Robbins LLP, a securities law firm, will soon be representing a shareholder who filed a class action lawsuit against Driven Brands Holdings Inc., accusing the largest automotive services company in North America of misling investors regarding its ability to integrate its auto glass business and the performance of its car wash segment.
The firm said any other shareholder who may be interested in acting as lead plaintiff should contact the firm and submit paperwork by Feb. 20. For more information, call 800-350-6003.
Shareholders do not have to participate in the case to be eligible for a recovery. If they choose to take no action, they can remain an absent class member. All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
A second securities lawfirm, Faruqi & Faruqi, LLP, is also investigating the claims against Driven Brands, and encourages any investor who suffered losses of more than $100,000 between Oct. 27, 2021, and Aug. 1, 2023, to contact partner Josh Wilson at 877-247-4292 or 212-983-9330 (ext. 1310), or visit www.faruqilaw.com/DRVN for more information.
Faruqi & Faruqi also encourages anyone with information regarding Driven Brands’ conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
The lawsuit was filed on behalf of all purchasers of Driven Brands common stock between Oct. 27, 2021, and August 1, 2023.
According to the complaint, during that period, Driven repeatedly touted its ability to execute and integrate acquisitions as a “core strength,” and assured investors it had made “significant progress” integrating the auto glass businesses it had acquired. The company also said the large scale of its car wash business served as a “competitive moat” that would preserve Driven’s competitive position.
In truth, the complaint said, Driven was “several quarters” behind on integrating its auto glass businesses, and its car wash business was faltering and more exposed to a decline in demand from retail customers than it represented to investors. As a result, the company’s statements concerning its business and prospects, including its fiscal year 2023 financial guidance, lacked a reasonable basis.
The shareholder who filed the suit alleges the truth began to emerge May 8, 2023, when Driven announced that four days earlier, its former CFO Tiffany Mason abruptly and inexplicably left the company, just one day after Driven reported its financial results for the first quarter of 2023 and Mason participated in the company’s corresponding earnings call. In the wake of Mason’s abrupt departure, Driven reaffirmed its financial guidance for fiscal 2023.
Then, on Aug. 2, 2023, Driven reported earnings for the second quarter of 2023 that missed expectations, the complaint said, including disappointing results for both its paint, collision and glass and car wash business segments. The company also slashed its earnings guidance for fiscal 2023.
Driven attributed its earnings miss and guidance cut to delays in the integration of its acquired auto glass businesses and increased exposure to “intensified competitive intrusion” in its car wash segment, which negatively impacted consumer demand and the company’s margins. These disclosures caused the price of Driven common stock to decline by $10.63 per share, or 41%.
