All persons and entities, excluding the defendants, who purchased or otherwise acquired Class A and/or Class C common stock of Under Armour, Inc. during the period from September 16, 2015, to November 1, 2019. Plaintiffs assert claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for Under Armour’s alleged use of improper sales and accounting practices to maintain an image of consistent growth, misrepresenting the company’s financial condition.

Class A and/or Class C common stock of Under Armour, Inc.

The complaint alleges that Under Armour, Inc. engaged in fraudulent practices to artificially inflate its financial performance and stock price. Kevin Plank, the company’s founder and CEO during the Class Period, drove an aggressive growth strategy that aimed to maintain a 20% growth streak. This strategy led to improper sales practices, including “pull forward” sales, channel stuffing, and inducements to retailers to accept more inventory than needed. These actions masked the declining demand for Under Armour’s core products, such as training t-shirts and hooded sweatshirts, which had become oversaturated in the market.

Under Armour’s brand heat, or consumer demand for its products, began to die down as the company failed to innovate and adapt to new trends like athleisure. This, coupled with the loss of major retail partners such as Sports Authority, led to significant financial pressures. Despite these challenges, Under Armour maintained unrealistic sales goals and resorted to heavy discounting and promotions, which further eroded its premium brand image.

In response to declining demand and to protect his control over the company, Plank orchestrated a recapitalization plan to issue a new class of stock, Class C shares, which were distributed as a 1:1 dividend to all Class A and Class B shareholders on April 7, 2016. This allowed Plank to sell significant shares without losing voting control. The SEC and DOJ investigations revealed ongoing deceptive practices, including moving revenue between quarters to meet sales targets. Under Armour’s stock price fell nearly 19% following the disclosures of these investigations and the company’s actual financial health. These allegations indicate that Plank and other executives knowingly engaged in these practices to maintain the façade of growth and profitability, ultimately leading to substantial economic losses for investors who purchased the company’s securities at inflated prices.

Class action on behalf of all persons and entities, excluding the defendants, who purchased or otherwise acquired Class A and/or Class C common stock of Under Armour, Inc. during the period from September 16, 2015, to November 1, 2019. Plaintiffs assert claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for Under Armour’s alleged use of improper sales and accounting practices to maintain an image of consistent growth, misrepresenting the company’s financial condition.