The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.
Tiffany Hagler-Geard | Bloomberg | Getty Images
Stitch Fix shares tumbled in extended trading Tuesday after the online styling service offered a weak outlook for its fiscal third quarter and slashed its forecast for the full year, as it struggles to grow its subscriber base.
In its latest quarter, the company said it experienced challenges with onboarding new customers and converting clients. Stitch Fix reported a per-share loss in line with analysts’ estimates, and revenue slightly above expectations, for the three-month period ended Jan. 29.
Looking ahead, however, Stitch Fix is being much more cautious about future growth. Chief Executive Elizabeth Spaulding said the company’s active client count is not where she wants it to be.
Here’s how the retailer did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:
- Loss per share: 28 cents vs. 28 cents expected
- Revenue: $516.7 million vs. $514.8 million expected
For its third quarter, Stitch Fix expects net revenue to be between $485 million and $500 million, which would represent a decline of 5% to 7% from the prior year. Analysts had been looking for sales of $560.5 million.
For its fiscal year, which ends July 30, Stitch Fix sees revenue flat to slightly down year over year, assuming that the number of active clients is flat through the end of the 12-month period. Analysts had expected revenue to be up 8.1% for the year.
The company said it is actively evaluating its marketing spend to better manage improvements to onboarding and conversion. As a result, it said it has withdrawn a previously provided outlook for full-year adjusted earnings before interest, taxes and amortization.
Find the full press release from Stitch Fix here.
This story is developing. Please check back for updates.
