Under Armour Facebook
- Under Armour’s shares are set to sink after the company lowered its sales forecast the day after it said that it has been investigated by federal authorities over its accounting practices.
- The sportswear company was down 14% in premarket at 9 a.m. in New York.
- The company said last month that CEO Kevin Plank will step down on January 1.
- View Business Insider’s homepage for more stories.
Under Armour’s shares tanked in premarket trading after saying officials had been investigating its accounting practices and after the company lowered its full-year sales forecast.
Shares dropped 14% in premarket at 9 a.m. in New York. The company announced on Sunday that it had been investigated by federal authorities for the last two years over its accounting practices.
“Justice Department prosecutors are conducting a criminal inquiry into the matter in coordination with civil investigators at the Securities and Exchange Commission,” the Wall Street Journal said, citing a person familiar with the matter.
Under Armour said to the Journal in response to its article: “The company began responding in July 2017 to requests for documents and information relating primarily to its accounting practices and related disclosures. The company firmly believes that its accounting practices and disclosures were appropriate.”
The Justice Department and Securities and Exchange Commission declined to comment to the Journal.
On Monday morning the company lowered its sales forecast in its third-quarter earnings statement from a 3% to 4% rise in revenue down to just 2%.
The company cited:
- “Lower than planned excess inventory to service the off-price channel
- Ongoing traffic and conversion challenges in direct-to-consumer
- Negative impacts from changes in foreign currency.”
Investigators questioned members of staff in Baltimore, the company’s HQ, as recently as last week, the WSJ said in its report.
Meanwhile, the company is transitioning between CEOs, as current CEO Kevin Plank said last month that he will step down on January 1. Plank founded the company in 1996, and will remain a central figure, becoming executive chairman and brand chief.
