According to the law firm press release, Five Below is a specialty discount retailer targeted at teens and pre-teens that prices all of its clothing and accessories at $5 or below.
The complaint alleges that during the Class Period, the defendants made false and misleading statements or failed to disclose adverse information about Five Below’s business and prospects. Specifically, the complaint alleges that while actively concealing from investors that the Company’s two founders intended to step down from their roles as Chief Executive Officer (“CEO”) and Chairman and name as CEO their newly hired President – who was relatively new to Five Below and totally untested in the role of CEO at a publicly traded company – Five Below raised its fiscal 2014 sales and earnings guidance twice, once at the start of the Class Period on June 5, 2014 and then again on September 10, 2014. With the price of Five Below common stock increasing on their misrepresentations about the Company’s business metrics and financial prospects, reaching a Class Period high of nearly $48 in intraday trading, both of the Company’s founders and its Chief Financial Officer cashed in, selling almost $30 million worth of their personally held shares at fraud-inflated prices.
On December 4, 2014, Five Below disclosed that its sales growth had diminished and that it was reducing its annual sales and profit forecasts. That same day, the Company’s two founders also announced their resignations as CEO and Chairman of Five Below – disclosing that the newly hired President was taking over as CEO. On this news, the price of Five Below stock fell, closing down 21% from its Class Period high.
On May 27, 2015, the Lead Plaintiff voluntarily dismissed this action.