Stitch Fix Sinks 22% as MGM Drops 10% on Collapsed Bid
Three separate shocks — a guidance cut, a withdrawn takeover and a margin squeeze — drove Stitch Fix, MGM Resorts and Darden lower on Sept. 24 as the broad market slipped.
Stitch Fix shares fell 22.34% to 2.19 on Sept. 24, 2026 after guiding full-year 2027 Ebitda well below analyst expectations, while MGM Resorts dropped 10.46% to 33.89 after Barry Diller's People Inc. abandoned plans to buy the rest of the casino operator and Darden Restaurants slipped 1.68% on softer first-quarter profits.
Three unrelated corporate events collided on the same session tape Thursday, and each one landed harder than the broader market's modest retreat. Stitch Fix Inc. (SFIX) was the worst of them, down 22.34% at 2.19 as of 16:11 GMT on Sept. 24, 2026, after the online styling company told investors to expect far less earnings before interest, taxes, depreciation and amortization in fiscal 2027 than Wall Street had penciled in. MGM Resorts International (MGM) fell 10.46% to 33.89 after Barry Diller's People Inc. walked away from a plan to acquire the portion of the casino operator it does not already own. Darden Restaurants Inc. (DRI) slipped 1.68% to 210.11 after first-quarter results showed sales rising but profit falling.
For context, the market itself was doing very little of the damage. The S&P 500 tracker (SPY) was off 0.51% at $763.91, the Nasdaq 100 fund (QQQ) down 0.79% at $735.38, and the Dow 30 vehicle (DIA) down 0.65% at $510.96. Nothing in those numbers explains a 22% drawdown in a single small-cap or a double-digit slide in a large casino name. These were idiosyncratic moves — company news, not macro news.
Stitch Fix guides 2027 profitability well below the Street
The sharpest reaction belonged to Stitch Fix. The company forecast full-year 2027 Ebitda substantially weaker than analysts had modeled, and reported a fourth-quarter loss per share from continuing operations of 2.0 cents. Ebitda is a rough proxy for operating cash generation; for a company that has spent years trying to convince investors it can reach durable profitability at a smaller revenue base, a guided step backward on that specific line is the most expensive thing management can say.
The price action tells you how thinly the equity was supported going in. At 2.19 the stock is 0.63 below the prior close of 2.82, and it traded as low as 2.10 during the session against a high of 2.35 — meaning the entire day's range sat beneath Wednesday's settlement. There was no intraday attempt to reclaim the prior close, which is usually the fingerprint of a repricing rather than a panic that reverses.
The practical question for anyone holding it is whether the guidance reflects a deliberate spending cycle — marketing, client acquisition, inventory — or a demand problem. The company disclosed the forecast; it did not, in the details available, characterize the shortfall. Investors will be looking to the next quarterly update for evidence on which of those two it is, because the multiple the market is willing to pay depends entirely on the answer.
MGM loses a bid, and the premium that came with it
MGM Resorts' decline is a cleaner story to read. When an acquirer proposes to buy in the rest of a company, the share price absorbs some expectation that a deal closes at a premium. When that acquirer withdraws — as People Inc. did — the expectation is deleted, and the stock reverts toward where fundamentals alone would carry it. MGM shed 3.96 from its prior close of 37.85 to trade at 33.89, with a day range of 33.60 to 34.54, as reported by Bloomberg Markets.
That the entire trading range sat roughly ten percent under the previous close suggests the market did not treat this as a negotiating pause. Deals that stall on price often leave a stock hovering, because traders keep some probability alive. A clean gap down of this size implies the arbitrage community exited rather than repositioned.
The longer-term consideration is what MGM looks like as a standalone story again. It has to be valued on operating performance across its properties rather than on the prospect of a controlling buyer paying up. Anyone who bought on deal speculation now owns a casino operator on its own merits — a different investment with a different set of risks, chiefly consumer discretionary spending and regional gaming volumes.
Darden's revenue grew; the cost line grew faster
Darden's move was the mildest of the three, and the mechanics behind it are the most familiar in the restaurant business. Sales rose in the first quarter. Profits slipped. Expenses increased. That combination is what happens when a chain is holding traffic and pricing but paying more for labor, food or occupancy than it can pass through to the check.
The longer-term consideration is what MGM looks like as a standalone story again.
The stock fell 3.58 from the prior close of 213.69 to 210.11, with a range of 206.22 to 212.99 — notably, it recovered off its low, which is not what SFIX or MGM managed. That partial repair suggests buyers viewed the miss as a margin issue rather than a demand issue. Same-store traffic and cost inflation move on different clocks, and investors typically pay more attention to the first.
What the three moves have in common
The unifying theme is that the market is grading forward information far more harshly than backward information. Darden's actual quarter was mixed and the stock lost less than two percent. Stitch Fix's guidance for a fiscal year that has not started cost it more than a fifth of its value. MGM's operations did not change at all on Thursday — only the probability of a transaction did — and it lost double digits.
Three things are worth watching from here. First, whether Stitch Fix follows the guidance with a concrete cost plan, which is the usual sequence when a management team wants to stop a slide. Second, whether any other bidder surfaces for MGM, or whether the company signals a capital-return response to a share price that has just reset lower. Third, whether Darden's expense pressure shows up across casual dining more broadly when peers report — a single chain's cost squeeze is a company problem, but a pattern across the group is a sector one.
Frequently asked questions
Why did Stitch Fix shares fall more than 22%?
Stitch Fix forecast full-year 2027 Ebitda — earnings before interest, taxes, depreciation and amortization — that was much weaker than analysts had expected. It also reported a fourth-quarter loss per share from continuing operations of 2.0 cents. The stock traded at 2.19 as of 16:11 GMT on Sept. 24, 2026, down 22.34% from the prior close of 2.82.
What happened to the People Inc. bid for MGM Resorts?
Barry Diller's People Inc. dropped its plan to acquire the portion of MGM Resorts it did not already own. With the takeover premium removed from the share price, MGM fell 10.46% to 33.89 on Sept. 24, 2026, from a prior close of 37.85. The entire intraday range, 33.60 to 34.54, sat below Wednesday's settlement.
Did Darden Restaurants report lower sales?
No. Darden posted higher first-quarter sales. The problem was on the cost side: profits slipped and expenses increased, meaning revenue growth did not translate into earnings growth. The stock fell 1.68% to 210.11 from a prior close of 213.69, recovering from an intraday low of 206.22.
Were these moves driven by the broader market?
No. The major benchmarks were only modestly lower on Sept. 24, 2026: the S&P 500 tracker at $763.91 (-0.51%), the Nasdaq 100 fund at $735.38 (-0.79%) and the Dow vehicle at $510.96 (-0.65%). Declines of 22% and 10% in individual names are company-specific events, not index-driven ones.
What is Ebitda and why does guidance on it matter so much?
Ebitda stands for earnings before interest, taxes, depreciation and amortization. It is a rough proxy for operating cash generation and strips out financing and accounting items. For companies still working toward sustained profitability, forward Ebitda guidance is the single line investors use to judge whether the business model works at the current scale.
What should investors watch next in these three stories?
Whether Stitch Fix follows its weak 2027 outlook with a specific cost-reduction plan; whether another bidder emerges for MGM Resorts or the company responds to a lower share price with capital returns; and whether Darden's higher expenses show up at other casual-dining chains when they report, which would make it a sector issue rather than a single-company one.
Sources
- Darden Restaurants Falls on Results; Stitch Fix Down on Forecast | Stock Movers — Bloomberg Markets
