The Beauty Health Company
Investors that purchased the Company’s securities and have suffered a loss, please fill in transaction information below, or email to info@portnoylaw.com.
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CONTACT:
Portnoy Law Firm
Lesley F. Portnoy, Esq.,
www.portnoylaw.com
Office: 310.692.8883
1800 Century Park East, Suite 600
Los Angeles, CA 90067
info@portnoylaw.com
On March 8, 2022, Beauty Health made an announcement regarding the launch of the HydraFacial Syndeo, a cloud-based digital device designed to store customer information and customize treatments for facial skincare.
However, on August 9, 2023, Beauty Health disclosed that its gross margin for the second quarter of 2023 was negatively affected due to a shift in product mix towards lower-margin refurbished devices. This shift occurred as U.S. providers awaited Syndeo enhancements scheduled for the third quarter of 2023 to improve the user experience. Additionally, the company announced the involuntary departure of Chief Financial Officer Liyuan Woo without cause. In response to this news, the stock price of Beauty Health dropped by $0.41 per share, representing a decrease of approximately 5.44%, with the stock closing at $7.12 on August 9, 2023.
Then, on November 13, 2023, Beauty Health revealed its financial results for the third quarter of 2023, reporting lower-than-expected U.S. revenue and announcing restructuring charges of $63.1 million related to device upgrades for early-generation Syndeo devices. Consequently, the company revised its fiscal year 2023 net sales guidance to a range of $385 to $400 million and adjusted EBITDA margin guidance to a range of 5% to 6%, while also suspending its long-term 2025 financial outlook. In addition, Beauty Health disclosed the departure of Andrew Stanleick as President and Chief Executive Officer, effective November 19, 2023. As a result of this news, Beauty Health shares experienced a significant decline of $2.51 per share, representing a decrease of approximately 64.36%, with the stock closing at $1.39 on November 14, 2023.
The lawsuit alleges that, throughout the Class Period, the Defendants engaged in false and/or misleading statements and failed to disclose that:
(i) Syndeo 1.0 and 2.0 devices encountered issues leading to frequent treatment interruptions; (ii) As a consequence, the Company incurred substantial costs to develop enhancements; (iii) Despite the enhancements, providers continued to experience problems with the Syndeo devices; (iv) As a result, the Company would cease marketing Syndeo 1.0 and 2.0 devices, incurring significant inventory write-downs; (v) The Company’s profitability would be adversely affected as a result of these issues.
