Under Armour calms down investors: Sport Authority’s problems won ́t affect us
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Athletic apparel group Under Armour has tried to calm down investors assuring that the struggles of fashion peer Sports Authority won´t affect their business.
It is worth recalling that Sports Authority has just filed for bankruptcy protection due to outstanding debts, including 23 million dollars to Under Armour.
Addressing the unrest generated by Sports Authority’s news, Under Armour said Friday that despite the money it is owed by the ailing chain, it is standing by the financial outlook it provided earlier in the year.
The athletic gear company said that it continues to project 4.95 billion dollars in full-year 2016 net revenue, which implies a 25 percent increase compared to the previous year’s figures, and 503 million dollars in full-year operating income.
“Although we do not currently believe that the exposure to our receivables from The Sports Authority is materially impacted by these developments, we will continue to monitor the proceedings and its related impact during the first quarter of 2016,” Under Armour said in a statement Friday.
The company went on to say that it plans to offset any impact of the bankruptcy on its full-year results through “continued sales to The Sports Authority and sales through other channels and customers,” reports ‘Forbes’.
Tending a friendly hand to the struggling retailer, Under Armour noted that “The Sports Authority is a longstanding customer of ours, and we intend to support them as they proceed through their restructuring.”
Citibank retail analyst Kate McShane is also confident that Under Armour can compensate for any lost sales at Sports Authority: “While we estimate that Nike and Under Armour are among the vendors with the largest total exposure to The Sports Authority, we believe the inventories previously allocated to the portion of Sports Authority stores that will be closed can be quickly diverted either to Dick's Sporting Goods percent or other retailers,” McShane said in a research note following Under Armour’s statement.