RADNOR, Pa.--(BUSINESS WIRE)--
The law firm of Kessler Topaz Meltzer & Check, LLP announces that it has filed a shareholder class action lawsuit against Dollar General Corporation (NYSE: DG) (“Dollar General” or the “Company”) on behalf of purchasers of the Company’s securities between March 10, 2016 and November 30, 2016, inclusive (the “Class Period”). The action was filed in the U.S. District Court for the Middle District of Tennessee and is captioned Iron Workers Local Union No. 405 Annuity Fund v. Dollar General Corp., et al., No. 3:17-cv-00063.
Investors who purchased Dollar General securities during the Class Period may, no later than March 20, 2017, petition the Court to be appointed as a lead plaintiff representative of the class. For additional information, or to view a copy of the complaint, please visit https://www.ktmc.com/new-cases/dollar-general-corporation#join.
Dollar General investors who wish to discuss this action and their legal options are encouraged to contact Kessler Topaz Meltzer & Check (Darren J. Check, Esq., D. Seamus Kaskela, Esq. or Adrienne O. Bell, Esq.) at (888) 299 – 7706 or at [email protected].
Dollar General is one of the largest discount retailers in the United States. As a discount retailer, Dollar General’s core customers are low- and fixed-income households, a significant percentage of which qualify for the federal food stamp benefits program (formally known as the Supplemental Nutrition Assistance Program or “SNAP”). Beginning in 1996, SNAP benefits were limited to no more than 3 months out of any 26 month period for unemployed individuals who are not disabled or raising minor children. Many states waived this limitation in the aftermath of the 2008 financial crisis. Given the improving condition of the U.S. economy, at least 20 states were planning to re-implement the limitation in 2016, which would go into effect in April at the beginning of the second fiscal quarter of 2016.
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.
Dollar General shareholders may, no later than March 20, 2017, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a 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 in the action. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff. For additional information, or to view a copy of the complaint, please visit https://www.ktmc.com/new-cases/dollar-general-corporation#join.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, or for additional information about participating in this action, please visit www.ktmc.com.
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