Stitch Fix Shares Slide on Lower-Than-Expected Earnings

Both Stitch Fix's revenue and earnings per share trailed analysts' forecasts for the quarter ended May 2.
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Stitch Fix  (SFIX) - Get Report shares fell in after-hours trading Monday, after the personal-shopping service and clothing retailer reported weaker-than-expected earnings amid the coronavirus epidemic.

For the fiscal 2020 third quarter ended May 2, revenue registered $371.7 million, down 9% from $408.9 million in the year-earlier quarter. Analysts surveyed by FactSet predicted $418.2 million for the latest quarter.

Stitch Fix posted a loss of $33.9 million, or 33 cents per share, in the quarter, swinging from a profit of $7.0 million, or 7 cents per share a year ago. Analysts had forecast a 15-cent loss for the latest quarter.

Stitch Fix shares stood at $24.00, down 3.69% in post-market trading, after easing 0.16% in the regular session. The stock has gained 9% over the past three months.

Stitch Fix CEO Katrina Lake emphasized the positive.

“We are proud of … the results we delivered in these extraordinary times,” she said in a statement. “We grew active clients to 3.4 million, an increase of 9%, and grew net revenue per active client by 6%, our eighth consecutive quarter of growth and a reflection of our loyal and engaged client base.”

She contrasted Stitch Fix’s revenue decline to an 80% drop in the broader apparel and accessories market. The company expects sales to grow in the current quarter.

Last week, Stitch Fix told about 1,400 California-based stylists, or 18% of its staff, that they will lose their jobs. But most of them can relocate and stay with the San Francisco-based company.

It plans to hire about 2,000 stylists in lower-cost locations like Dallas, Pittsburgh, Cleveland, Minneapolis and Austin, Texas, starting in the summer.