WASHINGTON, Nov 25 (Reuters) - Credit rating agency S&P

Global on Tuesday placed sportswear company Under Armour's ( UAA )

ratings on watch for potential downgrades.

In a Tuesday report accompanying its outlook change, S&P

cited Under Armour's ( UAA ) continued restructuring challenges and

persistent sales declines, including a 16% drop in footwear

sales and 1% dip in apparel sales in the latest quarter.

Under Armour's ( UAA ) gross margin also took a hit during the

second quarter, which S&P analysts attributed mainly to U.S.

tariff policy as well "ongoing regional geopolitical conflicts."

The company's margins declined 275 basis points (bps) in the

second quarter, and it said it expects margins to decline an

additional 310 bps to 330 bps in its third quarter.

"This is a larger drop than we expected earlier in the

year," S&P's analysts wrote.

The analysts further pointed to higher-than-expected

expenses facing the company as part of its 2025 restructuring

plan, which include a recently approved $95 million addition.

This brings the company's total estimated restructuring expenses

to $255 million through fiscal year 2026, versus $160 million

when the company announced its restructuring plan last summer.

S&P maintained Under Armour's ( UAA ) ratings of BB-, which is on

the upper end of speculative-grade, noting it will "resolve" the

negative ratings watch placement "as soon as practical within

the next 90 days" depending in part on holiday sales and

profits.

(Reporting by Matt Tracy in Washington, D.C.)