Business

Under Armour faces probe over accounting practices: Report

Sportswear-maker Under Armour is under investigation by US federal law enforcement officials over whether it shifted sales from quarter to quarter to appear financially healthier, the Wall Street Journal reported on Sunday.

The Baltimore-based company confirmed that it is under investigation and is cooperating with the Justice Department and US Securities and Exchange Commission (SEC). It also defended its accounting practices and disclosures.

The Journal, citing unnamed sources, said in its report that a criminal inquiry is being conducted by Justice Department prosecutors, who are also coordinating with civil investigators at the SEC.

An Under Armour spokesman said: "The company began responding in July 2017 to requests for documents and information relating primarily to its accounting practices and related disclosures, and the company firmly believes that its accounting practices and disclosures were appropriate."

Last month, Under Armour said long-time chief executive officer Kevin Plank was stepping down next year, handing the reins of the company to operations head Patrik Frisk in an attempt to help battle brutal competition from Nike and Adidas in the US.

The company, which was due to report third-quarter results yesterday, has been restructuring its operations as it struggles to stand out in the US.- REUTERS

BUSINESS & FINANCE