Katrina Lake, CEO of Stitch Fix
Adam Jeffery | CNBC
Stitch Fix reported a smaller-than-expected loss for the last quarter on Monday, but the company missed analyst expectations for revenue and outlook as shipping delays and lower customer spend hindered sales.
The stock fell 21% during long-term trading.
The subscription styling service lowered its revenue forecast for the current quarter and fiscal year, citing ongoing uncertainty due to the coronavirus pandemic and longer purchase cycles due to delivery issues.
Here’s what the company reported for the quarter ended Jan. 30 compared to what Wall Street expected, based on an analyst survey by Refinitiv:
- Loss per share: 20 cents versus 22 cents expected
- Revenue: $ 504.1 million vs. $ 512.2 million expected
Stitch Fix reported a second-quarter fiscal net loss of $ 21 million, or 20 cents a share, from earnings of $ 11.4 million, or 11 cents a share, a year earlier. Analysts polled by Refinitiv expected a loss per share of 22 cents.
Net sales rose 12% to $ 504.1 million, falling short of expectations of $ 512.2 million. Shipping delays during the holiday season meant the company had to deal with a backlog and failed to record sales for all the boxes shipped during the quarter. Stitch Fix recognizes earnings when customers checkout items, not when the company ships the order.
The company also said overall sales during the holiday season were softer than expected as consumers are no longer spending money on themselves, but buying gifts for others. However, it had its strongest January on record.
For the fiscal third quarter, Stitch Fix expects net sales of $ 505 million to $ 515 million, growth of 36% to 39% and an adjusted loss before interest, tax, depreciation and amortization of $ 5 million to $ 9 million. Executives said it was a “mixed bag” in shipping and handling delays so far in February, and they expect the trend to continue for the remainder of the fiscal third quarter.
For the full fiscal year 2021, the company now expects revenue growth of 18% to 20%, down from the previous outlook of 20% to 25%. Wall Street forecast revenue growth of 22.6% for the fiscal year.
The company added 110,000 new active customers during the quarter for a total roster of nearly 3.9 million. Stitch Fix said it added more active customers in the first half of fiscal year 2021 than in the entire previous fiscal year.
However, customers spend less on average. Active customers spent an average of $ 467, down 7% from the same time a year ago.
Stitch Fix defines active customers as people who have purchased an item directly from its website in the previous 52 weeks from the last day of the quarter.
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