NEW YORK, Aug. 22, 2007 (PRIME NEWSWIRE) -- Roy Jacobs & Associates announces that it is investigating possible securities violations regarding disclosures and omissions by Tween Brands Inc. ("Tween Brands" or the "Company") (NYSE:TWB) concerning its prior guidance for fiscal 2007, and its just announced poor second quarter financial performance, which has caused the Company's share price to decline by over 25%.
The investigation is on behalf of purchasers of Tween Brands securities between June 8, 2007 and August 21, 2007. For further information you may call toll free, 1-888-884-4490, or contact counsel by e-mail by writing to rjacobs@jacobsclasslaw.com.
In May 2007 the Company announced positive earnings guidance for the second quarter 2007 of $0.13 to $0.16 per share which the Company deemed conservative, and earnings for fiscal 2007 of $2.15 to $2.25. The Company also announced a resumption of the Company's share repurchase program up to $150 million over a two year period beginning May 29, 2007. The market reacted favorably to this share repurchase plan and other positive statements by rising 2.9%.
On June 8, 2007 Chief Executive Michael Rayden sold over 68,000 shares for proceeds of over $2.8 million. On June 11, 2007 Rayden sold over 82,000 additional shares for proceeds of over 3.3 million.
It appears that it was known to Rayden and the Company, but not revealed to the investing public that Tween Brand's financial performance was not as robust as expected, and was not meeting the guidance previously announced in May. Indeed, as the Company later admitted, the Company was experiencing a decline in retail traffic and lower store transactions throughout the quarter. Yet Rayden sold his shares. While the Company had purchased approximately 1.6 million of its own shares in the first quarter of 2007, based on the information currently available, it purchased only approximately 40,000 of its own shares in the second quarter, indicating that there was no confidence in the guidance previously disseminated.
Finally the Company was today forced to reveal what it and Rayden knew -- that the Company's financial performance during the second quarter had been weak, plagued by a decline in retail traffic, lower store transactions and other factors which seem to have been apparent during the quarter. The Company announced that earning would be a terribly disappointing $0.07 per share. The Company was also forced to revise downward its prior guidance for fiscal 2007. The market's reaction to this wholly unexpected news caused the price of Tween Brands' shares to decline by over $10 per share on greatly increased volume. At no time during the second quarter did the Company or Rayden advise the investing public that based on what they knew, the prior second quarter guidance and yearly guidance should no longer be relied upon.
If you purchased Tween Brand shares from June 8, 2007 through August 21, 2007 and are interested in discussing your rights free of charge, please contact Roy L. Jacobs. Mr. Jacobs will speak with you personally at no cost or obligation.