SAN FRANCISCO - Stitch Fix , Inc. (NASDAQ: NASDAQ:SFIX), a leading online personal styling service, saw its shares leap 16.8% following the announcement of third-quarter results that surpassed Wall Street's expectations.
The company reported a narrower loss and higher revenue than analysts had anticipated, alongside guidance for the fourth quarter and full year that also exceeded consensus estimates.
For the third quarter ended April 27, 2024, Stitch Fix reported a loss per share of -$0.18, which was $0.06 better than the analyst estimate of -$0.24. Revenue for the quarter was $322.7 million, down 16% YoY but ahead of the consensus estimate of $306.19 million. The company's net revenue per active client increased by 2% YoY to $525, despite a 20% decrease in active clients compared to the same period last year.
Looking forward, Stitch Fix provided an optimistic outlook, projecting fourth-quarter revenue in the range of $312 million to $322 million, above the consensus of $307 million. For the full fiscal year 2024, the company anticipates revenue between $1.33 billion and $1.34 billion, which also surpasses the consensus estimate of $1.31 billion.
Stitch Fix's CEO, Matt Baer, expressed confidence in the company's transformation efforts, stating, "Our Q3 revenue and adjusted EBITDA exceeded our expectations, which we believe signals that our transformation efforts are beginning to work." He emphasized the strategic focus on strengthening the foundation and reimagining the client experience as key drivers for sustainable, profitable growth in the future.
Stitch Fix's solid financial position was highlighted by the $244.5 million in cash, cash equivalents, and investments at the end of the quarter, with no debt on the balance sheet. The company's gross margin also showed improvement, increasing by 280 basis points YoY to 45.5%, reflecting improved product margins and transportation leverage.
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