The stock of Stitch Fix (SFIX) is 23% higher after the online clothing retailer announced a financial loss that was narrower than had been expected on Wall Street, and provided upbeat forward guidance.
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The San Francisco-based company posted a Fiscal first-quarter loss of -$0.05, which was much better than the loss of -$0.14 that analysts had penciled in for the company. Revenue in the quarter totaled $318.8 million, which beat expectations of $307.04. Still, sales were down 12.6% from a year earlier.
“Our fiscal year is off to a strong start. We exceeded our expectations in the first quarter on the top and bottom lines,” said CEO Matt Baer in the company’s earnings release. He added that improvements made to the customer experience at Stitch Fix are starting to pay off.
Strong Guidance
Stitch Fix ended the quarter with 2.43 million active clients, down 18.6% from a year ago but demonstrating a slower rate of decline compared to past quarters. Net revenue per active user rose 4.9% to $531. At the same time, gross margins at Stitch Fix expanded 180 basis points to 45.4%.
In terms of guidance, Stitch Fix said that for its Fiscal second quarter, it anticipates revenue of $290 million to $300 million, ahead of Wall Street consensus estimates that called for $283.6 million in sales. Stitch Fix maintained its full-year Fiscal 2025 revenue outlook of $1.14 billion to $1.18 billion. The company continues to forecast a return to revenue growth by the end of Fiscal 2026.
SFIX stock has risen 29% year-to-date.
Is SFIX Stock a Buy?
The stock of Stitch Fix has a consensus Hold rating among five Wall Street analysts. That rating is based on four Hold and one Sell recommendations issued in the last three months. The average SFIX price target of $3.36 implies 26.96% downside risk from current levels.
Read more analyst ratings on SFIX stock
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
