Ollie’s Bargain Outlet Holdings, Inc. (OLLI) Accused of Misleading Shareholders
According to the class action complaint for alleged violations of the Securities Exchange Act of 1934, on June 6, 2019, Ollie’s reported first quarter 2019 financial results that exceeded expectations and prompted the Company to raise its sales and earnings guidance for fiscal 2019. On June 10, 2019, Ollie’s stated “here were no other changes to internal control over financial reporting…that have materially affected… internal control over financial reporting” and reaffirmed its previously reported financial results. However, Ollie’s failed to disclose in its reports that it was likely to experience a decrease in sales quarter-over-quarter due to lack of sufficient inventory to meet demand at certain store locations. As a result, on August 28, 2019, Ollie’s reported a 1.7% decrease in sales for its second quarter 2019 and lowered its fiscal 2019 guidance, citing a “bottleneck issue” that existed in its supply chain “for most all of Q2.” On this news, Ollie’s’ share price fell $21.41, or over 27%, to close at $56.36 and has yet to recover.
