BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Ascena Retail Group (“Ascena” or the “Company”) (NASDAQ: ASNA) securities between September 16, 2015 and June 8, 2017, inclusive (the “Class Period”). Ascena Retail investors have until August 6, 2019 to file a lead plaintiff motion.
Investors suffering losses on their Ascena Retail investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to firstname.lastname@example.org.
On May 18, 2015, the Company announced that it would acquire ANN Inc. for a combination of cash and stock.
On September 19, 2016, the Company filed a Form 10-K for fiscal year ended July 30, 2016, that reported $733.9 million goodwill related to ANN, which is a $225.7 million reduction.
On this news, the Company’s share price fell $2.43, or nearly 30%, to close at $5.69 on September 20, 2016, thereby injuring investors.
Then, on May 17, 2017, the Company revised its third quarter and full fiscal year 2017 sales and earnings outlook, further noting that the Company would be taking an unspecified impairment charge.
On this news, the Company’s share price fell $0.76, or nearly 27%, to close at $2.06 on May 18, 2017, thereby further injuring investors.
Then, on June 8, 2017, the Company issued a press release regarding its third quarter financial results, reporting a GAAP loss of $5.29 per diluted share compared to net earnings of $0.08 per diluted share for the same period in the year prior. The loss included a $1.324 billion impairment charge to the Company’s goodwill and other intangible assets.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s acquisition of ANN, Inc., the parent company of Ann Taylor and LOFT, was a complete disaster for the Company as ANN’s operations were in far worse condition than had been represented to the public; (2) to mask the true condition of ANN, Defendants improperly delayed recognizing an impairment charge to the value of ANN’s goodwill and, as a result, Ascena’s reported income and assets were materially overstated and the Company’s financial results were not prepared in conformity with GAAP; (3) many of the brands acquired in the ANN acquisition were in steep decline and were also materially overvalued on Ascena’s Class Period financial statement; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased shares of Ascena Retail, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to email@example.com, or visit our website at www.howardsmithlaw.com.
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