SAN DIEGO and NEW YORK, Feb. 18, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Fairway Group Holdings Corp. (NASDAQ: FWM) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities and Exchange Act of 1934 between April 16, 2013 and February 6, 2014 (the "Class Period"). Fairway Group, together with its subsidiaries, operates food retail stores in the Greater New York metropolitan area.
Fairway Group Is Accused of Misrepresenting Its Financial Status
According to the complaint, shares of Fairway Group fell $3.31 or nearly 29% to close at $8.12 on February 7, 2014, following the release of Fairway Group's third quarter 2014 financial results, in which the company disclosed declining same store sales and increased direct store expenses. Further, despite previously predicting an EBIDTA growth of 20%-25%, Fairway Group reported a mere 3.2% EBIDTA growth for the third quarter 2014 over the same quarter compared to the year prior. The February 6, 2014 announcement of the company's disappointing financial results was coupled with the disclosure that the company's Chief Executive Officer, Herbert Ruetsch would be leaving his position.The complaint also alleges that Fairway Group made materially false and misleading statements regarding the company's business, operational, and compliance policies. Specifically, Fairway failed to disclose that: (i) the company's same store sales were declining; and (ii) its direct store expenses were increasing; (iii) Fairway's financial forecasts were wholly unrealistic.