Francesca's Holdings Corp (NASDAQ: FRAN) Investor Securities Class Action Lawsuit 09/27/2013

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Company Name(s): 
Francesca's
Case Name: 
Francesca's Shareholder Class Action Lawsuit 09/27/2013
Case Status: 
Case Dismissed
Affected Securities
NASDAQ: FRAN
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
09/27/2013
Class Period Begin: 
03/20/2013
Class Period End: 
09/03/2013
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
11/26/2013
Case Dismissed: 
06/12/2015
Summary: 

June 12, 2015 - The parties filed a stipulation withdrawing the appeal and the U.S. District Court of Appeals for the Second Circuit granted the stipulation.

April 29, 2015 - The lead plaintiff filed a notice of appeal.

March 31, 2015 - The court granted defendants' motions to dismiss and closed the case.

May 13, 2014 - The defendants filed motions to dismiss.

March 14, 2014 - The lead plaintiff filed an amended consolidated complaint.

December 19, 2013 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

November 26, 2013 - Lead plaintiff motions were filed.

September 27, 2013 - An investor in shares of Francesca's Holdings Corporation (NASDAQ: FRAN) filed a lawsuit in the U.S. District Court for the Southern District of New York against Francesca's Holdings Corporation over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between March 20, 2013 and September 3, 2013.

According to the complaint the plaintiff alleges, on behalf of all persons or entities who purchased or otherwise acquired securities of Francesca's Holdings Corporation (NASDAQ: FRAN) between March 20, 2013 and September 3, 2013, that Francesca's Holdings Corporation and certain of its officers and directors violated the Securities Exchange Act of 1934.

More specifically, the plaintiff alleges that the defendants between March 20, 2013 and September 3, 2013 failed to disclose that unseasonably rainy and cold spring and summer weather had diminished the mall traffic Francesca’s Holdings Corporation relied upon to drive same-store sales growth, that a competitive back-to-school retail environment weighed on same-store sales growth, that same-store sales were declining, forcing Francesca’s Holdings Corporation to rely upon new store openings to increase sales, that Francesca's Holdings Corporation had been forced to engage in promotional selling at significant discounts during its first quarter 2013 in order to meet its financial targets, that Francesca's Holdings Corporation had been forced to increase promotional activity during the second quarter of 2013, that Francesca’s Holdings Corporation concealed the impact sales terms and margins with its suppliers would have on its ability to maintain above-average profit margins, and that, as a result, Francesca's Holdings Corporation was not on track to achieve the financial results defendants had led the market to expect between March 20, 2013 and September 3, 2013.

The plaintiff claims that as a result of defendants’ false and misleading statements between March 20, 2013 and September 3, 2013, certain company insiders were able to sell hundreds of millions of dollars of Francesca’s Holdings Corporation stock at artificially inflated prices.

Francesca's Holdings Corporation reported that its Total Revenue rose from $79.37 million for the 52 weeks period that ended on January 30, 2010 to $296.37 million for the 53 weeks period that ended on February 2, 2013, and that its respective Net Income increased from $10.60 million to $47.06 million. On June. 5, 2013, Francesca's Holdings Corporation reported its first fiscal quarter 2013 results. Francesca's Holdings said that its net income for the first quarter of 2013 increased to $10.9 million, compared to net income for the first quarter of 2012 of $8.7 million, and that Net sales for the thirteen weeks increased 29% to $79.0 million, compared to net sales for the first quarter of 2012 of $61.32 million.

Then on September 4, 2013, Francesca's Holdings Corporation reported its second quarter 2013 financial results. Francesca's Holdings Corporation also announced the board of directors authorized a $100 million share repurchase program.

Shares of Francesca's Holdings Corporation (NASDAQ: FRAN) declined from $24.00 per share on September 3, 2013, to $17.74 per share on September 4, 2013.

The plaintiff seeks to recover damages on behalf of all purchasers of Francesca’s Holdings Corporation (NASDAQ: FRAN) common stock between March 20, 2013 and September 3, 2013.

On September 27, 2013, Francesca's Holdings Corporation (NASDAQ: FRAN) shares closed at $18.92 per share.