Under Armour yesterday announced that it will lose $120M in "expected sales to The Sports Authority this year as the chain liquidates in bankruptcy," according to Lorraine Mirabella of the Baltimore SUN. UA in an SEC filing said that it "will recognize only" $43M of $163M in anticipated revenues "from the sporting goods chain this year." The brand said that it will "also recognize an impairment charge" of about $23M during Q2. Because of the charge and the loss of anticipated sales, UA "lowered its sales outlook for the full year" to about $4.925B, or 24% growth "compared with last year." The company still "expects revenue growth" in the high 20% range for Q2 (Baltimore SUN, 6/1). In Baltimore, Ryan Sharrow noted when Sports Authority filed for Chapter 11 bankruptcy protection, UA “did not expect the move to impact the company’s previously issued outlook” for ’16. However, that “changed when Sports Authority said it no longer planned to restructure” (BIZJOURNALS.com, 5/31). UA Foudner, Chair & CEO Kevin Plank said that his company “still has strong brand momentum and pointed out that Sports Authority’s bankruptcy is a one-time event” (DOW JONES NEWSWIRES, 5/31).
BATTLE OF THE BRANDS: The NBA Finals features Nike endorser LeBron James facing off with Under Armour ambassador Stephen Curry, and CNBC contributor Pete Najarian said the matchup is "great for both" of the brands. Najarian said, "They get all the exposure in the world." Najarian: "You look at the size of shoes right now in the Under Armour portfolio, it's still around 10 percent. There's plenty of room for them to grow there internationally as well as here in the U.S. so if you have a little bit more of that youthful spirit to you that you're looking for the growth." CNBC’s Scott Wapner said Curry "accounts for a much greater percentage of the growth in Under Armour's shoe business than LeBron does for Nike" ("Fast Money Halftime Report," CNBC, 5/31).
