Under Armour Cuts View; Sees $23Mln Writedown With Sports Authority Liquidation

(RTTNews) - Under Armour Inc. (UA) announced that it has revised its second quarter and full year guidance after the bell Tuesday, following recent developments related to the bankruptcy proceedings of The Sports Authority. The stock closed down by $0.19 at $37.73.In after-hours, the stock further declined by 3.02% to $36.59.

As a result of impairment and loss of further planned sales to The Sports Authority, the company now expects 2016 net revenues of approximately $4.925 billion, down from an earlier forecast of about $5 billion, representing growth of 24% over 2015. The company sees 2016 Operating income will be approximately $440 million to $445 million, compared with an earlier projection for as much as $507 million.

Given the recent decision of the bankruptcy court to approve the liquidation of The Sport Authority's business rather than a restructuring or sale of the ongoing business, the company now expects to recognize an impairment charge of approximately $23 million related to The Sports Authority during the second quarter of 2016.

For the second quarter, the company continues to expect revenue growth to be in the high 20s percent range. However, as a result of the impairment, operating income is now expected to range from $17 million to $19 million, and the company's tax rate for the second quarter is expected to be approximately 70%.