Under Armour, a company founded by Kevin Plank, recently posted their third-quarter earnings, but nobody seemed to notice.
There was a bigger story that came out about this company founded by Kevin Plank. Most news outlets including The Wall Street Journal had found out that the Securities and Exchange Commission (SEC) and the Justice Department are working with this firm to determine if it has been honest about its revenue recognition accounting. The investigation is trying to determine if they have moving sales from one quarter to another. This firm is openly admitting that they are being investigated and that their accounting practices are appropriate.
What makes thins even more interesting is that Kevin Plank, the CEO and founder of Under Armour, is leaving his post in January of 2020. He will be replaced by Kevin Frisk who has worked for the firm since 2017. Plank is not leaving the firm. He is just changing titles. His new titles at this firm will be Brand Chief and Executive Chair.
What did the third-quarter report from Kevin Plank’s firm say? The report said that it had an EPS of $0.23. The earnings had a growth of negative 8%. These results were higher than the experts expected. This firm did make sales of $1.43 billion. This firm did beat expectations and its tops line printed in contraction.
If you looked closely at this report for this Kevin Plank company, you would find that there are some bad signs. The international revenue did increase by 5%, but the revenue in North America decreased by 4%. It is also not a good sign that wholesale and direct to consumer revenue declined. The direct to consumer sales ended up being negative 1%. This is especially not good as it is a world that people buy more from their computers at home than going to the local mall.
If you break down Kevin Plank’s company by product type, there are some silver linings. Apparel produced sales of $986 million. Under Armour’s footwear sales did not do too well as they fell by negative 12% to $251 million. The gross margin of all sales was good as the gross margin went up by 48.5%.
With new changes at the top at this Kevin Plank company, there is a good chance that they look at this quarter and turn the negatives into positives in the next quarters.
Learn more: https://en.wikiquote.org/wiki/Kevin_Plank