Under Armour to Pay $434M to Settle Lawsuit Over Sales Disclosures

Under Armour on Friday said it has agreed to pay $434 million to settle a 2017 class action lawsuit accusing the sports apparel maker of defrauding shareholders about its revenue growth in order to meet Wall Street forecasts. The proposed settlement, subject to court approval, averts a scheduled July 15 trial in Baltimore federal court. The shareholder lawsuit accused the apparel maker and CEO Kevin Plank of intentionally misleading them about the company's financial health. In 2021, the Baltimore-based company had agreed to pay $9 million to settle Securities and Exchange Commission charges that it misled investors about its revenue growth.

Total Retail's Take: While Under Armour has consistently denied the accusations and entered into this agreement in principle, that doesn't change the fact that the already challenged brand will be shelling out close to half a billion to settle this case. That financial burden figures to further strain Under Armour's turnaround plan, which has seen a shift in leadership (with Plank returning to the CEO position), job cuts, and a re-evaluation of its product mix. To say that it has been a turbulent couple of years for the sports apparel brand would be an understatement. However, with the lawsuit now behind it and a strategy in place for revitalizing the business, perhaps Under Armour can reclaim past success. It has a long way to go, however.