Under Armour Shares Plunge 18% After US Justice Department Probe Revealed
Under Armour, a key brand partner of Harman saw their shares plunge 18% last night after US regulators moved on the Company over ‘accounting practises’.
What has been revealed is that since July 2017 it had been responding to requests for documents and information from both the Securities and Exchange Commission and the Department of Justice relating to its “accounting practices and related disclosures”.
In Australia Under Armour headphones are a hot seller with demand forcing the product into back order with the new stock set to hit stores shortly.
Recently Under Armour announced major sponsorship deals with both AFL Club Essendon and Soccer club Sydney FC.
Under Armour said it “continues to believe its accounting practices and related disclosures were appropriate”. The news was first reported by the Wall Street Journal on Sunday, which noted the probe was focused on whether the company inflated its sales figures.
The investigation creates “another dark cloud” for Under Armour, said Rick Patel, an analyst at Needham. T
The UK Financial Times said that the sportswear company’s shareholders are currently contending with a leadership change at the group. Chief executive Kevin Plank, who founded Under Armour in his grandmother’s basement, last month announced he would relinquish his title as chief executive and assume the role of executive chairman and brand chief, tasking chief operating officer Patrik Frisk with turning around the company when he takes the helm.
Currently, the Company is facing stiff competition from the likes of Nike and Adidas.
Under Armour, shares had been up 20 per cent year-to-date as of Friday’s close.