Dive Brief:

• The Securities and Exchange Commission is investigating whether global sportswear company Under Armour used smoothing techniques in its accounting to make its performance appear healthier over time, The Wall Street Journal reported Monday.
• At press time, the SEC had not publicly acknowledged the investigation.
• The investigation concerns whether the company, as part of its revenue recognition practices, shifted sales from quarter to quarter. The SEC is trying to determine whether the company recorded revenue before it was earned and also whether it deferred the dating of expenses, the Journal said.

Dive Insight:

Under Armour has been responding to requests for documents since July 2017 and "firmly believes that its accounting practices and disclosures were appropriate," the company said in a statement released in response to the Journal article.

The company has been struggling in recent years. It reported quarterly growth of between 22% and 31% from the fourth quarter of 2014 through the third quarter of 2016. Its growth dropped to about 12% in the fourth quarter of 2016 and has been struggling since, showing a 5% loss in the third quarter of 2017.

Meanwhile, its CFO post has become a revolving door. Three executives have served as finance chief since 2016: Brad Dickerson, the company's CFO since 2008, stepped down in February 2016. He was replaced by Chip Molloy, a former PetSmart finance executive, who served until early 2017. David Bergman, in an internal move, then stepped in.

The company has been restructuring since Bergman took over, and last month it announced its founder, Kevin Plank, was intending to step down as CEO on Jan. 1. He will stay on as executive chairman. Patrik Frisk, Under Armour's president and COO, is slated to become CEO on Jan. 1.

The company reported third-quarter revenue of about $1.43 billion, slightly more than analysts' expectations.

Net income in the quarter was $102 million, up 7.2% from the year prior, while operating income increased 9.7% to $139 million. A few highlights executives pointed to in their earnings call Monday: Total debt decreased 26% to $592 million and inventory decreased by 23%, Retail Dive reported.