NEW YORK, Jan. 19, 2017 /PRNewswire/ -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Dollar General Corporation ("Dollar General" or the "Company") (NYSE: DG) and certain of its officers, on behalf of shareholders who purchased Dollar General securities between March 10, 2016, and November 30, 2016, both dates inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: http://www.bgandg.com/dg.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
Dollar General is a large discount retailer in the United States. The Company's main customers are low-and fixed-income households, many of which qualify for the federal food stamp benefits program (formally known as the Supplemental Nutrition Assistance Program or "SNAP"). In 1996 SNAP benefits were restricted to unemployed individuals who are not disabled or raising minor children and to no more than 3 months out of any 26-month phase. Many states waived the benefit limits following the 2008 financial crisis. Since the U.S. economy has gone up, at least 20 states were planning to re-institute the limitations 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, defendants made materially false and misleading statements and failed to disclose adverse facts about Dollar General's business and operations to the investing public. 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 its financial performance since 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 significant to shareholders because they were made in response to concerns by analysts that SNAP benefits would be reduced in several states – which could impact 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.
Then, on December 1, 2016, Dollar General released its third quarter 2016 financial and operational results which included a decrease in same-store sales, despite the Company's previously forecasted annual same-store sales growth of 2-4%, and most analysts expected a quarterly increase in same-store sales of nearly 1%. Dollar General again accredited its poor quarterly performance, mainly to reductions in SNAP benefits, and confessed the true impact of the SNAP reductions to its sales, saying 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." Following this news, Dollar General's stock dropped $3.84 per share, 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.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm's site: http://www.bgandg.com/dg or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Dollar General you have until March 20, 2017 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | firstname.lastname@example.org
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