BALTIMORE — After warning that sharp drops in apparel and footwear sales were looming in the U.S., Under Armour posted a quarterly loss and 10% decrease in revenue Thursday for its most recent quarter.

One analyst called the Baltimore-based sports apparel brand’s performance “dismal.”

“To say Under Armour has started its new fiscal year on a downbeat note would be an understatement,” said Neil Saunders, managing director of GlobalData, in a report Thursday. “Today’s numbers are dismal and reflect a company that is struggling for relevance in a market that has become more unforgiving of merchandising mistakes and brand blunders.”

But Under Armour shares soared as investors appeared encouraged by the progress of a turnaround plan launched after the company brought back founder Kevin Plank as CEO in April. Under Armour’s stock jumped nearly 20% to close at $7.71 per share in Thursday trading.

Under Armour said its results for the three months ending June 30, its fiscal first quarter, came in better than expected, showing progress in a strategy designed to elevate its brand status among consumers.

“We are encouraged by early progress in our efforts to reconstitute a premium positioning for the Under Armour brand,” Plank said in the earnings announcement.

Sharon Zackfia, an analyst with William Blair, noted that the 10% revenue decline was better than an expected drop in the low teens. Gross profit margins also improved beyond expectations as the brand shifted away from discounting, she said in a report.

“While the goal of resetting the brand to a more premium positioning while narrowing the focus to core fundamentals could prove to be a meaningful catalyst over the longer term, the reality is that this will take time to unfold,” Zackfia said.

New product launches stemming from the turnaround, for example, are not expected until the second half of fiscal year 2026.

Plank said the company is benefiting from its strongest product strategy in years along with stronger brand leaders. As Under Armour acquired zero-plastic fashion streetwear designer Unless Collective this week, it tapped that company’s founder, former Adidas executive Eric Liedtke, to lead brand strategy.

Under Armour’s revenue fell 10%, to $1.2 billion, in its fiscal first quarter, with an even sharper drop of 14% in the U.S. International revenue dipped 2%, with strength in Latin America but a 10% decline in Asia-Pacific.

The company posted a loss of $305 million, or 70 cents per share. On an adjusted basis, it said earnings were a penny per share.

Wholesale revenue — which includes sales to retailers — fell 8% to $681 million, while direct-to-consumer sales were down 12% to $480 million. Sales fell 8% in the apparel category, to $758 million, and 15% for footwear, to $310 million.

During a call with analysts Thursday, Plank said he was encouraged by steps to gain recognition as a top sports brand that gives underdogs “a fighting chance to compete.”

The company is working to reduce and better focus its product assortment, get new products to consumers faster and refine marketing to highlight products’ performance advantages. It also expects to elevate the consumer experience, for instance through redesigned company Brand House stores, including a flagship location opening this year at the company’s new global headquarters at Baltimore Peninsula.

Plank said he sees a “tremendous opportunity” to go after the 16- to 24-year-old varsity athlete consumer, both on and off the field, “in an authentic way.”

“I do feel like we’re a company that’s been left more to selling on the logo and the price tag next to it versus articulating the actual depth of story that we have available about each incredible product that we build,” Plank said. “We’re a company that will be spending half a billion dollars on marketing, just last year and this year, and I’m not sure that that’s felt.”

William Blair’s Zackfia said risks include the brand’s ability to maintain a strong image amid intense competition, high turnover rates in senior management and the majority voting control held by Plank.

GlobalData’s Saunders noted that investors were forewarned of the deterioration — “some of which is down to yet another brand reset as the company tries to improve its relevance.”

Because of better-than-expected results, Under Armour raised its operating income outlook for the current fiscal year, despite challenges such as rising ocean freight rates and headwinds in its Asia-Pacific business.

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