A class action lawsuit was filed against Atkore, Inc. (ATKR) by Levi & Korsinsky on February 21, 2025. The plaintiffs (shareholders) alleged that they bought ATKR stock at artificially inflated prices between February 1, 2024 and February 3, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Atkore stock during that period can click here to learn about joining the lawsuit.
Atkore describes itself as a leading provider of electrical, safety, and infrastructure solutions. Its products include electrical conduit and fittings, cable and cable management systems, infrastructure products, and safety and security Products.
The company’s claims about the prospects of its polyvinyl chloride (PVC) pipes and the anti-competitive price fixing methods followed by Atkore are at the heart of the current complaint.
Atkore’s Misleading Claims
According to the lawsuit, Atkore and three of its current and/or former senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about its PVC pipe pricing from SEC filings and related material.
For instance, during the Class Period, the company’s former CEO and CFO constantly reiterated that the company was experiencing price normalization trends. Also, the company highlighted its solid volume performance, noting that organic volumes had shown significant growth compared to the prior year periods.
However, subsequent events (discussed below) revealed that Atkore allegedly misled investors about its PVC pipe pricing trends and the related sales expectations.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the pricing trends of Atkore’s PVC pipes, which allowed the company to earn significant and unsustainable financial benefits through its anticompetitive practices.
The information became clear before the markets opened on February 4, 2024, when Atkore released its Q1FY25 results. Importantly, Atkore’s net sales of $661.6 million missed analysts’ estimates of $680.7 million. What’s worse, the company lowered its full-year Fiscal 2025 guidance for earnings per share (EPS) and adjusted EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization), both of which also came in below consensus estimates.
Additionally, during the related earnings call, the CFO explained that Atkore’s Plastic Pipe and Conduit Product category’s growth fell to mid-single digits in Q1, as against high-single digits witnessed in the prior year period. Following the disappointing results, ATKR stock declined 19.6%.
To conclude, the defendants allegedly misled investors regarding the price-fixing mechanism followed for its PVC pipes, which was ultimately exposed and led to a downfall of the segment. Owing to these challenges, ATKR stock has lost 63.9% in the past year.
