Under Armour Inc.'s accounting practices are under investigation by federal law enforcement, The Wall Street Journal reported Sunday evening. Officials are looking into whether the Baltimore-based athletic footwear and apparel company manipulated its sales numbers to look stronger than they really are.
The article cited unnamed sources saying that investigators questioned people in Baltimore. Another source told the Journal that Justice Department prosecutors are conducting a criminal inquiry in coordination with investigators from the Securities and Exchange Commission.
In a statement, a spokeswoman said the company is cooperating with federal officials.
“Under Armour is cooperating with the U.S. Securities and Exchange Commission and the U.S. Department of Justice investigations," the spokeswoman’s statement said. "The company began responding in July 2017 to requests for documents and information relating primarily to its accounting practices and related disclosures, and the company firmly believes that its accounting practices and disclosures were appropriate.”
Since late 2016, the $5.2 billion brand represented by Olympic swimmer Michael Phelps and New England Patriots quarterback Tom Brady has been fighting to boost declining sales in the United States, its biggest market.
North American sales slipped 3% in the most recent quarter. Under Armour is set to announce quarterly financial results Monday.
Late last month, the company’s board announced that founder Kevin Plank will step down as the athletic apparel maker’s CEO at the end of the year. Patrik Frisk, the company’s president and chief operating officer, will take over Jan. 1 as CEO.