Driven Brands Holdings Inc. (DRVN) stock fell nearly 40% after the company said it would restate financial results for fiscal years 2023 and 2024, and the first three quarters of 2025, due to "material errors."
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Driven Brands stock drops 40% after company discloses material errors
Driven Brands Holdings Inc. (NasdaqGS: DRVN) shares plunged nearly 40 percent after the automotive services company disclosed it had identified "material errors" in its financial statements for fiscal years 2023 and 2024 and for quarterly periods in 2025, requiring a restatement of its results.
"On February 23, 2026, the Audit Committee of the Board of Directors, after consultation with the Company's management, concluded there were material errors in our previously issued consolidated financial statements," the company stated in a Form 8-K filing. As a result, the financial statements for fiscal years 2023 and 2024, as well as the quarterly and year-to-date periods through September 27, 2025, "should not be relied upon and required restatement."
The errors relate to the recording of leases, cash balances, operating cash flows, and revenue recognition, among other items. The announcement caused the price of Driven Brands' shares to fall from a close of $16.61 on February 24, 2026, to open at $9.99 on February 25, 2026. The company also announced a delay in the filing of its Annual Report on Form 10-K for the 2025 fiscal year.
The disclosure has led to legal action, with a securities class action lawsuit filed on behalf of investors who purchased Driven Brands shares between May 3, 2023, and February 24, 2026. The lawsuit, City of Hollywood Police Officers' Retirement System v. Driven Brands Holdings Inc., et al., No. 26-cv-00283, is pending in the United States District Court for the Western District of North Carolina. Investors have until May 8, 2026, to file for the lead plaintiff position.
This article is for informational purposes only and does not constitute investment advice.
[1] DRVN FINAL DEADLINE: ROSEN, A GLOBAL AND LEADING LAW FIRM, Encourages Driven Brands Holdings Inc. Investors with Losses in Excess of $100K to Secure Counsel Before Important May 8 Deadline in Securities Class Action - DRVN[2] Compass, Inc. Reports First Quarter 2026 Results[3] Driven Brands 72 Hour Deadline Alert: Kahn Swick & Foti, LLC Reminds Investors With Losses In Excess Of $100,000 of Deadline in Class Action Lawsuit Against Driven Brands ...[4] Robbins LLP Reminds DRVN Stockholders of the Pending Class Action Lawsuit; Harmed Investors Should Contact the Firm for Information About the Class Action Against Driven Brands ...[5] Driven Brands 72 Hour Deadline Alert: Kahn Swick & Foti, LLC Reminds Investors With Losses In Excess Of $100,000 of Deadline in Class Action Lawsuit Against Driven Brands Holdings Inc. - DRVN - Business Wire
