The Beauty Health Company (SKIN) Misled Investors Regarding its Business Prospects
A shareholder filed a class action lawsuit on behalf of persons and entities that purchased or otherwise acquired The Beauty Health Company (NASDAQ: SKIN) securities between May 10, 2022 and November 13, 2023. Beauty Health is a health and beauty company that provides “skin health experiences.”
According to the complaint, on November 13, 2023, after the market closed, Beauty Health announced its financial results for the third quarter of 2023. The Company disclosed that “[t]he quarter was overshadowed by lower-than-expected U.S. revenue and $63.1 million in restructuring charges related to device upgrades of early generation Syndeo devices.” As a result, “the Company is revising its fiscal year 2023 net sales guidance to a range of $385 to $400 million, its fiscal year adjusted EBITDA margin guidance to a range of 5% to 6% and is suspending its long-term 2025 financial outlook.” The Company further disclosed that Andrew Stanleick would depart the Company as President and Chief Executive Officer and relinquish his Board seat, effective November 19, 2023. On this news, the Company’s share price fell $2.51, or 64.36%, to close at $1.39 per share on November 14, 2023, on unusually heavy trading volume.
The complaint alleges that during the class period, defendants failed to disclose that: (1) Syndeo 1.0 and 2.0 devices had issues leading to “frequent treatment interruptions;” (2) as a result, the Company incurred significant costs to develop enhancements; (3) despite the enhancements, providers continued to experience issues with the Syndeo devices; (4) as a result, the Company would no longer market Syndeo 1.0 and 2.0 devices and incur significant inventory writedowns; and finally, (5) as a result, the Company’s profitability would be adversely impacted.
What Now: Similarly situated shareholders may be eligible to participate in the class action against The Beauty Health Company. Shareholders who want to act as lead plaintiff for the class should contact Robbins LLP. Plaintiffs must file their lead plaintiff papers by January 16, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.