NEW YORK, Nov. 7, 2018 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Stitch Fix, Inc. ("Stitch Fix" or the "Company") (NASDAQ: SFIX) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and index under 18-cv-06565, is on behalf of a class consisting of all persons and entities, other than Defendants and their affiliates, who purchased or otherwise, acquired Stitch Fix common stock between June 8, 2018, and October 1, 2018, inclusive (the "Class Period") seeking remedies under §§10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and SEC Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Stitch Fix securities between June 8, 2018, and October 1, 2018, both dates inclusive, you have until December 10, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Stitch Fix is an online retail fashion subscription service. Stitch Fix purchases clothing, shoes, and accessories from name-brand manufacturers and designs more in-house that it has manufactured. Stitch Fix personnel then select and deliver curated boxes of items to "clients" to try on, buy what they like, and return the rest. While some or all of the items can be returned free of charge, clients are incentivized to accept the entire selection through a 25% price discount that is only applied if the client accepts the entire shipment.
Beginning in 2017, the Company started to advertise its services on television, which attributed to its considerable active client growth during 2017 and 2018. For investors in Stitch Fix, reported active clients is a key metric for them to value the Company and make investment decisions.
When the Company was marketing its IPO in November 2017, it specifically touted that its active client base had grown from 867,000 at August 1, 2015, to 1,674,000 at July 30, 2016, to 2,194,000 at July 29, 2017, representing year-over-year growth rates of 93.1% and 31.1%, respectively.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) its active client growth was weakening; (2) the Company would cease its investment in television advertising; and (3) as a result, the Company's public statements were materially false and misleading at all relevant times.
On October 1, 2018, after the close of trading, Stitch Fix reported its 4Q18 financial results, which fell short of projected active client growth expectations, disclosing that the Company had signed up far fewer than expected new active clients during 4Q18, which had ended more than two months earlier, on July 28, 2018. The Company reported that its active client count was virtually flat and that its active client growth had declined by 70% quarter-over-quarter.
On this news, the price of Stitch Fix common stock fell $15.69 per share, greater than 35%, to close at $31.58 per share on October 2, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP