Woolworths Group Ltd. has been hit with a class-action lawsuit claiming that the supermarket giant breached its continuous disclosure obligations when it reaffirmed its profit guidance for full year 2015, resulting to "misleading or deceptive conduct."
Law firm Maurice Blackburn said Sept. 11 that it filed the lawsuit in the Australian federal court in behalf of investors who suffered losses after Woolworths cut its profit outlook when it "learned it was using the wrong price and stock metrics."
The firm noted that following the announcement of the food retailer, which also identified a "need for a price investment," Woolworths' share price declined about 5% on May 6, 2015, and a further 2% the next day.
"Woolworths will consider any proceedings once served, but otherwise anticipates that they will be thoroughly defended," the company said in a statement posted on its website.
The Australian retailer, which also said proceedings were "to be funded by what it understands to be an off-shore litigation funder," disclosed in January that IMF Bentham will not proceed with funding the claim upon investigation and correspondence with Woolworths.
Woolworths added that it received no communication from Maurice Blackburn after IMF Bentham's announcement prior to reports of its class-action lawsuit.
The company's shares closed at A$28.54 in Sydney on Sept. 11, up 1.06%.