BALTIMORE, May 31, 2016 /PRNewswire/ -- Under Armour,
Inc. (NYSE: UA, UA.C) today announced that it is revising its previously issued outlook for the full year and second quarter
of 2016 following recent developments related to the bankruptcy proceedings of The Sports Authority.
During the first quarter of 2016, the Company became aware of the potential restructuring of The Sports Authority. As
previously stated, at that time the Company did not believe that the exposure to its receivables from The Sports Authority was
materially impacted and the Company announced its intention to continue to support The Sports Authority as it proceeded through
its restructuring, including support through continued sales in 2016.
Given the recent decision of the bankruptcy court to approve the liquidation of The Sport Authority's business rather than a
restructuring or sale of the ongoing business, the Company now expects to recognize an impairment charge of approximately
$23 million related to The Sports Authority during the second quarter of 2016. In addition,
due to the bankruptcy, the Company was only able to recognize $43 million of the originally planned
$163 million in revenues with The Sports Authority for 2016.
As a result of this impairment as well as the loss of further planned sales to The Sports Authority, the Company now expects
2016 net revenues of approximately $4.925 billion, representing growth of 24% over 2015, and 2016
operating income of approximately $440 million to $445 million.
With regard to the second quarter of 2016, the Company continues to expect revenue growth to be in the high 20s percent range,
consistent with previously issued guidance. However, as a result of the impairment noted above, operating income is now
expected to range from $17 million to $19 million, and the Company's tax rate for the second
quarter is expected to be approximately 70%.
Kevin Plank, Chairman and CEO of Under Armour, stated, "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. This one-time event will not impact our focus on making the best decisions for Under Armour
through investments that protect and drive our growth."
About Under Armour, Inc.
Under Armour (NYSE: UA, UA.C), the originator of performance footwear, apparel and equipment, revolutionized how
athletes across the world dress. Designed to make all athletes better, the brand's innovative products are sold worldwide to
athletes at all levels. The Under Armour Connected Fitness™ platform powers the world's largest digital health and
fitness community through a suite of applications: UA Record, MapMyFitness, Endomondo and MyFitnessPal. The Under Armour
global headquarters is in Baltimore, Maryland. For further information, please visit the
Company's website at www.uabiz.com.
Forward Looking Statements
Some of the statements contained in this press release constitute forward-looking statements. Forward-looking
statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or
results of operations, our prospects and strategies for future growth, and potential developments related to the bankruptcy of
one of our customers. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts," "outlook," "potential" or the negative of these
terms or other comparable terminology. The forward-looking statements contained in this press release reflect our current
views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events
or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we
believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events,
results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these
forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by
the forward-looking statements, including, but not limited to: changes in general economic or market conditions that could affect
consumer spending; the financial health of our retail customers; our ability to effectively manage our growth and a more complex
global business; our ability to successfully manage or realize expected results from acquisitions and other significant
investments or capital expenditures; our ability to effectively develop and launch new, innovative and updated products; our
ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands;
increased competition causing us to lose market share or reduce the prices of our products or to increase significantly our
marketing efforts; fluctuations in the costs of our products; loss of key suppliers or manufacturers or failure of our suppliers
or manufacturers to produce or deliver our products in a timely or cost-effective manner, including due to port disruptions; our
ability to further expand our business globally and to drive brand awareness and consumer acceptance of our products in other
countries; our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results; risks
related to foreign currency exchange rate fluctuations; our ability to effectively market and maintain a positive brand image;
our ability to comply with trade and other regulations; the availability, integration and effective operation of information
systems and other technology, as well as any potential interruption in such systems or technology; risks related to data security
or privacy breaches; our ability to raise additional capital required to grow our business on terms acceptable to us; our
potential exposure to litigation and other proceedings; and our ability to attract and retain the services of our senior
management and key employees. The forward-looking statements contained in this press release reflect our views and assumptions
only as of the date of this press release. We undertake no obligation to update any forward-looking statement to reflect events
or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
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SOURCE Under Armour, Inc.