According to US Securities and Exchange Commission officials, Under Armour (UAA) pledged $ 9 million to settle claims. The regulatory agency charged the firm with misleading investors about its income growth.
A Commission investigation found Under Armor had been counting future sales in its quarterly reports for the past six quarters beginning in the second half of 2015.CNBC reports that the UAA stock shifted revenues from orders to deliver in the coming quarters by $408 million.
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However, Under Armour (UAA) did not inform investors much about the consequences of this practice when it explained the growth in revenue by a variety of factors. As a result, future earnings forecasts for the UAA stock may be affected if this tactic continues.
Kurt Gottshall, regional director of the SEC’s Investor Relations Division, was quoted on CNBC as saying “public companies shouldn’t misrepresent any relevant information to investors when describing financial performance”.Under Armor was ordered by the SEC to stop the practice, which violates the US anti-fraud laws.
While the UAA stock agreed to pay the fine, it did not confirm or deny the Securities and Exchange Commission allegations. “The settlement only deals with the disclosure of information by the UAA stock and excludes any statements from the SEC or the exchanges that sales during these periods did not comply with generally accepted accounting principles,” according to a statement from Under Amour.
Under Armour (UAA) closed the last trading session at $24.17, falling -0.58% from its closing price. The stock traded 6.38 million shares, below the average daily volume of 5.42 million shares published for the last 50 days. Under Armour Inc., shares have increased 2.76% in the last five days, but are up 10.01% over the last month. In the last three months, the stock price increased by 34.35%, and it has been up 40.77 percent in the last year. In addition, its price-to-cash-flow ratio stands at 83.31, and its price-to-sales ratio is 2.25.
