Robbins Arroyo LLP: Under Armour, Inc. (UA) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Under Armour, Inc. (NYSE: UA) in the U.S. District Court for the District of Maryland. The complaint is brought on behalf of all purchasers of Under Armour securities between April 21, 2016 and January 30, 2017, for alleged violations of the Securities Exchange Act of 1934 by Under Armour’s officers and directors. Under Armour, together with its subsidiaries, develops, markets, and distributes branded performance apparel, footwear, and accessories for men, women, and youth primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America.
Under Armour Accused of Unjustifiably Touting High Sales Growth Expectations
According to the complaint, Under Armour officials issued a series of public statements touting an optimistic forecast for the company. The company’s Chief Executive Officer, Kevin A. Plank, stated in an April 2016 press release that, “[w]ith this unrelenting consumer focus and ongoing investment, we are setting the foundation for our growth story over the next 20 years.” Notably, soon after making these statements, Plank sold approximately 1.05 million shares of his Class C common stock, which was an unusual move, and departed from his prior selling activity. Despite dumping a large quantity of his personal holdings, Plank continued to maintain confidence in the company’s growth, emphasizing its strong financial results for the second quarter of 2016 and boasting about the continued worldwide demand for Under Armour items. Lawrence P. Molloy, the company’s Chief Financial Officer (“CFO”), added that he expected revenues to grow approximately 20% for the third quarter.
Around August 2016, Under Armour’s growth began to slow after a slew of department store closures and the bankruptcy of The Sports Authority, despite Under Armour’s prior positive assurances that the trend of steady sales growth would continue. On January 31, 2017, Under Armour announced weaker-than expected fourth quarter earnings, citing “numerous challenges and disruptions in North American retail.” Subsequently, Molloy stepped down from his position, despite only serving as CFO for approximately 13 months. On this news, Under Armour’s stock dropped 28% in pre-market trading, ultimately falling by $7.41 per share to close at $21.49 per share on January 31, 2017.
Under Armour Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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