Under Armour said it expects to take a $23 million impairment charge in the second quarter related to Sports Authority’s liquidation while it also lowered its outlook for the year.

When Sports Authority filed its bankruptcy petition on March 2, court documents showed that Under Armour was owed $23.2 million.

In its statement, Under Armour noted that during the first quarter it “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.”

However, with the bankruptcy court’s approval of a liquidation plan for Sport Authority’s business rather than a restructuring or sale of the ongoing business, Under Armour will now recognize a charge of approximately $23 million in the second quarter, officials said. Unsecured claim holders are not expected to earn any recovery as part of the liquidation plan after more secured claims are paid off.

Under Armour also noted that due to the liquidation, it was only able to recognize $43 million of the originally planned $163 million in revenues with The Sports Authority for 2016.

As a result, 2016 revenues are now expected to reach $4.93 billion, representing growth of 24 percent over 2015. Previously, it expected revenue of $5 billion, representing growth of 26 percent.

Including the impact the impairment charge, operating income is now expected to climb between 7.7 percent to 8.9 percent to between $440 million to $445 million. Previously, it expected operating income in the range of $503 million to $507 million, representing growth of 23 percent to 24 percent over 2015.

For the second quarter, Under Armour 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 charge, operating income is now expected to range from $17 million to $19 million, which would represent a decline between 40.4 percent and 46.7 percent from $31.9 million a year ago. Previously, earnings were projected to expand to between $40 million to $42 million, representing 25 percent to 32 percent growth.

The company’s tax rate for the second quarter is expected to be approximately 70 percent.

Under Armour’s stock was trading down around 5 percent, below $36 per share June 1, following the news.

Kevin Plank, chairman and CEO, 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.”

In reporting first-quarter results on April 22, Under Armour officials said it’s increasing channel and geographic diversification would help it offset the negative impact on sales of both the bankruptcies of Sports Authority and Sport Chalet.

On the call, Plank noted that overseas had grown to represent 13 percent. But he also pointed to continued expansion at Dick’s Sporting Goods, helped by collaborations on premium footwear, as well as things as elevated golf shops and other in-store executions. Newer growth is coming from Champs Sports, including its five large-format The Armoury Concepts, and Foot Locker, which where the brand has more doubled its store placement base due to the popularity of Stephen Curry basketball shoes. At the department store level, Under Armour added 275 women’s departments this year at chains such as Macy’s, Bon-Ton and Bloomingdale’s.

Overall, Plank stressed how the growth of more than 30 percent in the first quarter “continues to demonstrate the strength of the brand, and how strong our portfolio ultimately is,” and pointed to Under Armour having more than half the distribution points of Nike as another sign of future expansion potential.

“Our growth is effectively coming from everywhere,” said Plank. “And North America is something that we feel incredibly strong about.”

As reported, on May 16, a group of liquidators won the right to conduct going-out-of-business sales at a bankruptcy auction for the assets of Sports Authority. Going-out-of-business sales began last Thursday, May 26, and are expected to continue through August.

Under Armour is the first major vendor to lower its full-year outlook due to the liquidation of Sports Authority.

In early May, Asics America Corp. said it saw operating income decline 64 percent mainly due an increase in cost of sales ratio and a recording of allowance for doubtful receivables, presumably tied to the bankruptcies of Sports Authority and Sport Chalet. Asics was left with an unsecured claim of $23.3 million, according to the bankruptcy filing.

The largest unsecured trade creditor was Nike Inc., which was owed $47.9 million according to the bankruptcy filing. The remaining top-ten list included Implus Footcare LLC, with an unsecured claim for $9.4 million, Agron Inc. (an Adidas licensee), $9.2 million MJ Soffe LLC, $5.3 million, Easton Baseball/Softball Inc., $4.6 million, Wilson Team Sports, $4.5 million, Thorlo Inc., $4.5 million, and Golden Viking Sports LLC, $4.4 million.