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Stitch Fix Q2 sales fall short of expectations

By Huw Hughes

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Report

American online styling service Stitch Fix reported an increase in second-quarter revenues on Monday that came in below analysts’ expectations, causing shares to drop 39 percent after closing.

Net revenue in the three months to 1 February increased 22 percent year-on-year to 451.8 million dollars, though analysts had expected revenues of around 452.6 million dollars.

The San Francisco-based company cited heightened promotional activity resulting in lower-than-expected order values.

It now expects full-year revenue to be between 1.8 and 1.84 billion dollars, down from a previous estimate of between 1.9 and 1.93 billion dollars.

Net income fell to 11.4 million dollars, or 0.11 dollars per diluted share, compared to 12 million dollars, or 0.12 dollars per diluted share.

Its number of active clients increased by 17 percent year-on-year to 3.5 million. Net revenue per active client increased by 8 percent to 501 dollars.

“We are pleased to deliver another strong quarter in Q2,” Stitch Fix founder and CEO Katrina Lake said in a statement. “Net revenue was 452 million dollars, representing 22 percent year-over-year growth, in line with our guidance. We grew active clients to 3.5 million, an increase of 17 percent year over year, and grew net revenue per active client by 8 percent year over year, our seventh consecutive quarter of growth and a reflection of our unique personalization capabilities.

“This quarter, we are excited to expand our new direct buy offerings to even more clients. As we continue to evolve our personalization capabilities we're confident in our ability to capture additional market share, and deliver on our mission to transform the way people find what they love.”

Photo courtesy of Stitch Fix

Stitch Fix