Boxer Carlos Balderas poses for a portrait at the U.S. Olympic Committee Media Summit in Beverly Hills, Los Angeles, California.Reuters/AI Project
- Sportswear brand Under Armour has announced that the company has been under investigation by the US Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ) since July 2017.
- In a statement, the company said it was “cooperating” with the probes and stressed that it “firmly believes that its accounting practices and disclosures were appropriate.”
- Sources told The Wall Street Journal that federal authorities are looking into whether the sportswear brand “shifted sales from quarter to quarter to appear healthier.”
- The company has experienced trouble in recent years including a recent revenue drop and a surplus of unsold merchandise totalling $1.3 billion.
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Under Armour on Sunday said that the US Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ) have been investigating its accounting practices since July 2017.
An Under Armour spokesperson said in a statement to Business Insider that it was “cooperating” with the probes and stood behind its accounting disclosures:
“Under Armour is cooperating with the US Securities and Exchange Commission and the US Department of Justice investigations. The company began responding in July 2017 to requests for documents and information relating primarily to its accounting practices and related disclosures, and the company firmly believes that its accounting practices and disclosures were appropriate.”
People familiar with the matter told The Wall Street Journal that federal authorities are looking into whether the sportswear brand “shifted sales from quarter to quarter to appear healthier.”
One source told The Journal that investigators questioned people at the company’s headquarters in Baltimore last week. Another source said that the DOJ is conducting a criminal inquiry in conjunction with the civil investigators at the SEC.
The company is set to report on its third-quarter results on Monday.
Business Insider has previously reported on the company’s ups and downs over its 20-year history.
In its July earnings result, the company missed revenue forecasts and said it expected a revenue decline in North America throughout 2019.
The company has also experienced a surplus of leftover merchandise totalling $1.3 billion in 2018 and became embroiled in a scandal involving executives going to strip clubs and expensing the outings on the company dime.
The company announced a long-term growth plan in December 2018, which focused on growing its direct-to-consumer business along with footwear and women’s products.
Kevin Plank, the company’s CEO and founder, resigned last month and will be replaced by Patrik Frisk, the company’s former chief operating officer effective January 1.