Under Armour Under Investigation By The SEC
Under Armour is under federal investigation over concern that the sport-apparel company has been dishonest about its reported sales.
The Securities and Exchange Commission have been questioning employees at Under Armour’s main office in Baltimore as recently as last week. There is suspicion that the company has been shifting sales on a quarterly basis, resulting in inflated sales numbers and appearing financially healthy.
“The company began responding in July 2017 to requests for documents and information relating primarily to its accounting practices and related disclosures. The company firmly believes that its accounting practices and disclosures were appropriate,” a representative from Under Armour said.
The company’s sales have been suffering over the past two years. They reported flat sales for this most recent quarter. The decline in sales occurred once Under Armour missed its sales targets for the fourth quarter of 2016. This decline was an abrupt end to a 26-quarter streak of growth. During this streak they maintained at least 20% yearly growth.
Additionally, Under Armour reported a 3% decline in their North American sales without any sign of a rebounding increase. It is expected that sales will decline from $1.44 billion in the second quarter to $1.41 billion in the third quarter.