Dollar General Corporation
Period: Mar 10, 2016 to Nov 30, 2016
Lead Plaintiff Deadline: Mar 20, 2017 + Deadline passed
Summary of Case:
A securities class action has been filed against Dollar General Corporation (NYSE: DG) on behalf of purchasers of the Company's securities between March 10, 2016 and November 30, 2016. This case has been filed in the USDC - Middle District of Tennessee.
The complaint alleges that throughout the Class Period the defendants made false and misleading statements and failed to disclose material adverse facts about the Company's business and operations to investors. Specifically, defendants made false and/or misleading statements and/or failed to disclose that the announced limitations on SNAP benefits would have a material impact on the Company's financial performance because 56% of Dollar General's stores are located in states that re-implemented time limitations on SNAP benefits in 2016, and therefore the impact of SNAP reductions would be disproportionate to the percentage of the Company's overall sales comprised of SNAP payments. These statements were material to investors because they were made in response to concerns by analysts that SNAP benefits were going to be reduced in a number of states - which potentially would have impacted Dollar General's sales to the extent its business operations were exposed to SNAP changes.
The truth about the impact that SNAP reductions were having on Dollar General's business began to surface on August 25, 2016, when the Company announced disappointing second quarter 2016 financial and operational results. The Company attributed its disappointing quarterly results, in part, to "a reduction in both SNAP participation rates and benefit levels." On this news, Dollar General's stock price declined $16.18 per share, or more than 17%, from a close of $91.79 per share on August 24, 2016, to close at $75.61 on August 25, 2016.
Subsequently, on December 1, 2016, Dollar General announced third quarter 2016 financial and operational results that included a reduction in same-store sales, even though the Company had previously predicted annual same-store sales growth of 2-4%, and most analysts expected a quarterly increase in same-store sales of nearly 1%. The Company again attributed its poor quarterly performance, in large part, to reductions in SNAP benefits, and finally admitted the true impact that SNAP reductions were having on its sales, stating that the benefit reductions "affect about 56% of our store base . . . And those states that have had the reduction or elimination, they are approximately 100-basis-point worse in comp. That gives you a real good idea of how impactful those SNAP benefits reductions have been." On this news, Dollar General's stock price declined $3.84, or nearly 5%, from a close of $77.32 per share on November 30, 2016, to close at $73.48 per share on December 1, 2016.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.