Dollar General investors may receive additional information about the case by clicking the link "Join this Class Action" above.
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.
If you are a member of the class described above you may, no later than March 20, 2017, move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed 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. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
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