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SFIX.US
id: 220
N.D. California
Court5:22-cv-04893
Case number06/09/2020
Class period Start06/09/2022
Class period EndOn March 8, 2022, Stitch Fix provided a weak outlook for its Q3 2022 and cut its revenue guidance for the full year. Also, Stitch Fix announced self-inflicted friction between the Freestyle program and the Fix program.
On this news, the price of Stitch Fix stock declined by 6%.
Back 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) to “expand our addressable market, deepen client engagement and grow wallet share over time.” The Company 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. But the Company continued to assure investors that this was a short-term problem.
Taking into account all the statements of the Company and the actual results, there are grounds for suspicion that there was misinformation or negligence from the Company's management, which led to significant losses for investors.
Case Status
Motion to dismiss
Alleged Offence
Mismanagement,
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose,
Malpractice,
Negligence,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/08/2022
Filing date
09/13/2024