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Stitch Fix (SFIX) to Post Q3 Earnings: What Awaits the Stock?

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Stitch Fix, Inc. (SFIX - Free Report) is likely to register top-line growth when it reports third-quarter fiscal 2021 numbers on Jun 7, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $511.4 million, which indicates an increase of 37.6% from the prior-year quarter’s reported figure.

Speaking of the bottom line, the company is expected to report a loss for the quarter in review. The Zacks Consensus Estimate is currently pegged at a loss of 27 cents per share. The consensus mark has remained stable in the past 30 days. In the prior-year quarter, the company reported a loss of 33 cents per share. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by 9.1%.

Key Aspects to Note

Stitch Fix’s top line is expected to gain from continued growth in the company’s active client base. It has been witnessing growth in both existing and new clients. The company has been evolving its Fix offerings to drive conversion as well as retention of new and existing clients.

Apart from these, the company has been focusing on efforts to boost assortments to include more affordable products across categories.  Also, investments to boost digital features and the ‘direct buy’ facility have been encouraging. Markedly, the company’s direct-buy penetration has been growing across men's and women's client base. Such prudent efforts along with well-chalked customer engagement strategies are likely to have supported the company’s revenue growth in the to-be-reported quarter.

Notably, on its last earnings call, management provided an encouraging top-line view for the third quarter. It projected revenues in the range of $505-$515 million, which suggests year-over-year growth of 36-39%.     

However, we cannot ignore the concerns surrounding rising expenses that might have put some pressure on margins. The company has been incurring higher shipping costs along with increased marketing, COVID-related costs and other variable expenses.

Stitch Fix, Inc. Price, Consensus and EPS Surprise

 

Stitch Fix, Inc. Price, Consensus and EPS Surprise

Stitch Fix, Inc. price-consensus-eps-surprise-chart | Stitch Fix, Inc. Quote

 

What the Zacks Model Unveils

Our proven model does not conclusively predict a beat for Stitch Fix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stitch Fix has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Sally Beauty Holdings, Inc. (SBH - Free Report) currently has an Earnings ESP of +1.20% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Signet Jewelers Limited (SIG - Free Report) currently has an Earnings ESP of +2.84% and a Zacks Rank #2.

Darden Restaurants, Inc. (DRI - Free Report) currently has an Earnings ESP of +4.70% and carries a Zacks Rank #3.

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