Pier 1 Imports stock has been in the toilet since mid-February, when the company surprised Wall Street with an earnings warning and the abrupt departure of its long-time chief financial officer.
Now the legal sharks are circling.
Shareholders lawsuits are being filed, seeking class action status, alleging that the Fort Worth-based company and its executives misled shareholders about the retailer’s prospects, leading investors to buy the stock at “artificially inflated prices.”
One suit, filed by on behalf of Kathleen D. Kenney in U.S. District Court in Dallas on Friday, seeks a class action for all persons or entities that purchased Pier 1 stock between Dec. 19, 2013 and Feb. 10, 2015.
It details numerous instances in that time period when Chief Executive Officer Alex Smith talked up the company’s prospects, touting the early successes of its revamped website and its “1 Pier 1 omni-channel initiative,” which allows shoppers to order goods online and pick them up at their neighborhood store.
By the fall of 2014, the company said its e-commerce business was expanding better than anticipated, and in December, Smith told analysts that the company expected “to be one of the most sophisticated and profitable omni-channel retailers,” the suit states.
But on Feb. 10, the company announced that it had flubbed its sales and expense forecasts, leading to the sudden resignation of Cary Turner as CFO. The next day, the stock tumbled nearly 25 percent, or more than $4 a share, to $12.84.
Today, the stock (ticker: PIR) was trading ar $10.27 a share.