SAN FRANCISCO, Dec. 10, 2024 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ: SFIX), the leading online personal styling service, today announced its financial results for the first quarter of fiscal year 2025, ended November 2, 2024.
"Our fiscal year is off to a strong start. We exceeded our expectations in the first quarter on the top and bottom lines,” said Matt Baer, Chief Executive Officer, Stitch Fix. "Our clients are responding to the newness we have brought to our assortment as well as the improvements we've made to our client experience. This progress is a testament to the Stitch Fix team's ongoing execution of our transformation strategy, and we continue to expect to return to revenue growth by the end of FY26.”
During the first quarter of fiscal 2024, we ceased operations of our UK business and met the accounting requirements for reporting the UK business as a discontinued operation. Accordingly, our unaudited condensed consolidated financial statements reflect the results of the UK business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures below relate to our continuing operations.
First Quarter Fiscal 2025 Key Metrics and Financial Highlights
- Net revenue of $318.8 million, a decrease of 12.6% year-over-year.
- Active clients of 2,434,000, a decrease of 74,000, or 3.0%, quarter-over-quarter; and a decrease of 555,000, or 18.6%, year-over-year.
- Net revenue per active client ("RPAC”) of $531, an increase of 4.9% year-over-year.
- Gross margin of 45.4%, an increase of 180 basis points year-over-year, which reflects improved transportation leverage and product margins.
- Net loss of $6.3 million and diluted loss per share of $0.05.
- Adjusted EBITDA of $13.5 million, which reflects continued cost management discipline.
- Net cash provided by operating activities of $14.3 million and free cash flow of $9.9 million in the first fiscal quarter.
- We ended the quarter with $253.3 million of cash, cash equivalents, and investments; and no debt.
Our financial outlook for the second quarter of fiscal 2025, ending February 1, 2025, is as follows:
| Q2 2025 | ||
| Net Revenue | $290 million - $300 million | (12)% - (9)% YoY |
| Adjusted EBITDA | $8 million - $13 million | 2.8% - 4.3% margin |
Our financial outlook for fiscal year 2025 is as follows:
| Fiscal Year 2025 | ||
| Net Revenue
| $1.14 billion - $1.18 billion | (15)% - (12)% YoY |
| (13)% - (10)% YoY adjusted to a 52-week period (1) | ||
| Adjusted EBITDA | $25 million - $36 million | 2.2% - 3.1% margin |
We expect both 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.
Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) because it does not provide an outlook for GAAP net income (loss) due to the uncertainty and potential variability of restructuring and other one-time costs, net other income (expense), provision for income taxes, and stock-based compensation expense, which are reconciling items between Adjusted EBITDA and GAAP net income (loss). Because Stitch Fix cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures” below.
Conference Call and Webcast Information
Matt Baer, Chief Executive Officer of Stitch Fix, and David Aufderhaar, Chief Financial Officer of Stitch Fix, will host a conference call at 2:00 p.m. Pacific Time today to discuss the Company's financial results and outlook. A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at https://investors.stitchfix.com.
To access the call by phone, please register at the following link:
Dial-In Registration: https://register.vevent.com/register/BIb75f616c9a2a4320adf40088c7b87810
Upon registration, telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.stitchfix.com.
About Stitch Fix, Inc.
Stitch Fix (NASDAQ: SFIX) is the leading online personal styling service that helps people discover the styles they will love that fit perfectly so they always look - and feel - their best. Few things are more personal than getting dressed, but finding clothing that fits and looks great can be a challenge. Stitch Fix solves that problem. By pairing expert stylists with best-in-class AI and recommendation algorithms, the company leverages its assortment of exclusive and national brands to meet each client's individual tastes and needs, making it convenient for clients to express their personal style without having to spend hours in stores or sifting through endless choices online. Stitch Fix, which was founded in 2011, is headquartered in San Francisco. For more information, please visit https://www.stitchfix.com.
Forward-Looking Statements
This press release, the related conference call, and webcast contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward looking, including but not limited to statements regarding our expectations for future financial performance, including our profitability and long-term targets; guidance on financial results and metrics for the second quarter and full fiscal year of 2025; that the execution of our strategy and priorities will enable us to achieve long-term, sustainable, and profitable growth and positive free cash flow; our expectation to return to revenue growth by the end of fiscal year 2026; that the changes we have made to our client experience will help us acquire, retain, and reactivate highly engaged clients over time and better serve our clients; that our actions to make Stylists more visible to our clients will deepen relationships between clients and Stylists and increase client engagement; and our expectations regarding warehouse costs, transportation costs, gross margin, inventory levels, and advertising spend. These statements involve substantial risks and uncertainties, including risks and uncertainties related to the current macroeconomic environment; our ability to generate sufficient net revenue to offset our costs; consumer behavior; our ability to acquire, engage, and retain clients; our ability to provide offerings and services that achieve market acceptance; our data science and technology, Stylists, operations, marketing initiatives, and other key strategic areas; risks related to our inventory levels and management; risks related to our supply chain, sourcing of materials and shipping of merchandise; our ability to forecast our future operating results; and other risks described in the filings we make with the SEC. Further information on these and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in filings we make with the SEC from time to time, including in the section titled "Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended August 3, 2024. These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.stitchfix.com. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made.
| Stitch Fix, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except per share amounts) | ||||||||
| November 2, 2024 | August 3, 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 137,153 | $ | 162,862 | ||||
| Short-term investments | 116,119 | 84,106 | ||||||
| Inventory, net | 119,145 | 97,903 | ||||||
| Prepaid expenses and other current assets | 20,099 | 21,839 | ||||||
| Total current assets | 392,516 | 366,710 | ||||||
| Property and equipment, net | 49,204 | 51,517 | ||||||
| Operating lease right-of-use assets | 60,616 | 63,780 | ||||||
| Other long-term assets | 4,783 | 4,857 | ||||||
| Total assets | $ | 507,119 | $ | 486,864 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 114,386 | $ | 87,058 | ||||
| Operating lease liabilities | 21,999 | 21,817 | ||||||
| Accrued liabilities | 69,352 | 73,007 | ||||||
| Gift card liability | 6,296 | 6,749 | ||||||
| Deferred revenue | 9,256 | 9,217 | ||||||
| Other current liabilities | 5,232 | 5,201 | ||||||
| Current liabilities, discontinued operations | 32 | 502 | ||||||
| Total current liabilities | 226,553 | 203,551 | ||||||
| Operating lease liabilities, net of current portion | 89,465 | 95,685 | ||||||
| Other long-term liabilities | 606 | 606 | ||||||
| Total liabilities | 316,624 | 299,842 | ||||||
| Stockholders' equity: | ||||||||
| Class A common stock, $0.00002 par value | 1 | 1 | ||||||
| Class B common stock, $0.00002 par value | 1 | 1 | ||||||
| Additional paid-in capital | 694,339 | 684,650 | ||||||
| Accumulated other comprehensive income (loss) | (295 | ) | (335 | ) | ||||
| Accumulated deficit | (473,509 | ) | (467,253 | ) | ||||
| Treasury stock, at cost | (30,042 | ) | (30,042 | ) | ||||
| Total stockholders' equity | 190,495 | 187,022 | ||||||
| Total liabilities and stockholders' equity | $ | 507,119 | $ | 486,864 | ||||
| Stitch Fix, Inc. | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share and per share amounts) | ||||||||
| For the Three Months Ended | ||||||||
| November 2, 2024 | October 28, 2023 | |||||||
| Revenue, net | $ | 318,818 | $ | 364,785 | ||||
| Cost of goods sold | 174,013 | 205,682 | ||||||
| Gross profit | 144,805 | 159,103 | ||||||
| Gross margin | 45.4 | % | 43.6 | % | ||||
| Selling, general, and administrative expenses | 153,771 | 187,764 | ||||||
| Operating loss | (8,966 | ) | (28,661 | ) | ||||
| Interest income | 2,932 | 2,248 | ||||||
| Other income (expense), net | (72 | ) | 411 | |||||
| Loss before income taxes | (6,106 | ) | (26,002 | ) | ||||
| Provision for income taxes | 157 | 169 | ||||||
| Net loss from continuing operations | (6,263 | ) | (26,171 | ) | ||||
| Net income (loss) from discontinued operations, net of income taxes | 7 | (9,319 | ) | |||||
| Net loss | (6,256 | ) | (35,490 | ) | ||||
| Other comprehensive income (loss): | ||||||||
| Change in unrealized gains and losses on available-for-sale securities, net of tax | 40 | 121 | ||||||
| Foreign currency translation | - | (1,129 | ) | |||||
| Total other comprehensive income (loss), net of tax | 40 | (1,008 | ) | |||||
| Comprehensive loss | $ | (6,216 | ) | $ | (36,498 | ) | ||
| Loss per share from continuing operations, attributable to common stockholders: | ||||||||
| Basic | $ | (0.05 | ) | $ | (0.22 | ) | ||
| Diluted | $ | (0.05 | ) | $ | (0.22 | ) | ||
| Loss per share from discontinued operations, attributable to common stockholders: | ||||||||
| Basic | $ | 0.00 | $ | (0.08 | ) | |||
| Diluted | $ | 0.00 | $ | (0.08 | ) | |||
| Loss per share attributable to common stockholders: |
| |||||||