Under Armour Affected By Sports Authority Closure

by San Antonio Attorney

Sports Apparel Under Armour, has become the first retailer to admit that they got affected by the closure of Sports Authority last July.

The shoe and sports apparel, based in Baltimore, emphasized that they did not anticipate that their exposure of their receivables from Sports Authority can be directly affected by Sports Authority restructuring.  When Sports Authority was advised that closure of its stores would help save them from debt, Under Armour was also considering its options as it also has a key holding of the Growth Seeker Portfolio.

However, Under Armour is expected to generate revenues worth $4.95 billion, along with an operating income of $440-$450 million.  Under Armous is expected to generate the fiscal 2016 revenue of 24% as compare to the previous year.

The revenue growth of the current quarter is targeted to belong in the 20% range that will make it consistent with the previous guidance of the company.

Last May, Sports Authority closed 450 of its branches across 27 states rather than undergo reorganization under the Chapter 11 bankruptcy.

Kevin Plank, CEO of Under Armour, said that the positive news that comes out of this is the fact that their company is aimed to expand globally.  The international sales are set to bring in 13% of revenues by 2016.

Plank released this public statement after being asked about Sports Authority’s restructuring plans.  Despite a change of tone in today’s press statement, Plank is still optimistic about the prospects of his company.

On the other hand, Dick’s Sporting Good, the rival of Sports Authority, has continued to build a stronger relationship with Under Armour.  This came after a few months of collaborating on introducing a new apparel shop design by 2017.

Under Armour expressed its interest of expanding their golf merchandise at Dick’s Sporting Goods.  Dick’s Sporting Goods represents approximately 11.5% of the revenue of the company last 2015.

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