Stitch Fix logos on smartphones are arranged in Hastings-on-Hudson, New York, US, on Saturday, June 5, 2021. Stitch Fix Inc. The earnings release is scheduled for June 7.
Tiffany Hagler-Geard / | Bloomberg | beautiful pictures
Repairs on Tuesday reported a narrower-than-expected loss for its fiscal first quarter and beat analysts’ sales expectations, thanks to more users of its Freestyle direct-buying service.
However, the online shopping and styling service slashed its revenue outlook for the fiscal year, saying it faces ongoing supply chain pressure and is in a transition period as it brings in more new user.
Its shares fell more than 21% in after-hours trading with the news.
“We’re in the big learning phase of introducing new customers to Freestyle and the Fix experience,” CEO Elizabeth Spaulding said in a phone interview. “And there’s this broader supply chain landscape. … We wanted to make sure we were appropriately prudent during the year.”
Here’s how Stitch Fix did over the three-month period ending October 30, compared with what analysts had predicted, based on survey data compiled by Refinitiv:
- Loss per share: 2 cents vs expected loss of 14 cents
- Revenue: $581 million vs $571 million expected
Stitch Fix reported a net loss of $1.83 million, or 2 cents per share, compared with net income of $9.54 million, or 9 cents per share, a year earlier. That’s 14 cents higher than analysts’ estimate of a loss-per-share.
Revenue rose 19% to $581 million from $490 million a year earlier. That beat expectations with $571 million.
Stitch Fix says active customers grew 11% to 4.18 million from a year ago. That number, however, is less than the 4.23 million active customers the analyst predicted, according to StreetAccount. The company defines active customers as those who have ordered a Fix subscription or purchased an item directly from its website in the previous 52 weeks from the last day of the quarter.
The company said net revenue per active customer rose 12% to a record $524. The sparse growth shows growth as more customers buy more items of clothing, in addition to their subscriptions. The company completed the introduction of Freestyle to the public in the fourth quarter. Previously, only Stitch Fix subscribers could use the service.
“It’s early days. … We’re just opening up new customer experiences, but we’re in the game,” Spaulding said. “This is currently opening up the ecosystem … and it will absolutely be a multi-smart transformation. But we are deeply committed to that building phase.”
During its fiscal second quarter, Stitch Fix had sales of $505 million to $520 million. Analysts were looking for $585 million in revenue.
For the financial year, the company predicts revenue will grow at a high single-digit rate, down from its previous projection of 15% or more growth. Analysts were looking for sales to grow 15.7% year over year.
Stitch Fix’s stock is down about 57% so far. The company has a market capitalization of $2.7 billion.
Find the full press release on earnings from Stitch Fix here.
This story is evolving. Please check back for updates.
