NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Central District of California on behalf of those who acquired The Beauty Health Company (“Beauty Health” or the “Company”) (NASDAQ: SKIN) securities during the period from May 10, 2022 through November 13, 2023 (the “Class Period”). Investors have until January 16, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On March 8, 2022, Beauty Health announced it was rolling out the HydraFacial Syndeo, a cloud-based digital device that stores customer information and customizes treatment for delivery of skin care treatments for the face.
On August 9, 2023, Beauty Health announced that the Company’s second quarter 2023 gross margin was “unfavorably impacted by a mix shift toward lower-margin refurbished devices . . . as U.S. providers awaited Syndeo enhancements in the third quarter 2023 to improve user experience.” The Company also announced the involuntary separation without cause of Chief Financial Officer Liyuan Woo. On this news, the price of Beauty Health shares declined by $0.41 per share, or approximately 5.44%, from $7.53 per share to close at $7.12 on August 9, 2023.
On November 13, 2023, Beauty Health announced its financial results for the third quarter of 2023. The Company disclosed lower-than-expected U.S. revenue and reported $63.1 million in restricting charges related to device upgrades of early generation Syndeo devices. As a result, Beauty Health announced it was 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 price of Beauty Health shares declined by $2.51 per share, or approximately 64.36%, from $3.90 per share to close at $1.39 on November 14, 2023.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) Syndeo 1.0 and 2.0 devices had issues leading to frequent treatment interruptions; (ii) as a result, the Company incurred significant costs to develop enhancements; (iii) despite the enhancements, providers continued to experience issues with the Syndeo devices; (iv) as a result, the Company would no longer market Syndeo 1.0 and 2.0 devices and incur significant inventory write-downs; and (v) as a result, the Company’s profitability would be adversely impacted.
If you purchased or otherwise acquired Beauty Health securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: https://www.kmllp.com.
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