NEW YORK (AP) — Under Armour is cutting its full-year revenue guidance, saying that the closure of Sports Authority stores will hurt its sales.
Shares dropped almost 3 percent in Wednesday premarket trading.
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 Inc. shares fell $1.04, or 2.8 percent, to $36.69 in premarket trading about 90 minutes before the market open.
