Under Armour Inc. has issued a statement in response to a Wall Street Journal story, maintaining that its accounting practices have been “entirely appropriate.” The Wall Street Journal spoke with former executives who said the company took a number of measures in the lead up to past earnings announcements, including redirecting goods to the off-price channel, in order to cover up slowing sales. “For many years, quarterly shifts in wholesale revenue related to timing of shipments based on financial goals; customer requests; year-to-year seasonal variance; different fiscal calendar alignments; product availability; logistics; and numerous other dynamics have been, and continue to be, part of the normal course of business practices in the apparel, footwear and retail sector,” the Under Armour statement says. “In this respect, our process for recognizing revenue and recording returns and other allowances has not changed and has always been in compliance with generally accepted accounting principles.” Last week, it was revealed that Under Armour was under federal investigation for its accounting practices. The athletic gear company also announced third-quarter earnings, which included a decline in North American sales and a downward guidance revision. Under Armour stock is down 17.1% for the month to date, and down 23.5% over the past year. The S&P 500 index is up 13.4% for the past 12 months.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
Under Armour contends after Wall Street Journal report that accounting practices have been ‘entirely appropriate’
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