Why Under Armour Stock Was Underwater This Week

Written by Eric Volkman for The Motley Fool

This followed an earnings report that disappointed investors.

The company lowered its full-year revenue guidance.

Investors weren't all that eager to try Under Armour's (NYSE:UA) equity on for size these past few days. According to data compiled by S&P Global Market Intelligence, the apparel maker's shares were down in excess of 12% week to date as of Friday before market open. It wasn't hard to determine the key reason why -- an analyst downgraded her recommendation on the stock.

Tuesday morning, Adrienne Yih of Barclays adjusted her takes on several clothing stocks under her coverage. In doing so, she downshifted her Under Armour rating to underweight (read: sell) from equal weight (hold). However, she maintained her price target of $5 per share.

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Yih's move came less than a week after Under Armour reported its first quarter of fiscal 2027 results. For the period, net revenue slipped by 3% year over year to just under $1.1 billion, while net income not under generally accepted accounting principles (non-GAAP, or adjusted), rose to $0.05 per share from $0.02.

Under Armour also lowered its full-year revenue guidance.

According to reports, Yih indicated that the company's relatively long product development cycle likely won't yield major improvements in fundamentals this fiscal year. She also waxed bearish on what she considers a delay in its brand recovery, stiff competition in the athletic apparel segment, and other negative factors.

These days, it feels like Under Armour's burst of popularity on the consumer market was a long time ago. I'm not seeing any buzz about the brand anywhere, and those recent financials aren't particularly encouraging. I think there are more promising stocks in the specialty clothing space just now.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc and Under Armour. The Motley Fool has a disclosure policy.