NEW YORK, N.Y. – Under Armour is cutting its full-year revenue guidance, saying that the closure of Sports Authority stores will hurt its sales.
Its shares dropped 4.5 per cent in afternoon trading Wednesday.
Privately held Sports Authority, which sells Under Armour goods, announced in March that it was filing for bankruptcy protection. A bankruptcy court recently decided to approve the liquidation of Sports Authority’s business rather than a restructuring or sale. Sports Authority said in May that it would start discounting sneakers, clothing and other goods until the end of August. The Englewood, Colorado-based company plans to sell its store leases in an auction.
Under Armour Inc. said in a regulatory filing that due to the court’s decision, it now anticipates taking an approximately $23 million impairment charge in the second quarter related to Sports Authority. Under Armour also said that it only recognized $43 million in sales through Sports Authority this year, considerably below the $163 million that it expected.
Baltimore-based Under Armour now foresees full-year revenue of about $4.93 billion. Its prior outlook was for about $5 billion in revenue. Analysts had predicted revenue of $5.02 billion, according to a FactSet survey.
Under Armour shares fell $1.71, or 4.5 per cent, to $36.02 in afternoon trading. Its shares are down more than 11 per cent since a year ago.