Moody’s Ratings downgraded Under Armour, Inc. on Dec. 4, lowering its corporate family rating (CFR) to B1 from Ba3 and its senior unsecured notes rating to B2 from B1. The outlook was revised to stable from negative, while the company’s speculative grade liquidity rating improved to SGL-2 from SGL-3.
The downgrade reflects Moody’s expectation that Under Armour’s operational turnaround will be more challenging than anticipated due to cautious retailer orders, weak consumer discretionary spending, and higher tariffs. Despite strategic initiatives aimed at elevating the brand and improving margins, the company faces execution risks amid intense competition and prior struggles to restore its brand health.
Moody’s projects Under Armour’s adjusted debt-to-EBITDA ratio to rise to the high-5x range by fiscal year ending March 2026, before declining to low- to mid-3x in FY 2027 as restructuring costs ease and revamped products gain traction. Liquidity improved following the refinancing of $600 million notes due 2026 and strong availability under its $1.1 billion revolving credit facility.
The stable outlook reflects expectations for good liquidity and earnings recovery in FY 2027, though Moody’s warns that sustained weak performance or aggressive financial policies could trigger further downgrades.
