Under Armour has agreed in principle to pay $434 million to settle the lawsuit filed by purchasers of shares of the sportswear company.
The firm, however, clarified that the agreement to settle the litigation is not an admission of wrongdoing and continues to deny the accusations.
“Today’s announcement allows us to move past this more than seven-year-old matter so we can avoid the ongoing distraction of litigation and provide certainty to the business at a time when we are executing on important strategic priorities,” said Mehri Shadman, Under Armour’s chief legal officer and corporate secretary.
“We firmly believe that our sales practices, accounting practices, and disclosures were appropriate, and deny any wrongdoing in this case.”
The North East Scotland Pension Fund filed the lawsuit in 2017 on behalf of 71,000 workers including Aberdeen, Aberdeenshire and Moray council staff.
The pension fund invested millions of pounds in Under Armour shares but claimed the company misled investors into believing consumer demand for its products was strong between the third quarter of 2015 and the fourth quarter of 2016, when in fact there was a decline.
Under Armour will source the settlement amount from its cash on hand and $1.1 billion revolving credit facility.
Following the settlement, the sportswear company expects to end FY25 with about $500 million in cash and cash equivalents and no borrowings outstanding under its $1.1 billion revolving credit facility.
