The share price of Stitch Fix declined on March 8 2021 after the company announced their quarterly earnings for the quarter ending on January 30, 2021, which did not meet the expectations of the investors. In the normal trading session, SFIX stock prices declined by 6.14% but they plunged 22.90% more in the after-hours session on Monday, March 8.
Second-quarter financial highlights:
The company reported a revenue of $504.1 million with an increase of 12% year-over-year. The company active clients increased by 12% year-over-year and reached 408,000. The company net revenue per client declined by 7% year-over-yearand it was $467 per client. In the reported quarter the company suffered a net loss of $21 million and diluted loss per share of $0.20. the company recorded an adjusted EBITDA loss of $8.9 million.
Reasons for poor financial performance:
The company blamedthe Corona virus ad said that due to restrictions, the delivery time was increased and the company has not recognizedall the revenue for fixes they shipped during the quarter. The company said that they are looking for other courier services to reduce the delivery time and process our returns in time.
Stitch Fix Founder and CEO Katrina Lake said that the company delivered the strongest January in their records due to the increase of demand for their model of personalized discovery and radical convenience make us attractive to capture more market share. The company is also bringing the direct buy option to new clients which will be available at the start of the next financial year.
Financial forecast for third-quarter 2021
The company is expecting a revenue of $505 million to $515 million for the third quarter which is below the expectations of analysts which estimated $523 million. The full financial year, the company revised its revenue numbers and now its expecting revenue of $2.02 billion to $2.05 billion.
About the company:
Stitch Fix is an online personal styling service and was founded in 2011 by CEO Katrina Lake. The company’s mission is to change the way people find clothes they love by combining technology with the personal touch of seasoned style experts. The company also has personalized selections of apparel, shoes, and accessories, curated by Stitch Fix stylists and algorithms.