Underneath Armour to pay $9 million to settle SEC fees By Reuters
© Reuters. FILE PHOTO: Clients exit an Underneath Armour retailer in New York
By Katanga Johnson
WASHINGTON (Reuters) -U.S. sports activities attire maker Underneath Armour Inc (NYSE:) has agreed to pay $9 million to settle Securities and Alternate Fee (SEC) fees that it misled traders about its income progress, the company stated on Monday.
The SEC discovered that Underneath Armour (NYSE:) did not confide in traders that it employed a gross sales tactic to speed up or “pull ahead” a complete of $408 million in present orders within the second half of 2015 after a heat winter started to harm gross sales of the corporate’s higher-priced chilly climate attire that prospects had requested be shipped in future quarters.
Maryland-based Underneath Armour didn’t admit to or deny the SEC’s fees, the regulator stated in its order.
“This settlement pertains to the corporate’s disclosures and doesn’t embrace any allegations from the SEC that gross sales throughout these durations didn’t adjust to typically accepted accounting rules,” Underneath Amour stated in an announcement.
For six consecutive quarters starting within the third quarter of 2015, the SEC discovered that Underneath Armour misleadingly attributed its income progress to varied elements with out disclosing to traders materials details about the impacts of its pull ahead practices. It additionally discovered that the corporate’s use of pull forwards raised important uncertainty as as to if it could meet its income steering in future quarters.
The corporate has agreed to stop and desist the apply, which is a violation of U.S. antifraud provisions, the SEC stated.
“When public firms describe how they achieved monetary outcomes, they have to not misstate any data that’s materials to traders,” stated Kurt Gottschall, who leads the SEC’s Denver regional workplace.
“Through the use of pull forwards for a number of consecutive quarters to satisfy analysts’ income targets whereas attributing its income progress to different elements, Underneath Armour created a deceptive image of the drivers of its monetary outcomes and hid identified uncertainties regarding its enterprise,” he added.
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