ASCENA RETAIL GROUP, INC. SHAREHOLDERS HAVE AN OPPORTUNITY TO RECOVER THEIR INVESTMENT LOSSES
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Ascena Retail Group, Inc.
Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of shareholders of Ascena Retail Group, Inc. (“Ascena” or the “Company”) (NASDAQ: ASNA) between September 16, 2015, and June 8, 2017. The lawsuit seeks to recover Ascena shareholders’ investment losses.
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New York, New York—Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, announces that a securities class action lawsuit has been filed on behalf of shareholders of Ascena Retail Group, Inc. (“Ascena” or the “Company”) (NASDAQ: ASNA) between September 16, 2015, and June 8, 2017 both dates inclusive, (the “Class Period”). The lawsuit was filed in the United States District Court for the District of New Jersey to recover damages for Ascena investors under the Securities Exchange Act of 1934. If you wish to serve as lead plaintiff, you must move the court no later than August 6, 2019. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you take no action, you may remain an absent class member.
According to the lawsuit, throughout the Class Period, Defendants failed to disclose that the Ann Taylor and LOFT Acquisition (“Ann Acquisition”) was a complete disaster for the Company as Ann Inc.’s (“Ann”) operations were in far worse condition than had been represented to the public; that, in order 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 Generally Accepted Accounting Principles (“GAAP”); and that many of the brands acquired in the Ann Acquisition were in steep decline and were also materially overvalued on Ascena’s Class Period financial statements.
The truth began to be revealed to the market on September 19, 2016, when Ascena filed a form 10-K with the Securities and Exchange Committee (“SEC”) and held an earnings call where they reduced earnings guidance for the Company. In response to these announcements, the price of Ascena stock fell from $8.12 per share on September 19, 2016 to $5.69 per share on September 20, 2016.
On May 17, 2017, Ascena issued a press release revising its third quarter and full year fiscal 2017 sales and earnings outlook. The press release also noted that the Company would be taking an impairment charge but failed to quantify the amount. In response to this announcement, the price of Ascena stock dropped from $2.82 per share to $2.06 per share, a decline of 26%.
On June 7, Ascena issued a press release detailing its third quarter financial results. The Company reported a GAAP loss of $5.29 per diluted share compared to net earnings of $.08 per diluted share in the year-ago period. Further, comp sales were down 8% and non-GAAP EPS was $.05. The press release further stated that “[T]he loss in the current quarter includes a non-cash pre-tax impairment charge of $1.324 billion (after tax impact of ($5,22 per diluted share) to write down a portion of the Company’s goodwill and other intangible assets.” During the twenty-two days between when the Company announced its intention to take the impairment until after they announced the amount of the impairment, the price of Ascena stock fell another 35% or $1.00 per share before it closed on June 8, 2017 at $1.82 per share.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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Matthew E. Guarnero
Bernstein Liebhard LLP