What was the "momentum trap" that led to Under Armour's financial decline?

The momentum trap refers to the immense pressure the company faced to maintain a streak of twenty-six consecutive quarters with at least 20% revenue growth. To keep this streak alive, the internal culture shifted from product excellence to hitting financial targets at any cost. This led to "pull-forward" sales, where executives convinced retailers to take merchandise early to count those sales in the current quarter, essentially mortgaging the company's future to save its present.

Why is Under Armour intentionally shrinking its product line and revenue goals?

Under founder Kevin Plank’s "brand reset," the company is focusing on "quality over quantity" to restore its premium status. By reducing its total product styles (SKUs) by 25%, Under Armour aims to exit "promotional prisons" where excess inventory forced constant discounting. The goal is to sell fewer items at higher price points, focusing on core performance categories like football, training, and running rather than trying to be a lifestyle brand for everyone.

How can the company report a $431 million loss while claiming an adjusted profit?

The massive $431 million GAAP loss includes significant "special items" and "accounting noise" related to the company’s restructuring. This includes nearly $100 million for litigation reserves to settle shareholder lawsuits, $95 million to spin off the Curry Brand, and various layoff and asset impairment costs. When these one-time "surgery" costs are stripped away, the core business actually achieved a positive adjusted operating result of $26 million.

What are the primary external challenges facing the brand's turnaround?

Even as Under Armour tries to fix its internal issues, it faces significant external headwinds, most notably new tariffs that are expected to create a $100 million "sinkhole" in profits. Additionally, the brand faces a "trust deficit" in North America, where consumers have been trained to wait for sales. While international regions like EMEA are growing, the North American market—which accounts for over 50% of revenue—continues to struggle with declining wholesale orders and a loss of "brand heat" compared to newer competitors like Hoka and On.

Under Armour's Downfall and the Struggle to Reset

29 min

29 sources

Mar 25, 2026

Business Leadership Entrepreneurship

Under Armour was once the next Nike, but sales are sliding. We explore why the brand lost its cool and if a founder-led turnaround can save it.

Best quote from Under Armour's Downfall and the Struggle to Reset

Under Armour’s downfall wasn't caused by a lack of good products; it was caused by a lack of integrity in their business model. They chased a 20% growth streak that was unsustainable, and they used increasingly desperate measures to keep it alive.

This audio lesson was created by a BeFreed community member

Input question

The downfall of under Armour

Host voices

Eli

Nia

Learning style

Deep

Knowledge sources

Frequently Asked Questions

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"Reading used to feel like a chore. Now it’s just part of my lifestyle."

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"Feels effortless compared to reading. I’ve finished 6 books this month already."

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Under Armour's Downfall and the Struggle to Reset

29 min

29 sources

Mar 25, 2026

Business Leadership Entrepreneurship

Under Armour was once the next Nike, but sales are sliding. We explore why the brand lost its cool and if a founder-led turnaround can save it.

Best quote from Under Armour's Downfall and the Struggle to Reset

Under Armour’s downfall wasn't caused by a lack of good products; it was caused by a lack of integrity in their business model. They chased a 20% growth streak that was unsustainable, and they used increasingly desperate measures to keep it alive.

Key Takeaways

The Fall of the Next Nike

0:00

Eli: You know, I was looking at the sports world today, and it’s wild how quickly the "next Nike" can hit a wall. I mean, Under Armour used to be the untouchable underdog, but now they’re facing a massive 5% sales drop and a net loss that just widened to over $430 million.

0:17

Nia: It’s a total "state of the union" crisis, Eli. Their North American business—the heart of the brand—is down 10% this past quarter. While they’re seeing some growth in places like EMEA and Latin America, it’s just not enough to offset the decline at home.

0:32

Eli: Right, and it’s not just about fewer people buying shirts. They’re dealing with a 310 basis point hit to their gross margin from things like higher tariffs and huge litigation reserves.

0:43

Nia: Exactly. Even with founder Kevin Plank back as CEO, they’re navigating what he calls the "most challenging phase" of a total brand reset. So, let’s dive into how they ended up in this restructuring spiral and what it means for their future.

The Momentum Trap and the Twenty Percent Streak

The Financial Architecture of a Turnaround

The Regional Tug of War

The Product Pivot and the Battle for "Cool"

The Shadow of the Past: Legal and Ethical Hurdles

The Founder’s Return: Hero or Hazard?

The Investor’s Dilemma: Bottoming Out or Falling Further?

Practical Playbook: Lessons from the Under Armour "Reset"

Closing Reflection and Wrap-Up

This audio lesson was created by a BeFreed community member

Input question

The downfall of under Armour

Host voices

Eli

Nia

Learning style

Deep

Knowledge sources

Frequently Asked Questions

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"Reading used to feel like a chore. Now it’s just part of my lifestyle."

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@djmikemoore

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@OojasSalunke

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From Columbia University alumni built in San Francisco

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See more on how BeFreed is discussed across the web

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

483

"Makes me feel smarter every time before going to work"

@Cashflowbubu

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

201

"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

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"Makes me feel smarter every time before going to work"

@Cashflowbubu

"Instead of endless scrolling, I just hit play on BeFreed. It saves me so much time."

@Moemenn

"I never knew where to start with nonfiction—BeFreed’s book lists turned into podcasts gave me a clear path."

@Chloe, Solo founder, LA

117

"Perfect balance between learning and entertainment. Finished ‘Thinking, Fast and Slow’ on my commute this week."

@Raaaaaachelw

"Crazy how much I learned while walking the dog. BeFreed = small habits → big gains."

@Matt, YC alum

108

"Reading used to feel like a chore. Now it’s just part of my lifestyle."

@Erin, Investment Banking Associate , NYC

254

"Feels effortless compared to reading. I’ve finished 6 books this month already."

@djmikemoore

"BeFreed turned my guilty doomscrolling into something that feels productive and inspiring."

@Pitiful

4.5K

"BeFreed turned my commute into learning time. 20-min podcasts are perfect for finishing books I never had time for."

@SofiaP

"BeFreed replaced my podcast queue. Imagine Spotify for books — that’s it. 🙌"

@Jaded_Falcon

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"It is great for me to learn something from the book without reading it."

@OojasSalunke

"The themed book list podcasts help me connect ideas across authors—like a guided audio journey."

@Leo, Law Student, UPenn

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"Makes me feel smarter every time before going to work"

@Cashflowbubu

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