Robbins Arroyo LLP: Polaris Industries, Inc. (PII) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Polaris Industries, Inc. (NYSE: PII) in the U.S. District Court for the District of Minnesota. The complaint is brought on behalf of all purchasers of Polaris securities between January 26, 2016 and September 11, 2016, for alleged violations of the Securities Exchange Act of 1934 by Polaris’s officers and directors. Polaris, together with its subsidiaries, designs, engineers, manufactures, and markets off-road vehicles, snowmobiles, motorcycles, and on-road vehicles in the United States, Canada, Western Europe, Australia, and Mexico. Polaris markets its products under the RANGER, RZR, RANGER Crew, and Polaris RUSH brand names, among others.
Polaris Accused of Downplaying the Effects of Its Recalls
According to the complaint, on July 23, 2015, Polaris issued a recall for one of the company’s RZR vehicles, followed by three more recalls in October 2015, December 2015, and April 2016, affecting more than 160,000 RZR vehicles of various model years. Nevertheless, Polaris issued a series of press releases and filings with the U.S. Securities and Exchange Commission touting positive financial and operating results and predicting solid guidance. For example, on January 26, 2016, and again on April 21, 2016, Polaris reported full-year guidance in the range of $6.20 to $6.80 per diluted share. Then, on April 19, 2016, Polaris announced that it was again voluntarily recalling certain RZR off-road vehicles due to reports of thermal-related incidents, and subsequently only slightly lowered and narrowed its guidance range to $6.00 to $6.30 per diluted share on July 20, 2016.
The complaint alleges that Polaris officials failed to disclose that: (i) the company was unable to sufficiently validate the initially identified repair for certain of its recalled RZR vehicles; (ii) as a result, the company would need to implement a more complex and expensive repair solution; (iii) the financial impact of RZR vehicle recalls was therefore greater than the company had disclosed to investors; and (iv) consequently, the company had overstated its full-year 2016 guidance. On September 12, 2016, Polaris issued a press release announcing that as a result of “RZR thermal-related issues,” the company was drastically lowering its earnings guidance for the full year 2016 to the range of $3.30 to $3.80 per diluted share, $2.50 to $2.70 per diluted share lower than previously expected. On this news, Polaris stock fell $4.05 per share, or approximately 5%, to close at $76.79 per share on September 12, 2016.
Polaris 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