We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Stitch Fix's Q2 Loss Narrower Than Expected, Fiscal 2025 View Raised
Read MoreHide Full Article
Stitch Fix, Inc. (SFIX - Free Report) reported second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. The top line deteriorated from the year-earlier quarter. Meanwhile, the bottom line fared better year over year. The company raised its fiscal 2025 view. As a result, shares of SFIX rose 19.4% during the after-market trading session yesterday.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Stitch Fix's strategic initiatives focus on transforming client experience and driving growth through multiple key improvements. The company has enhanced its assortment with trend-driven styles, leveraged AI-powered inventory management and strengthened client-stylist relationships, leading to higher adoption rates and improved retention. Investments in the Freestyle direct e-commerce platform, category expansion into non-apparel items and flexible Fix options have contributed to higher average order values and engagement.
Moreover, Stitch Fix has optimized marketing strategies, introduced stylist profiles and implemented advanced personalization tools, all of which have helped drive year-over-year growth in men's and Freestyle businesses while working toward overall revenue growth in fiscal 2026.
Stitch Fix, Inc. Price, Consensus and EPS Surprise
Stitch Fix reported an adjusted loss of 5 cents per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 11 cents. The metric was also narrower than the loss of 21 cents reported in the year-ago quarter.
SFIX recorded net revenues of $312.1 million, which surpassed the Zacks Consensus Estimate of $295 million. However, the metric declined 5.5% from the year-ago quarter due to lower net active clients.
The number of active clients engaged in ongoing operations was 2,371,000, marking a year-over-year decline of 15.5%. The average net revenues generated per active client from ongoing operations were $537, representing an increase of 4.3% from the previous year.
Insight Into SFIX’s Margins & Expenses
In the fiscal second quarter, this Zacks Rank #3 (Hold) company’s gross profit declined 3.2% to $138.9 million from $143.5 million in the year-ago period. However, the gross margin expanded 110 basis points (bps) year over year to 44.5%, supported by higher average order values and improved product margins. We expected the gross profit to decline 8.7% year over year to $130.9 million.
Selling, general and administrative expenses (SG&A) declined 18.5% from $181.5 million in the prior-year quarter to $147.9 million. SG&A expenses, as a percentage of net revenues, were 47.4%, down 750 bps from 54.9% in the prior-year quarter. Advertising was 7.8% of net revenues, down 160 bps year over year. We anticipated SG&A expenses to decline 17.7% year over year.
Stitch Fix reported an adjusted EBITDA of $15.9 million compared with $4.4 million in the year-ago quarter, reflecting its ongoing cost-management discipline. We note that the adjusted EBITDA margin improved 380 bps year over year to 5.1% in the quarter under review.
The company ended the fiscal second quarter with cash and cash equivalents of $113.2 million, short-term investments of $105.9 million, no debt, net inventory of $109.6 million and shareholders’ equity of $197.8 million.
The net cash used in operating activities from continuing operations was $1.9 million and the free cash outflow was $19.4 million.
SFIX Stock Past-Three Month Performance
Image Source: Zacks Investment Research
Stitch Fix’s FY25 Guidance
For the third quarter of fiscal 2025, Stitch Fix anticipates revenues to be between $311 million and $316 million, indicating a 3.6-2.1% year-over-year decline. Adjusted EBITDA is expected to be in the range of $7-$10 million, indicating a margin of 2.3-3.2%. The gross margin is projected to remain steady between 44% and 45% for both the fiscal third quarter and the fiscal full year, with advertising expenses constituting approximately 8-9% of revenues.
SFIX expects fiscal 2025 total revenues to be between $1.23 billion and $1.24 billion compared with the previous guidance of $1.14-$1.18 billion. The company is now projecting total adjusted EBITDA to be between $40 million and $47 million with a margin of 3.3-3.8%, up from the prior estimate of $25-$36 million.
SFIX stock has gained 7.9% in the past three months against the industry’s 22.5% decline.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and revenues indicates growth of 21.4% and 14.9%, respectively, from the levels of fiscal 2024. BOOT delivered a trailing four-quarter average earnings surprise of 7.2%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for DECK’s fiscal 2025 earnings and revenues implies growth of 21% and 15.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.
lululemon is a yoga-inspired athletic apparel company that creates lifestyle components. It has a Zacks Rank of 2 at present. LULU delivered a 6.7% earnings surprise in the last reported quarter.
The consensus estimate for lululemon’s fiscal 2025 earnings and revenues indicates growth of 12.5% and 9.7%, respectively, from the fiscal 2024 reported levels. LULU delivered a trailing four-quarter average earnings surprise of 6.7%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Stitch Fix's Q2 Loss Narrower Than Expected, Fiscal 2025 View Raised
Stitch Fix, Inc. (SFIX - Free Report) reported second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate. The top line deteriorated from the year-earlier quarter. Meanwhile, the bottom line fared better year over year. The company raised its fiscal 2025 view. As a result, shares of SFIX rose 19.4% during the after-market trading session yesterday.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Stitch Fix's strategic initiatives focus on transforming client experience and driving growth through multiple key improvements. The company has enhanced its assortment with trend-driven styles, leveraged AI-powered inventory management and strengthened client-stylist relationships, leading to higher adoption rates and improved retention. Investments in the Freestyle direct e-commerce platform, category expansion into non-apparel items and flexible Fix options have contributed to higher average order values and engagement.
Moreover, Stitch Fix has optimized marketing strategies, introduced stylist profiles and implemented advanced personalization tools, all of which have helped drive year-over-year growth in men's and Freestyle businesses while working toward overall revenue growth in fiscal 2026.
Stitch Fix, Inc. Price, Consensus and EPS Surprise
Stitch Fix, Inc. price-consensus-eps-surprise-chart | Stitch Fix, Inc. Quote
More on Stitch Fix’s Q2 Results
Stitch Fix reported an adjusted loss of 5 cents per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 11 cents. The metric was also narrower than the loss of 21 cents reported in the year-ago quarter.
SFIX recorded net revenues of $312.1 million, which surpassed the Zacks Consensus Estimate of $295 million. However, the metric declined 5.5% from the year-ago quarter due to lower net active clients.
The number of active clients engaged in ongoing operations was 2,371,000, marking a year-over-year decline of 15.5%. The average net revenues generated per active client from ongoing operations were $537, representing an increase of 4.3% from the previous year.
Insight Into SFIX’s Margins & Expenses
In the fiscal second quarter, this Zacks Rank #3 (Hold) company’s gross profit declined 3.2% to $138.9 million from $143.5 million in the year-ago period. However, the gross margin expanded 110 basis points (bps) year over year to 44.5%, supported by higher average order values and improved product margins. We expected the gross profit to decline 8.7% year over year to $130.9 million.
Selling, general and administrative expenses (SG&A) declined 18.5% from $181.5 million in the prior-year quarter to $147.9 million. SG&A expenses, as a percentage of net revenues, were 47.4%, down 750 bps from 54.9% in the prior-year quarter. Advertising was 7.8% of net revenues, down 160 bps year over year. We anticipated SG&A expenses to decline 17.7% year over year.
Stitch Fix reported an adjusted EBITDA of $15.9 million compared with $4.4 million in the year-ago quarter, reflecting its ongoing cost-management discipline. We note that the adjusted EBITDA margin improved 380 bps year over year to 5.1% in the quarter under review.
SFIX’s Financial Snapshot: Cash, Inventory & Equity Overview
The company ended the fiscal second quarter with cash and cash equivalents of $113.2 million, short-term investments of $105.9 million, no debt, net inventory of $109.6 million and shareholders’ equity of $197.8 million.
The net cash used in operating activities from continuing operations was $1.9 million and the free cash outflow was $19.4 million.
SFIX Stock Past-Three Month Performance
Image Source: Zacks Investment Research
Stitch Fix’s FY25 Guidance
For the third quarter of fiscal 2025, Stitch Fix anticipates revenues to be between $311 million and $316 million, indicating a 3.6-2.1% year-over-year decline. Adjusted EBITDA is expected to be in the range of $7-$10 million, indicating a margin of 2.3-3.2%. The gross margin is projected to remain steady between 44% and 45% for both the fiscal third quarter and the fiscal full year, with advertising expenses constituting approximately 8-9% of revenues.
SFIX expects fiscal 2025 total revenues to be between $1.23 billion and $1.24 billion compared with the previous guidance of $1.14-$1.18 billion. The company is now projecting total adjusted EBITDA to be between $40 million and $47 million with a margin of 3.3-3.8%, up from the prior estimate of $25-$36 million.
SFIX stock has gained 7.9% in the past three months against the industry’s 22.5% decline.
Stocks to Consider
Some better-ranked stocks are Boot Barn Holdings, Inc. (BOOT - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) and lululemon athletica inc. (LULU - Free Report) .
Boot Barn is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and revenues indicates growth of 21.4% and 14.9%, respectively, from the levels of fiscal 2024. BOOT delivered a trailing four-quarter average earnings surprise of 7.2%.
Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for DECK’s fiscal 2025 earnings and revenues implies growth of 21% and 15.6%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 36.8%.
lululemon is a yoga-inspired athletic apparel company that creates lifestyle components. It has a Zacks Rank of 2 at present. LULU delivered a 6.7% earnings surprise in the last reported quarter.
The consensus estimate for lululemon’s fiscal 2025 earnings and revenues indicates growth of 12.5% and 9.7%, respectively, from the fiscal 2024 reported levels. LULU delivered a trailing four-quarter average earnings surprise of 6.7%.