Episode summary
Under Armour Sinks as Tariffs, Sputtering Sales Hit Outlook | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Lisa Mateo, Isabelle Lee · Guests: Poonam Goyal, Michael Halen, Mandeep Singh, Tom Orlik
Summary
Under Armour’s weaker outlook set the tone for a run of company-specific warnings tied to promotions, tariffs, and consumer caution. The analyst said Under Armour’s turnaround is being delayed by a $100 million tariff hit, a tougher promotional backdrop, and a likely mid- to high-single-digit sales decline next quarter, with North America potentially down low double digits. She argued that premium product launches can help, but changing customer perception will take time.
Wendy’s also faced pressure after cutting full-year guidance and posting a bigger-than-expected quarterly drop. The analyst said the problem is largely self-inflicted: too many promotions, confusing marketing, and weak execution in operations and breakfast. He argued Wendy’s needs to fix speed of service and consistency before leaning back into menu innovation or collaborations.
On tech, the analyst said Meta’s $29 billion data-center financing and SoftBank’s move to buy Foxconn’s Ohio plant reflect the scale of AI infrastructure spending and the need for external partners. Separately, the economist argued the natural rate of interest is rising because savings are shrinking and investment demand is increasing, with 10-year Treasury yields around 4.5% as the new normal.
Key takeaways
- The analyst said Under Armour expects a $100 million tariff cost hit and could see North America sales fall 14% to 16%.
- Wendy’s problems were described as mostly self-inflicted, driven by too many promotions and weaker restaurant operations.
- The analyst said Wendy’s breakfast push has been a drag because breakfast demand is slipping and execution has been poor.
- Meta’s $29 billion data-center financing was framed as evidence that AI infrastructure spending is becoming too large to fund entirely in-house.
- The economist said the natural rate of interest has shifted higher, with 10-year Treasury yields likely settling around 4.5% over time.
Notable quotes
“We have a $100 million impact on their cost from tariffs that they're expecting”
“So, the turnaround isn't shaping up like we expected and I just think it needs a lot more time right now”
“so this is primarily self-inflicted, you know, restaurant consumers are spending money”
“so that's why we're seeing this huge bifurcation and there's a a widening gap between winners and losers”
How the episode opens
Bloomberg Audio Studios podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern
On Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Back to earnings.
Under Arour shares, let's take a look. They are down 18%. Uh they forecast worse than expected sales and profit for the current quarter.
Here to break it all down for us is Punam Goyle, senior US e-commerce and retail analyst at Bloomberg Intelligence. Punam, thanks for coming out this morning. Um so weren't they just I'm confused because wasn't Under Armour just starting to to make this turnaround planned?
Yeah, you know, we've we've seen Under Armour make several attempts at a turnaround in the last decade. So this is another attempt and they do have the right pillars in place. you know, focusing on brand equity, focusing on full price sales.
The issue is that the macro is not cooperating. We have a $100 million impact on their cost from tariffs that they're expecting. We're seeing that they want to push full price in an environment where promotions are picking up.
So, that's going to cost them sales. Net net, basically that means that sales are going to be down mid to high single digits in the next fiscal quarter. and North America, which you know is a clear key region for them, could be down low double digits.
So, the turnaround isn't shaping up like we expected and I just think it needs a lot more time right now.
That is actually what caught my eye too, the weak North America outlook. I think they're forecasting a 14% to 16% drop in North America sales, which is massive.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- under armour earnings outlook
- wendy's sales guidance
- meta data center financing
- softbank foxconn stargate with openai and oracle
- natural rate of interest
Companies and tickers mentioned
- UA
- UAA
- WEN
- META
- OWL
- SFTBY
- ORCL
- Under Armour
- Wendy's
- Meta Platforms Inc.
- Pacific Investment Management Co.
- Blue Owl Capital Inc.
- SoftBank Group Corp.
- Foxconn Technology Group
- OpenAI
- Oracle Corp.
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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