our e-commerce traffic it'll take care of everything else in the business I do think it's a good canary in the coal mine for what's happening out there. i do think it's a good canary in the coal mine for what's happening out there Traffic is certainly not brilliant today, it's something that we're, as I say, work the mix. traffic is certainly not brilliant today it's something that we're as i say work the mix We're looking at different ways that we can really consolidate our line, the offering that we have, and make it get more intentional so the consumer isn't walking into an environment of, "Welcome to Under Armour. we're looking at different ways that we can really consolidate our line the offering that we have and make it get more intentional so the consumer isn't walking into an environment of "welcome to under armour We sell a bunch of stuff. we sell a bunch of stuff What would you like to buy?" Versus, "Here's three great things that you couldn't live without and that only Under Armour could make." Leaning and driving on that. It is the consumer is something that we're watching closely including consumer confidence right now. What would you like to buy?" Versus, "Here's three great things that you couldn't live without and that only Under Armour could make." Leaning and driving on that. what would you like to buy?" versus "here's three great things that you couldn't live without and that only under armour could make." leaning and driving on that It is the consumer is something that we're watching closely including consumer confidence right now. it is the consumer is something that we're watching closely including consumer confidence right now

Speaker 6: Thank you. Thank you. thank you

Speaker 5: The next question will come from Sam Poser with Williams Trading. Please go ahead. The next question will come from Sam Poser with Williams Trading. the next question will come from sam poser with williams trading Please go ahead. please go ahead

Speaker 9: Thank you for taking my questions. I have some technical stuff, and then I have also, I wanted to first start with the brand direction. Like, you guys are one of the few brands out there that support, like, every track and field sport. Can you talk about the sports that you're focusing on, especially after, you know, the victories, the two victories at Boston, and how sort of the reach, you know, how you're thinking about the reach by sport, both individual sport and team sports, and what you're doing across all that? Thank you for taking my questions. thank you for taking my questions I have some technical stuff, and then I have also, I wanted to first start with the brand direction. i have some technical stuff and then i have also i wanted to first start with the brand direction Like, you guys are one of the few brands out there that support, like, every track and field sport. like you guys are one of the few brands out there that support like every track and field sport Can you talk about the sports that you're focusing on, especially after, you know, the victories, the two victories at Boston, and how sort of the reach, you know, how you're thinking about the reach by sport, both individual sport and team sports, and what you're doing across all that? can you talk about the sports that you're focusing on especially after you know the victories the two victories at boston and how sort of the reach you know how you're thinking about the reach by sport both individual sport and team sports and what you're doing across all that

Speaker 3: Sam, let me take the first part of that question. Our sports focus, as I said, we've limited and really culled things down, focusing on the leadership, the decision makers we have in the building so we can be more deliberate, more intentional. I'll probably wear you out with that word, but it's something that we're driving across the business, ensuring that every dollar is driving an ROI return for what we put into it. The 12 categories that we have are the ones that you know, it's, we basically list them out as training, running, and sportswear being our major growth opportunities, all of that underpinned and supported by team sports. Sam, let me take the first part of that question. sam let me take the first part of that question Our sports focus, as I said, we've limited and really culled things down, focusing on the leadership, the decision makers we have in the building so we can be more deliberate, more intentional. our sports focus as i said we've limited and really culled things down focusing on the leadership the decision makers we have in the building so we can be more deliberate more intentional I'll probably wear you out with that word, but it's something that we're driving across the business, ensuring that every dollar is driving an ROI return for what we put into it. i'll probably wear you out with that word but it's something that we're driving across the business ensuring that every dollar is driving an roi return for what we put into it The 12 categories that we have are the ones that you know, it's, we basically list them out as training, running, and sportswear being our major growth opportunities, all of that underpinned and supported by team sports. the 12 categories that we have are the ones that you know it's we basically list them out as training running and sportswear being our major growth opportunities all of that underpinned and supported by team sports You've seen the initiatives we have from a marketing standpoint around flag football, particularly with women as being the articulation of that voice and something that we're driving back toward making sure that authenticity and credibility is something that always screams from Under Armour. You're right, Sharon Lokedi's win is something which is defining for the brand. As I said in my prepared remarks, it's not just a moment, but when you can do that twice, it tells the consumer that in the largest market that we have to compete in from a footwear standpoint, that Under Armour can not only compete, but we can absolutely win. Doing it back-to-back is significant. Sharon, though, is you're not gonna sell a lot of $250 running shorts that we have. You've seen the initiatives we have from a marketing standpoint around flag football, particularly with women as being the articulation of that voice and something that we're driving back toward making sure that authenticity and credibility is something that always screams from Under Armour. you've seen the initiatives we have from a marketing standpoint around flag football particularly with women as being the articulation of that voice and something that we're driving back toward making sure that authenticity and credibility is something that always screams from under armour You're right, Sharon Lokedi's win is something which is defining for the brand. you're right sharon lokedi's win is something which is defining for the brand As I said in my prepared remarks, it's not just a moment, but when you can do that twice, it tells the consumer that in the largest market that we have to compete in from a footwear standpoint, that Under Armour can not only compete, but we can absolutely win. as i said in my prepared remarks it's not just a moment but when you can do that twice it tells the consumer that in the largest market that we have to compete in from a footwear standpoint that under armour can not only compete but we can absolutely win Doing it back-to-back is significant. doing it back-to-back is significant Sharon, though, is you're not gonna sell a lot of $250 running shorts that we have. sharon though is you're not gonna sell a lot of $250 running shorts that we have We have the greatest opportunity for us to be able to build, I think, something more extraordinary for as we bring that out to our Velociti Distance, our Velociti Pro, and get into commercial price points, where we can actually sell and activate with the consumer. The two largest places where the consumer is participating today is we hear you on track and field, and we do support the majority of those sports as helping and supporting some of the 3,000 colleges that Under Armour or sorry, 400+ colleges we have and 3,000+ high schools that we have around the country. These are things that all feed into it. We believe that running is a place that we have permission to win. We have the greatest opportunity for us to be able to build, I think, something more extraordinary for as we bring that out to our Velociti Distance, our Velociti Pro, and get into commercial price points, where we can actually sell and activate with the consumer. we have the greatest opportunity for us to be able to build i think something more extraordinary for as we bring that out to our velociti distance our velociti pro and get into commercial price points where we can actually sell and activate with the consumer The two largest places where the consumer is participating today is we hear you on track and field, and we do support the majority of those sports as helping and supporting some of the 3,000 colleges that Under Armour or sorry, 400+ colleges we have and 3,000+ high schools that we have around the country. the two largest places where the consumer is participating today is we hear you on track and field and we do support the majority of those sports as helping and supporting some of the 3,000 colleges that under armour or sorry 400+ colleges we have and 3,000+ high schools that we have around the country These are things that all feed into it. these are things that all feed into it We believe that running is a place that we have permission to win. we believe that running is a place that we have permission to win We just need to tell the consumer about that and do it in a more articulated way. We just need to tell the consumer about that and do it in a more articulated way. we just need to tell the consumer about that and do it in a more articulated way

Speaker 9: Thank you. You mentioned that the tax rate is gonna be elevated. Can you give us idea of exactly, you know, what that looks like? You know, what tax rate we're looking at? Also, the interest expense line after you pay down the debt, can you give us some idea of what you're assuming there as well, please? Thank you. thank you You mentioned that the tax rate is gonna be elevated. you mentioned that the tax rate is gonna be elevated Can you give us idea of exactly, you know, what that looks like? can you give us idea of exactly you know what that looks like You know, what tax rate we're looking at? you know what tax rate we're looking at Also, the interest expense line after you pay down the debt, can you give us some idea of what you're assuming there as well, please? also the interest expense line after you pay down the debt can you give us some idea of what you're assuming there as well please

Speaker 7: Yep, sure thing. On the tax rate, we're not guiding to a specific ETR number, but I think what you need to know is and what we mentioned on the call, it's basically both on a GAAP and non-GAAP basis. It's really the geography of where the earnings are coming from and the ability to use your deductions against that. While I would tell you if North America starts to return to growth, we're very well positioned in terms of our tax structure. Yep, sure thing. yep sure thing On the tax rate, we're not guiding to a specific ETR number, but I think what you need to know is and what we mentioned on the call, it's basically both on a GAAP and non-GAAP basis. on the tax rate we're not guiding to a specific etr number but i think what you need to know is and what we mentioned on the call it's basically both on a gaap and non-gaap basis It's really the geography of where the earnings are coming from and the ability to use your deductions against that. it's really the geography of where the earnings are coming from and the ability to use your deductions against that While I would tell you if North America starts to return to growth, we're very well positioned in terms of our tax structure. while i would tell you if north america starts to return to growth we're very well positioned in terms of our tax structure When you have basically certain jurisdictions like China and other areas where you have to pay taxes, you're not able to basically use the losses to offset what you have because some of the restructuring expenses that we've taken, it results in a elevated effective tax rate. You know, in under normalized instances, we would be in the high twenties. You know, mid to high twenties is where we would be, but that's not what we're looking at currently. In terms of the interest expense, think of it as basically our debt, once we get past the June payoff and everything. We have basically $400 million of senior notes, and we have $200 million currently drawn under the revolver. When you have basically certain jurisdictions like China and other areas where you have to pay taxes, you're not able to basically use the losses to offset what you have because some of the restructuring expenses that we've taken, it results in a elevated effective tax rate. when you have basically certain jurisdictions like china and other areas where you have to pay taxes you're not able to basically use the losses to offset what you have because some of the restructuring expenses that we've taken it results in a elevated effective tax rate You know, in under normalized instances, we would be in the high twenties. you know in under normalized instances we would be in the high twenties You know, mid to high twenties is where we would be, but that's not what we're looking at currently. you know mid to high twenties is where we would be but that's not what we're looking at currently In terms of the interest expense, think of it as basically our debt, once we get past the June payoff and everything. in terms of the interest expense think of it as basically our debt once we get past the june payoff and everything We have basically $400 million of senior notes, and we have $200 million currently drawn under the revolver. we have basically $400 million of senior notes and we have $200 million currently drawn under the revolver The revolver balances will obviously fluctuate over the course of the year. On a blended basis, you're looking at around 6.5%-6.6% interest expense against that. For modeling purposes, that's where we would guide you. You know, our revolver is priced at SOFR plus 150 basis points. So that's how it comes out on a blended basis. The revolver balances will obviously fluctuate over the course of the year. the revolver balances will obviously fluctuate over the course of the year On a blended basis, you're looking at around 6.5%- 6.6% interest expense against that. on a blended basis you're looking at around 6.5%- 6.6% interest expense against that For modeling purposes, that's where we would guide you. for modeling purposes that's where we would guide you You know, our revolver is priced at SOFR plus 150 basis points. you know our revolver is priced at sofr plus 150 basis points So that's how it comes out on a blended basis. so that's how it comes out on a blended basis

Speaker 9: Thanks. I mean, just I mean, then we could assume that your tax rate in the probably in the first two quarters will be the highest because of the I mean, that's just what it sounds like based on the way. Thanks. thanks I mean, just I mean, then we could assume that your tax rate in the probably in the first two quarters will be the highest because of the I mean, that's just what it sounds like based on the way. i mean just i mean then we could assume that your tax rate in the probably in the first two quarters will be the highest because of the i mean that's just what it sounds like based on the way

Speaker 7: I think that's. I think that's. i think that's

Speaker 9: especially in the first quarter, the way you're guiding. especially in the first quarter, the way you're guiding. especially in the first quarter the way you're guiding

Speaker 7: I think that's a fair assumption. I think that's a fair assumption. i think that's a fair assumption

Speaker 9: Okay. Okay. okay

Speaker 7: it can be lumpy over the as well. Yep. it can be lumpy over the as well. it can be lumpy over the as well Yep. yep

Speaker 9: All right. Thank you very much. All right. all right Thank you very much. thank you very much

Speaker 3: Thank you, Sam. Thank you, Sam. thank you sam

Speaker 5: The next question will come from Bob Drbul with BTIG. Please go ahead. The next question will come from Bob Drbul with BTIG. the next question will come from bob drbul with btig Please go ahead. please go ahead

Speaker 1: Good morning. You know, Reza, congratulations and welcome. I guess the question for you is what are your first impressions as you settle in at Under Armour? I guess the second question I'd like to ask is just, can you guys give some more color on the increased spend in marketing and sort of how your strategy is evolving there? Thanks. Good morning. good morning You know, Reza, congratulations and welcome. you know reza congratulations and welcome I guess the question for you is what are your first impressions as you settle in at Under Armour? i guess the question for you is what are your first impressions as you settle in at under armour I guess the second question I'd like to ask is just, can you guys give some more color on the increased spend in marketing and sort of how your strategy is evolving there? i guess the second question i'd like to ask is just can you guys give some more color on the increased spend in marketing and sort of how your strategy is evolving there Thanks. thanks

Speaker 7: Thank you so much. It's a great question and one that Kevin actually asked me last week when we had a senior leadership meeting that I basically went through this. I'll just give you some inside baseball and what I shared with the management team as well. The first thing that I'll start with is the management team is really impressive. I'm not just saying that because my boss is in the room, but honestly from every layer, whether it's the senior management to the levels below my finance team, I think it's very, very clear in terms of what everybody is focused on. I would tell you and everybody on this call, rest assured that things that are controllable are being controlled. Thank you so much. thank you so much It's a great question and one that Kevin actually asked me last week when we had a senior leadership meeting that I basically went through this. it's a great question and one that kevin actually asked me last week when we had a senior leadership meeting that i basically went through this I'll just give you some inside baseball and what I shared with the management team as well. i'll just give you some inside baseball and what i shared with the management team as well The first thing that I'll start with is the management team is really impressive. the first thing that i'll start with is the management team is really impressive I'm not just saying that because my boss is in the room, but honestly from every layer, whether it's the senior management to the levels below my finance team, I think it's very, very clear in terms of what everybody is focused on. i'm not just saying that because my boss is in the room but honestly from every layer whether it's the senior management to the levels below my finance team i think it's very very clear in terms of what everybody is focused on I would tell you and everybody on this call, rest assured that things that are controllable are being controlled. i would tell you and everybody on this call rest assured that things that are controllable are being controlled We have a clear strategy. We have a clear way forward. Obviously, I have a partner in Kevin who has 30 years of experience in this industry and knows this company intimately. We are mid-journey in turning around the company. Just to overly simplify it, I would tell you guys know that I come from a consumer products background as well, very simplistically, you gotta look at it as revenues are driven. It's product plus brand times marketing equals revenues. The biggest surprise for me is really on product. The product truly is phenomenal. I'm just gonna share with you an example of my daughter, who's literally one of our, you know, aspirational/target consumers, who's 23. We have a clear strategy. we have a clear strategy We have a clear way forward. we have a clear way forward Obviously, I have a partner in Kevin who has 30 years of experience in this industry and knows this company intimately. obviously i have a partner in kevin who has 30 years of experience in this industry and knows this company intimately We are mid-journey in turning around the company. we are mid-journey in turning around the company Just to overly simplify it, I would tell you guys know that I come from a consumer products background as well, very simplistically, you gotta look at it as revenues are driven. just to overly simplify it i would tell you guys know that i come from a consumer products background as well very simplistically you gotta look at it as revenues are driven It's product plus brand times marketing equals revenues. it's product plus brand times marketing equals revenues The biggest surprise for me is really on product. the biggest surprise for me is really on product The product truly is phenomenal. the product truly is phenomenal I'm just gonna share with you an example of my daughter, who's literally one of our, you know, aspirational/target consumers, who's 23. i'm just gonna share with you an example of my daughter who's literally one of our you know aspirational/target consumers who's 23 When I started here, for those of you who haven't been here, we have a phenomenal campus store that's in our headquarters building here in Baltimore. I went down, and obviously I did some shopping for myself, and I did some shopping for my family, and I bought my daughter a Meridian top. If you don't know Meridian, I highly recommend buying some. The Meridian top that I got her, to be fully transparent with you, she was not an Under Armour consumer previously. My son has always been, she wasn't. She tries this top on, again, she is very honest. She basically said, "This is one of the best tops I've ever had. When I started here, for those of you who haven't been here, we have a phenomenal campus store that's in our headquarters building here in Baltimore. when i started here for those of you who haven't been here we have a phenomenal campus store that's in our headquarters building here in baltimore I went down, and obviously I did some shopping for myself, and I did some shopping for my family, and I bought my daughter a Meridian top. i went down and obviously i did some shopping for myself and i did some shopping for my family and i bought my daughter a meridian top If you don't know Meridian, I highly recommend buying some. if you don't know meridian i highly recommend buying some The Meridian top that I got her, to be fully transparent with you, she was not an Under Armour consumer previously. the meridian top that i got her to be fully transparent with you she was not an under armour consumer previously My son has always been, she wasn't. my son has always been she wasn't She tries this top on, again, she is very honest. she tries this top on again she is very honest She basically said, "This is one of the best tops I've ever had. she basically said "this is one of the best tops i've ever had Like, why don't you sell this?" That really comes down to the point here is we really have brand and product. For brand, people want us to win. I can't tell you how many people have reached out and said like, you know, "We really liked Under Armour. We want it to win." Like they I feel like there's really good affinity towards the brand. The product is great. The issue is marketing. I'm looking at that as an example of, you know, you have somebody who looks at something, it wouldn't even think to have gone and purchased that product. I'll just touch on one other thing, and then I'll segue over to Kevin for more detail on the marketing side. Like, why don't you sell this?" That really comes down to the point here is we really have brand and product. like why don't you sell this?" that really comes down to the point here is we really have brand and product For brand, people want us to win. for brand people want us to win I can't tell you how many people have reached out and said like, you know, "We really liked Under Armour. i can't tell you how many people have reached out and said like you know "we really liked under armour We want it to win." Like they I feel like there's really good affinity towards the brand. we want it to win." like they i feel like there's really good affinity towards the brand The product is great. the product is great The issue is marketing. the issue is marketing I'm looking at that as an example of, you know, you have somebody who looks at something, it wouldn't even think to have gone and purchased that product. i'm looking at that as an example of you know you have somebody who looks at something it wouldn't even think to have gone and purchased that product I'll just touch on one other thing, and then I'll segue over to Kevin for more detail on the marketing side. i'll just touch on one other thing and then i'll segue over to kevin for more detail on the marketing side The other thing is, as I come into this role, obviously I bring a fresh perspective. You should just know that we have a huge focus on profitability, like driving profitability. We're scrubbing the cost structure. We're looking at the revenue realities of where we are. We're right-sizing the company for those revenue realities. There's a huge focus and clear strategy in terms of navigating this dynamic environment that we're in right now. Let me turn it over to Kevin to talk about the marketing point. The other thing is, as I come into this role, obviously I bring a fresh perspective. the other thing is as i come into this role obviously i bring a fresh perspective You should just know that we have a huge focus on profitability, like driving profitability. you should just know that we have a huge focus on profitability like driving profitability We're scrubbing the cost structure. we're scrubbing the cost structure We're looking at the revenue realities of where we are. we're looking at the revenue realities of where we are We're right-sizing the company for those revenue realities. we're right-sizing the company for those revenue realities There's a huge focus and clear strategy in terms of navigating this dynamic environment that we're in right now. there's a huge focus and clear strategy in terms of navigating this dynamic environment that we're in right now Let me turn it over to Kevin to talk about the marketing point. let me turn it over to kevin to talk about the marketing point

Speaker 3: Yeah. Thank you, Reza. Absolutely, getting your daughter to know that what we make and how great it is critical. Bob, thank you for the question 'cause this is something's been highly discussed, talked through, contemplated, frankly deliberately decided of what we believe is the right thing for us to take for our business. Let me just take a minute here and sort of go through marketing. We recently did a structural review to identify, you know, how we can drive greater marketing spend synergy because we found ourselves really running three smaller companies with a $3 billion-ish one in America and a $1.2 billion-ish one in Europe and a south of a $1 billion one in APAC that we're looking to grow. We believe that we can get and drive, I think just more competency with the way that we're cutting through to our consumer. Yeah. yeah Thank you, Reza. thank you reza Absolutely, getting your daughter to know that what we make and how great it is critical. absolutely getting your daughter to know that what we make and how great it is critical Bob, thank you for the question 'cause this is something's been h ighly discussed, talked through, contemplated, frankly deliberately decided of what we believe is the right thing for us to take for our business. bob thank you for the question 'cause this is something's been h ighly discussed talked through contemplated frankly deliberately decided of what we believe is the right thing for us to take for our business Let me just take a minute here and sort of go through marketing. let me just take a minute here and sort of go through marketing We recently did a structural review to identify, you know, how we can drive greater marketing spend synergy because we found ourselves really running three smaller companies with a $3 billion-ish one in America and a $1.2 billion-ish one in Europe and a south of a $1 billion one in APAC that we're looking to grow. we recently did a structural review to identify you know how we can drive greater marketing spend synergy because we found ourselves really running three smaller companies with a $3 billion-ish one in america and a $1.2 billion-ish one in europe and a south of a $1 billion one in apac that we're looking to grow We believe that we can get and drive, I think just more competency with the way that we're cutting through to our consumer. we believe that we can get and drive i think just more competency with the way that we're cutting through to our consumer At Under Armour, we like to say that our currency is product, but our voice is overwhelming storytelling, and I don't feel like we've been living up to that. I believe that there's more efficiency in our current, you know, nearly $500 million marketing budget. We align this year though to deploy and spend that additional $30 million, which is, we know something that would be highly scrutinized. To be honest with you, this isn't just us throwing money at something. We believe that this will actually help us drive more efficiency. We wanna better ensure that we can move back to growth in fiscal 2028, and so we think it's an important time for us to do it. There's two places that we're looking to deploy those dollars. At Under Armour, we like to say that our currency is product, but our voice is overwhelming storytelling, and I don't feel like we've been living up to that. at under armour we like to say that our currency is product but our voice is overwhelming storytelling and i don't feel like we've been living up to that I believe that there's more efficiency in our current, you know, nearly $500 million marketing budget. i believe that there's more efficiency in our current you know nearly $500 million marketing budget We align this year though to deploy and spend that additional $30 million, which is, we know something that would be highly scrutinized. we align this year though to deploy and spend that additional $30 million which is we know something that would be highly scrutinized To be honest with you, this isn't just us throwing money at something. to be honest with you this isn't just us throwing money at something We believe that this will actually help us drive more efficiency. we believe that this will actually help us drive more efficiency We wanna better ensure that we can move back to growth in fiscal 2028, and so we think it's an important time for us to do it. we wanna better ensure that we can move back to growth in fiscal 2028 and so we think it's an important time for us to do it There's two places that we're looking to deploy those dollars. there's two places that we're looking to deploy those dollars Number one, this isn't about acquiring, you know, new products or new properties. This is about celebrating the product that we already have. As I mentioned Bouncy, our women's bra program, which is something which is extraordinary with new innovations coming out. HeatGear, ColdGear, Fleece, and making sure the products we have are actually selling through. We have several launches coming later this year as well, as I've said, emphasizing that our innovation pipeline is full, so we wanna make sure that we're not missing that opportunity. I don't believe that we've been as clear as we could be in the past. Secondly, we also wanna make sure that we're paying off the assets where we have spent money. Number one, this isn't about acquiring, you know, new products or new properties. number one this isn't about acquiring you know new products or new properties This is about celebrating the product that we already have. this is about celebrating the product that we already have As I mentioned Bouncy, our women's bra program, which is something which is extraordinary with new innovations coming out. as i mentioned bouncy our women's bra program which is something which is extraordinary with new innovations coming out HeatGear, ColdGear, Fleece, and making sure the products we have are actually selling through. heatgear coldgear fleece and making sure the products we have are actually selling through We have several launches coming later this year as well, as I've said, emphasizing that our innovation pipeline is full, so we wanna make sure that we're not missing that opportunity. we have several launches coming later this year as well as i've said emphasizing that our innovation pipeline is full so we wanna make sure that we're not missing that opportunity I don't believe that we've been as clear as we could be in the past. i don't believe that we've been as clear as we could be in the past Secondly, we also wanna make sure that we're paying off the assets where we have spent money. secondly we also wanna make sure that we're paying off the assets where we have spent money Things like our new partnership with the NFL, the collegiate partnerships and the, you know, 9+ figures that we spend on sports marketing, making sure that we're doing a better job activating that. Where we are now is that we're focused on effectiveness. Doing fewer but better impactful activations, clearer messaging, things that'll help us, frankly, sell more premium shirts and shoes. Everything going through that lens, that discipline. Also being more data-driven with the allocation of every marketing dollar spent and that we're going through and driving a serious ROI as to does this investment make sense to us. Things like our new partnership with the NFL, the collegiate partnerships and the, you know, 9+ figures that we spend on sports marketing, making sure that we're doing a better job activating that. things like our new partnership with the nfl the collegiate partnerships and the you know 9+ figures that we spend on sports marketing making sure that we're doing a better job activating that Where we are now is that we're focused on effectiveness. where we are now is that we're focused on effectiveness Doing fewer but better impactful activations, clearer messaging, things that'll help us, frankly, sell more premium shirts and shoes. doing fewer but better impactful activations clearer messaging things that'll help us frankly sell more premium shirts and shoes Everything going through that lens, that discipline. everything going through that lens that discipline Also being more data-driven with the allocation of every marketing dollar spent and that we're going through and driving a serious ROI as to does this investment make sense to us. also being more data-driven with the allocation of every marketing dollar spent and that we're going through and driving a serious roi as to does this investment make sense to us As I said, I like this construct of, you know, when we're doing it right, we're mostly talking and describing the benefits of what our brand, of what our product does, but through a brand lens of something that matters. This is going to be a targeted investment to strengthen the brand. It'll position our business. As Reza said, it sticks within our current 10%-11%. We agree. We want to focus on SG&A. We want to get SG&A down. We're hyper-aware of that. We're a bit at this moment where we do think it's an inflection. I believe that what you've seen us be able to action so far on the product side, which at this point is mostly just words for you as it begins to come through. As I said, I like this construct of, you know, when we're doing it right, we're mostly talking and describing the benefits of what our brand, of what our product does, but through a brand lens of something that matters. as i said i like this construct of you know when we're doing it right we're mostly talking and describing the benefits of what our brand of what our product does but through a brand lens of something that matters This is going to be a targeted investment to strengthen the brand. this is going to be a targeted investment to strengthen the brand It'll position our business. it'll position our business As Reza said, it sticks within our current 10%-11%. as reza said it sticks within our current 10%-11% We agree. we agree We want to focus on SG&A. we want to focus on sg&a We want to get SG&A down. we want to get sg&a down We're hyper-aware of that. we're hyper-aware of that We're a bit at this moment where we do think it's an inflection. we're a bit at this moment where we do think it's an inflection I believe that what you've seen us be able to action so far on the product side, which at this point is mostly just words for you as it begins to come through. i believe that what you've seen us be able to action so far on the product side which at this point is mostly just words for you as it begins to come through That 25% that we've taken out, the additional cuts that we're making to SKUs, just taking simply volume out of the system, will leave our team in a much, much better place. Maybe I could just leave you as we think about marketing too, is just how we're thinking about the business and, you know, we had recently a two-week summit I described loosely earlier. After that, we brought all of our marketing leaders from APAC, from EMEA, together, and we spent, you know, three or four days here in Baltimore in an on-site, off-site, and we aligned on these four proofs. The first one I've said is, you know, if we can drive more consumer traffic to our website, the overall business will grow. Secondly was this heightened focus that we have on new consumers. That 25% that we've taken out, the additional cuts that we're making to SKUs, just taking simply volume out of the system, will leave our team in a much, much better place. that 25% that we've taken out the additional cuts that we're making to skus just taking simply volume out of the system will leave our team in a much much better place Maybe I could just leave you as we think about marketing too, is just how we're thinking about the business and, you know, we had recently a two-week summit I described loosely earlier. maybe i could just leave you as we think about marketing too is just how we're thinking about the business and you know we had recently a two-week summit i described loosely earlier After that, we brought all of our marketing leaders from APAC, from EMEA, together, and we spent, you know, three or four days here in Baltimore in an on-site, off-site, and we aligned on these four proofs. after that we brought all of our marketing leaders from apac from emea together and we spent you know three or four days here in baltimore in an on-site off-site and we aligned on these four proofs The first one I've said is, you know, if we can drive more consumer traffic to our website, the overall business will grow. the first one i've said is you know if we can drive more consumer traffic to our website the overall business will grow Secondly was this heightened focus that we have on new consumers. secondly was this heightened focus that we have on new consumers I mentioned that in my prepared remarks. Third is the need that we have for the focus on that product to brand marketing. Again, when we're doing it right, you should not be able to tell the difference between the two, and that's what's the brilliance or the cleverness that hopefully you'll be seeing as our marketing. Fourth and finally is aligning on the pooling of more of our marketing dollars together that we're leveraging and creating content here from a global base to say that having to be done exclusively in the regions. Of course, allowing them to translate and make it region or market appropriate, but having just a greater strength here from headquarters as well with a stronger point of view. This brand knows who it is. I mentioned that in my prepared remarks. i mentioned that in my prepared remarks Third is the need that we have for the focus on that product to brand marketing. third is the need that we have for the focus on that product to brand marketing Again, when we're doing it right, you should not be able to tell the difference between the two, and that's what's the brilliance or the cleverness that hopefully you'll be seeing as our marketing. again when we're doing it right you should not be able to tell the difference between the two and that's what's the brilliance or the cleverness that hopefully you'll be seeing as our marketing Fourth and finally is aligning on the pooling of more of our marketing dollars together that we're leveraging and creating content here from a global base to say that having to be done exclusively in the regions. fourth and finally is aligning on the pooling of more of our marketing dollars together that we're leveraging and creating content here from a global base to say that having to be done exclusively in the regions Of course, allowing them to translate and make it region or market appropriate, but having just a greater strength here from headquarters as well with a stronger point of view. of course allowing them to translate and make it region or market appropriate but having just a greater strength here from headquarters as well with a stronger point of view This brand knows who it is. this brand knows who it is We know who a consumer that we're hunting for is as well, and we have incredible empathy for the products that they will choose and desire. We know who a consumer that we're hunting for is as well, and we have incredible empathy for the products that they will choose and desire. we know who a consumer that we're hunting for is as well and we have incredible empathy for the products that they will choose and desire

Speaker 1: Thank you very much, Kevin and Reza. Thank you very much, Kevin and Reza. thank you very much kevin and reza

Speaker 3: Thank you. Thank you. thank you

Speaker 7: Thank you. Thank you. thank you

Speaker 5: Your next question will come from Laurent Vasilescu with BNP Paribas. Please go ahead. Your next question will come from Laurent Vasilescu with BNP Paribas. your next question will come from laurent vasilescu with bnp paribas Please go ahead. please go ahead

Speaker 12: Hi, good morning. This is William Dossett on for Laurent. Thanks for taking our question and also congrats, Reza, on the new role. Hi, good morning. hi good morning This is William Dossett on for Laurent. this is william dossett on for laurent Thanks for taking our question and also congrats, Reza, on the new role. thanks for taking our question and also congrats reza on the new role

Speaker 7: Thank you. Thank you. thank you

Speaker 12: My two questions were with respect to channel and regional performance. In North America, in fiscal 2027, guidance for down low single digits, how should we think about the trajectory of wholesale versus DTC, especially considering that the wholesale partnerships have become increasingly collaborative in recent quarters? On Asia, within the guidance for low single digit growth, can you give us an update on what you're seeing on the ground there, especially in China? Back in February, it was mentioned that there was a stabilization in Asia expected within 12 months. Is that still the base case or are you ahead of that target? My two questions were with respect to channel and regional performance. my two questions were with respect to channel and regional performance In North America, in fiscal 2027, guidance for down low single digits, how should we think about the trajectory of wholesale versus DTC, especially considering that the wholesale partnerships have become increasingly collaborative in recent quarters? in north america in fiscal 2027 guidance for down low single digits how should we think about the trajectory of wholesale versus dtc especially considering that the wholesale partnerships have become increasingly collaborative in recent quarters On Asia, within the guidance for low single digit growth, can you give us an update on what you're seeing on the ground there, especially in China? on asia within the guidance for low single digit growth can you give us an update on what you're seeing on the ground there especially in china Back in February, it was mentioned that there was a stabilization in Asia expected within 12 months. back in february it was mentioned that there was a stabilization in asia expected within 12 months Is that still the base case or are you ahead of that target? is that still the base case or are you ahead of that target

Speaker 7: Why don't I start with that, Kevin, and then you can pick up from maybe the Asia point. The overall in terms of North America, the direct to consumer channels that we're looking at, if I'm thinking about DTC, and really our Factory House stores is what's driving a lot of that, are expected to continue to outperform. In terms of wholesale, we're seeing decent sell-through currently. I think as we're in the sell-in for the further seasons, the early indications are that it is an improving trend. Which is what you're seeing in the numbers that are coming out. If we're looking at it overall, you know, I gave indications around the overall wholesale, not necessarily broken out by region. Why don't I start with that, Kevin, and then you can pick up from maybe the Asia point. why don't i start with that kevin and then you can pick up from maybe the asia point The overall in terms of North America, the direct to consumer channels that we're looking at, if I'm thinking about DTC, and really our Factory House stores is what's driving a lot of that, are expected to continue to outperform. the overall in terms of north america the direct to consumer channels that we're looking at if i'm thinking about dtc and really our factory house stores is what's driving a lot of that are expected to continue to outperform In terms of wholesale, we're seeing decent sell-through currently. in terms of wholesale we're seeing decent sell-through currently I think as we're in the sell-in for the further seasons, the early indications are that it is an improving trend. Which is what you're seeing in the numbers that are coming out. i think as we're in the sell-in for the further seasons the early indications are that it is an improving trend. which is what you're seeing in the numbers that are coming out If we're looking at it overall, you know, I gave indications around the overall wholesale, not necessarily broken out by region. if we're looking at it overall you know i gave indications around the overall wholesale not necessarily broken out by region Our expectation is that wholesale in this year is going to be up, slightly. It'll be flat to up slightly. If I'm looking at direct to consumer specifically, we expect that the Factory House will perform. Let me turn that over to Kevin to talk about the China trends. Our expectation is that wholesale in this year is going to be up, slightly. our expectation is that wholesale in this year is going to be up slightly It'll be flat to up slightly. it'll be flat to up slightly If I'm looking at direct to consumer specifically, we expect that the Factory House will perform. if i'm looking at direct to consumer specifically we expect that the factory house will perform Let me turn that over to Kevin to talk about the China trends. let me turn that over to kevin to talk about the china trends

Speaker 3: Yeah. Laurent, thank you. Let me just back up a little bit on some of that wholesale because we are seeing incredible partnership, where I think some of what, you know, wholesale is seeing from us. DTC plays out real time. Wholesale gets to see some of the trends of where we're going. We are exploring right now deeper partnership, deeper collaboration. And I say collaboration, I mean, literally collabs, with things that will help us premiumize and elevate the brand. Our wholesale must grow, though. It's 60% of our business, something that we're focused on. We know that we have to win there. Yeah. yeah Laurent, thank you. laurent thank you Let me just back up a little bit on some of that wholesale because we are seeing incredible partnership, where I think some of what, you know, wholesale is seeing from us. let me just back up a little bit on some of that wholesale because we are seeing incredible partnership where i think some of what you know wholesale is seeing from us DTC plays out real time. dtc plays out real time Wholesale gets to see some of the trends of where we're going. wholesale gets to see some of the trends of where we're going We are exploring right now deeper partnership, deeper collaboration. we are exploring right now deeper partnership deeper collaboration And I say collaboration, I mean, literally collabs, with things that will help us premiumize and elevate the brand. and i say collaboration i mean literally collabs with things that will help us premiumize and elevate the brand Our wholesale must grow, though. our wholesale must grow though It's 60% of our business, something that we're focused on. it's 60% of our business something that we're focused on We know that we have to win there. we know that we have to win there This is a total execution from A, the right product, B, the right storytelling for the customer on the sell-in to see the way it executes at retail or online in their stores too. We are focused on that full end-to-end throughput that we have as our product goes to market. As it relates to China, Under Armour is in a pretty unique place. We've got a terrific leader across APAC in Simon Pestridge, who is a brand first leader. Simon took on this commercial role probably 18 or 20 months ago. This is a total execution from A, the right product, B, the right storytelling for the customer on the sell-in to see the way it executes at retail or online in their stores too. this is a total execution from a the right product b the right storytelling for the customer on the sell-in to see the way it executes at retail or online in their stores too We are focused on that full end-to-end throughput that we have as our product goes to market. we are focused on that full end-to-end throughput that we have as our product goes to market As it relates to China, Under Armour is in a pretty unique place. as it relates to china under armour is in a pretty unique place We've got a terrific leader across APAC in Simon Pestridge, who is a brand first leader. we've got a terrific leader across apac in simon pestridge who is a brand first leader Simon took on this commercial role probably 18 or 20 months ago. simon took on this commercial role probably 18 or 20 months ago What he's done is basically helped us perform a bit of a flip, where we were incredibly promotional, incredibly discounted, and we did a really great job, so far as we're watching to turn the inflection of that business from, you know, down in the teens where we were a little more than a year ago, to something where we're looking at flattish to, you know, even positive there. The market is not great, meaning the consumer is tough everywhere. You're not having sort of any places where you get a free lunch or an easy ride. I think what we're doing right now is brand right marketing. We've exited or exiting performance marketing, reducing it significantly as we can flip that into brand right marketing. What he's done is basically helped us perform a bit of a flip, where we were incredibly promotional, incredibly discounted, and we did a really great job, so far as we're watching to turn the inflection of that business from, you know, down in the teens where we were a little more than a year ago, to something where we're looking at flattish to, you know, even positive there. what he's done is basically helped us perform a bit of a flip where we were incredibly promotional incredibly discounted and we did a really great job so far as we're watching to turn the inflection of that business from you know down in the teens where we were a little more than a year ago to something where we're looking at flattish to you know even positive there The market is not great, meaning the consumer is tough everywhere. the market is not great meaning the consumer is tough everywhere You're not having sort of any places where you get a free lunch or an easy ride. you're not having sort of any places where you get a free lunch or an easy ride I think what we're doing right now is brand right marketing. i think what we're doing right now is brand right marketing We've exited or exiting performance marketing, reducing it significantly as we can flip that into brand right marketing. we've exited or exiting performance marketing reducing it significantly as we can flip that into brand right marketing That's actually driving and selling a product versus selling a price savings or a discount. We also have a terrific pro there named Carol Chen, who runs the business for us, who is an industry vet, who knows the partners, who knows our franchisees, and is someone who's been critical and a real staple for Simon there as we look in market. For us, you know, we're testing new retail concepts. We're trying new things and working the merchandising mix. I think, you know, China, I don't know if I could compare it to the U.S. I guess I could just say broadly that I don't think there's, as I said, there's no free rides that you get in any market around the world right now. That's actually driving and selling a product versus selling a price savings or a discount. that's actually driving and selling a product versus selling a price savings or a discount We also have a terrific pro there named Carol Chen, who runs the business for us, who is an industry vet, who knows the partners, who knows our franchisees, and is someone who's been critical and a real staple for Simon there as we look in market. we also have a terrific pro there named carol chen who runs the business for us who is an industry vet who knows the partners who knows our franchisees and is someone who's been critical and a real staple for simon there as we look in market For us, you know, we're testing new retail concepts. for us you know we're testing new retail concepts We're trying new things and working the merchandising mix. we're trying new things and working the merchandising mix I think, you know, China, I don't know if I could compare it to the U.S. i think you know china i don't know if i could compare it to the u.s I guess I could just say broadly that I don't think there's, as I said, there's no free rides that you get in any market around the world right now. i guess i could just say broadly that i don't think there's as i said there's no free rides that you get in any market around the world right now It's more competitive, especially with some of the local options they have there in China. Under Armour is certainly holding its own, and we have a great plan for growth there. It's more competitive, especially with some of the local options they have there in China. it's more competitive especially with some of the local options they have there in china Under Armour is certainly holding its own, and we have a great plan for growth there. under armour is certainly holding its own and we have a great plan for growth there

Speaker 12: Thank you very much. Best of luck. Thank you very much. thank you very much Best of luck. best of luck

Speaker 5: The next question will come from Paul Lejuez with Citigroup. Please go ahead. The next question will come from Paul Lejuez with Citigroup. the next question will come from paul lejuez with citigroup Please go ahead. please go ahead

Speaker 11: Thank you. It's Tracy Kogan filling in for Paul. I was hoping you could tell us what your CapEx expectations were for this year, and free cash flow. Then secondly, I was wondering if you've built any benefit from the World Cup into your guidance. Thank you. Thank you. thank you It's Tracy Kogan filling in for Paul. it's tracy kogan filling in for paul I was hoping you could tell us what your CapEx expectations were for this year, and free cash flow. i was hoping you could tell us what your capex expectations were for this year and free cash flow Then secondly, I was wondering if you've built any benefit from the World Cup into your guidance. then secondly i was wondering if you've built any benefit from the world cup into your guidance Thank you. thank you

Speaker 7: With regards to CapEx, I think it'll, it will be similar to what you've seen last year. We're, we're past building our campus here in Baltimore, so that's kind of a more normalized level going forward, I think. In terms of free cash flow, we're expecting free cash flow generation in the year. The expectations are both the core operations as well, as well as some working capital benefit, building in terms of the free cash flow that we'll see this year. We did have some one-timers last year in terms of free cash flow, which you're well aware of in terms of some settlement payments and things like that. Yeah, I mean, I think we expect it to be a good year in terms of overall free cash flow generation, even after CapEx investments. With regards to CapEx, I think it'll, it will be similar to what you've seen last year. with regards to capex i think it'll it will be similar to what you've seen last year We're, we're past building our campus here in Baltimore, so that's kind of a more normalized level going forward, I think. we're we're past building our campus here in baltimore so that's kind of a more normalized level going forward i think In terms of free cash flow, we're expecting free cash flow generation in the year. in terms of free cash flow we're expecting free cash flow generation in the year The expectations are both the core operations as well, as well as some working capital benefit, building in terms of the free cash flow that we'll see this year. the expectations are both the core operations as well as well as some working capital benefit building in terms of the free cash flow that we'll see this year We did have some one-timers last year in terms of free cash flow, which you're well aware of in terms of some settlement payments and things like that. we did have some one-timers last year in terms of free cash flow which you're well aware of in terms of some settlement payments and things like that Yeah, I mean, I think we expect it to be a good year in terms of overall free cash flow generation, even after CapEx investments. yeah i mean i think we expect it to be a good year in terms of overall free cash flow generation even after capex investments What was the second part of the question? Sorry. What was the second part of the question? what was the second part of the question Sorry. sorry

Speaker 11: If you've built any benefit from the World Cup into your guidance. If you've built any benefit from the World Cup into your guidance. if you've built any benefit from the world cup into your guidance

Speaker 7: Not anything that's of particular note. Obviously, we have some assets that we plan to activate during the course of the World Cup, but there isn't anything that would be a one-time that wouldn't be recurring in future years that's outsized. Not anything that's of particular note. not anything that's of particular note Obviously, we have some assets that we plan to activate during the course of the World Cup, but there isn't anything that would be a one-time that wouldn't be recurring in future years that's outsized. obviously we have some assets that we plan to activate during the course of the world cup but there isn't anything that would be a one-time that wouldn't be recurring in future years that's outsized

Speaker 3: Yeah. From a pure market standpoint there, we're gonna have, I think 10 to a dozen players that'll be participating in the World Cup here in the U.S. You know, it's gonna be a period of time. It's one where it's incredibly expensive to get in. Basically, the majority, if not all of our marketing in Europe is built around football. Bringing the beautiful game here to the U.S. is something we're gonna celebrate with a number of our players, like Fermín López and the range that we have, which is extraordinary. We wanna make sure we're supporting some of the players we'll have on the Spanish national team and some of the other national teams. Yeah. yeah From a pure market standpoint there, we're gonna have, I think 10 to a dozen players that'll be participating in the World Cup here in the U.S. from a pure market standpoint there we're gonna have i think 10 to a dozen players that'll be participating in the world cup here in the u.s You know, it's gonna be a period of time. you know it's gonna be a period of time It's one where it's incredibly expensive to get in. it's one where it's incredibly expensive to get in Basically, the majority, if not all of our marketing in Europe is built around football. basically the majority if not all of our marketing in europe is built around football Bringing the beautiful game here to the U.S. is something we're gonna celebrate with a number of our players, like Fermín López and the range that we have, which is extraordinary. bringing the beautiful game here to the u.s is something we're gonna celebrate with a number of our players like fermín lópez and the range that we have which is extraordinary We wanna make sure we're supporting some of the players we'll have on the Spanish national team and some of the other national teams. we wanna make sure we're supporting some of the players we'll have on the spanish national team and some of the other national teams As far as a major play in World Cup, it's something that we wanna make sure that we're understood and played in football, but we wanna definitely take our time and not try to outspend in some place where we think it may be a bit uphill for us. We have a position to win. We're gonna continue to do that through our language in Europe, especially. As far as a major play in World Cup, it's something that we wanna make sure that we're understood and played in football, but we wanna definitely take our time and not try to outspend in some place where we think it may be a bit uphill for us. as far as a major play in world cup it's something that we wanna make sure that we're understood and played in football but we wanna definitely take our time and not try to outspend in some place where we think it may be a bit uphill for us We have a position to win. we have a position to win We're gonna continue to do that through our language in Europe, especially. we're gonna continue to do that through our language in europe especially

Speaker 11: Great. Thank you. Great. great Thank you. thank you

Speaker 5: We'll take our last question from Rick Patel with Raymond James. Please go ahead. We'll take our last question from Rick Patel with Raymond James. we'll take our last question from rick patel with raymond james Please go ahead. please go ahead

Speaker 8: Thanks. Good morning. Congrats, Reza, on the new role. Thanks. thanks Good morning. good morning Congrats, Reza, on the new role. congrats reza on the new role

Speaker 7: Thanks, Rick. Thanks, Rick. thanks rick

Speaker 8: You talked about the e-commerce channel and how if things can do well there, they bode well for the overall business. Can you double-click on the levers you can pull to improve traffic there and what guidance assumes as the year moves forward? As a follow-on, you know, with product, with the product assortment evolving towards brand elevation, how are you thinking about segmentation of newness across D2C versus wholesale channels? You talked about the e-commerce channel and how if things can do well there, they bode well for the overall business. you talked about the e-commerce channel and how if things can do well there they bode well for the overall business Can you double-click on the levers you can pull to improve traffic there and what guidance assumes as the year moves forward? can you double-click on the levers you can pull to improve traffic there and what guidance assumes as the year moves forward As a follow-on, you know, with product, with the product assortment evolving towards brand elevation, how are you thinking about segmentation of newness across D2C versus wholesale channels? as a follow-on you know with product with the product assortment evolving towards brand elevation how are you thinking about segmentation of newness across d2c versus wholesale channels

Speaker 7: Why don't I start with the numbers side of it, and then Kevin can talk to some of the macro points as well. Look, e-commerce is stabilizing after 2026. We are expecting it to improve as the year goes on. There is a bit of a reset that's happening in e-commerce. One of the focuses that Kevin touched on is how we're trying to basically be much more intentional in the way that we present ourselves in the e-commerce channel because that really is the best reflection of the brand. There are changes that you're gonna be seeing, particularly in North America, in terms of how that is. We do expect that to take some time to bear fruit. There is. You're absolutely right. Traffic is challenged in terms of e-commerce overall. Why don't I start with the numbers side of it, and then Kevin can talk to some of the macro points as well. why don't i start with the numbers side of it and then kevin can talk to some of the macro points as well Look, e-commerce is stabilizing after 2026. look e-commerce is stabilizing after 2026 We are expecting it to improve as the year goes on. we are expecting it to improve as the year goes on There is a bit of a reset that's happening in e-commerce. there is a bit of a reset that's happening in e-commerce One of the focuses that Kevin touched on is how we're trying to basically be much more intentional in the way that we present ourselves in the e-commerce channel because that really is the best reflection of the brand. one of the focuses that kevin touched on is how we're trying to basically be much more intentional in the way that we present ourselves in the e-commerce channel because that really is the best reflection of the brand There are changes that you're gonna be seeing, particularly in North America, in terms of how that is. there are changes that you're gonna be seeing particularly in north america in terms of how that is We do expect that to take some time to bear fruit. we do expect that to take some time to bear fruit There is. there is You're absolutely right. you're absolutely right Traffic is challenged in terms of e-commerce overall. traffic is challenged in terms of e-commerce overall What we're cognizant of is not over-investing marketing dollars on performance because to drive unqualified traffic. I don't think that'll have much of a benefit. We wanna make sure that we're executing the brand elevation play we have in e-commerce. To do that, you're gonna start to see from a marketing perspective, a greater mix in terms of what we're doing, both at the brand level, as well as performance to try to do that. I think the bigger point is really from a macro perspective, strategically resetting the presence that we have on e-commerce to make it more brand elevating and to drive higher price points and ASPs. Kevin, I don't know if you wanna add to that. What we're cognizant of is not over-investing marketing dollars on performance because to drive unqualified traffic. what we're cognizant of is not over-investing marketing dollars on performance because to drive unqualified traffic I don't think that'll have much of a benefit. i don't think that'll have much of a benefit We wanna make sure that we're executing the brand elevation play we have in e-commerce. we wanna make sure that we're executing the brand elevation play we have in e-commerce To do that, you're gonna start to see from a marketing perspective, a greater mix in terms of what we're doing, both at the brand level, as well as performance to try to do that. to do that you're gonna start to see from a marketing perspective a greater mix in terms of what we're doing both at the brand level as well as performance to try to do that I think the bigger point is really from a macro perspective, strategically resetting the presence that we have on e-commerce to make it more brand elevating and to drive higher price points and ASPs. i think the bigger point is really from a macro perspective strategically resetting the presence that we have on e-commerce to make it more brand elevating and to drive higher price points and asps Kevin, I don't know if you wanna add to that. kevin i don't know if you wanna add to that

Speaker 3: I think it's good coverage. I think it's good coverage. i think it's good coverage

Speaker 7: Good coverage. Thank you. Good coverage. good coverage Thank you. thank you

Speaker 8: Thanks very much. Thanks very much. thanks very much

Speaker 3: Thanks, Rick. Thanks, Rick. thanks rick

Speaker 5: This will conclude our question and answer session, as well as our conference call for today. Thank you for attending today's presentation. You may now disconnect. This will conclude our question and answer session, as well as our conference call for today. this will conclude our question and answer session as well as our conference call for today Thank you for attending today's presentation. thank you for attending today's presentation You may now disconnect. you may now disconnect