GPS:NYSE Class Action Lawsuit (GPS) was filed on December 5, 2022 on behalf of the shareholders. Furthermore, Item 303 of SEC Regulation S-K, 17 C.F.R. §229.303(b)(2)(ii), required defendants in their SEC filings above to “describe any known trends or uncertainties that have had or that are reasonably likely to have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.”
The Company failed to disclose the trend that the Company was in fact unable to properly stock appropriately sized clothing in executing the Company’s BODEQUALITY program at Old Navy—which was having a materially adverse impact on the Company’s profitability and sales.
Then on April 21, 2022, after market hours, the Company announced that Nancy Green, CEO of Old Navy had stepped down.
On this news, Gap’s stock price fell $2.57 per share, or 17%, to close at $11.72 per share on April 22, 2022, on unusually heavy trading volume, damaging investors.
On May 20, 2022, during market hours, The Wall Street Journal published an article revealing that the Company had improperly managed its inventory of plus size clothing at its Old Navy stores causing material declines in margins and business results.
On this news, the Company’s stock to fall 7% from closing at $11.19 per share on May 19, 2022 to closing at $10.33 per share on May 23, 2022, over the rest of trading May 20, 2022 and the next full trading day of May 23, 2022.
On May 27, 2022, the Company filed with the SEC a form 10-Q for period ended April 30, 2022. The 10-Q was signed and certified as to their accuracy by Syngal and O’Connell. In the 10-Q, the Company admitted that execution missteps in size and assortment of inventory at Old Navy adversely impacted the Company’s financial results.
On this news, Gap’s stock price fell 4.9% to close at $11.03 per share on May 31, 2022, further damaging investors.
On July 11, 2022, after market hours, the Company announced that Syngal was stepping down from her position as President and CEO of the Company, and resigned from the Board of Directors.
On this news, Gap’s stock price fell 5% to close at $8.32 per share on July 12, 2022, further damaging investors.