January 3, 2020 - A consolidated complaint was filed.
May 22, 2019 - An investor in shares of PriceSmart, Inc. (NASDAQ: PSMT) filed a lawsuit in the U.S. District Court for the Southern District of California over alleged violations of Federal Securities Laws by PriceSmart, Inc. in connection with certain allegedly false and misleading statements made between October 26, 2017 and October 25, 2018.
San Diego, CA PriceSmart, Inc. owns and operates U.S. style membership shopping warehouse clubs in Central America, the Caribbean, and Colombia. PriceSmart, Inc. reported that its Total Revenue rose from over $2.99 billion for the 12 months period that ended on August 31, 2017 to over $3.16 billion for the 12 months period that ended on August 31, 2018 and that its Net INcome over those respective time periods declined from $90.72 million to $74.32 million.
On October 25, 2018, PriceSmart, Inc. filed a Form with the Securities and Exchange Commission disclosing non-reliance on previously issued financial statements, citing discovery of “balance sheet misclassification.” According to the form, the Audit Committee met on October 24, 2018 and determined that, as a result of the misclassification, certain financial statements would need to be restated; in addition, PriceSmart also “expects to include in its Form 10-K a conclusion that there was a material weakness in internal controls over financial accounting related to this misclassification.”
According to the complaint the plaintiff alleges on behalf of purchasers of PriceSmart, Inc. (NASDAQ: PSMT) common shares between October 26, 2017 and October 25, 2018, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between October 26, 2017 and October 25, 2018, the Defendants failed to disclose to investors that the Company’s omni-channel business strategy had failed to reach key operating goals, that the Company’s South America distribution strategy had failed to realize key cost saving goals, that the Company had invested Trinidad and Tobago dollars into certificates of deposits with financial institutions, that these investments had been improperly classified as cash and cash equivalents; that the relevant corrections would materially impact financial statements; that there was a material weakness in the Company’s internal controls over financial reporting; that increasing competition negatively impacted the Company’s revenue and profitability, and that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.