Bernstein Liebhard LLP Announces That A Class Action Has Been Filed Against
Family Dollar Stores, Inc.
NEW YORK, Feb. 26, 2013
NEW YORK, Feb. 26, 2013 /PRNewswire/ --Bernstein Liebhard LLP today announced
that a class action has been commenced in the United States District Court for
the Western District of North Carolina on behalf of a class (the "Class") of
purchasers of Family Dollar Stores, Inc. ("Family Dollar" or the "Company")
(NYSE: FDO) common stock between October 3, 2012 and January 2, 2013 (the
(Logo: http://photos.prnewswire.com/prnh/20120202/MM47134LOGO )
The complaint charges Family Dollar and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Family Dollar
operates a chain of approximately 7,500 general merchandise retail discount
stores in 45 states, which sell consumables, home products, apparel and
accessories, and seasonal and electronics products.
The complaint alleges that during the Class Period, defendants issued
materially false and misleading statements regarding Family Dollar's
then-present sales demand, profitability and financial results for the first
quarter of 2013, ended November 24, 2012, and for December 2012. As a result
of defendants' false statements, Family Dollar's stock traded at artificially
inflated prices throughout the Class Period, reaching a high of $71.20 per
share by November 30, 2012. Meanwhile, Family Dollar's senior executives
cashed in, selling their own Family Dollar stock at artificially inflated
prices, including its Chief Executive Officer who sold more than $15.6 million
worth of his Family Dollar stock during the Class Period.
Then, on January 3, 2013, before the markets opened, Family Dollar issued a
press release disclosing that sales in the Company's first quarter 2013 –
which had ended November 24, 2012 – had significantly underperformed, with
significant increases in sales of lower margin consumables rather than higher
margin discretionary products, that the Company's soft holiday sales in
December had required significant discounting, that the Company's inventory
had become bloated, and that, as a result, defendants were slashing the
Company's 2013 financial guidance. The price of Family Dollar stock dropped on
this news, falling $8.30 per share – or approximately 13% – to close at $55.74
per share on January 3, 2012.
According to the complaint, the true facts, which were known by the defendants
but concealed from the investing public during the Class Period, were as
follows: (a) the Company's intentional efforts to increase sales of lower
margin consumables, such as cigarettes, Pepsi drinks, gift cards, magazines
and other high-turnover merchandise, in order to increase foot traffic and
better compete against chains such as Dollar General Corp and Wal-Mart Stores
Inc., had significantly diminished profits in the first quarter of 2013 and in
December 2012; (b) significant price cuts undertaken in an attempt to move
unsalable inventory had also significantly diminished profits in the first
quarter of 2013 and in December 2012; (c) Family Dollar's sales of more
profitable discretionary items such as toys and other household goods had
significantly underperformed expectations in the first quarter of 2013 and
during December 2012; (d) bloated inventories in Family Dollar's stores would
significantly weigh down 2013 profitability; and (e) based upon the above,
defendants lacked a reasonable basis for their positive statements about the
Company's sales and profitability during the Class Period, in particular their
first quarter and fiscal 2013 guidance.
Plaintiffs seek to recover damages on behalf of all Class members who invested
in Family Dollar common stock during the Class Period. If you invested in
Family Dollar common stock as described above during the Class Period, and
either lost money on the transaction or still hold the stock, you may wish to
join in this action to serve as lead plaintiff. In order to do so, you must
meet certain requirements set forth in the applicable law and file appropriate
papers no later than April 22, 2013.
A "lead plaintiff" is a representative party that acts on behalf of other
class members in directing the litigation. In order to be appointed lead
plaintiff, the court must determine that the class member's claim is typical
of the claims of other class members, and that the class member will
adequately represent the class. Under certain circumstances, one or more
class members may together serve as lead plaintiff. Your ability to share in
any recovery is not, however, affected by the decision whether or not to serve
as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel
of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a Family Dollar shareholder
and/or have information relating to the matter, please contact Joseph R.
Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and
shareholder rights cases and recovered over $3 billion for its clients. It
has been named to The National Law Journal's "Plaintiffs' Hot List" in each of
the last ten years.
You can obtain a copy of the complaint from the clerk of the court for the
United States District Court for the Western District of North Carolina.
Bernstein Liebhard LLP
10 East 40th Street
New York, New York 10016
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York, New York 10016, (212) 779-1414. The lawyer responsible for this
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do not guarantee or predict a similar outcome with respect to any future
Joseph R. Seidman, Jr.
Bernstein Liebhard LLP
SOURCE Bernstein Liebhard LLP
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