Under Armour (UAA) - Get Report posted stronger-than-expected third quarter earnings Monday, but an ongoing investigation into the sportswear group's accounting practices by federal regulators will likely cloud the company's near-term market performance.     

Under Armour said earnings for the three months ending in September came in at 25 cents per share, essentially flat to the same period last year and 7 cents ahead of the Street consensus forecast. Group revenues, the company said, fell 1% to $1.4 billion, a figure that came largely in-line with analysts' estimates. 

Looking into the final months of 2019, Under Armour said it expects full year earnings at the higher end of its prior forecast of between 33 cents and 34 cents per share, and said revenues would be about 2% higher than 2018 thanks in part to lower-than-expected excess inventory, down from its previous estimate of an increase of between 3% and 4%.

"Building our long-term brand strength remains at the center of everything we do," said outgoing CEO Kevin Plank. "Our ongoing transformation across the business continues to make us smarter, faster and more operationally excellent. As we make the turn into 2020, we are confident in our ability to deliver our fourth quarter targets while proactively supporting higher levels of strategic marketing investments that will further fuel the Under Armour brand."

Under Armour shares were marked 16.2% lower at the start of trading Monday to change hands at $18.74 each, a move that would wipe out all of the stock's year-to-date gains and value the group at around $7.6 billion.

Under Armour said it is co-operating with investigations from both the Securities and Exchange Commission as well as the U.S. Department of Justice after the Wall Street Journal reported the two agencies were looking into the company's revenue recognition accounting, which it said was used to flatter sales from quarter to quarter.

Under Armour said its "practices and disclosures were appropriate" and has been responding to requests for documents since July 2017 "relating primarily to its accounting practices and related disclosures."