The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Stitch Fix shares jumped more than 17% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.
Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in its women’s and kids’ categories.
Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the pandemic.
Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 19 cents vs. a loss of 13 cents expected
- Revenue: $571.2 million vs. $548 million expected
Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.
Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.
Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever.
Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.
Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.
CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead.
For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.
For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.
As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.