The Strategist

US Department of Justice suspects Under Armor of financial reporting fraud

11/04/2019 - 04:10

The US Department of Justice is conducting an investigation into the US-based Under Armor equipment and sportswear manufacturer, The Wall Street Journal reported citing sources. The department suspects the company of manipulating financial statements, according to which the company tried to seem more developed.

Sources said the investigators conducted an interrogation in Baltimore, where the Under Armor headquarters are located. According to one of the interlocutors of the newspaper, the Justice Ministry opened a criminal case in this case. The company said it was cooperating with the investigation.

According to the newspaper, until 2016, the company showed revenue growth of at least 20% for 26 weeks, but in 2016 it did not manage to achieve the indicators stated in the forecast. At the end of 2017, the company's shares plunged. In reporting, Under Armor lowered its growth forecasts for next year, and also reported that the company lost its financial director, who had worked in his position for only one year. The founder, chairman and CEO of the manufacturer Kevin Plank explained the low rates by the decrease in the number of customers and changes in the sportswear industry, including bankruptcy of the retailer.

Under Armor was founded in 2016. It manufactures and supplies sportswear, equipment and shoes. In addition, the company cooperates with American teams in various sports.


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