BALTIMORE _ Under Armour again Friday defended its accounting practices that have come under scrutiny amid federal probes and media reports that the brand manipulated sales numbers to mask weakening demand for its athletic apparel.
The Baltimore-based athletic apparel company confirmed earlier this month that its accounting methods are being investigated by the U.S. Securities and Exchange Commission and the Justice Department.
Under Armour reiterated Friday that it believes its practices have been "entirely appropriate," saying management and the board have "reviewed this matter extensively over the past two and a half years and stand by the company's financial reporting."
Under Armour's response followed a report late Thursday that said managers felt pressured to make quarterly sales goals to fuel a nearly seven-year run of quarterly sales gains in excess of 20 percent, a streak that ended in 2016.
The report by the Wall Street Journal quoted unnamed former executives who said they would shift business from future quarters, ask retailers to take delivery of merchandise early and reroute products meant for outlet stores to discount chains to count those sales at the end of a quarter.
The former executives said such practices, which some said are common in retail, were used to maintain the record growth, which they said was important to founder and CEO Kevin Plank, the story said.
The Journal first reported news of investigations into revenue recognition earlier this month and said federal officials are looking into whether the company manipulated its sales numbers to make them appear stronger.
Under Armour's stock took a beating, plunging nearly 19% on that initial news. Its shares were trading up nearly 4% midday Friday at $17.79 each.
Plank sent a letter Friday to Under Armour employees defending the integrity of a brand approaching its 15th year as a publicly traded company, one he said has grown into one of the world's biggest athletic apparel sellers.
"Given recent events that have entered the realm of public opinion without full context, it is disappointing to have our integrity and reputation called into question," Plank said in the letter.
He said officials are constrained by the ongoing investigation and therefore cannot address "media allegations raised by anonymous sources."
"We've certainly never claimed to be perfect, but our team has earned and deserves more respect than this reporting currently affords us," Plank said.
Plank's letter said sportsmanship is central to the brand's mission, adding, "Win or lose, we play with honor, fairness and respect for the game."
As to the inquiries by the SEC and Justice Department, "we respect the government's process and will continue to cooperate with thoughtful and proper resolve, " Plank said in the letter.
