Stitch Fix is forecasting weaker than expected revenue as sales slow

Investing.com -- Stitch Fix (NASDAQ:SFIX) shares were falling after the personal styling platform missed on revenue and forecast lower-than-expected sales for the fiscal third quarter.

The company reported $412.1 million in fiscal second-quarter net revenue and a loss of 58 cents a share. Analysts expected it to report $413M in revenue and a loss per share of 34 cents. Net revenue was down 20% from the same quarter a year ago.

Stitch Fix also reported active clients of 3,574,000 in the quarter, down 445,000 or 11% from the same quarter a year ago. Analysts expected active clients to number 3.6M.

Shares were down more than 5% in after-hours trading but are up 59.8% so far this year.

Interim CEO Katrina Lake said in a statement: “This quarter, we continued to execute on our plan to achieve profitability and preserve liquidity, delivering adjusted EBITDA of $3.8M, which is at the high end of our guidance range. Looking forward, we will continue to invest in the advanced data science and machine learning capabilities combined with personalized styling expertise that have set us apart for more than a decade.”

The company said CFO Dan Jedda will step down to pursue another opportunity, to be succeeded by David Aufderhaar, its SVP of finance on April 3.

Stitch Fix said it executed a restructuring plan and other initiatives to realize $135M in cost reductions for the fiscal year 2023, which it said raised full fiscal year 2023 adjusted earnings before interest, taxes, depreciation and amortization and tightening the range to between $0M and $10M.

For the current quarter, the company is forecasting net revenue of $385M to $395M, which would be a drop of 20% to 22%. It is forecasting sales of $1.625 billion to $1.645B for its full fiscal year ending in July, compared with $1.647B expected by analysts.