NEW YORK, March 01, 2024 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Western District of Pennsylvania on behalf of those who acquired Dick’s Sporting Goods, Inc. (“DSG” or the “Company”) (NYSE: DKS) securities during the period of May 25, 2022 to August 21, 2023 inclusive (“the Class Period”). Investors have until April 22, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On May 25, 2022, DSG announced its financial results for the first quarter of fiscal year 2022 and discussed changes in its business strategy during an earnings call. The company claimed to have undergone a “transformation” to sustain its structurally higher merchandise margin when compared to pre-COVID levels. These changes included leveraging relationships with manufacturers for exclusive products, improving pricing technology, and new digital marketing tools. In subsequent updates on August 23, 2022, and November 22, 2022, DSG continued to provide assurances regarding its merchandise margin. DSG executives continued to speak positively about demand, mentioning excess inventory in certain outdoor categories but expressing confidence in managing it effectively. However, on May 19, 2023, analyst reports from TD Cowen and Telsey Advisory Group lowered sales and earnings estimates for DSG due to their concerns about the “durability of margin expansion since 2019.” On this news, the price of DSG shares declined by $9.24, or approximately 6.8%, from $135.91 per share on May 18, 2023 to close at $126.67 on May 19, 2023.
Subsequently, on May 23, 2023, DSG reported its first-quarter fiscal year 2023 results and emphasized that margins would remain elevated and inventory positions would remain favorable. Then, on August 22, 2023, DSG announced significantly lower profitability and margins for the second quarter of 2023, attributing the results to issues such as elevated inventory and promotional sales of excess Outdoor inventory. On this news, the price of DSG shares declined by $35.51, or approximately 24.1%, from $147.04 per share on August 21, 2023 to close at $111.53 per share on August 22, 2023.
The lawsuit alleges that the Company’s representations about DSG’s inventory, margins, and prospects were each misleading when made. Specifically, the true facts included: (i) demand for products in DSG’s Outdoor segment was slowing faster than represented, resulting in excess inventory; (ii) the “structural changes” that Company executives repeatedly touted, including
differentiated products, improved pricing technology, and more efficient clearance channels, did not allow the Company to manage its excess inventory without hurting the Company’s profitability; and (iii) the need to liquidate excess inventory, including in the Outdoor segment, would have a materially negative effect on the Company’s profitability.
If you purchased or otherwise acquired Dick’s Sporting Goods, Inc. securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com
