Methode Electronics, Inc. (NYSE: MEI) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS OCTOBER 25, 2024.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
The Class Period begins on December 2, 2021, when Methode filed its second quarter 2022 financial results.  In connection with these results, Defendant Donald W. Duda, the Company’s then-President and Chief Executive Officer, touted the “diversity of awards across key applications” and that “business awards over the last couple of years have put us on track in aggregate to replace the sales from the roll off of this truck [center console] program.”  In fact, Defendant Duda also explained to investors during the Company’s investor earnings call that Methode “expect[s] that . . . as that [center console program] rolls off and other programs roll on, that our margins would improve.”

Throughout the Class Period, Defendants repeatedly assured investors that Methode’s Automotive segment was growing and acquiring new business, but failed to disclose that Methode could not adequately meet its customers’ needs because the Company was saddled by operational inefficiencies in North America, including planning deficiencies, inventory shortages, and shipping delays.  

Investors began to learn the truth about the significant problems in Methode’s Automotive segment on March 9, 2023, when the Company announced its third quarter fiscal year 2023 financial results.  Methode reported that its overall quarterly net sales decreased nearly 4% year-over-year, which was largely driven by a nearly 10% decline in quarterly Automotive net sales.  Methode also cut its fiscal year 2023 net sales and diluted earnings per share (“EPS”) guidance.  On this news, the price of Methode common stock declined $6.25 per share, or more than 13% over multiple trading sessions, from a close of $47.61 per share on March 8, 2023, to close at $41.36 per share on March 13, 2023.  

On June 12, 2023, Methode preliminarily announced its fourth quarter and full fiscal year 2023 financial results.  Methode revealed that it expected, inter alia, full fiscal year diluted EPS in the range between $2.10 per share and $2.14 per share, which was well-below Methode’s revised profitability guidance announced the prior quarter.  On this news, the price of Methode common stock plummeted $8.17 per share, or more than 18%, from a close of $45.07 per share on June 12, 2023, to close at $36.90 per share on June 13, 2023.

Ten days later, on June 22, 2023, Methode reported its fourth quarter and full fiscal year 2023 financial results, including full fiscal year diluted EPS of $2.10 per share, at the bottom of its guidance range.  On this news, the price of Methode common stock declined $4.75 per share, or nearly 13% over multiple trading sessions, from a close of $37.52 per share on June 21, 2023, to close at $32.77 per share on June 23, 2023.  

Over the next several months, Methode made several additional partial revelations about the Company’s operational inefficiencies, while also assuring investors that it was swiftly addressing such issues and that a corrective action plan was in place. 

Then, on December 7, 2023, Methode reported its second quarter fiscal year 2024 financial results, including a goodwill impairment of $56.5 million in its North American and European Automotive segments.  Methode further reported a year-over-year decrease in net sales and a quarterly loss from operations due to the goodwill impairment resulting from operational inefficiencies in its Automotive segment.  Methode also revealed that it terminated the employment of the Company’s then-Chief Operating Officer, Defendant Joseph Khoury, who had been placed on leave in July 2023.  On this news, the price of Methode common stock declined $2.26 per share, or more than 9%, from a close of $24.39 per share on December 6, 2023, to close at $22.13 per share on December 7, 2023.  

Finally, investors learned the full extent of Methode’s operational challenges on March 7, 2024, when the Company reported its third quarter fiscal year 2024 financial results.  Critically, on Methode’s investor earnings call held that same day, Avinash Avula, the Company’s then-President and Chief Executive Officer, revealed a “$21 million year-over-year” decrease in Methode’s quarterly net sales due to continued operational inefficiencies within the Automotive segment.  Methode also suspended its financial guidance for fiscal years 2024 and 2025 and stated that “[a]ny and all previous guidance provided by the company should no longer be relied upon.”  On this news, the price of Methode common stock declined $6.55 per share, or more than 31%, from a close of $21.04 per share on March 6, 2024, to close at $14.49 per share on March 7, 2024.  

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.