New York — Under Armour Inc. is being investigated by federal authorities over its accounting practices.
The athletic gear company said Sunday it’s been cooperating with the Securities and Exchange Commission and Justice Department on their investigations for two years and the company “firmly believes that its accounting practices and disclosures were appropriate.”
Under Armour reports earnings for the third quarter Monday.
The investigation was first reported by The Wall Street Journal, which said the probe involves whether the retailer shifted sales from quarter to quarter to make results appear stronger.
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The SEC and Justice Department declined to comment.
The Journal pointed out that Under Armour founder Kevin Plank is stepping down as CEO Jan. 1 and the post will go to COO Patrik Frisk. “Plank plans to stay on at the company as executive chairman and brand chief,” the Journal added.
Under Armour has struggled since its explosive sales growth petered out in 2017. Last year, it announced job cuts as part of a restructuring effort.
CNBC notes that, “Under Armour has struggled on its home turf as of late in the face of stiff competition from Nike, Adidas and Lululemon. Its sales in North America dropped 2% in 2018 to $3.7 billion. Analysts say the retailers’ ‘performance’ focused gear, like sweat-proof shirts, does not resonate with as many shoppers.”
