Under Armour

Under Armour Settles Lawsuit for $434 Million Over Sales Disclosures

Sportswear giant Under Armour has announced a settlement of $434 million to resolve a class-action lawsuit dating back to 2017, which accused the company of misleading shareholders about its revenue growth.

The settlement, pending court approval, comes ahead of a scheduled trial on July 15 in a Baltimore federal court, averting further legal proceedings.

Shareholders alleged that Under Armour, along with CEO Kevin Plank, intentionally misled them about the company’s financial status. This follows a separate $9 million settlement in 2021 with the Securities and Exchange Commission (SEC) over similar charges related to revenue growth misrepresentation.

The SEC’s investigation found that Under Armour failed to disclose a sales tactic that accelerated $408 million in existing orders in the second half of 2015, a fact that was not disclosed to investors.

Mark Solomon, lead counsel for the shareholders, hailed the settlement as a significant victory, emphasizing the role of pension funds in holding companies accountable.

Under Armour plans to fund the settlement through available cash and by utilizing its revolving credit facility. Additionally, the company has committed to maintaining separate roles for the chair and CEO for at least three years.

While Under Armour has consistently denied the allegations, it entered into the settlement agreement without admitting fault or wrongdoing. The company anticipates accruing the $434 million settlement amount during the first quarter of fiscal year 2025, compared to $100 million set aside at the end of fiscal 2024.

Oh hi there đź‘‹
It’s nice to meet you.

Sign up to receive awesome content in your inbox, every week.

We don’t spam!

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *