WASHINGTON – United States athletic apparel company Under Armour yesterday agreed to pay US$9 million (RM36.98 million) to settle charges by financial regulators that it misled investors about its revenues.
The Securities and Exchange Commission (SEC) said for six quarters from the third quarter of 2015 through 2016, Under Armour inflated sales to meet analysts’ expectations.
Faced with missing those revenue targets, the company pulled forward US$408 million in orders that customers had requested for future quarters, said SEC in a statement.
Under Armour, which sponsors American football player Tom Brady, boxer Anthony Joshua and basketball player Stephen Curry, then attributed that revenue growth to “various factors” without telling investors about the “accelerated” orders.
“By using pull forwards for several consecutive quarters to meet analysts’ revenue targets while attributing its revenue growth to other factors, Under Armour created a misleading picture of the drivers of its financial results and concealed known uncertainties concerning its business,” said Kurt Gottschall, director of SEC’s Denver office, in a statement.
Under Armour said the settlement resolves the charges from the US financial regulator, and “the company neither admitted nor denied SEC’s charges”, it said in a statement.
The firm also agreed to “other non-monetary settlement terms”, without elaborating.
Its stock was up 0.6% after the close. – AFP, May 4, 2021
