NEW YORK--(BUSINESS WIRE)--Pomerantz LLPannounces that a class action lawsuit has been filed against Foot Locker, Inc. (“Foot Locker” or the “Company”) (NYSE: FL) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, is on behalf of a class consisting of investors who purchased or otherwise acquired securities of Foot Locker between August 19, 2016 and August 17, 2017, both dates inclusive (the “Class Period”). Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Foot Locker securities between August 19, 2016, and August 17, 2017, both dates inclusive, you have until May 8, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Foot Locker is a retail footwear company that offers athletics footwear, apparel, and equipment for men, women, and kids. The Company serves customers worldwide. As of October 28, 2017, Foot Locker had 3,349 stores in 23 countries in North America, Europe, Australia and New Zealand.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Foot Locker’s vendors were transitioning to selling through various online retailers, diminishing the utility of Foot Locker’s large number of brick and mortar stores and the once-high value of its exclusivity relationships with those vendors; (ii) competition with online retailers had increased the pricing competition Foot Locker faced while concomitantly lowering demand at its stores; and (iii) as a result, Defendants’ statements about Foot Locker’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On May 19, 2017, Foot Locker issued a press release entitled “Foot Locker, Inc. Reports 2017 First Quarter Results,” announcing its first quarter 2017 (“1Q17”) financial results for the period ended April 29, 2017. Foot Locker reported that its 1Q17 revenue growth had plummeted, falling to essentially flat. Same store sales increased only a mere half percent. As a result, Foot Locker reported that its profits fell during the period to $180 million, or $1.36 per share, below the $1.38 per share the Company had led investors to expect, and well below the $191 million, or $1.39 per share, the Company had reported for 1Q16. During the conference call held with investors and analysts that morning, defendants further disclosed that this trend was not restricted to the second half of 2016 and 1Q17, but would continue, and that the Company was then forecasting second quarter 2017 (“2Q17”) comparable store sales up only in the low single digits, with profits relatively flat compared to the 2Q16. Defendants stated that if sales did not improve, the Company would be forced to cut costs and inventory in order to make its 2017 financial guidance of a mid-single digit EPS increase.
On this news, Foot Locker’s share price fell $11.73, or 16.65%, to close at $58.72 per share on May 19, 2017.
On August 18, 2017, before the open of trading, Foot Locker issued a press release entitled “Foot Locker, Inc. Reports 2017 Second Quarter Results,” announcing its 2Q17 financial results for the period ended July 29, 2017. Foot Locker reported that its 2Q17 revenues had now actually declined 4.4% year-over-year, falling nearly $80 million from $1.78 billion in the 2Q16 to $1.7 billion in the 2Q17. Same-store sales fell a full 6%. As a result, Foot Locker reported that its profits fell during the period to just $51 million, or $0.39 per share, drastically below the $0.90 per share the Company had led investors to expect, and well below the $127 million, or $0.94 per share, the Company had reported in 2Q16. The Company also stated that it would close approximately 130 stores, more than the 100 stores it had previously announced it would close. During the conference call held with investors and analysts that morning, the Company said it expected weaker sales for the remainder of FY17, with same-store sales likely to be down between 3% and 4% for 3Q17 and 4Q17.
On this news, Foot Locker’s share price fell $13.32, or 27.92%, to close at $34.38 per share on August 18, 2017, on usually high trading volume.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com