Did you lose money on investments in Stitch Fix? If so, please visit Stitch Fix, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.
NEW YORK, NY / ACCESSWIRE / September 20, 2022 / Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the common stock of Stitch Fix, Inc. ("Stitch Fix" or the "Company") (NASDAQ:SFIX) between December 8, 2020, and March 8, 2022, inclusive (the "Class Period"). The lawsuit was filed in the United States District Court for the Northern District of California and alleges violations of the Securities Exchange Act of 1934.
Stitch Fix sells a range of apparel, shoes, and accessories through its website and mobile application. Traditionally, Stitch Fix sold products as a "Fix" box, through which the customer would receive a monthly box of items chosen by a personal stylist. The customer would not know specifically which items they were receiving but would have the option to return whichever items it did not want.
On December 8, 2020, Stitch Fix launched the "Freestyle" program - a new, direct buy program where customers could choose from the outset which items to purchase. In connection with that announcement, Stitch Fix touted the Freestyle program as a way to "expand our addressable market, deepen client engagement and grow wallet share over time." The Company also stated that Freestyle would "serve as another catalyst as we attract new clients, convert prospective clients and reactivate lapsed clients." Throughout the Class Period, Stitch Fix touted that the two programs were synergistic, and repeatedly denied claims that the Freestyle program could cannibalize its legacy Fix business.
On December 7, 2021, however, Stitch Fix admitted for the first time that the Company had downplayed the magnitude of its transition from the subscription-based Fix model to the retail-based Freestyle model. Stitch Fix further admitted that the Company saw some "short term cannibalization" from new customers who chose to use the new direct-buy Freestyle option rather than the traditional Fix option. In addition, Stitch Fix announced a loss for its first quarter of 2021 and cut its full-year revenue projections. As a result of these disclosures, the price of Stitch Fix stock declined by $5.97 per share, or 24%, from $24.97 per share to $19.00 per share.
However, Stitch Fix continued to assure investors that this was a short-term problem, claiming that the Company had "been testing client onboarding flows" and that "we see significant new client potential ahead as Freestyle enables us to access a greater share of shopping occasions."
Then, on March 8, 2022, Stitch Fix offered a weak outlook for its third quarter of 2022 and cut its revenue guidance for the full year. In addition, Stitch Fix announced a self-inflicted friction between the Freestyle program and the Fix program. Specifically, Stitch Fix explained that when customers visited stitchfix.com-the primary landing page for customers interested in the Fix-the Company directed them to the Freestyle experience first, and "therefore, in leading clients to the Freestyle experience first, [it] inadvertently created friction" for potential customers interesting in ordering Fix.
On this news, the Company's stock price fell over 6%, to close at $10.34 per share on March 9, 2022.
If you wish to serve as lead plaintiff, you must move the Court no later than October 25, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery does not require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
If you purchased Stitch Fix common stock, and/or would like to discuss your legal rights and options please visit Stitch Fix, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or [email protected].
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal's "Plaintiffs' Hot List" thirteen times and listed in The Legal 500 for ten consecutive years.
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SOURCE: Bernstein Liebhard LLP