It was a gloomy day on Wall Street with the S&P 500 entering correction territory, but digital styling service Stitch Fix Inc. was a ray of light.
Shares of Stitch Fix jumped 19.6 percent to $5.06 in after-hours trading on Tuesday on the company’s fiscal second-quarter report, which showed smaller losses, better-than-expected sales and a stronger outlook.
Net losses narrowed to $6.5 million from $35.5 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization tallied $15.9 million with a margin of 5.1 percent.
Revenues for the quarter ended Feb. 1 slipped 5.5 percent to $312.1 million — better than the $298 million in sales analysts forecast, according to Yahoo Finance. The top line held up better than the company’s active client count, which decreased 15.5 percent from a year earlier to $2.4 million.
That put revenues per active client at $537 in the quarter, a gain of 4.3 percent from a year earlier and a step in the right direction for the company, which is in the midst of a turnaround.
Matt Baer, chief executive officer of Stitch Fix, said: “Our clients are responding to the improvements we’ve made to our experience, including the increased newness in our assortment, expanded Fix flexibility, and investments in stronger client-stylist relationships. We are encouraged by our progress and remain focused on successfully executing our strategy so we can realize our vision to be the most client-centric and personalized shopping experience.”
Accordingly, Stitch Fix upped its outlook for the full fiscal year.
It now expects adjusted EBITDA of $40 million to $47 million, above the $25 million to $36 million forecast in December. And revenues are now slated to hit $1.225 billion to $1.24 billion, instead of the $1.14 billion to $1.18 billion previously projected.
Stitch Fix ended the quarter with $229.8 million of cash on hand and no debt, giving the company some extra to maneuver in what has rapidly become a tough climate for fashion retailers.
