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id: 832, Created by Stan Vick, Scout
Generac (GNRC) Missed Guidance Case
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- In August 2023, Generac revised downward 2023 guidance.
- $GNRC fell 24%, losing $2.3B of its shareholder value.
- First claim already filed in Wisconsin by one of the affected stockholders.
On August 2, 2023, Generac (GNRC) announced revised downward guidance for 2023 due to “weakness in residential products.” The Company blamed the downturn on a “softer consumer spending environment” which led to weaker-than-expected sales of residential units.
On this news, $GNRC fell by over 24% and lost $2.3 billion of its market capitalization, seriously damaging investors.
Earlier, on May 3, 2023, during the earnings call, President & CEO Aaron P. Jagfeld gave investors an optimistic outlook.
- He stated an expectation that “gross sales from residential energy technology products and services to deliver between $300 million and $350 million for the full year 2023." Jagfeld further indicated an expectation for improvement in Q2 2023.
- York A. Ragen, Generac’s CFO & CAO, stated, “Demand for our home standby products tends to be driven more by power outages than overall macroeconomic conditions,” giving investors the impression that Generac’s sales should remain steady in spite of worsening economic conditions in the U.S. and abroad. Jagfeld later reiterated that macroeconomic factors are a secondary factor for the Company’s sales and growth, stating, “I think the biggest thing over my time here, almost 3 decades at the company, is that power outages trump the economy every day of the week.”
Considering all representations, investors have reasons to suspect Generac of misleading about true business prospects. The initial claim has been filed in Illinois by one of the affected stockholders.
Failure to Disclose,
Shock Event Date
02 August 2023
21 November 2023
Lead Plaintiff Deadline
22 January 2024
William M Conley