NEW YORK, Dec. 26, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Western District of North Carolina on behalf of all persons or entities who purchased or otherwise acquired Driven Brands Holdings Inc. (“Driven” or the “Company”) (NASDAQ: DRVN) securities between October 27, 2021 and August 1, 2023, inclusive (the “Class Period”). The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
The Complaint alleges that, throughout the Class Period, Defendants made numerous materially false and misleading statements and omissions that fall into two categories: (i) statements concerning Driven’s ability to efficiently and effectively integrate a high volume of acquired businesses, including statements related to the status of integrating its U.S. auto glass businesses; and (ii) statements concerning the performance and competitive position of Driven’s car wash business segment. Specifically, the Complaint alleges that throughout the Class Period, Defendants repeatedly touted Driven’s ability to execute and integrate acquisitions as a “core strength,” and assured investors that it had made “significant progress” integrating the auto glass businesses it had acquired. The Complaint also alleges that the Company represented that the large scale of its car wash business served as a “competitive moat” that would preserve Driven’s competitive position. The Complaint further alleges that while Driven acknowledged some “softness” in customer demand for its car wash business segment, the Company downplayed that issue and pointed investors to the growth of its car wash subscriptions, which Driven labeled as the “Holy Grail” in the car wash business.
The Complaint also alleges that in truth, Driven was several quarters behind on integrating its auto glass businesses, and the Company’s car wash business was faltering and more exposed to a decline in demand from retail customers than Defendants represented to investors. The Complaint alleges that, as a result, the Company’s statements concerning its business and prospects, including its fiscal year 2023 financial guidance, were materially misleading and/or lacked a reasonable basis.
The Complaint further alleges that the truth began to emerge on May 8, 2023, when Driven revealed that, on May 4, 2023, the Company’s former Chief Financial Officer, Defendant Tiffany L. Mason (“Mason”), had abruptly left the Company under unusual circumstances. Mason’s exit came just one day after Driven reported its financial results for the first quarter of 2023.
The Complaint also alleges that on August 2, 2023, Driven reported earnings for the second quarter of 2023 that missed expectations, including disappointing results for its Paint, Collision and Glass business segment as well as its Car Wash segment. With respect to its auto glass business, the Complaint further alleges that the Company admitted that it was at least “several quarters” behind on its integration of the businesses it had acquired. In addition, regarding Driven’s Car Wash segment, the Complaint alleges the Company disclosed that increased exposure to “intensified competitive intrusion” negatively impacted demand from Driven’s high-margin retail car wash customers. The Complaint further alleges that as a result of delays in Driven’s integration of its acquired auto glass businesses and the faltering performance of its car wash businesses, the Company slashed its full-year earnings guidance for fiscal 2023, despite having reaffirmed that guidance a little over two months earlier. The Complaint alleges that these disclosures caused the price of Driven common stock to decline by $10.63 per share, or 41%.
Investors who purchased or otherwise acquired shares of Driven should contact the Firm prior to the February 20, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
