Stitch Fix (SFIX) stock is spiraling Wednesday after the online personal styling company reported mixed results for its fiscal fourth quarter and provided disappointing guidance.
In the three months ended August 3, Stitch Fix's revenue decreased 12.4% year-over-year to $319.6 million, as its active clients fell 19.6% to 2.51 million. Still, its net revenue per active client increased 4.5% to $533.
The company also said its net loss widened to 29 cents per share from 17 cents per share in the year-ago period.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We are executing our transformation strategy with discipline and, during the fourth quarter, we delivered results at the high end of our guidance on both the top and bottom line," said Stitch Fix CEO Matt Baer in a statement.
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $318 million and a net loss of 21 cents per share, according to MarketWatch.
Stitch Fix also provided its outlook for its fiscal first quarter and full year. For the first quarter, it anticipates revenue in the range of $303 million to $310 million, representing a year-over-year decline of 15% to 17%. For the full fiscal year, Stitch Fix sees revenue between $1.11 billion to $1.16 billion, representing a year-over-year decline of 13% to 17%. Both of these forecasts came up short of analysts' forecasts for Q1 revenue of $319 million and full-year revenue of $1.3 billion.
"While there is a lot of work still to do, I am confident we are on the right path to continue to improve the trajectory of our business which includes returning to revenue growth by the end of fiscal 2026," Baer said.
Is Stitch Fix stock a buy, sell or hold?
Today's technical troubles are nothing new for the penny stock, which is down more than 50% since mid-July. And Wall Street remains on the sidelines when it comes to SFIX.
According to S&P Global Market Intelligence, the consensus recommendation among the seven analysts covering the consumer discretionary stock is Hold. And while the average analyst target price for Stitch Fix is $3.40, representing implied upside of about 36% to current levels, though price-target cuts could come down the pike after today's slide.
Financial services firm Truist Securities is one of those with a Hold rating on the consumer discretionary stock.
"With revenue and active clients not likely to show year-over-year growth until the end of fiscal 2026, we remain on the sidelines believing the stock is range-bound near to medium term," says Truist Securities analyst Youssef Squali.
"Management's ongoing turnaround strategy of strengthening its operational and financial foundations while improving the client experience is showing green shoots but this progress is being more than offset by ongoing client losses."
Related Content
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
QUIZ: Test Your Retirement IQQuiz Are you smarter than…everyone else? Test your retirement smarts with this quiz.
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Should You Buy Gold as It Tops $4,000? Here's What the Experts SayRate cuts, a weak dollar and macro uncertainty have helped create a "perfect storm" for gold this year. Should investors add exposure or is it too late to buy?
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's GuideStock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
Rally Fades on Mixed AI Revolution News: Stock Market TodayAll three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
