Allegations
According to the complaint, defendants provided investors with false and/or materially misleading information about FIVE’s financial strength and operations, including its outlook for the first quarter and full year 2024. This information included FIVE’s statement that net sales are expected to be in the range of $826 million to $846 million based on opening approximately 55 to 60 new stores in the first quarter. Further, FIVE claimed that net sales for the full year are expected to be in the range of $3.97 billion to $4.07 billion based on opening between 225 and 235 new stores.
Investors discovered that these statements were false and/or materially misleading when, on June 5, 2024, FIVE announced disappointing first quarter 2024 sales result and cut its
full year 2024 guidance stating, “Net sales are expected to be in the range of $3.79 billion to $3.87 billion based on opening approximately 230 new stores.” At the same time, FIVE claimed that for the second quarter, “Net sales are expected to be in the range of $830 million to $850 million based on opening approximately 60 new stores.” In response to the disclosure, FIVE’s stock price declined $14.07/per share within the span of just one day.
On July 16, 2024, FIVE announced the resignation of Joel Anderson from his positions as President and Chief Executive Officer, as well as from his seat on the Company’s Board of Directors. Concurrently, FIVE projected a decrease of 6% to 7% in comparable sales for the fiscal second quarter ending August 3, 2024. Following this news, FIVE’s stock price dropped over 25% on July 17, 2024.