UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

For the quarterly period ended JuneSeptember 30, 2010

or

For the transition period from              to             

Commission File No. 001-33202

UNDER ARMOUR, INC.

(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of JulyOctober 31, 2010, there were 38,403,67338,496,515 shares of Class A Common Stock and 12,500,000 shares of Class B Convertible Common Stock outstanding.

UNDER ARMOUR, INC.

JuneSEPTEMBER 30, 2010

INDEX TO FORM 10-Q

PART I. FINANCIAL INFORMATION

Under Armour, Inc. and Subsidiaries

Unaudited Consolidated Balance Sheets

(In thousands, except share data)

See accompanying notes.

1

Under Armour, Inc. and Subsidiaries

Unaudited Consolidated Statements of Income

(In thousands, except per share amounts)

See accompanying notes.

2

Under Armour, Inc. and Subsidiaries

Unaudited Consolidated Statements of Stockholders’ Equity and Comprehensive Income

(In thousands)

See accompanying notes.

Under Armour, Inc. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

(In thousands)

See accompanying notes.

3

Under Armour, Inc. and Subsidiaries

Notes to the Unaudited Consolidated Financial Statements

1. Description of the Business

Under Armour, Inc. is a developer, marketer and distributor of branded performance apparel, footwear and accessories. These products are sold worldwide and worn by athletes at all levels, from youth to professional on playing fields around the globe, as well as by consumers with active lifestyles.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Under Armour, Inc. and its wholly owned subsidiaries (the “Company”). Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America for interim consolidated financial statements. In the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair presentationstatement of the financial position and results of operations were included. All intercompany balances and transactions were eliminated. The consolidated balance sheet as of December 31, 2009 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2009 (the “2009 Form 10-K”), which should be read in conjunction with these consolidated financial statements. The results for the three and sixnine months ended JuneSeptember 30, 2010 are not necessarily indicative of the results to be expected for the year ending December 31, 2010 or any other portions thereof.

Concentration of Credit Risk

Financial instruments that subject the Company to a significant concentration of credit risk consist primarily of accounts receivable. The majority of the Company’s accounts receivable are due from large sporting goods retailers. Credit is extended based on an evaluation of the customer’s financial condition, and generally collateral is not required. The most significant customers that accounted for a large portion of net revenues and accounts receivable were as follows:

Allowance for Doubtful Accounts

As of JuneSeptember 30, 2010, December 31, 2009 and JuneSeptember 30, 2009, the allowance for doubtful accounts was $4.8$4.6 million, $5.2 million and $4.8$5.5 million, respectively.

Sales Returns, Allowances, Markdowns and Discounts

The Company records reductions to revenue for estimated customer returns, allowances, markdowns and discounts. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns and markdowns. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from the Company’s estimates. If the Company determined that actual or expected returns or allowances were significantly greaterhigher or lower than the reserves it had established, it would record a decrease or an increase, as appropriate, to net sales in the period in which the Company made such a determination. Provisions for customer specific discounts based on contractual obligations with certain major customers are recorded as reductions to net sales.

Reserves for returns and allowances are recorded as offsets to accounts receivable as settlements are made through offsets to outstanding customer invoices. Beginning in the first quarter of 2010, reserves for markdowns and discounts earned by customers in the period have been recorded as offsets to accounts receivable as settlements are made through

offsets to outstanding customer invoices. In prior periods, the majority of these amounts were recorded as accrued expenses as settlements were made through cash disbursements. As of JuneSeptember 30, 2010, there were $7.7$8.7 million in customer markdowns and discounts recorded as offsets to accounts receivable, and no amounts were recorded as accrued expenses. As of December 31, 2009 and JuneSeptember 30, 2009, there were no significant customer markdowns or discounts recorded as offsets to accounts receivable, and $6.9 million and $7.4$6.4 million were recorded as accrued expenses, respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.

Assessing the realizability of deferred tax assets requires significant judgment. The Company recorded $2.6 millionconsiders all available positive and $1.0 millionnegative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company’s deferred tax assets, which increase income tax expense forin the three months ended June 30, 2010 and 2009, respectively, and $7.8 million and $4.1 million of income tax expense for the six months ended June 30, 2010 and 2009, respectively. The effective rates for income taxes were 42.3% and 43.1% for the six months ended June 30, 2010 and 2009, respectively. The effective tax rate for the six months ended June 30, 2010 was lower than the effective tax rate for the six months ended June 30, 2009 primarily due to decreased losses in foreign subsidiaries and certain tax strategies implemented by the Company in 2010. The Company’s annual 2010 effective tax rateperiod when such a determination is expected to be improved from its 2009 annual effective tax rate of 43.2% due to the drivers noted above.made.

Shipping and Handling Costs

The Company charges certain customers shipping and handling fees. These fees are recorded in net revenues. Outbound freight costs associated with shipping goods to customers are recorded as cost of goods sold. The Company includes the majority of outbound handling costs as a component of selling, general and administrative expenses. Outbound handling costs include internal costs associated with preparing goods to ship to customers and certain costs to operate the Company’s distribution facilities. These costs, included within selling, general and administrative expenses, were $3.4$5.0 million and $2.4$3.1 million for the three months ended JuneSeptember 30, 2010 and 2009, respectively, and $7.0$12.0 million and $4.8$7.9 million for the sixnine months ended JuneSeptember 30, 2010 and 2009, respectively.

Management Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, including estimates relating to assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Recently Adopted Accounting Standards

In June 2009, the Financial Accounting Standards Board issued an amendment to the accounting and disclosure requirements for the consolidation of variable interest entities (“VIEs”). This amendment requires an enterprise to perform a qualitative analysis when determining whether or not it must consolidate a VIE. The amendment also requires an enterprise to continuously reassess whether it must consolidate a VIE. Finally, an enterprise will be required to disclose significant judgments and assumptions used to determine whether or not to consolidate a VIE. This amendment iswas effective for financial statements issued for annual periods beginning after November 15, 2009, and for interim periods within the first annual period. The adoption of this amendment in the first quarter of 2010 did not have any impact on the Company’s consolidated financial statements.

Reclassifications

Outbound freight costs associated with shipping goods of $2.0$2.4 million and $4.7$7.1 million included in selling, general and administrative expenses for the three and sixnine months ended JuneSeptember 30, 2009, respectively, were reclassified to cost of goods sold to conform to the presentation for the three and sixnine months ended JuneSeptember 30, 2010. In addition, costs of $1.4$1.7 million and $2.8$4.5 million associated with the Company’s sourcing offices and Special Make-Up Shop included in cost of goods sold for the three and sixnine months ended JuneSeptember 30, 2009, respectively, were reclassified to selling, general and administrative expenses to conform to the presentation for the three and sixnine months ended JuneSeptember 30, 2010. The Company began reclassifying these amounts in the first quarter of 2010 and believes these changes were appropriate given its view that cost of goods sold should primarily include product costs which are variable in nature. In addition, these reclassifications will more closely align with the way the Company manages its business.

3. Inventories, Net

Inventories consisted of the following:

4. Revolving Credit Facility and Long Term Debt

Revolving Credit Facility

The Company has a revolving credit facility with certain lending institutions. The revolving credit facility has a term of three years, expiring in January 2012, and provides for a committed revolving credit line of up to $200.0 million based on the Company’s qualified domestic inventory and accounts receivable balances. The commitment amount under the revolving credit facility may be increased by an additional $50.0 million, subject to certain conditions and approvals perunder the credit agreement.

The revolving credit facility may be used for working capital and general corporate purposes. It is collateralized by substantially all of the assets of the Company and its domestic subsidiaries (other than the Company’s trademarks), and by a pledge of 65% of the equity interests of certain of the Company’s foreign subsidiaries. Up to $5.0 million of the revolving credit facility may be used to support letters of credit, of which $3.5 million wasno amounts were outstanding as of JuneSeptember 30, 2010. The Company must maintain a certain leverage ratio and fixed charge coverage ratio as defined in the credit agreement. As of JuneSeptember 30, 2010, the Company was in compliance with these financial covenants. The revolving credit facility also provides the lenders with the ability to reduce the borrowing base, even if the Company is in compliance with all conditions of the revolving credit facility, upon a material adverse change to the business, properties, assets, financial condition or results of operations of the Company. The revolving credit facility contains a number of restrictions that limit the Company’s ability, among other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge its assets as security, guaranty obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets, or materially change its line of business. In addition, the revolving credit facility includes a cross default provision whereby an event of default under other debt obligations, as defined in the credit agreement, will be considered an event of default under this credit agreement.

Borrowings under the revolving credit facility bear interest based on the daily balance outstanding at a LIBOR rate option (with LIBOR subject to a rate floor of 1.25%) plus an applicable margin (varying from 2.0% to 2.5%) or, in certain cases at the Company’s discretion, a base rate option (based on the prime rate or as otherwise specified in the credit agreement, with the base rate subject to a rate floor of 2.25%) plus an applicable margin (varying from 1.0% to 1.5%). The revolving credit facility also carries a commitment fee varying from 0.38% to 0.5% of the committed line amount less outstanding borrowings and letters of credit. The applicable margins are calculated quarterly and vary based on the Company’s leverage ratio as defined in the credit agreement.

Prior to entering into the revolving credit facility in January 2009, the Company terminated its prior $100.0 million revolving credit facility. In conjunction with the termination of the prior revolving credit facility, the Company repaid the then outstanding balance of $25.0 million. The prior revolving credit facility was also collateralized by substantially all of the Company’s assets, other than its trademarks, and included covenants, conditions and other terms similar to the Company’s current revolving credit facility.

As of JuneSeptember 30, 2010, borrowings under the $200 million revolving credit facility were limited to approximately $130.0$184.3 million based on the Company’s eligible domestic inventory and accounts receivable balances. The weighted average interest rate on the balances outstanding under the prior revolving credit facility was 1.4% during the sixnine months ended JuneSeptember 30, 2009. No balances were outstanding under the current revolving credit facility during the threenine months ended JuneSeptember 30, 2010 and 2009, and six months ended June 30, 2010.respectively.

Long Term Debt

The Company has long term debt agreements with various lenders to finance the acquisition or lease of qualifying capital investments. Loans under these agreements are collateralized by a first lien on the related assets acquired. As these agreements are not committed facilities, each advance is subject to approval by the lenders. Additionally, these agreements include a cross default provision whereby an event of default under other debt obligations, including the Company’s revolving credit facility, will be considered an event of default under these agreements. These agreements require a prepayment fee if the Company pays outstanding amounts ahead of the scheduled terms. The terms of the revolving credit facility limit the total amount of additional financing under these agreements to $35.0 million, of which $27.4$22.1 million was availableremaining as of JuneSeptember 30, 2010. At JuneSeptember 30, 2010, December 31, 2009 and JuneSeptember 30, 2009, the outstanding principal balancebalances under these agreements was $15.6were $18.5 million, $20.1 million and $20.1$18.1 million, respectively. Currently, advances under these agreements bear interest rates which are fixed at the time of each advance. The weighted average interest rates on outstanding borrowings were 5.9%5.3% and 6.0% for the three months ended JuneSeptember 30, 2010 and 2009, respectively, and 5.9%5.7% and 6.0% for each of the sixnine months ended JuneSeptember 30, 2010 and 2009.2009, respectively.

The Company monitors the financial health and stability of its lenders under the revolving credit and long term debt facilities; however, instability in the credit markets could negatively impact lenders and their ability to perform under these facilities.

Interest expense was $0.6$0.5 million for each of the three months ended JuneSeptember 30, 2010 and 2009, and $1.1$1.7 million and $1.5$2.0 million for the sixnine months ended JuneSeptember 30, 2010 and 2009, respectively. Interest expense includes the amortization of deferred financing costs and interest expense under the revolving credit and long term debt facilities.

5. Commitments and Contingencies

There were no significant changes to the contractual obligations reported in the 2009 Form 10-K.10-K other than those which occur in the normal course of business.

6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The fair value accounting guidance outlines a valuation framework andframework; creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosuresdisclosures; and prioritizes the inputs used in measuring fair value as follows:

Level 1:

Financial assets and (liabilities) measured at fair value as of JuneSeptember 30, 2010 are set forth in the table below:

Fair values of the financial assets and liabilities listed above are determined using inputs that use as their basis readily observable market data that are actively quoted and are validated through external sources, including third-party pricing services and brokers. The foreign currency forward contracts represent gains and losses on derivative contracts, which are the net difference between the U.S. dollars to be received or paid at each contract’s settlement date and the U.S. dollar value of the foreign currency to be sold or purchased at the current forward exchange rate. The fair value of the TOLI held by the Rabbi Trust is based on the cash-surrender value of the life insurance policies, which are invested primarily in mutual funds and a separately managed fixed income fund. These investments are in the same funds and purchased in substantially the same amounts as the selected investments of participants in the Deferred Compensation Plan, which represent the underlying liabilities to participants in the Deferred Compensation Plan.this plan. Obligations under the Deferred Compensation Plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments.

7. Stock-Based Compensation

During the six months ended June 30, 2010, 127.5 thousand shares of restricted stock and 234.0 thousand stock options were awarded to certain officers and key employees under the Under Armour, Inc. Amended and Restated 2005 Omnibus Long-Term Incentive Plan (“the 2005 Plan”). The restricted stock and stock options have a vesting term of four years. The stock options have a term of ten years and a weighted average exercise price of $30.24, basedBased on the closing price of the Company’s Class A Common Stock on the date of grant.grant, the restricted stock has a weighted average fair value of $31.38, and the stock options have a weighted average exercise price of $30.24 and a term of ten years. The weighted average fair value of the stock options was $16.71 and was estimated using the Black-Sholes option-pricing model consistent with the weighted average assumptions included within the 2009 Form 10-K.

In addition, in March 2010, 1.1 million performance-based stock options were awarded to certain officers and key employees under the 2005 Plan. The performance-based stock options have vesting that is tied to the achievement of a certain combined annual operating income target for 2011 and 2012. Upon the achievement of the combined operating income target, 50% of the options will vest and the remaining 50% will vest one year later. If certain lower levels of combined operating income for 2011 and 2012 are achieved, fewer or no options will vest at that time and one year later, and the remaining stock options will be forfeited. The weighted average fair value of the performance-based stock options was $16.38 and was estimated using the Black-Sholes option-pricing model consistent with the weighted average assumptions included within the 2009 Form 10-K. As of JuneSeptember 30, 2010, the Company had not recorded stock based compensation expense for these performance-based stock options as the Company concluded it was unable to predict with certainty whethernot probable the combined operating income targets would be reached. The Company will assess the probability of the achievement of the operating income targets at the end of each reporting period. WhenIf it becomes probable that the performance targets related to these performance-based stock options will be achieved, a cumulative adjustment will be recorded as if ratable stock-based compensation expense had been recorded since the grant date. A cumulative adjustmentAdditional stock-based compensation of $1.8up to $3.1 million would have been recorded at JuneSeptember 30, 2010 had the achievement of theall operating income targets been deemed probable.

8. Foreign Currency Risk Management and Derivatives

The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates mainly relating to transactions generated by its international subsidiaries in currencies other than their local currencies. These gains and losses are primarily driven by intercompany transactions. Since August 2007,When deemed necessary, the Company has enteredenters into foreign currency forward contracts to reduce the risk associated with foreign currency exchange rate fluctuations on intercompany transactions and projected inventory purchases for its European and Canadian subsidiary. Since December 2008, the Company has entered into foreign currency forward contracts to reduce the risk associated with foreign currency exchange rate fluctuations on intercompany transactions for its European subsidiary.subsidiaries.

As of JuneSeptember 30, 2010, the notional value of the Company’s outstanding foreign currency forward contractscontract used to mitigate the foreign currency exchange rate fluctuations on its Canadian subsidiary’s intercompany transactions was $16.3$18.0 million with a contract maturitiesmaturity of 1 month. As of JuneSeptember 30, 2010, the notional value of the Company’s outstanding foreign currency forward contracts used to mitigate the foreign currency exchange rate fluctuations on its European subsidiary’s intercompany transactions was $51.2$63.5 million with contract maturities of 1 month. The foreign currency forward contracts are not designated as cash flow hedges, and accordingly, changes in their fair value are recorded in other expense,income (expense), net. As of JuneSeptember 30, 2010 and 2009, the fair values of the Company’s foreign currency forward contracts were liabilities of $0.3 million and $0.5 million, respectively, and were included in accrued expenses on the consolidated balance sheets. As of December 31, 2009 and June 30, 2009, the fair values of the Company’s foreign currency forward contracts were assets of $0.6 million, $0.3 million and $0.2 million, respectively, and were included in prepaid expenses and other current assets on the consolidated balance sheet. Refer to Note 6 for a discussion of the fair value measurements. Included in other expense,

Other income (expense), net wereincluded the following amounts related to changes in foreign currency exchange rates and derivative foreign currency forward contracts:

The Company enters into foreign currency forward contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the foreign currency forward contracts. The Company monitors the credit quality of these financial institutions and considers the risk of counterparty default to be minimal.

9. ComprehensiveProvision for Income Taxes

ComprehensiveThe Company recorded $21.1 million and $20.5 million of income tax expense for the three months ended September 30, 2010 and 2009, respectively, and $28.9 million and $24.6 million of income tax expense for the nine months ended September 30, 2010 and 2009, respectively.

As of September 30, 2010, the Company had $11.0 million in deferred tax assets associated with foreign net operating loss carryforwards which will begin to expire in 5 to 9 years. As of September 30, 2010, the Company believed certain deferred tax assets associated with foreign net operating loss carryforwards would expire unused based on updated forward-looking financial information impacting the Company’s tax planning strategies. Therefore, a valuation allowance of $1.5 million was recorded against the Company’s net deferred tax assets as of September 30, 2010. The valuation allowance resulted in an increase to income tax expense of $1.5 million. Although realization of the remaining foreign net operating loss carryforwards is not assured, the Company believes it is more likely than not that the remaining $9.5 million will be realized. This realizable amount could be increased or decreased if future taxable income during the carryforward periods is increased or reduced.

The effective rates for income taxes were 38.9% and 43.8% for the nine months ended September 30, 2010 and 2009, respectively. The effective tax rate for the nine months ended September 30, 2010 was lower than the effective tax rate for the nine months ended September 30, 2009 primarily due to certain tax planning strategies and federal and state tax credits reducing the effective tax rate for the period. This reduction was partially offset by periodthe valuation allowance noted above. The Company’s annual 2010 effective tax rate is stated below:expected to be improved from its 2009 annual effective tax rate of 43.2% due to the drivers noted above.

10. Earnings per Share

The following represents a reconciliation from basic earnings per share to diluted earnings per share:

Effects of potentially dilutive securities are presented only in periods in which they are dilutive. Stock options and restricted stock units representing 0.8 million shares of common stock outstanding for the three months ended September 30, 2010 were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive. Stock options, restricted stock units, and warrants representing 1.3 million and 1.1 million shares of common stock outstanding for the three months ended JuneSeptember 30, 20102009, and 2009, respectively, and 1.31.1 million and 1.2 million shares of common stock outstanding for the sixnine months ended JuneSeptember 30, 2010 and 2009, respectively, were excluded from the computation of diluted earnings per share because their effect would have been anti-dilutive.

11. Segment Data and Related Information

The Company has historically operated within one operating and reportable segment based on how the Chief Operating Decision Maker (“CODM”) managesmanaged the business. Beginning within the second quarter of 2010, the Company’s operating segments changed to reflect how the CODM makes decisions about allocating resources and assessing performance. In order to make these decisions, the CODM now receives discrete financial information by geographic region based on the Company’s strategy to become a global brand. These geographic regions include North America; Latin America; Europe, the Middle East and Africa (“EMEA”); and Asia. The Company’s new operating segments are based on these geographic regions. Each geographic segment operates exclusively in one industry: the development, marketing and distribution of branded performance apparel, footwear and accessories. As the Latin America, EMEA and Asia operating segments dodid not meet the quantitative thresholds for individual disclosure as reportable segments, they were combined into other foreign countries.

The geographic distribution of the Company’s net revenues, operating income and total assets are summarized in the following tables based on the location of its customers and operations. Net revenues represent sales to external customers for each segment. In addition to net revenues, operating income is a primary financial measure used by the Company to evaluate performance of each segment. Intercompany balances were eliminated for separate disclosure. Prior period data included below was reclassified to conform to the current period presentation.