Under Armour Inc. issued a statement in response to a Wall Street Journal article, maintaining that its accounting practices have been “entirely appropriate.”
The Wall Street Journal interviewed former executives who said Under Armour used numerous measures in the lead up to past earnings announcements, including redirecting goods to the off-price channel, in order to cover up slowing sales.
Under Armour’s statement said, “For many years, quarterly shifts in wholesale revenue related to timing of shipments based on financial goals; customer requests; year-to-year seasonal variance; different fiscal calendar alignments; product availability; logistics; and numerous other dynamics have been, and continue to be, part of the normal course of business practices in the apparel, footwear and retail sector. In this respect, our process for recognizing revenue and recording returns and other allowances has not changed and has always been in compliance with generally accepted accounting principles.”
Last week, Under Armour confirmed that it has been under federal investigation for its accounting practices from the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) since July 2017.