Baltimore — Under Armour is facing renewed scrutiny from investors and analysts as mounting operating losses and an aggressive sponsorship strategy raise concerns about the company’s long-term financial health.
The sportswear maker, once celebrated as a challenger to Nike and Adidas, has struggled to sustain growth amid shifting consumer trends and rising competition. Recent quarterly reports show continued pressure on margins, with operating income turning negative even as revenue modestly improves. Analysts attribute much of the weakness to high marketing and endorsement expenses that have failed to generate consistent returns.
Under Armour has poured hundreds of millions of dollars into sponsorships with athletes, universities, and professional teams — a strategy originally designed to elevate the brand’s visibility. However, several of these deals have become costly commitments with limited payoff. Some analysts say the company’s approach, while ambitious, no longer aligns with its current financial position.
“The brand’s exposure is strong, but the economics are not,” said one retail analyst. “They’re spending as if they’re the dominant player in the market, not a company still trying to stabilize.”
In addition to rising costs, Under Armour faces challenges in re-establishing its identity among consumers. The company’s focus on performance apparel — once its hallmark — has lost traction as competitors lean into lifestyle and athleisure markets. Supply-chain disruptions and shifting demand in North America have also weighed on profitability.
CEO Stephanie Linnartz, who took over to lead a strategic reset, has pledged to simplify operations, improve inventory control, and refocus on core performance products. Still, analysts caution that meaningful recovery will take time and that ongoing sponsorship obligations may continue to strain finances.
Investors are watching closely to see whether Under Armour can adapt to a marketplace increasingly driven by fashion, innovation, and digital engagement. For now, despite modest optimism over restructuring efforts, the company’s balance sheet and sponsorship portfolio remain key sources of concern.
