Why Stitch Fix Stock Lost 19% in July

What happened

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Online clothing retailer Stitch Fix (NASDAQ: SFIX) stock trailed the market last month by losing 19% compared to a 1% uptick in the S&amp;P 500, according to S&amp;P Global Market Intelligence. That decline didn’t threaten broader returns, though, as shareholders remain up more than 30% so far in 2019 compared to a 14% increase in the S&amp;P 500.” data-reactid=”12″>Online clothing retailer Stitch Fix (NASDAQ: SFIX) stock trailed the market last month by losing 19% compared to a 1% uptick in the S&P 500, according to S&P Global Market Intelligence. That decline didn’t threaten broader returns, though, as shareholders remain up more than 30% so far in 2019 compared to a 14% increase in the S&P 500.

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Image source: Getty Images.

So what

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="July's drop occurred following a second-quarter earnings report that initially found approval on Wall Street that was quickly overwhelmed by bearishness. There were plenty of good signs for the business in that report, including rising revenue per customer and improved renewal rates. These wins suggest the company might continue gaining market share in its core niche while expanding into new categories like men’s and kids’ clothing.” data-reactid=”26″>July’s drop occurred following a second-quarter earnings report that initially found approval on Wall Street that was quickly overwhelmed by bearishness. There were plenty of good signs for the business in that report, including rising revenue per customer and improved renewal rates. These wins suggest the company might continue gaining market share in its core niche while expanding into new categories like men’s and kids’ clothing.

Now what

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="CEO Katrina Lake and her team are bullish about their prospects in these other apparel segments and in new markets like the U.K. The attractiveness of the industry is bringing bigger rivals to the scene, though, with Amazon putting lots of resources toward a similar service. Yet if Stitch Fix can establish its brand more firmly in its customers’ budgets, as it has in recent quarters, then it will be difficult for any competitor to knock it from its impressive growth pace.” data-reactid=”28″>CEO Katrina Lake and her team are bullish about their prospects in these other apparel segments and in new markets like the U.K. The attractiveness of the industry is bringing bigger rivals to the scene, though, with Amazon putting lots of resources toward a similar service. Yet if Stitch Fix can establish its brand more firmly in its customers’ budgets, as it has in recent quarters, then it will be difficult for any competitor to knock it from its impressive growth pace.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" More From The Motley Fool ” data-reactid=”29″> More From The Motley Fool

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Demitrios Kalogeropoulos owns shares of Amazon and Stitch Fix. The Motley Fool owns shares of and recommends Amazon and Stitch Fix. The Motley Fool has a disclosure policy.” data-reactid=”37″>John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Demitrios Kalogeropoulos owns shares of Amazon and Stitch Fix. The Motley Fool owns shares of and recommends Amazon and Stitch Fix. The Motley Fool has a disclosure policy.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally published on Fool.com” data-reactid=”38″>This article was originally published on Fool.com

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