Why This Analyst Can't Get Behind Stitch Fix

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TheStreet's Martin Baccardax noted that the company reported a loss of 20 cents per share, down from a profit of 11 cents over the same period last year and 2 cents inside the Street consensus forecast. Group revenues, Stitch Fix said, rose 11.6% to $504.1 million. Stitch Fix reported nearly 3.9 million active clients, up 12% from a year earlier. Net revenue per active client slipped 7% to $467.

"We are seeing strong new client acquisition trends, healthy auto-ship retention levels and increased client engagement with direct buy. That said, there are also near-term factors that may impact the back half of fiscal 2021 and are reflected in our updated full-year guidance," CFO Dan Jedda told investors on a conference call late Monday, citing shipping and client delays.

"In addition, there's still a lot of uncertainty given COVID, and as a result, we're taking a more measured approach to our outlook," he added. "As such, we plan to continue testing the (direct buy) product through fiscal Q3 and into Q4 before a full-scale product launch in late fiscal Q4."

Jeff Marks, senior portfolio analyst with Jim Cramer's Action Alerts PLUS, weighs in on Stitch Fix.

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