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Can Stitch Fix Keep RPAC Growth Going Into Fiscal 2026?
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Key Takeaways
SFIX posted Q1 RPAC of $559, up 5.3% year over year, marking a seventh straight quarter of growth.
SFIX saw AOV rise nearly 10%, driven by larger fixes, better assortments, and category expansion.
SFIX ended Q1 with 2.3M active clients, taking a disciplined approach amid tougher comps ahead.
Stitch Fix, Inc. (SFIX - Free Report) reported a strong start to fiscal 2026, with rising Revenue per Active Client (RPAC) marking the seventh consecutive quarter of sustained growth. RPAC reached $559, representing a 5.3% year-over-year increase in the fiscal first quarter. Average Order Value (AOV), which rose nearly 10% this quarter, marked the ninth consecutive period of year-over-year growth. Management attributes this steady rise to a reimagined client experience that emphasizes larger fix offerings and a higher quality brand assortment.
The improvement in RPAC reflects clients spending more per active client, supporting Stitch Fix’s ability to capture a greater share of wallet from its existing client base. Management also highlighted efforts to expand relevance in categories like activewear, athleisure, footwear, and accessories, which are helping drive higher-value interactions and improved engagement. Alongside this, management noted improving new-client quality, with three-month lifetime values rising year over year for nine consecutive quarters.
Stitch Fix closed the fiscal first quarter with 2.3 million active clients, reaching the high end of expectations. Management reiterated that it is taking a disciplined, methodical approach to rebuilding the active client base.
The key question is whether RPAC can keep climbing. Management explicitly noted that double-digit AOV growth in the second half of fiscal 2025 will create more difficult comparisons ahead. At the same time, the company expects inflation and weakening consumer confidence to remain factors that could influence discretionary spending behavior. Even so, management believes ongoing product innovation and personalization initiatives are designed to drive stronger engagement and retention over time.
SFIX Faces Competition From Designer Brands & GAP
Designer Brands, Inc. (DBI - Free Report) in the third quarter of fiscal 2025, posted a 3.2% decline in net sales and a 2.4% decline in total comparable sales. However, profitability improved year over year, as Designer Brands’ gross profit increased to $339.6 million from $333.8 million last year. Gross margin rose to 45.1% from 43.0% in the prior year.
GAP, Inc. (GAP - Free Report) in the third quarter of fiscal 2025 posted net sales of $3.9 billion, an increase of 3% year over year, supported by solid comparable sales growth of 5%. However, GAP’s profitability faced pressure as gross margin declined 30 basis points to 42.4% versus last year. Merchandise margin contracted 70 basis points year over year, reflecting headwinds that included an estimated net tariff impact of approximately 190 basis points.
Image: Bigstock
Can Stitch Fix Keep RPAC Growth Going Into Fiscal 2026?
Key Takeaways
Stitch Fix, Inc. (SFIX - Free Report) reported a strong start to fiscal 2026, with rising Revenue per Active Client (RPAC) marking the seventh consecutive quarter of sustained growth. RPAC reached $559, representing a 5.3% year-over-year increase in the fiscal first quarter. Average Order Value (AOV), which rose nearly 10% this quarter, marked the ninth consecutive period of year-over-year growth. Management attributes this steady rise to a reimagined client experience that emphasizes larger fix offerings and a higher quality brand assortment.
The improvement in RPAC reflects clients spending more per active client, supporting Stitch Fix’s ability to capture a greater share of wallet from its existing client base. Management also highlighted efforts to expand relevance in categories like activewear, athleisure, footwear, and accessories, which are helping drive higher-value interactions and improved engagement. Alongside this, management noted improving new-client quality, with three-month lifetime values rising year over year for nine consecutive quarters.
Stitch Fix closed the fiscal first quarter with 2.3 million active clients, reaching the high end of expectations. Management reiterated that it is taking a disciplined, methodical approach to rebuilding the active client base.
The key question is whether RPAC can keep climbing. Management explicitly noted that double-digit AOV growth in the second half of fiscal 2025 will create more difficult comparisons ahead. At the same time, the company expects inflation and weakening consumer confidence to remain factors that could influence discretionary spending behavior. Even so, management believes ongoing product innovation and personalization initiatives are designed to drive stronger engagement and retention over time.
SFIX Faces Competition From Designer Brands & GAP
Designer Brands, Inc. (DBI - Free Report) in the third quarter of fiscal 2025, posted a 3.2% decline in net sales and a 2.4% decline in total comparable sales. However, profitability improved year over year, as Designer Brands’ gross profit increased to $339.6 million from $333.8 million last year. Gross margin rose to 45.1% from 43.0% in the prior year.
GAP, Inc. (GAP - Free Report) in the third quarter of fiscal 2025 posted net sales of $3.9 billion, an increase of 3% year over year, supported by solid comparable sales growth of 5%. However, GAP’s profitability faced pressure as gross margin declined 30 basis points to 42.4% versus last year. Merchandise margin contracted 70 basis points year over year, reflecting headwinds that included an estimated net tariff impact of approximately 190 basis points.
The Zacks Rundown for SFIX
Stitch Fix’s shares have gained 28.3% in the past six months compared with the industry’s rise of 12%. SFIX presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
From a valuation standpoint, SFIX trades at a forward price-to-sales ratio of 0.5, lower than the industry’s average of 1.98.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SFIX’s current year and next year earnings estimates indicates year-over-year growth of 9.1% and 56.7%, respectively.
Image Source: Zacks Investment Research