Stitch Fix, Inc. Reports Financial Results for Q1 Fiscal 2025
Stitch Fix, Inc. (NASDAQ: SFIX), an online personal styling service leader, announced its financial results for the first quarter of fiscal year 2025, which ended on November 2, 2024.
Key Financial Metrics
| Metrics | Q1 FY2025 | Year-Over-Year Change |
|---|---|---|
| Net Revenue | $318.8M | -12.6% |
| Earnings Per Share (EPS) | -$0.05 | Not Provided |
| Adjusted EBITDA | $13.5M | Not Provided |
| Net Cash Provided by Ops | $14.3M | Not Provided |
| Free Cash Flow | $9.9M | Not Provided |
Despite a 12.6% year-over-year decrease in net revenue, Stitch Fix achieved a gross margin of 45.4%, a 180 basis points improvement, due to enhanced transportation leverage and product margins. The company reported a net loss of $6.3 million, translating to a diluted loss per share of $0.05.
Revenue Performance Across Major Segments
| Segment | Revenue Performance |
|---|---|
| Active Clients | 2,434,000 clients |
| Revenue per Active Client | $531 |
The company experienced a decrease in active clients but observed a 4.9% increase in revenue per active client year-over-year, indicating improving client engagement despite a challenging client retention landscape.
Key Developments and Operational Highlights
- Ceased operations of the UK business, fulfilling requirements for reporting it as a discontinued operation.
- Continued strong execution of transformation strategy focused on updating the product assortment and enhancing client experience.
- No debt at the quarter’s end, with cash, cash equivalents, and investments totaling $253.3 million.
Management Comments
Matt Baer, Stitch Fix's CEO, highlighted the company's robust start to the fiscal year, exceeding expectations on both topline and bottom-line metrics. He emphasized the effectiveness of their ongoing transformation strategy in boosting client experience and expressed confidence in returning to revenue growth by the end of FY2026.
Forward Guidance
For the second fiscal quarter of 2025, Stitch Fix anticipates maintaining a gross margin in the range of 44% to 45%. The full fiscal year 2025 advertising expense as a percentage of revenue is expected to be at the high end of the 8% to 9% range.
The company's focus on refining its client offerings and improving operational efficiencies clearly reflects its commitment to achieving sustainable growth and profitability. Despite current challenges, management's strategic initiatives and fiscal prudence offer a cautiously optimistic outlook for the future.
For more in-depth analysis and insights, stay tuned with our platform to stay ahead of the market.
