Stitch Fix disappoints shareholders with weak guidance

Stitch Fix Inc (NASDAQ: SFIX) reported strong results for its fiscal first quarter on Tuesday. Shares still tanked 20% in extended trading on weaker-than-expected guidance for the future.

Q1 results

Stitch Fix said its net loss printed at $1.8 million in Q1 that translates to 2 cents per share. In the comparable quarter of last year, it had posted $9.5 million in net income or 9 cents per share. At $581.2 million, its quarterly revenue noted an about 18.5% annualised growth.

According to FactSet, experts had forecast 14 cents of per-share loss on $570.8 million in revenue. The personal styling company reported $38.2 million in adjusted EBITDA versus $17.5 million expected.

Active clients

Stitch Fix had 4.18 million active clients as of the end of Q1, lower than 4.23 million expected but 11% higher than last year. Net revenue per active client was up 12%. According to CEO Elizabeth Spaulding:

Future outlook

For the fiscal second quarter, Stitch Fix forecasts negative $5.0 million to positive $5.0 million in adjusted EBITDA on up to $520 million in revenue. In comparison, analysts were calling for $5.5 million in adjusted EBITDA on $585 million in revenue.

The California-based company also lowered its guidance for financial 2022 as a whole. It now expects under 10% growth in revenue and up to 2.0% increase in adjusted EBITDA margin. Spaulding said: