Under Armour Has Settled its SEC Charges Over This For $9M

Athletic/sportswear apparel company Under Armour has agreed to pay $9 millin in fines in order to settle with the Securities and Exchange Commission over misleading its revenue growth to investors.

The company had mislead investors from the third quarter of 2015 all the way to the fourth quarter of 2016 said the SEC.

In an SEC filing, Under Armour used a “pull forward” sales tactic to pull forward $408 million in revenue in existing orders. According to the SEC, the company made positive statements regarding its revenue growth rate and the factors contributing to the revenue growth rate, without disclosing the significant impact on revenue from its use of pull forward tactics.

“Under Armour created a misleading picture of the drivers of its financial results and concealed known uncertainties concerning its business,” SEC Denver Regional Director Kurt Gottschall said in a statement.

Under Armour said in a statement that the settlement relates to the company’s disclosures and does not include any allegations from the SEC that sales during these periods did not comply with “generally accepted accounting principles.”

“The company neither admitted nor denied the SEC’s charges. The settlement resolves all outstanding SEC claims, “ Under Armour said.
The SEC also revealed in its filing that Under Armour has agreed to cease and desist the practice.

It was in 2019 that The Wall Street Journal reported federal officials were examining whether the company had shifted sales from quarter to quarter to appear healthier.

The SEC doesn’t plan to take any enforcement action against Kevin Plank, the company’s co-founder and executive chairman, or Chief Financial Officer David Bergman, Under Armour said in a press release.

The company had previously disclosed that the two men had been told they could be sued by the SEC.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.