Under Armour reaffirms outlook following Sports Authority's Chapter 11

By

Obi Anyanwu

Published
Mar 7, 2016

Under Armour on Friday reiterated its outlook on 2016 following the Sports Authority’s recent announcement that it has filed for bankruptcy.

 
The Baltimore-based company expects its 2016 net revenues to reach $4.95 billion, representing growth of 25% over 2015, and 2016 operating income of approximately $503 million, representing growth of 23% over 2015. The company outlined its financial targets in its recent earnings release issued on January 28.
 
“The Sports Authority is a longstanding customer of the Company, and the Company intends to support them as they proceed through their restructuring,” said Under Armour. 

“The Company plans to offset the impact of the bankruptcy on the Company's full year 2016 results through continued sales to The Sports Authority and sales through other channels and customers.  In addition, although the Company does not currently believe that the exposure to its receivables from The Sports Authority is materially impacted by these developments, the Company will continue to monitor the proceedings and its related impact during the first quarter of 2016.”
 
Sports Authority announced that it had filed for Chapter 11 bankruptcy protection on Wednesday after it missed a $20 million coupon payment in January. The Colorado-based company plans to close 140 stores and 2 distribution centers in Denver and Chicago as part of its restructuring plan.
 
Since the company has filed for bankruptcy it is not obligated to pay back its debtors, which includes Under Armour. Despite the potential lost money, Under Armour expects the same financial results for fiscal 2016.