A class action has been filed in the United States District Court for the District of Minnesota on behalf of purchasers of Best Buy Co., Inc. (NYSE: BBY) common stock during the period between September 14, 2010 and December 13, 2010 (the “Class Period”). The complaint alleges that during the Class Period, defendants made false and misleading statements concerning demand for the Company’s consumer electronics product offerings and the Company’s true financial condition. Specifically, the complaint alleges that the following facts were known to defendants or deliberately disregarded during the Class Period: (a) demand for Best Buy consumer electronics product offerings was weak or declining and could not support the Company’s aggressive fiscal year (“FY”) 2011 sales, revenue, and earnings forecasts; (b) the Company’s FY 2011 earnings forecast could not be achieved without substantial earnings management and, in particular, a sharp reduction and curtailment of SG&A expenses and aggressive share repurchases which reduced the Company’s outstanding shares and increased reported earnings; and (c) despite defendants’ statements to the contrary, and because of weak sales demand known to defendants or deliberately disregarded, as of September 14, 2010, the Company was not “on track to deliver and exceed [its] annual EPS guidance” of $3.70 per share.
On December 14, 2010, the Company reported its third quarter 2011 financial results. According to the complaint, the Company reported that as product sales it knew to be weak or declining even as early as June 2010 had continued across the board, it had missed Wall Street revenue expectations by a wide margin, reporting $0.54 per share, compared to Wall Street consensus estimates of $0.61. In addition, as a result of weak sales demand and despite the increased FY 2011 earnings forecast in September 2010, the Company slashed its FY 2011 earnings forecast of $3.55-$3.70 to $3.20-$3.40 – well below even the initial FY 2011 earnings forecasts set in March 2010. Finally, the Company disclosed that it had repurchased 11 million shares in the quarter, for a total of more than 31 million shares repurchased during the first three quarters of FY 2011, which would have a $0.12 per share positive impact on the reduced FY 2011 EPS forecast of $3.20-$3.40. On this news there was an immediate and massive sell off of the Company’s shares on December 14, 2010, and a stock price decline of 22% from a Class Period high of $45.63 per share to close at $35.52 per share on December 14, 2010.
If you are a current shareholder and purchased during the period September 14, 2010 and December 13, 2010, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.