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The sportswear company agreed to pay $9 million to settle a Securities and Exchange Commission investigation into its accounting practices. The SEC charged Under Armour with disclosure failures, more specifically with misleading investors about its revenue and sales numbers to make them appear higher than they were.
It was alleged that Under Armour did this through the use of “pull forwards,” which saw the revenue from orders that would be shipped in future quarters reflected in a current quarter. The SEC’s charges claim that Under Armour did not fully disclose the practice to investors, and that “using these undisclosed pull forwards, Under Armour was able to meet analysts’ revenue estimates.”
In the settlement, which resolves the charges, Under Armour did not confirm or deny the SEC’s charges against the company, but agreed to cease and desist from engaging in any further violations.
