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Feb 01
Stitch Fix Q2 2025 Earnings Report
Stitch Fix reported a 5.5% decline in revenue for Q2 2025 but improved gross margin and client engagement.
Key Takeaways
Stitch Fix reported Q2 2025 revenue of $312.1 million, a 5.5% year-over-year decline, reflecting a decrease in active clients. Despite this, net revenue per active client grew by 4.3% to $537, driven by higher order values. Gross margin improved to 44.5%, and the company reported an adjusted EBITDA of $15.9 million. The net loss narrowed to $6.6 million compared to a $35.5 million loss in the prior year.
Revenue declined 5.5% year-over-year to $312.1 million.
Net loss improved to $6.6 million, compared to $35.5 million in Q2 2024.
Net revenue per active client increased 4.3% to $537.
Gross margin expanded to 44.5%, reflecting higher order values and improved product margins.
Stitch Fix
Stitch Fix
Forward Guidance
Stitch Fix expects continued revenue challenges in Q3 2025 but remains focused on client engagement and cost efficiency.
Positive Outlook
- Net revenue guidance of $311 million to $316 million for Q3 2025.
- Adjusted EBITDA expected between $7 million and $10 million for Q3 2025.
- Gross margin projected to remain stable at 44% to 45%.
- Continued investments in personalization and styling improvements.
- Cost management efforts driving EBITDA margin improvement.
Challenges Ahead
- Revenue expected to decline 3.6% to 2.1% year-over-year in Q3 2025.
- Declining active client base remains a concern for future growth.
- Macroeconomic conditions may impact consumer spending on discretionary items.
- High advertising expenses expected to remain at the upper end of 8% to 9% of revenue.
- Free cash flow remains negative, impacting near-term liquidity.