Under Armour (UA) drops following the company lowering its FY16 outlook to account for the bankruptcy of The Sports Authority
Under Armour Inc. says it now expects to take in $120 million less revenue than planned from sales of its sportswear at Sports Authority stores as the retail chain prepares to go out of business. Baltimore-based Under Armour (NYSE: UA) announced it will take a $23 million second-quarter charge tied to Sports Authority's liquidation plans.
In a federal filing, it said Sports Authority's bankruptcy means it will only be able to collect $43 million of the originally planned $163 million in revenue it expected through sales of its merchandise at Sports Authority stores for 2016.
Under Armour is a major supplier to Englewood, Colorado-based Sports Authority, which began liquidating merchandise from its 450 stores recently and is selling off store leases in late June.
In March, when Sports Authority filed for chapter 11 bankruptcy protection, Under Armour said it did not expect the move to impact the company's outlook for 2016. But that changed when Sports Authority said it no longer planned to restructure.
Under Armour had previously projected revenue for 2016 of $5 billion, representing growth of 26 percent over last year. The company now expects revenue of $4.925 billion, up 24 percent over last year.
** charts before guidance **
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