Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Target, BurgerFi, and Hesai and Encourages Investors to Contact the Firm
NEW YORK, May 24, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Target Corporation (NYSE: TGT), BurgerFi International, Inc. (NASDAQ: BFI, BFIIW), and Hesai Group (NASDAQ: HSAI). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Target Corporation (NYSE: TGT)
Class Period: August 18, 2021 - May 17, 2022 (For Common Stock Only)
Lead Plaintiff Deadline: May 30, 2023
Prior to the Class Period, Target experienced unprecedented double-digit growth in 2020 as consumers increased spending with funds provided from stimulus checks and shifted their spending away from services in favor of goods. In its 2Q 2021 earnings call, Target attributed its success to its “durable, flexible” business strategy, which it stated allowed the Company to stay nimble and quickly respond to its customers’ rapidly shifting preferences. Target touted its “balanced multi-category assortment” as a “key driver of flexibility” and a unique advantage that allowed the Company to “serve our guests, even when their wants and needs are changing rapidly.” To ensure that its assortment stayed in balance in a volatile environment, Target reviewed the data that it gathered from its 100+ million-member loyalty program, Target Circle, as well as other sources, on a weekly basis to gain insights and inform its merchandising decisions. Because these preferences were often changing “week by week,” these insights were essential to allow Target to “optimize [its] assortment.”
However, despite Target’s runaway success in 2020, the Company’s revenue was constrained by Target’s inability to keep its shelves fully stocked. In the first half of 2021, though inventory had meaningfully improved compared to the prior year, Target was still experiencing some headwinds which prevented the Company from maintaining optimal inventory. On August 18, 2021, during a Company earnings call where Defendants discussed second quarter 2021 results, Target attributed its inventory struggles to two pandemic-related factors: (1) unexpectedly greater demand due to changing consumer behavior; and (2) vendor constraints resulting in less product for Target to replenish. To mitigate the risk that replenishment of in-demand goods could take longer than usual going into the second half of 2021, Target announced during that earnings call that it had been ordering larger upfront quantities in advance of season to ensure that shelves were stocked with products consumers wanted, when they wanted them.
At the same time Target announced its early purchasing strategy, Defendants stated during the August 18, 2021, earnings call that consumer shopping preferences continued to shift. For example, while demand for home and hardline products—two of Target’s core product categories—skyrocketed in 2020, the Company was now noticing a softening in demand for those products. Nevertheless, Target falsely assured investors that its “unique multi-category assortment” enabled the Company “to flex between patterns in consumer behavior changes,” and that its inventory “perfectly positioned [Target] to serve our guests’ evolving wants and needs.”
As recently as March 1, 2022, Defendants continued to boast about Target’s “balanced” assortment and how the Company was “leveraging guest insights to enhance our assortment” and adapt to the rapidly changing consumer trends.
However, contrary to Defendants’ statements touting the flexibility of Target’s purported “durable” business model and “balanced assortment,” Defendants were aware that the Target’s strategy of buying early had resulted in the Company over-purchasing goods that were no longer in demand. As early as August 2021, Target’s “multi-category” inventory became out-off-balance and overweight in home and hardline products — “bigger, bulkier products like furniture, TVs, and more” — due to waning demand. Target’s assortment problem only continued to grow throughout the Class Period as consumers began to “refocus their spending” away from home and hardline goods and into experiences.
By May 18, 2022, Defendants would admit when reporting on results for the first quarter of 2022 that contrary to their public statements, Target’s “durable, flexible strategy” was thwarted by its practice of ordering inventory before it was needed, resulting in overstocked, unsellable inventory taking up valuable store shelf space and leaving Target unable to quickly pivot to meet changing consumer preferences as represented. This resulted in Target’s inventory increasing by nearly $1.1 billion over the previous quarter and overweight in “bigger, bulkier” hardline and home products that the Company was now forced to markdown to “make room for fast-growing categories.” As a result, Target’s revenue and gross margin declined nearly 19% and 4.3%, respectively, for the quarter, and Defendants stated they expected the excess inventory to negatively affect earnings into the next quarter.
The price of Target’s common stock had been artificially inflated by Defendants’ misrepresentations about the Company’s “balanced multi-category assortment,” insight into consumer behavior, and ability to respond to shifting trends throughout the Class Period. Upon the news that Target’s sales growth was lower than expected and that Target was unable to sustain the more moderate growth the Company had anticipated just a few weeks earlier, the price of Target’s common stock plummeted as the artificial inflation was removed from the price.
On this news, Target’s stock price declined $53.67 per share, or nearly 25%, from a closing price of $215.28 per share on May 17, 2022, to a closing price of $161.61 per share on May 18, 2022.
For more information on the Target class action go to: https://bespc.com/cases/TGT
BurgerFi International, Inc. (NASDAQ: BFI, BFIIW)
Class Period: December 17, 2020 - November 15, 2022
Lead Plaintiff Deadline: June 5, 2023
BurgerFi previously operated as a blank-check company, also referred to as a special purpose acquisition company (“SPAC”), which is a development stage company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business transaction with one or more operating businesses or entities.
On December 17, 2020, the Company announced that it had completed a business combination with BurgerFi International, LLC (“Legacy BurgerFi”), a private Delaware limited liability company touted as “one of the nation’s fastest-growing better burger concepts” (the “Business Combination”). As a result of the Business Combination, among other things, the Company purchased 100% of the membership interests of Legacy BurgerFi, resulting in Legacy BurgerFi becoming a wholly owned subsidiary of the Company, and the Company changed its name to “BurgerFi International, Inc.”
Following the Business Combination, the Company, together with its subsidiaries, has owned and franchised fast-casual and premium-casual dining restaurants.
On November 4, 2021, the Company completed its acquisition of Anthony’s Coal Fired Pizza & Wings (“Anthony’s”) for $156.6 million (the “Anthony’s Acquisition”). Defendant Ophir Sternberg (“Sternberg”), Executive Chairman of the Company, touted the Anthony’s Acquisition as “a significant step forward in BurgerFi’s ongoing growth strategy and transition into a premium multibrand platform.”
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company had overstated the effectiveness of its acquisition and growth strategies; (ii) the Company had misrepresented to investors the purported benefits of Anthony’s Acquisition and its post-Business Combination business and financial prospects; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On August 11, 2022, during pre-market hours, BurgerFi issued a press release announcing the Company’s second quarter (“Q2”) 2022 results. Among other results, that press release reported Q2 revenue of $45.3 million, missing consensus estimates by $2.28 million. The Company also disclosed that “[n]et loss in the second quarter was $60.4 million compared to a net income of $9.0 million in the year-ago quarter[,]” which “[wa]s primarily the result of goodwill impairment charges of $55.2 million in relation to BurgerFi and Anthony’s coupled with higher depreciation, amortization of intangibles, share-based compensation, interest expense resulting from the acquisition-related debt” (emphases in original).
On this news, BurgerFi’s stock price fell $0.10 per share, or 3.03%, to close at $3.20 per share on August 11, 2022.
Then, on November 16, 2022, during pre-market hours, BurgerFi issued a press release announcing the Company’s third quarter (“Q3”) 2022 results. Among other results, that press release reported Q3 revenue of $43.3 million, missing consensus estimates by $0.84 million, explaining that “[f]or the BurgerFi brand, same-store sales decreased 11% and 6% in corporate owned and franchised locations, respectively” (emphases in original).
On this news, BurgerFi’s stock price fell $0.24 per share, or 10.57%, to close at $2.03 per share on November 16, 2022.
For more information on the BurgerFi class action go to: https://bespc.com/cases/BFI
Hesai Group (NASDAQ: HSAI)
Class Period: In connection with Hesai Group’s February 2023 IPO
Lead Plaintiff Deadline: June 6, 2023
According to the lawsuit, the Registration Statement contained false and/or misleading statements and/or failed to disclose that: (1) Hesai Group’s gross margin decrease was caused by a lower in-house utilization rate; (2) Hesai Group’s gross margin was 30% for the fourth quarter—which was completed over a month before the date of the amended registration statement; and (3) as a result, defendants’ public statements were materially false and misleading at all relevant times and negligently prepared. When the true details entered the market, the lawsuit claims that investors suffered damages.
For more information on the Hesai class action go to: https://bespc.com/cases/HSAI
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
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