Either over- or under-watering seems likely. The mounding is not apparent in your photos at all, so it would seem you did not get the plant above the existing grade much, And if it is sitting in a pocket of different material surrounded by heavy clay, in a rainy summer climate the planting hole could be collecting water. Otherwise the coarse potting soil it came in could be shedding water to the surrounding soil, especially if the plant was not installed in a heavily amended hole, where the back-fill is as coarse as the potting soil.

Finally if it came with not yet visible root rot from the outlet that could continue to manifest on your planting site afterward, even if placed in conditions that would not necessarily promote root rot otherwise. A way to check for a water mold infestation on plant roots is to look and see if a lot of them have turned black on the outside.

Thank you Ken & Embothrium!

I took a closer look at the root today and here is what I found out. The roots on the south side of the plant were dry.

The plant is on the slope facing south. The rain water runs from north (uphill) to south (downhill). Because of this, the mulches on the south side of the gardenia were carried away by water and the mulch layer was very thin. I checked the roots on each side of the plant and the roots on north, east and west side were bright white and full of energy. But the roots on the south side were dry, not dark brown yet, just slightly brown. It rained heavily here yesterday, but the soil on the south side of the plant was already a little bit dry. I touched the ground and the soil temperature was high. So I think found the root cause - root area got exposed to extreme heat.

I went ahead and mulched the south side again. And put some stones to hold the mulches in place. I will give some water to it every two days (really don't want to over water it). Will monitor it for 2 weeks to see if things can turn around.

The gardenia was bought from a local nursery, in container. When I planted the gardenia, I actually removed the lower 2/3 of the original potting soil. Because I know the potting soil will rot in heavy clay here, I just place the plant with 1/3 of the original soil above the ground. No digging at all. Then I just spread the roots out, cover them with the soil mix (sand, perlite and peat moss) . If the roots are sensitive and need a lot of oxygen, that's the only way I know that will work in my backyard.

1. Roots on the south side of the plant

2. Roots on the north side of the plant

If consisting only of the 3 ingredients you listed the mix you mounded with has no soil in it, that is probably how the south side got so well baked - the rooting area lacked even the insulating properties of un-mulched soil that is getting direct sun exposure.

It also means the mounding material isn't going to be supplying much mineral nutrition.