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Under Armour settles $9 million SEC fines over misleading revenue growth

Under Armour settles $9 million SEC fines over misleading revenue growth
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Under Armour announced Monday that it reached a settlement with the U.S. Securities and Exchange Commission to pay $9 million in fines over misleading its revenue growth to investors between 2015 and 2016.

According to the SEC filing, Under Armour used the “pull forward” method to accelerate existing orders that customers requested be shipped in future quarters, in an effort to close the gap between internal forecasts and analysts’ revenue estimates.

The SEC says the company pulled forward approximately $408 million in orders from the third quarter of 2015 through the fourth quarter of 2016.

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The agency noted that Under Armour would have missed analysts' revenue estimates in the stated time period if it had not pulled forward orders.

The SEC filing also wrote that Under Armour made “positive statements” about its revenue growth rate and the factors contributing to the rate, without revealing the “significant impact on revenue from its use of pull forwards.”

In a statement on Monday, Under Armour wrote that the settlement relates to its disclosures, and “does not include any allegations from the SEC that sales during these periods did not comply with generally accepted accounting principles.”

“The Company neither admitted nor denied the SEC's charges. The settlement resolves all outstanding SEC claims,” the statement added.

The SEC filing ordered Under Armour to “cease and desist” the practice.