Both the SEC and the Department of Justice are investigating accounting practices at Under Armour. The focus is on revenue recognition. UA has been missing sales targets since 2016, and since 2016 has had three of CFOs, two of whom left with the usual “personal reasons” explanations.
There have been some unusual cultural issues at the company– including the expensing of strip club visits and inappropriate behavior by male executives. Although CEO and founder Kevin Plank has vowed to do better, he will be stepping down as CEO on January 1, but will remain as chairman of the board.
The pattern is always the same: tremendous growth that cannot be sustained, a wild yee-haw culture, executives rotating in, out, and through, and the inevitable questions about accounting. Groovy company, groovy leaders, followed by groovy accounting. This one will not end well.