| Company: | Family Dollar Stores Inc, |
| Ticker Symbol: | FDO |
| Class Period: | Oct-3-12 to Jan-2-13 |
| Date Filed: | Feb-28-13 |
| Lead Plaintiff Deadline: | Apr-29-13 |
| Court: | Western District of North Carolina |
| Allegations: | |
Family Dollar operates a chain of more than 7,400 general merchandise retail discount stores in 45 states, providing value-conscious consumers with a selection of competitively priced merchandise in convenient neighborhood stores.
The Complaint alleges that defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company' business, operations and prospects. Specifically, the Complaint alleges that: (a) the Company' intentional efforts to increase sales of lower-margin consumables, such as cigarettes and other tobacco products, 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 (ended November 24, 2012) 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 December 2012; (c) Family Dollar' sales of more profitable discretionary items such as toys and other household goods had significantly underperformed expectations in the first quarter of 2013 ended November 24, 2012 and during December 2012; (d) bloated inventories in Family Dollar' stores would significantly weight down 2013 profitability; (e) contrary to what defendants' November 20, 2012 and December 24, 2012 press releases had both stated and implied, i.e., that the Company' stores were going to be open on Thanksgiving and Christmas Day to address increased consumer demand, those stores were instead going to be open in a desperate attempt to buttress sagging sales; and (f) based upon the above, defendants lacked a reasonable basis for their positive statements about the Company' sales and profitability during the Class Period, in particular their first quarter and fiscal 2013 guidance.
As a result of defendants' false and misleading statements, the Company' stock traded at artificially inflated prices during the Class Period. During the Class Period, the Company' Chairman of the Board and Chief Executive Officer, Howard R. Levine, sold more than $15.6 million worth of Family Dollar stock at those artificially inflated prices.
On January 2, 2013, the Company disclosed its actual first quarter 2013 and December 2012 financial results, which fell far below its original bullish statements. On this news, shares in Family Dollar fell almost 13%, closing at $55.74 per share on January 3, 2013, from a close of $64.04 per share on January 2, 2013, on volume of over 14 million shares.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
