Under Armour will lose $120 million in expected sales to The Sports Authority this year as the chain liquidates in bankruptcy , the Baltimore-based brand said Tuesday.
The sports apparel maker said in a Securities and Exchange Commission filing it will recognize only $43 million of $163 million in anticipated revenues from the sporting goods chain this year. The bankruptcy court recently approved the retailer's liquidation rather than a restructuring or sale of the business.
The brand said it will also recognize an impairment charge of about $23 million during the second quarter.
Because of the charge and the loss of anticipated sales to the retailer, Under Armour lowered its sales outlook for the full year to about $4.925 billion, or 24 percent growth compared with last year.
The company still expects revenue growth in the high 20 percent range for the second quarter.
"While The Sports Authority's bankruptcy impacts our 2016 outlook, our brand's momentum is stronger than ever as we continue to see growth and increased demand across all categories and geographies," said Kevin Plank, Under Armour chairman and CEO, in the announcement.
He added that the one-time event "will not impact our focus on making the best decisions for Under Armour through investments that protect and drive our growth."
After Sports Authority filed for bankruptcy in early March, Under Armour said it did not expect the retailer's reorganization to materially impact its financial performance. At the time it projected $4.95 billion for 2016.
Sports Authority has begun liquidation sales at all of its stores, including those in the Baltimore-area.
After announcing the lowered sales outlook, Under Armour shares dived more than 3.7 percent in after hours trading to $36.30 each at one point.