Stitch Fix Slumps After Swing to Net Loss on Higher Revenue

Stitch Fix dropped after the San Francisco provider of personal styling services swung to a fiscal-second-quarter loss from a year-earlier profit on 12% higher revenue.
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Shares of Stitch Fix  (SFIX) - Get Report dropped after hours on Monday after the San Francisco provider of personal styling services swung to a fiscal-second-quarter loss from a year-earlier profit on 12% higher revenue.

The loss was narrower then Wall Street analysts expected while the revenue number missed their expectations.

For the quarter ended Jan. 30 Stitch Fix posted a net loss of 20 cents a share, compared with a profit of 11 cents a share in the year-earlier quarter. Revenue reached $504.1 million from $451.8 million.

A survey of analysts by FactSet produced consensus estimates of a loss of 22 cents a share on revenue of $512 million.

At last check Stitch Fix shares were trading down 20% at $54.94. They closed the regular Monday trading session off 6.1% at $68.52. In 2021 through the close of Monday regular trading, Stitch Fix shares were up 24%.

Stitch Fix reported nearly 3.9 million active clients, up 12% from a year earlier. Net revenue per active client slipped 7% to $467.

"This level of demand for our model of personalized discovery and radical convenience positions us well to continue to capture share amidst the ongoing shift in the retail Landscape, and gives us confidence in our long-term opportunity," Founder and Chief Executive Katrina Lake said in a statement.

On Feb. 1 analyst Lamont Williams at Stifel downgraded Stitch Fix to hold from buy on concern about its valuation. He raised his target price to $83 from $64 to reflect what had been a surge in the stock price.

At that point, the analyst said, "the recent multiple expansion to the current level, ahead of the recovery, results in a risk/reward balance that justifies the neutral rating."

The analyst had said that he remained bullish on the stock long term.