Under Armor has agreed to pay $ 9 million by the Securities and Exchange Commission to mislead investors.
The SEC alleges that the sports apparel manufacturer failed to tell investors that it was outpacing scheduled sales from future quarters – and counted them as full orders to meet Wall Street revenue expectations , Which is a violation of antifred provisions.
The Feds said the company began using the so-called “pull forward” strategy in the second half of 2015, when a warm winter hurt sales of its more expensive cold weather clothing, and continued for six quarters , Leading to an impact of $ 408 million in sales.
In settling the allegations, Under Armor did not accept the regulator’s allegations nor, did the SEC Announced Monday.
The SEC does not plan to pursue enforcement against Under Armor co-founder and president Kevin Planck or CFO David Bergman. The company previously revealed that two people could be sued by the SEC.
“The agreement relates to the company’s disclosures and does not include any allegation from the SEC that sales during these periods do not comply with generally accepted accounting principles,” under Armor said in a statement. “The settlement resolves all outstanding SEC claims.”
The SEC said Under Armor failed to drive its revenue growth in its “forward-looking” strategy and that the company’s reliance to drive future sales “raised significant uncertainty” as to whether it would foresee future quarters. Will meet its revenue guidance.
The SEC said that Under Armor has agreed to stop and remove the practice.
“Under Armor created a misleading picture of drivers of their financial results and concealed the uncertainties related to their business,” SEC Denver Regional Director Kurt Gottschel said in a statement. “When public companies state how they achieved financial results, they should not make any information wrong for investors.”
Leave a Reply