A lawsuit was filed by an investor in Dollar General Corp. (NYSE:DG) shares over alleged breaches of fiduciary duty by certain directors.
San Diego, CA -- (SBWIRE) -- 10/17/2017 -- An investor in shares of Dollar General Corp. (NYSE:DG) filed a lawsuit against directors of Dollar General Corp over alleged breaches of fiduciary duties.
Investors who are current long term investors in Dollar General Corp. (NYSE:DG) shares, have certain options and should contact the Shareholders Foundation at firstname.lastname@example.org or call 858-779-1554.
The plaintiff claims that certain company executives misrepresented the potential impact of a reduction in food stamp eligibility on business operations.
The lawsuit against directors of Dollar General Corp over alleged breaches of fiduciary duties follows a lawsuit that was filed against Dollar General Corp over alleged Securities Laws Violations. According to that complaint filed in the U.S. District Court for the Middle District of Tennessee the plaintiff alleges that the defendants made false and/or misleading statements and/or failed to disclose that the announced limitations on Supplemental Nutrition Assistance Program ("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. The plaintiff says that 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. The plaintiff claims that the truth about the impact that SNAP reductions were having on Dollar General Corp's business began to surface on August 25, 2016, when Dollar General Corp announced disappointing second quarter 2016 financial and operational results. The plaintiff alleges that previously predicted annual same-store sales growth of 2-4%, and most analysts expected a quarterly increase in same-store sales of nearly 1%, but reported a reduction in same-store sales in its financial results for its fiscal 2016 third quarter ended October 28, 2016. The plaintiff says that Dollar General Corp again attributed its poor quarterly performance, in large part, to reductions in SNAP benefits, and finally admitted the true impact that SNAP reductions were having on its sales, stating that the benefit reductions "affect about 56% of our store base . . . And those states that have had the reduction or elimination, they are approximately 100-basis-point worse in comp. That gives you a real good idea of how impactful those SNAP benefits reductions have been."
Those who purchased shares of Dollar General Corp. (NYSE:DG) have certain options and should contact the Shareholders Foundation.
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