The fall out from Sports Authority failing to successfully restructure during the bankruptcy process is illustrated by an announcement Under Armour made Tuesday.
Because Sports Authority is liquidating and not going forward as a business, Under Armour had to lower its revenue and earnings guidance for the year.
The company said it realized only $43 million of the $163 million in planned 2016 sales to the sporting goods retailer. Under Armour will also record a $23 million impairment charge – the amount Sports Authority owed the brand when it filed for bankruptcy.
As a result, Under Armour 2016 revenues are now expected to total $4.9 billion instead of $5 billion. Operating income will range from $440 million to $445 million compared to the previous forecast of $503 million to $507 million.
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