Case Page

 

Case Status:    DISMISSED    
On or around 10/10/2012 (Other)

Filing Date: May 31, 2012

According to the law firm press release, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements concerning the Company’s financial condition and future business prospects. More specifically, defendants misrepresented and omitted material facts concerning demand for the Company’s UGG brand, which is critical to its success. During the Class Period, the Company’s expansion and extensive distribution created a unique circumstance: UGG supply met demand for the first time. As new product lines faltered and the Company continued raising prices on its “classic” UGG products, inventories swelled to extremely high levels, requiring the Company and its retailers to use previously unheard of mark-down and close-out pricing to move UGG products. As a result of defendants’ false statements, which hid these adverse trends from the market, Deckers common stock traded at artificially inflated prices during the Class Period, reaching a high of $117.66 per share on October 28, 2011.

On February 23, 2012, the Company announced its full-year and fourth quarter 2012 financial results, reporting better-than-expected fourth quarter results, but also reporting that inventory levels had increased 100%, and that it “expects full-year diluted EPS to be approximately flat with 2011 levels.” As a result, the price of Deckers common stock dropped $12.49 per share to close at $77.72 per share. Then on April 26, 2012, after the market closed, the Company announced that it had missed its second quarter 2012 earnings and lowered its full-year 2012 guidance, projecting a decrease in 2012 diluted EPS of 9%-10%, compared to previous guidance for diluted EPS to be flat year-over-year. On this news, Deckers common stock dropped again, falling $17.63 per share to close at $51.83 per share on April 27, 2012, a one-day decline of more than 25%, on volume of more than 14 million shares traded.

According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company was not able to mitigate the effects of dramatically increasing prices for sheepskin; (b) the Company was seeing a decline in demand to a much larger extent than represented due to the unusually warm weather; (c) the Company’s extensive expansion resulted in the over-supply of UGG products, which meant that the price increases for those products were ineffective; (d) the Company’s inventory levels for its UGG brand were increasing rapidly, which led to the increased use of mark-downs and close-outs; (e) as a result of the foregoing, the Company’s gross margin was negatively impacted; and (f) based on the above, defendants lacked a reasonable basis for their positive statements about the Company and its revenue outlook.

On October 2, 2012, the Court issued an Order granting the defendants' motion to dismiss with prejudice.

COMPANY INFORMATION:

Sector: Consumer Cyclical
Industry: Footwear
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: DECK
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: C.D. California
DOCKET #: 12-CV-04768
JUDGE: Hon. Manuel L. Real
DATE FILED: 05/31/2012
CLASS PERIOD START: 10/27/2011
CLASS PERIOD END: 04/26/2012
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Chapin Fitzgerald Sullivan & Bottini LLP
    550 West C Street, Suite 2000, Chapin Fitzgerald Sullivan & Bottini LLP, CA 92101
    619-241-4810 ·
  2. Robbins Geller Rudman & Dowd LLP (San Diego)
    655 West Broadway, Suite 1900, Robbins Geller Rudman & Dowd LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
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