NEW YORK, Sept. 01, 2022 (GLOBE NEWSWIRE) -- Moore Kuehn, PLLC, a securities law firm located on Wall Street, is investigating whether certain officers and directors of Stitch Fix, Inc. (NASDAQ: SFIX) breached their fiduciary duties to shareholders.
According to a federal securities lawsuit, Stitch Fix insiders caused the company to make false and/or misleading statements and/or failed to disclose that: (i) the Fix and Freestyle programs were not complementary; (ii) the Freestyle program would be much preferred to the Company’s original Fix model; (iii) that the Freestyle program would inevitably cannibalize the Company’s legacy Fix business; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On December 7, 2021, 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.
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. As a result of this disclosure, the price of Stitch Fix stock declined by $0.67 per share, or 6%, from $11.01 per share to $10.34 per share.
If you own SFIX please contact Justin Kuehn, Esq. by email at jkuehn@moorekuehn.com or telephone at (212) 709-8245. There is no cost to you. Moore Kuehn is a New York-based law firm with attorneys representing investors and consumers. Please visit http://www.moorekuehn.com/practice/new-york-shareholder-derivative-litigation/
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Moore Kuehn, PLLC
Justin Kuehn, Esq.
30 Wall Street, 8th Floor
New York, New York 10005
jkuehn@moorekuehn.com
(212) 709-8245
