Lawsuits accuse Abercrombie & Fitch of misleading shareholders:
COLUMBUS, Ohio – Three lawsuits filed in recent days against Abercrombie & Fitch Co. accuse the casual clothing retailer of misleading stockholders about its profits.
The suits in U.S. District Court allege the suburban Columbus company violated securities laws by announcing sales increases without also revealing that profit margins would be sharply lower than expected in the second quarter.
After the company announced that sales at stores open more than one year jumped 38 percent in June, the stock reached a high of $74.10. In the week that followed the announcement, Chairman and Chief Executive Michael Jeffries sold 1.44 million shares for $104 million, according to regulatory filings.
The stock then lost value after the company announced last month that it had missed Wall Street expectations by 6 cents per share in the second quarter, earning 63 cents per share or $57.4 million.
The lawsuits, the first of which was filed Friday, are seeking class-action status and unspecified damages for investors who bought Abercrombie stock from June 2 through Aug. 16.
Abercrombie was also recently in trouble for discriminatory hiring practices and for forcing employees to use their paychecks to buy A&F clothing.