Robbins Arroyo LLP: Performance Sports Group Ltd. (PSG) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Performance Sports Group, Ltd. (NYSE: PSG) in the U.S. District Court for the Central District of California. The plaintiff brings the complaint on behalf of all purchasers of Performance Sports Group (“PSG”) securities between August 27, 2015 and March 7, 2016, for alleged violations of the Securities Exchange Act of 1934 by Performance Sports Group’s officers and directors. Performance Sports Group, together with its subsidiaries, designs, manufactures, and distributes performance sports equipment, related apparel, and accessories for ice hockey, roller hockey, lacrosse, baseball, and softball primarily in the United States, Canada, and Europe. Many of PSG’s products are sold to consumers from sporting goods stores or through online retailers.
Performance Sports Group Accused of Lying About the Sports Market
According to the complaint, PSG held a conference call on October 15, 2015, to discuss its first quarter 2016 earnings results, stating that although there had been a couple of acquisitions in the U.S. hockey market, they did not observe any decline in demand. On December 16, 2015, Team Express, an online sporting goods retailer and large customer of PSG, filed for Chapter 11 Bankruptcy protection. On January 13, 2016, PSG announced that Baseball/Softball Earnings Before Interest, Taxes, Depreciation and Amortization in the second quarter decreased 31% to $7.9 million, “largely driven by a bad debt write-off related to outstanding receivables for an internet baseball retailer that filed for bankruptcy reorganization.” On March 2, 2016, The Sports Authority, Inc., another large PSG customer, filed for Chapter 11 Bankruptcy protection after a year of publicly airing their financial concerns.
The complaint alleges that PSG officials failed to disclose that Sports Authority’s financial woes would impact PSG’s financial performance; that the baseball and softball markets were in decline; and the consolidation of PSG’s U.S. hockey customers would create a smaller demand for hockey equipment. On March 8, 2016, PSG held a conference call to discuss the revised fiscal year 2016 guidance and preliminary third quarter of 2016 results, stating that it was increasing its bad debt reserves for certain of its U.S. hockey and baseball/softball customers due to an unexpected significant downturn in retail sales, weakening of consumer demand, and the Chapter 11 filing by one of its largest U.S. national sporting goods retailers. PSG also admitted that Sports Authority’s bankruptcy caused PSG to write-down their receivable as well as take their future sales out of PSG’s forecast. On this news, PSG stock fell $5.75 per share, or over 66%, to close at $2.91 per share on March 8, 2016.
Performance Sports Group Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.Send This Post