Under Armour cut its guidance because Sports Authority is going out of business (UA)
Flickr/Sammy Zimmermanns
Under Armour has cut its sales guidance following the Sports Authority's bankruptcy.
In a statement Tuesday, the activewear retailer said it sees 2016 net revenues at $4.925 billion, down from $5 billion earlier, and lower than analysts' estimate for $5.02 billion according to Bloomberg.
When Under Armour first learned in the first quarter that Sports Authority was going bust, the company didn't think the debt it was owed would have a material impact.
But it now expects to take an impairment charge of about $23 million related to the bankruptcy in the second quarter. Also, it only earned $43 million in revenues from the Sports Authority this year, versus the $163 million it had planned to.
CEO Kevin Plank said, "While The Sports Authority's bankruptcy impacts our 2016 outlook, our brand's momentum is stronger than ever as we continue to see growth and increased demand across all categories and geographies."
Shares fell 1% in after-hours trading.
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