A lawsuit was filed on behalf of investors in Stitch Fix, Inc. (NASDAQ:SFIX) shares over alleged securities laws violations. Deadline: October 25, 2022. NASDAQ:SFIX investors should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 09/12/2022 -- An investor, who purchased shares of Stitch Fix, Inc. (NASDAQ: SFIX), filed a lawsuit over alleged violations of Federal Securities Laws by Stitch Fix, Inc. in connection with certain allegedly false and misleading statements.
Investors who purchased shares of Stitch Fix, Inc. (NASDAQ: SFIX) have certain options and for certain investors are short and strict deadlines running. Deadline: October 25, 2022. NASDAQ: SFIX investors should contact the Shareholders Foundation at email@example.com or call +1(858) 779 - 1554.
Traditionally, Stitch Fix, Inc sold products as a "Fix," 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. The customer paid a $20 "styling fee" per Fix, and that fee would be applied to any of the items the customer chose to buy.
In 2019, Stitch Fix, Inc announced a new direct-buy retail component, eventually named "Freestyle." The Freestyle program allowed customers to shop the site for specific products, giving the customer more control over what items they received, but also removing the curation element that differentiated Stitch Fix from other e-retailers. The Freestyle program was first made available to a subset of existing Stitch Fix, Inc customers in 2020, and incrementally rolled out to all existing customers in early 2021. In September 2021, the Freestyle program was formally launched to new customers.
On December 7, 2021, Stitch Fix, Inc announced a loss for its first quarter of 2022 and cut its full-year revenue projections, and admitted for the first time that, as a result of the "expansion into Freestyle" the Company "may experience short-term impacts of cannibalization."
On March 8, 2022, Stitch Fix, Inc reported earnings for its second quarter of 2022, the Company offered a weak outlook for its third quarter of 2022 and cut its guidance for the full year. Stitch Fix attributed the guidance cut to "friction" between the Freestyle and Fix businesses.
Shares of Stitch Fix, Inc. (NASDAQ: SFIX) declined from $96.92 per share in January 2021 to $4.705 per share on September 1, 2022.
The plaintiff claims that between December 8, 2020, and March 8, 2022, Stitch Fix, Inc. made numerous false and misleading statements to investors concerning the synergy between the Company's Fix and Freestyle programs, and repeatedly denied claims that the Freestyle program could cannibalize the Company's legacy Fix business. More specifically, the plaintiff alleges that between December 8, 2020, and March 8, 2022, Stitch Fix, Inc repeatedly assured investors that the Company's Freestyle business was "an additive experience" and "complimentary" to the Fix business, that "the combination of those two things will allow us to address many more types of clients," and that "we see solid growth in both sides of the business." In truth, throughout the Class Period, Stitch Fix concealed the fact that these programs were not complementary or additive. Stitch Fix knew that the Freestyle program would be much preferred to the Company's original Fix model, and that the Freestyle program would inevitably cannibalize the Company's legacy Fix business. As a result of these misrepresentations and omissions, Stitch Fix's Class A common stock traded at artificially inflated prices between December 8, 2020, and March 8, 2022.
Those who purchased shares of Stitch Fix, Inc. (NASDAQ: SFIX) have certain options and should contact the Shareholders Foundation.
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The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.