Mohawk Industries, Inc.
| Company Name | Mohawk Industries, Inc. |
| Stock Symbol | MHK |
| Class Period | April 28, 2017 to July 25, 2019 |
| Lead Plaintiff Motion Deadline | March 03, 2020 |
On July 25, 2018, after the market closed, the Company announced disappointing financial results for second quarter 2018, disclosing that Mohawk “reduced [its] production volumes more than [the Company] had thought” and that it “came into the year with higher inventories than [it] wanted to have.”
On this news, the Company’s share price fell $38.06, or over 17%, to close at $179.31 per share on July 26, 2018, thereby injuring investors.
Then, on October 25, 2018, after the market closed, Mohawk reported third quarter 2018 financial results that fell below the Company’s guidance, stating that “[t]o improve [its] inventory turns, [Mohawk was] presently manufacturing fewer units than [it was] selling, which is negatively impacting [its] costs.”
On this news, the Company’s share price fell $36.04 , or nearly 24%, to close at $115.03 per share on October 26, 2018, thereby injuring investors further.
Then, on July 25, 2019, after the market closed, Mohawk reported that sales in its Flooring NA segment declined 7% year-over-year and that there was “big buildup in inventory in ceramic.”
On this news, the Company’s share price fell $27.52, or nearly 18%, to close at $128.84 per share on July 26, 2019, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company engaged in deceptive and unsustainable sales practices to mask declining customer demand for its Conventional Flooring products; (2) that Mohawk’s increasing inventories was not the result of increasing inflation or the Company’s backward integration, but instead the result of the Company deliberately stuffing the channels with Conventional Flooring Products to boost sales; and (3) that as a result, defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
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