SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (http://www.rgrdlaw.com/cases/stitchfix/) today announced that a class action has been commenced on behalf of purchasers of Stitch Fix, Inc. (NASDAQ: SFIX) common stock during the period between June 8, 2018 and October 1, 2018 (the “Class Period”). This action was filed in the Northern District of California and is captioned Sawicki v. Stitch Fix, Inc., et al., No. 18-cv-6208.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Stitch Fix common stock during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. You can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/stitchfix/.
The complaint charges Stitch Fix and certain of its officers with violations of the Securities Exchange Act of 1934. Founded in 2011, Stitch Fix is an online retail fashion subscription service. For subscription businesses like Stitch Fix, an important business metric for investors is the number and growth rate of its “active clients.” During 2017 and 2018, Stitch Fix’s active client base had grown dramatically, reaching 2.7 million by the end of the third quarter of 2018. This growth was due, in large part, to the Company’s prolific television advertising campaign, which it had launched in 2017.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information about Stitch Fix’s business and prospects, including that its active client growth had slowed dramatically and that defendants had shut down Stitch Fix’s television advertising campaign for much of the fourth quarter of 2018. As a result of defendants’ false statements and/or omissions, the price of Stitch Fix common stock was artificially inflated to as high as $51.19 per share during the Class Period.
Then on October 1, 2018, after the close of trading, Stitch Fix reported its fourth quarter 2018 financial results, which fell short of projected active client growth expectations. In the Company’s press release, it reported 2.7 million active clients, disclosing that its new active client growth had stalled throughout the fourth quarter. During the conference call held with investors later that evening, Stitch Fix conceded that, despite having reported on June 7, 2018, which was already a third of the way through the 2018 fourth quarter, that it had grown active clients by 180,000 quarter-over-quarter to 2.7 million, its active client growth rate had declined dramatically during the fourth quarter and remained virtually flat. Also during the call, defendants disclosed that Stitch Fix had “temporarily ceased [its] national TV campaign for 10 weeks” during the 13 weeks of the 2018 fourth quarter, purportedly to “measure channel efficacy,” conceding that the decision had had a negative impact on new client growth during the quarter. On this news, the price of Stitch Fix stock declined $15.69 per share, or more than 35%.
Plaintiff seeks to recover damages on behalf of all purchasers of Stitch Fix common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.
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