Under Armour is reportedly under federal investigation after the Baltimore-based sportswear company has allegedly falsified records to boost the brand’s finances.
According to the Wall Street Journal, UA has been in contact with the Justice Department and Securities and Exchange Commission (SEC) since July 2017 on requests for documents and information related to its accounting practices. More specifically, the inquiry relates to whether the Baltimore-based brand has shifted the reporting of sales to quarters in which they did not occur. Under Armour is cooperating with both investigations and believes its financial practices and disclosures were appropriate, a company spokesperson said.
The brand has struggled in domestic sales after missing its sales target in the final quarter of 2016, which then-CEO Kevin Plank attributed it to the company’s lack of product assortment, the trend of shoppers visiting fewer stores, and shifts in the sportswear industry.
Last month, Under Armour announced that Plank is stepping down as CEO after spending over two decades at the position, but will remain as the company's executive chairman and brand chief. Plank will be replaced by the current COO, Patrik Frisk on Jan. 1.