A class action lawsuit has been filed on behalf of those who purchased or acquired Stanley Black & Decker, Inc. ("Stanley") (NYSE:SWK) common stock between October 28, 2021 and July 28, 2022, both dates inclusive (the “Class Period”).
Case Background:
On October 28, 2021, before the market opened, Stanley issued a press release reporting topline financial and operating results for the company’s third fiscal quarter of 2021. In the release, the company emphasized that “customer demand remains robust” which was driven, in part, “by our industry-leading innovation and strong professional demand.” Defendants falsely blamed a “universally difficult supply chain environment” and “inflationary trends” as the primary headwinds for Stanley’s growth.
Throughout the Class Period, Defendants repeatedly reassured investors that demand would remain high and that, should demand drop, Stanley would react accordingly. Additionally, while Defendants admitted that supply chain management and component sourcing was integral for Stanley to keep production in pace with demand in its core Tools and Outdoor business, Defendants misrepresented to investors throughout the Class Period that they were closely monitoring the effects of inflation and price increases on consumer demand, and that Defendants would react accordingly if the demand environment changed. Contrary to Defendants’ statements touting the heightened consumer demand and their ability to react accordingly to any effects of inflation or price increases on said demand, Stanley was incapable of nimbly responding to serious headwinds that indicated the pandemic demand bubble was soon to pop. Furthermore, Defendants knew that their statements were false and misleading as they admittedly tracked Stanley’s point-of-sale results to monitor demand.
The truth began to be revealed on the morning of 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 price of Stanley’s stock declined by $12.01 per share, to close at $127.13 on April 28, 2022.
Then, on July 28, 2022, before the market opened, Stanley issued a press release reporting the company's financial and operational results for the second quarter 2022 ended July 2, 2022. In the release, 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," that "the softening of the demand environment accelerated rapidly during the last portion of the quarter." Following this news, Stanley’s stock price declined $18.87, or more than 16%, to close at $98.58 per share on July 28, 2022.
The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) rising interest rates, inflation, and trends in returning to work away from home were in fact quickly eroding then heightened demand for Stanley’s tools and outdoor products; (2) the heightened, extraordinary demand Stanley had enjoyed as a result of the COVID-19 pandemic in 2021 and 2022 was returning to 2019 pre-pandemic levels; (3) Stanley’s operations were already showing signs of slowing demand; (4) as a result of reorganization, share repurchasing, and dividend growth, Stanley lacked the cash to react with agility to changes in demand; (5) as a result of Stanley’s inability to react to a sharp decline in demand, the company’s results and metrics, particularly sales volume, were severely negatively impacted; and (6) as a result, Stanley’s public statements were materially false and misleading at all relevant times.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member. …...more
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