It has been about a month since the last earnings report for Stitch Fix (SFIX Quick QuoteSFIX - Free Report) . Shares have added about 23.1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Stitch Fix due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Stitch Fix, Inc. before we dive into how investors and analysts have reacted as of late.

Stitch Fix Reports Narrower Q4 Loss & Higher Revenues

Stitch Fix reported a narrower-than-expected adjusted loss for the fourth quarter of fiscal 2026, while revenues fell slightly short of the Zacks Consensus Estimate. Revenues and revenue per active client increased year over year, but the active-client count declined.

Management expects a more challenging consumer environment and higher client acquisition costs to temper growth in fiscal 2027. Its adjusted EBITDA outlook also reflects planned investments in advertising and technology, including artificial intelligence.

More on Stitch Fix’s Q4 Results

SFIX reported an adjusted loss of 1 cent per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 6 cents and the year-ago adjusted loss of 7 cents. On a GAAP basis, the company reported a loss of 2 cents per share compared with a loss of 7 cents a year earlier.

Net revenues of $324.4 million increased 4.2% from $311.2 million a year earlier, but came in just below the $325 million consensus estimate. The quarter marked the company’s sixth consecutive quarter of year-over-year revenue growth.

Active clients totaled 2.277 million, down 1.4% both year over year and sequentially. Revenue per active client reached a record $592, up 7.8% from the prior-year quarter. Fix average order value rose 4.9%, supported by more items per Fix and a favorable assortment mix. Both the women’s and men’s Fix businesses grew, with the men’s business posting double-digit growth for the fifth consecutive quarter.

Across the women’s and men’s businesses, activewear and athleisure sales increased 21% year over year, while footwear grew 14%. Client retention improved sequentially for the eighth consecutive quarter. Management said higher acquisition costs weighed on its ability to attract and re-engage clients.

Insight Into SFIX’s Margins & Expenses

In the fiscal fourth quarter, the company’s gross profit rose 4.2% year over year to $141.4 million, while gross margin held steady at 43.6%. Stitch Fix said inventory management helped offset higher transportation costs and investments in new merchandise categories.

Selling, general and administrative expenses declined to $145.7 million from $146.9 million a year earlier. Advertising represented 9.9% of revenues. The operating loss narrowed to $4.4 million from $11.2 million.

Adjusted EBITDA increased to $10.8 million from $8.7 million in the prior-year quarter, exceeding the company’s $7-$10 million guidance range. Adjusted EBITDA margin improved to 3.3% from 2.8%. Management attributed the guidance beat largely to lower fixed operating expenses.

SFIX’s Financial Snapshot

Stitch Fix ended fiscal 2026 with $220.9 million in cash, cash equivalents and investments, and no debt. The company generated $9.1 million in operating cash flow and $4.4 million in free cash flow during the fourth quarter.

SFIX repurchased 2.7 million shares for $11.3 million in the fourth quarter. For fiscal 2026, it bought back 7.2 million shares for $26.4 million, leaving $93.6 million under the existing authorization.

SFIX Caps Fiscal 2026 With Better Profitability

Full-year net revenues increased 6.4% to $1.35 billion, marking the company's first full year of revenue growth since fiscal 2021. Gross margin was 43.7%, down 70 basis points year over year.

Adjusted EBITDA increased to $53.4 million from $49.1 million, while adjusted EBITDA margin edged up to 4% from 3.9%. The full-year net loss narrowed to $12.6 million from $28.8 million, and free cash flow increased to $19.8 million from $9.3 million.

Stitch Fix’s FY’27 Guidance

For the first quarter of fiscal 2027, management expects revenues of $323-$328 million, implying a year-over-year decline of 5.6% to 4.1%. Adjusted EBITDA is projected at $3-$6 million.

The first-quarter outlook reflects two temporary factors affecting Fix volume. Some shipments were moved from the first quarter of fiscal 2027 into the fourth quarter of fiscal 2026. An unintended August change to the post-checkout offer flow also limited the number of clients eligible to request another Fix. Management said the issue has been corrected and will not affect results beyond the first quarter.

For fiscal 2027, Stitch Fix expects revenues to be in the range of $1.31-$1.36 billion, representing a year-over-year change ranging from a 2.8% decline to 0.9% growth. Adjusted EBITDA is forecast at $27-$42 million compared with $53.4 million in fiscal 2026. Management expects gross margin of 43-44% and positive free cash flow for the year. The outlook reflects a lower active-client starting point, a more challenging consumer environment and planned growth investments. 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -92.86% due to these changes.

VGM Scores

At this time, Stitch Fix has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Stitch Fix has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Stitch Fix belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, Zumiez (ZUMZ Quick QuoteZUMZ - Free Report) , has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.

Zumiez reported revenues of $208.96 million in the last reported quarter, representing a year-over-year change of -2.5%. EPS of -$0.17 for the same period compares with -$0.06 a year ago.

For the current quarter, Zumiez is expected to post earnings of $0.07 per share, indicating a change of -84.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Zumiez has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.