The Stitch Fix app for download from the Apple App Store on a smartphone disposed in Hastings-on-Hudson, New York, United States on Saturday, June 5, 2021. Stitch Fix Inc. is expected to publish earnings on June 7 .
Tiffany Hagler Gear | Bloomberg | Getty Images
Stitch Fix shares jumped 14% in extended trading on Tuesday after the online shopping and styling service reported surprise earnings for its fiscal fourth quarter.
Sales for the three-month period ended July 31 also exceeded analysts’ expectations, thanks to disproportionate growth in Stitch Fix’s women and children categories. Men’s clothing has grown slower, the company said.
Consumers have been splurging on new outfits in recent months as many return to school and return to social gatherings. Some have also raised the need for new clothes after gaining or losing weight during the Covid pandemic.
Here’s how Stitch Fix fared compared to what Wall Street expected, based on an analyst poll conducted by Refinitiv:
- Earnings per share: 19 cents vs. expected loss of 13 cents
- Revenue: $ 571.2 million vs. $ 548 million expected
Net income attributable to shareholders was $ 28 million, or 19 cents per share, during the most recent period. A year ago, it was posting a net loss of $ 44.5 million, or 44 cents per share. Analysts were expecting the company to post a loss of 13 cents per share.
Revenue reached $ 571.2 million from $ 443.4 million a year earlier. It was better than analysts’ expectations for $ 548 million.
Stitch Fix reported nearly 4.2 million active customers, up 18% from the previous year. The company said net income per active customer was $ 505, breaking the $ 500 threshold for the first time. Customers have bought more keep-in-home items, Stitch Fix said, because they have more brands and prices to choose from.
Stitch Fix defines active customers as individuals who have either ordered a “Fix” subscription or purchased an item directly from its website within the 52 weeks preceding the last day of the quarter.
The company also said it had its lowest churn rate on record at the end of the period, meaning its customers are sticking around.
Last month, Stitch Fix finally opened up its direct purchase option, now known as “Freestyle”, to the public. This allows people to purchase Stitch Fix for individual garments, without the need for a subscription.
CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market over the coming year. The company’s next move will be to further market and raise awareness of the offering, she said. Stitch Fix is preparing to launch a national advertising campaign for its debut.
The first indications are that “Freestyle” is significantly accretive to the company’s revenue by measure of active customer, Spaulding told analysts on a conference call.
“Customers have agency, flexibility and choice while enjoying a highly personalized shopping experience,” said Spaulding.
For its first fiscal quarter, Stitch Fix said it expects sales of between $ 560 million and $ 575 million. That’s below analysts’ expectations for $ 588 million.
For the next fiscal year, Stitch Fix forecasts a sales increase of 15% or more over the previous year. Analysts polled by Refinitiv were looking for an 18% increase.
As the entire retail industry faces supply chain complications, Stitch Fix said he sees little impact, but nothing that will hurt the business for months to come. fall and winter. The company said it was less dependent on Vietnam, where manufacturing is largely at a standstill due to ongoing pandemic lockdowns in the region.
As the market closed on Tuesday, Stitch Fix shares have fallen nearly 39% this year. The company has a market capitalization of $ 3.8 billion.
Find the full Stitch Fix press release here.