A class action lawsuit has been filed in U.S. District Court for the Central District of California on behalf of all purchasers of the common stock of Guess?, Inc. (NYSE:GES) from February 14, 2000 through January 26, 2001, inclusive (the "Class Period").
The complaint charges Guess and certain of its officers and directors with issuing false and misleading statements concerning the Company's business and financial condition. Specifically, the complaint alleges that on November 9, 2000, after defendants had sold over $2.2 million of their own Guess shares, they revealed that Guess would earn only $0.13 per share in the 3rd Quarter fiscal 2000, compared to analysts' revised estimates of $0.33 per share. The Company would early only $0.08 per share in the 4th Quarter Fiscal 2000 compared to an estimated $0.44 per share, and for Fiscal 2001, $0.95 per share compared to $1.85 per share. Defendants also revealed that Guess would record a loss of over $4.7 million related to below cost sales of inventory, and an additional charge of $5.4 million to increase reserves for impaired or worthless inventory.
On January 26, 2001, defendants issued another press release which admitted that throughout the Class Period, they had artificially and improperly inflated its earnings by failing to expense costs or record accruals relating to the value of its substantially impaired inventory. As a result of the Company's accounting improprieties, Guess was forced to restate its financial results for the 1stQ, 2ndQ and 3rdQ of Fiscal 2000.

Update

This case was voluntarily dismissed on March 18, 2002. For more information, please contact us.