According to the law firm press release, Dollar General is one of the largest discount retailers in the United States. As a discount retailer, Dollar General’s core customers are low- and fixed-income households, a significant percentage of which qualify for the federal food stamp benefits program (formally known as the Supplemental Nutrition Assistance Program or “SNAP”). Beginning in 1996, SNAP benefits were limited to no more than 3 months out of any 26 month period for unemployed individuals who are not disabled or raising minor children. Many states waived this limitation in the aftermath of the 2008 financial crisis. Given the improving condition of the U.S. economy, at least 20 states were planning to re-implement the limitation 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 the defendants made false and misleading statements and failed to disclose material adverse facts about the Company’s business and operations to investors. 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 the Company’s financial performance because 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 material to investors because they were made in response to concerns by analysts that SNAP benefits were going to be reduced in a number of states – which potentially would have impacted Dollar General’s sales to the extent its business operations were exposed to SNAP changes.
On April 25, 2017, the Court appointed Lead Plaintiff and Counsel. Lead Plaintiff filed a consolidated complaint on June 26.