$UAA: Strategic Turnaround in Play — Yet $434M Settlement Overhang Lingers

Court: D. Maryland

Case: 1:17-cv-00388

Under Armour UAA is pushing a strategic transformation under returning CEO Kevin Plank, introducing innovations like NEOLAST fiber in performance tees and a shift toward premium pricing. Despite a 33% stock decline over the past year, UBS maintained a Buy rating with a $7.50 target price, citing potential for a fiscal 2027 comeback. Financial pressures remain, with earnings growth down 40.7% year-on-year, but gross margins holding near 48%. Still, even as turnaround plans advance, the unresolved $434M shareholder settlement continues to weigh on investor sentiment.

• Innovation Push: NEOLAST fiber introduced in new performance products.
• Stock Pressure: Shares down 33% in 2025.
• Analyst Support: UBS price target $7.50, Buy rating maintained.
• Financial Strain: Earnings growth down 40.7% year-on-year.
• Settlement Reminder: $434M litigation over revenue misstatements unresolved.

Timeline Overview

• Apr 21, 2016: Q1 earnings show 26th straight quarter of 20%+ revenue growth.
• Jan 31, 2017: Weak Q4 results + CFO resignation; stock falls 26%.
• Feb 3, 2017: Shareholders sue over misleading financial health claims.
• Feb 10, 2017: Lawsuit expands to allegations of inflated growth promises.
• 2025: Company agrees to a $434M settlement with investors.

Allegations Include

• Misleading assurances of sustained 20% revenue growth.
• Concealing internal challenges including excess inventory.
• Downplaying retailer bankruptcies’ impact on sales.
• Inflated projections that misrepresented business prospects.

Investor Update

The $434M settlement resolves claims tied to revenue misstatements but underscores governance risks. While the strategic plan offers hope for recovery by 2027, investor trust will depend on execution and transparent financial communication.

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