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Nov 02, 2024
Stitch Fix Q1 2025 Earnings Report
Stitch Fix's first quarter of fiscal year 2025 financial results were announced, exceeding expectations on both top and bottom lines.
Key Takeaways
Stitch Fix reported a decrease in net revenue by 12.6% year-over-year, totaling $318.8 million. The company's active clients decreased by 3.0% quarter-over-quarter and 18.6% year-over-year. Despite these declines, net revenue per active client increased by 4.9% year-over-year, and the gross margin improved by 180 basis points. The company had a net loss of $6.3 million, with a diluted loss per share of $0.05. Adjusted EBITDA stood at $13.5 million, and free cash flow was $9.9 million. The company ended the quarter with $253.3 million in cash, cash equivalents, and investments, with no debt.
Net revenue was $318.8 million, a 12.6% decrease year-over-year.
Active clients totaled 2,434,000, representing a 3.0% decrease quarter-over-quarter and an 18.6% decrease year-over-year.
Net revenue per active client was $531, a 4.9% increase year-over-year.
Net loss amounted to $6.3 million, with a diluted loss per share of $0.05.
Forward Guidance
For the second quarter of fiscal year 2025, Stitch Fix anticipates net revenue between $290 million and $300 million, representing a year-over-year decrease of 12% to 9%. Adjusted EBITDA is projected to be between $8 million and $13 million, with a margin of 2.8% to 4.3%. For the full fiscal year 2025, net revenue is expected to range from $1.14 billion to $1.18 billion, a year-over-year decrease of 15% to 12% (or 13% to 10% adjusted to a 52-week period). Adjusted EBITDA for the full year is anticipated to be between $25 million and $36 million, with a margin of 2.2% to 3.1%. The company expects the second quarter and full fiscal year 2025 gross margin to be approximately 44% to 45%, and full fiscal year 2025 advertising expense as a percentage of revenue to be at the high end of an 8% to 9% range.
Positive Outlook
- Second quarter gross margin expected to be approximately 44% to 45%.
- Full fiscal year 2025 gross margin expected to be approximately 44% to 45%.
- Adjusted EBITDA for the second quarter is projected to be between $8 million and $13 million.
- Adjusted EBITDA for the full year is anticipated to be between $25 million and $36 million.
- Company expects to return to revenue growth by the end of FY26.
Challenges Ahead
- Second quarter net revenue is projected to be between $290 million and $300 million, representing a year-over-year decrease of 12% to 9%.
Historical Earnings Impact
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