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Online Styling Firm Stitch Fix Stock Jumps on Surprise Profit

Stitch Fix says its new direct-purchase option has helped increase its addressable market.

Shares of Stitch Fix  (SFIX) - Get Stitch Fix, Inc. Class A Report jumped on Wednesday after the online personal shopping and styling service swung to a surprise fiscal-fourth-quarter profit and reached $2 billion in sales for the first time.

Shares of the San Francisco company at last check rose 16% to $41.12. The stock touched a 52-week high $113.76 in late January.

For the quarter ended July 31 Stitch Fix posted earnings of $21.5 million, or 19 cents a share, compared with a loss of $44.4 million, or 48 cents a share, in the year-earlier quarter.

Net sales for the quarter rose 29% to $571 million from $443 million.

For the fiscal year ended July 31, sales for Stitch Fix reached $2.1 billion from $1.7 billion.

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A survey of analysts by FactSet produced consensus estimates of a quarterly loss of 12 cents a share, or an adjusted loss of 13 cents a share, on revenue of $547.8 million.

"These results reflect strong performance across our business, in women’s, kids and the UK," Chief Executive Elizabeth Spaulding said in a statement. 

The company has almost 4.2 million clients, :and with the launch of Stitch Fix Freestyle in August we are significantly increasing our addressable market," she said.

Stitch Fix Freestyle is the retailer's new direct-purchase option, as opposed to its traditional monthly subscription.

For the fiscal first quarter ending Oct. 30, the company expects revenue between $560 million and $575 million. FactSet's call for the first quarter: $572.1 million.

For fiscal 2022 ending July 30, it sees revenue up at least 15% from fiscal 2021.