Stanley Black & Decker, Inc. (“Stanley”) is facing a securities class action lawsuit for allegedly violating federal securities laws by making misleading statements and omissions related to the company’s business, operations, and prospects. The lawsuit alleges that the company’s investors suffered significant losses due to Stanley’s materially misleading statements and omissions.
On October 28, 2021, Stanley released a press statement reporting financial and operational results for the third fiscal quarter of 2021. In the statement, the company emphasized the robust demand from customers and attributed it to industry-leading innovation and strong professional demand. However, the lawsuit claims that the company falsely attributed the “universally difficult supply chain environment” and “inflationary trends” as the primary headwinds for its growth.
Throughout the class period, Stanley repeatedly reassured investors that demand would remain high, and if demand dropped, Stanley would react accordingly. The company also claimed that it was closely monitoring the effects of inflation and price increases on consumer demand and would react accordingly. However, the lawsuit alleges that these statements were false and misleading, as Stanley was unable to respond to the headwinds that indicated that the pandemic demand bubble would soon burst. The company allegedly knew that its statements were false and misleading, as it tracked its point-of-sale results to monitor demand.
The truth was revealed on April 28, 2022, when Stanley filed a Form 10-Q with the SEC detailing the company’s financial and operating results for the first fiscal quarter ended April 2, 2022. Stanley disclosed in the Form 10-Q that net sales for the company’s first quarter were “partially offset by a 6% … decrease from volume,” revealing that demand was slowing. Following this news, the company’s stock price declined significantly.
Then, on July 28, 2022, before the market opened, Stanley issued another press release, reporting the company’s financial and operational results for the second quarter of 2022 ended July 2, 2022. In the statement, Stanley indicated that “the macroeconomic environment-including inflation, rising interest rates, and significantly slower demand in late May and June-drove the majority of the challenges we faced this quarter,” revealing that demand had further declined. Following this news, Stanley’s stock price declined significantly once again.
Contact us if you invested in Stanley Black & Decker, Inc. and have substantial losses, or have knowledge that may assist the firm’s investigation