NEW YORK, March 31, 2017 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against RH (“RH” or the “Company”) (NYSE: RH ) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and docketed under 17-cv-01425, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired RH securities between March 26, 2015 and June 8, 2016 both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
If you are a shareholder who purchased RH securities during the Class Period, you have until April 3, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com . To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
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RH is a leading luxury retailer in the home furnishing marketplace. The Company operates an integrated business with multiple channels of distribution including over 70 retail stores in the United States, source book magazines and websites. In 2015, RH announced a new product line, RH Modern.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) contrary to Defendants’ representations that the Company was prepared for the launch of RH Modern, that inventory was adequate, and that customers would not face shipping delays, in reality, the Company had severely inadequate inventory and was woefully unprepared to launch RH Modern; and (ii) as a result, RH’s public statements were materially false and misleading at all relevant times.
In early 2015, the Company’s core product line was facing headwinds as same store sales were decreasing. Specifically, in the RH’s earnings report for the first quarter of 2015, the Company announced its comparable store sales were down 9% from the previous quarter. To reinvigorate RH’s earnings, the Company began implementing its critical new product line, RH Modern. On June 11, 2015, the Company officially announced it would be releasing RH Modern later that fall. From the start of the Class Period, the Company touted its preparedness for the launch of RH Modern and increased its fiscal 2015 revenue guidance to $2.146 billion to $2.176 billion, representing growth in the range of 15% to 17% from the prior year. After raising its earnings-per-share (“EPS”) guidance to $2.95 to $3.10 for fiscal 2015 the previous quarter, the Company again raised its earnings guidance to a range of $3.02 to $3.15, representing growth in the range of 28% to 33% year-over-year. RH attributed the growth in revenue and earnings, in large part, to the release of RH Modern. In the months leading up to the release of RH Modern, the Company continued to tout the new product line, including the Company’s ability to have the new RH Modern products in-stock so that customers would receive furniture they ordered in a timely manner. In truth, the Company was woefully unprepared to launch RH Modern and to capitalize on the new product line. In December 2015, when RH Modern inventory problems began to emerge, the Company repeatedly downplayed the significance of the problems related to RH Modern, preventing investors from learning the full truth.
On December 10, 2015, the Company announced it had missed its earnings projections due, in part, to the fact that RH Modern furniture was not fully in-stock. On this news, RH’s share price fell $8.94 or 10.20% over two trading days, to close at $78.65 on December 14, 2015.
On February 9, 2016, the Company announced the surprise resignation of its Chief Operating Officer, Kenneth Dunaj, who just one year prior had been put in charge of inventory management.
On February 24, 2016, the Company announced disappointing earnings for the fourth quarter of 2015 due to shipping delays of the RH Modern furniture. On this news, RH’s share fell $13.43, or 25.86%, to close at $38.49 on February 25, 2016.
On June 8, 2016, RH announced the Company’s financial and operating results for the first quarter of 2016 and significantly reduced its earnings guidance for fiscal year 2016, citing “accommodations largely due to . . . production delays” in RH’s new product line, RH Modern, which the Company had previously touted as “the most important and significant new home furnishings business to be launched in the last 15 or 20 years.” On this news, RH’s share price fell $7.66, or 21.24%, to close at $28.41 on June 9, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT: Robert S. Willoughby Pomerantz LLP rswilloughby@pomlaw.com
