Under Armour Sued for Misleading Investors
Under Armour has had a rocky start to 2017. In addition to dwindling sales and current backlash from CEO Kevin Plank’s comments about the Trump administration, a federal class-action lawsuit was filed Friday accusing Under Armour of intentionally misleading shareholders about the company’s financial health. Reports say that the lawsuit, which was filed in U.S. District Court in Baltimore, home of Under Armour, states, “Despite outward votes of confidence and assurances to plaintiff and the rest of the investing public that Under Armour would continue as a force in the sports retail market, defendants, and Plank in particular, were aware of the decreasing growth margins and over surplus of unsold inventory.” Reports also state Chip Molloy, Under Armour’s former chief financial officer who announced his resignation for personal reasons after the disappointing earnings report last month, is named as a defendant in the lawsuit.
Total Retail’s Take: 2017 isn’t Under Armour’s year so far. In addition to slowing growth and a weakened forecast, the company’s reputation has also taken some hits. Loyal brand endorsers, including the Golden State Warriors’ Stephen Curry and renowned ballet dancer Misty Copeland, have publicly voiced their opposition to Plank’s opinions of the Trump administration. This class-action lawsuit is another crack in the foundation for Under Armour.