Under Armour slides amid US probe into accounting practices

Shares in Under Armour tumbled on Monday after the sportswear brand confirmed its accounting practices are under investigation by US authorities.

A statement released by the New York-listed company on Sunday said the business if facing probes from both the Department of Justice and the US Securities and Exchange Commission.

An Under Armour spokesperson 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."

The news overshadowed the company's third quarter results, which showed net income came in at $102.3m, compared with $75.3m during the same period last year.

This translates to earnings per share of 23 cents, well above the 18 cents expected by analysts.

However, the company still booked a 1% drop in revenue to $1.4bn, after a 12% decline in footwear revenue to $251m more than offset slight increases in sales of apparel and accessories.

Consequently, Under Armour cut its full-year revenue guidance from 3-4% growth to 2% growth, citing lower than planned excess inventory to service its off-price channel, ongoing traffic and conversion challenges, and foreign currency headwinds.

Chairman and chief executive Kevin Plank said: "As we make the turn into 2020, we are confident in our ability to deliver our fourth quarter targets while proactively supporting higher levels of strategic marketing investments that will further fuel the Under Armour brand."

Under Armour shares were down 15.18% at $17.93 at 1534 GMT.