Last updated on September 14th, 2018 at 11:25 am
Law firm Bronstein, Gewirtz & Grossman LLC (BGG) is investigating potential claims on behalf of Weis Markets investors. The investigation concerns whether Weis and certain of its officers and/or directors violated federal securities laws. Weis officials declined to comment on the investigation.
According to BGG, on Sept. 5 Spruce Point Capital Management published a report on Weis that asserts that “Weis is obfuscating its financial pressures with aggressive accounting and reduced disclosures that will make its recent share price performance unsustainable.”
The Spruce Point report states: “Weis is currently the highest-valued supermarket in the stock market, despite negative organic growth, declining gross and EBITDA margins, among the worst returns on capital in the industry, poor governance and limited information provided by management.”
Spruce Point also says its analysis disproves Weis’ claim that its “2017 sales growth was ‘primarily’ from acquisitions,” but instead “showed that core grocery and pharmacy sales declined by 1.1 percent and that Weis’ April 2018 announcement of “a new $101 million capital expenditure plan to invest in growth,” including the opening of two new stores, “did not disclose to investors that Weis would close three stores, resulting in unit stores declining by one in 2018.”
New York City-based BGG represents institutions and other investor plaintiffs in class-action security litigation. The firm’s expertise includes general corporate and commercial litigation as well as securities arbitration.
Founded in 1912, Sunbury, Pennsylvania-based Weis Markets is a Mid-Atlantic food retailer operating 206 stores in Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia and Virginia.
Keep reading:
Weis Markets Chooses ReposiTrak To Improve Inventory Management
Holiday Timing Snaps Weis Markets’ Consecutive Sales Increases
