Under Armour (UA) Guidance Cut on Sports Authority Disappearing - FBR

FBR Capital analyst, Susan Anderson, noted that after the market closed, Under Armour, Inc. (NYSE: UA) announced that it is revising its previously issued outlook for 2Q16/2016 due to bankruptcy proceedings of The Sports Authority (TSA). It was not expected that TSA would close all of its stores since a buyer was anticipated as likely to emerge.

UA noted that TSA was expected to generate $163M in revenue in 2016, ~3% of UA's total sales. UA will now only be able to recognize $43M of revenue from TSA, or 1% of TSA sales. As a result, UA lowered its 2016 revenue guidance to $4.925B, from $5.0B, and its EBIT guidance to $440M to $445M, from $503M to $507M.

UA reiterated it still expects to achieve high-20% revenue growth for 2Q16.

The analyst views this as a one-time external event and still expects UA to generate high-20%/low-30% revenue growth over the next several years.

No change to Outperform rating or $59 PT.

For an analyst ratings summary and ratings history on Under Armour, Inc. click here. For more ratings news on Under Armour, Inc. click here.

Shares of Under Armour, Inc. closed at $37.73 yesterday.

You May Also Be Interested In

• Morgan Stanley Upgrades Telecom Argentina (TEO) to Overweight
• B.Riley Starts Suncrete Inc (RMIX) at Buy
• Liberty LiLAC (LILA) PT Lowered to $11 at Benchmark