WASHINGTON, DC (March 9, 2018) — U.S. Market Advisors Law Group PLLC announces that a securities class action has been filed against Foot Locker, Inc. (“Foot Locker”) (NYSE: FL) . The class action is on behalf of investors who acquired Foot Locker common stock between August 19, 2016 and August 17, 2017 (the “Class Period”).
Foot Locker, through its subsidiaries, operates as an athletic shoes and apparel retailer. The Company operates in two segments, Athletic Stores and Direct-to-Customers.
Allegations Against Foot Locker
The complaint alleges that during the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse information regarding Foot Locker’s business and prospects, including that 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, and that competition with online retailers had increased the pricing competition Foot Locker faced while also materially lowering the demand at Foot Locker stores.
As a result of defendants’ failure to disclose this adverse information, the price of Foot Locker stock was artificially inflated to as high as $79.20 per share during the Class Period and Foot Locker senior executives, including the individuals defendants, were able to sell over 192,000 shares of their personally held Foot Locker stock at artificially inflated prices for gross proceeds of $13.3 million.
Then on August 18, 2017, Foot Locker announced disappointing second quarter 2017 financial results, including a 6% decline in quarterly same-store sales year-over-year, which resulted in a substantial revenue miss. The Company also stated that it would close approximately 130 stores, more than the 100 stores it had previously announced it would close.
During a conference call held with investors and analysts that morning, the Company said it expected weaker sales for the remainder of fiscal 2017. As a result of this news, the price of Foot Locker common stock declined nearly 28% to close at $34.38 per share on August 18, 2017, on unusually high trading volume of more than 36.2 million shares traded.
Pending Lead Plaintiff Deadline Approaching
Investors with losses have until May 8, 2018 to ask the Court to be appointed as Lead Plaintiff for the class. The Lead Plaintiff is a representative for absent members of the class. Investors do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. Contact USMA Law Group to discuss this action.
About USMA Law Group
U.S. Market Advisors Law Group PLLC is a national law firm based in Washington, D.C. The firm represents investors worldwide in U.S. securities class action lawsuits.
David P. Abel