As Stitch Fix continues to try mending itself, the online fashion company’s fiscal fourth-quarter earnings update looked mixed at best with some areas beating expectations and others setting off investors’ nerves.
On Tuesday, the San Francisco-based online styling service reported revenue of $319.6 million over the three months ending on Aug. 3. Net loss clocked in at 29 cents per share, or $35.7 million, though that shifted to 12 cents when accounting for restructuring costs and discontinued operations. (In the first quarter, when Stitch Fix shuttered its U.K. business, it had to conform to certain accounting and reporting requirements.)
Gross margin jumped 50 basis points year-over-year, landing at 44.6 percent.
According to Stitch Fix, that’s the result of improved transportation leverage, and adjusted earnings before interest, tax, depreciation and amortization of $9.5 million stems from the business’ ongoing cost management discipline.
Stitch Fix topped analysts’ revenue estimates of $317.5 million, but the company projected steeper-than-expected top-line declines for next year.
For the full year 2025, it expects revenue to land between $1.11 billion and $1.16 billion — well below the $1.3 billion Wall Street analysts had penciled in, according to Yahoo Finance.
Shares fell in after-hours trading 16.5 percent, landing at $3.13.
“We are executing our transformation strategy with discipline and, during the fourth quarter, we delivered results at the high end of our guidance on both the top and bottom line,” said Matt Baer, chief executive officer of Stitch Fix, in a press statement.
“I am proud of the Stitch Fix team’s efforts this past fiscal year and encouraged by the progress we have already made to strengthen the foundation of our business and reimagine our client experience.
Other details from the report included that net revenue for the full fiscal year clocked in at $1.34 billion, a drop of 17.4 percent compared to the previous year, when adjusted for the extra week.
Over the quarter, active clients of 2.5 million took a shave, showing a decline of 125,000, or 4.7 percent, with a decrease of 613,000, or 19.6 percent, year-over-year. However, net revenue per active client ticked up 4.5 percent over last year, coming to $533. Gross margin across 2024 came in at 44.3 percent. Free cash flow was $4.5 million, and the company ended the quarter with $247 million of cash, cash equivalents and investments, with no debt.
Baer acknowledged that there’s still plenty of work to do. “I am confident we are on the right path to continue to improve the trajectory of our business which includes returning to revenue growth by the end of [full-year 2026].”
