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Under Armor is the subject of the Federal Accounting Probe



Federal prosecutor investigate

Under Armor Inc.

The accounting practices of a study examining whether the sportswear manufacturer has postponed revenue from quarter to quarter to be healthier.

As part of the investigation, which was not published, the investigators interviewed people In Baltimore, where the company is still based in the past week, announced one of the persons.

The Department of Justice prosecutors are conducting a criminal investigation into the matter and coordinating with the civil investigators of the Securities and Exchange Commission, another person said.

Under Armor said it is cooperating with the Department of Justice and the SEC investigation. "The company began responding to requests for documents and information in July 201

7 that relate primarily to its accounting practices and related disclosures," Under Armor said after the release of this article. "The Company strongly believes its accounting practices and disclosures were appropriate."

Justice Department spokesmen and the SEC refused to comment on revenue before it was earned, or postponed the expense data so that, among other things, the return seemed stronger.

The company announcing the third quarter results on Monday has restructured its business and struggled with weaker sales in the last quarter 2 years. Until then, it was one of the fastest growing apparel manufacturers with 26 consecutive quarters of revenue growth of at least 20% over the previous year.

This phase ended abruptly when Under Armor missed its revenue targets in the final quarter of 2016. On January 31, 2017, the company's share plummeted following only 12% revenue growth in the holiday quarter and growth forecasts for the next Year lowered. On that day, Under Armor also said that his then head of finance left after one year in office.

At that time founder, chairman and CEO

Kevin Plank

The slowdown led to fewer shop visits by shoppers, the company's product lineup, and changes in the sportswear industry, including bankruptcies of retailers such as Sports Authority Inc. Mr. Plank led the company to restructure operations, reduce workplaces, and hire an outsider.

Patrik Frisk,

as president.

Under Armor had three CFOs from 2016 to 2017.

Brad Dickerson,

who has been CFO since 2008, left the company in February 2016.

Chip Molloy,

A former CEO of PetSmart Inc. took over, but remained in office for a year. Under Armor called at the time unspecified personal reasons for his departure.

David Bergman

was named Acting CFO in February 2017 after the company reported its quarterly loss of revenue and the departure of Mr. Molloy. Mr. Bergman, who has held various financial positions with Under Armor since 2004, was appointed Chief Financial Officer in December 2017.

Dickerson, Molloy and Bergman did not immediately respond to requests for comments on Sunday.

Slower growth, coupled with unexpected drops in quarterly earnings, raised concerns about Under Armor's ability to continue gaining market share

Nike Inc.

and

Adidas AG

, The company's shares, which used to trade above $ 40, closed at $ 18.91 on Friday.

Last month, the company announced that Mr. Plank resigned as CEO after more than 20 years on January 1. Mr. Plank will remain in the company as Executive Chairman and Brand Chief, and Mr. Frisk will take over the management and continue to report to Mr. Plank.

Mr. Plank, a former University of Maryland football player, founded Under Armor in his grandmother's basement with sweat-wicking compression clothing. Over time, he added new products and gained recognition from athletes such as NBA stars

Stephen Curry

and golfers

Jordan Spieth,

Building the company into a global brand with annual sales of approximately $ 5 billion.

In recent years, the company has again focused on performance clothing, but continued to struggle in the domestic market. Under Armor posted a 3% revenue decline in North America in the second fiscal quarter and expects full-year revenue to decline. Analysts expect third-quarter revenue of $ 1.41 billion after $ 1.44 billion a year ago.

Like many other companies, Under Armor has been confronted with complaints about its culture by current and former employees. Club visits and inappropriate conduct by executives, the Wall Street Journal reports. Mr. Plank has spoken openly about the shortcomings of Under Armor, promised improvements and replaced some senior executives.

Announcing plans to hand over the CEO title, the 47-year-old billionaire said the decision was part of the company's long-term succession plan.

Write to Aruna Viswanatha at [email protected] and Khadeeja Safdar at [email protected]

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