Under Armour founder Kevin Plank and Chief Financial Officer David Bergman received notice they could face civil-enforcement action based on the company’s accounting in 2015 and 2016. The Securities and Exchange Commission started investigating the company last year and issued the Wells notices last week.
Former Under Armour executives said the company would shift sales and other tactics to keep a 20% sales growth streak intact. Plank stepped down as CEO this year as the company restructures and has struggled with declining sales the past two years. The Wells notice news comes as the company is set to release its second quarter earnings report on Friday.
Under Armour had an up-and-down second quarter, including:
— Working to get out of several high-profile collegiate partnerships, including a $280 million deal with UCLA.
— Reportedly trying to sell the MyFitnessPal app. Connected fitness was a lone bright spot in the company’s first quarter, gaining 8.9% in revenue, while overall revenue dropped 23%.
— New diversity and inclusion initiatives announced last week.