Stitch Fix Announces Third Quarter of Fiscal Year 2025 Financial Results

SAN FRANCISCO, June 10, 2025 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ: SFIX), the leading online personal styling service, today announced its financial results for the third quarter of fiscal year 2025, ended May 3, 2025. “Stitch Fix delivered strong third quarter results, marked by our overall return to year-over-year revenue growth,” said Matt Baer, CEO, Stitch Fix. “Our performance, which exceeded expectations, is the direct result of the strength of the Stitch Fix value proposition and the team's disciplined execution of our strategy. Now in the growth phase of our transformation, we are focused on cementing our role as the retailer of choice for apparel and accessories by consistently delivering the most client-centric and personalized shopping experience.” Third Quarter Fiscal 2025 Key Metrics and Financial Highlights Net revenue of $325.0 million, an increase of 0.7% year-over-year.Active clients of 2,353,000, a decrease of 18,000, or 0.8%, quarter-over-quarter; and a decrease of 280,000, or 10.6%, year-over-year.Net revenue per active client (“RPAC”) of $542, an increase of 3.2% year-over-year.Gross margin of 44.2%, a decrease of 130 basis points year-over-year, driven primarily by lower product margins.Net loss of $7.4 million and net loss margin of 2.3%; diluted loss per share of $0.06.Adjusted EBITDA of $11.0 million and Adjusted EBITDA margin of 3.4%, which reflect continued cost management discipline.Net cash provided by operating activities of $20.5 million and free cash flow of $16.0 million in the third fiscal quarter.We ended the quarter with $242.1 million of cash, cash equivalents, and investments; and no debt. Financial Outlook Our updated financial outlook for the fourth quarter of fiscal 2025, ending August 2, 2025, is as follows: Q4 2025Net Revenue$298 million - $303 million(6.7)% - (5.2)% YoY0.0% - 1.7% YoY adjusted to a 13-week period (1)Adjusted EBITDA$3 million - $7 million1.0% - 2.3% margin (1) Fourth quarter of fiscal 2024 net revenue from continuing operations has been adjusted to remove the impact of the extra week for year-over-year comparative purposes. Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to July 31. The fiscal year 2025 is a 52-week year and the fiscal year 2024 was a 53-week year, with the extra week occurring in the fourth quarter ending August 3, 2024. Our updated financial outlook for fiscal year 2025 is as follows: Fiscal Year 2025Net Revenue$1.254 billion - $1.259 billion(6.2)% - (5.9)% YoY(4.7)% - (4.3)% YoY adjusted to a 52-week period (1)Adjusted EBITDA$43 million - $47 million3.5% - 3.8% margin (1) Full fiscal year 2024 net revenue from continuing operations has been adjusted to remove the impact of the 53rd week for year-over-year comparative purposes. We expect fourth quarter gross margin to be at the lower end of a 44% to 45% range, and full fiscal year 2025 gross margin to be in the middle of that same range. We expect full fiscal year 2025 advertising expense as a percentage of revenue to be at the high end of the 8% to 9% range we provided last quarter. We expect to be free cash flow positive for the full year. Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) or free cash flow outlook to net cash flows used in operating activities from continuing operations because it does not provide an outlook for GAAP net income (loss) or net cash flows used in operating activities from continuing operations due to the uncertainty and potential variability of restructuring and other one-time costs, net other income (expense), provision for income taxes, stock-based compensation expense, or net cash flows used in operating activities from continuing operations, which are reconciling items between the non-GAAP financial measure and the corresponding GAAP measure. Because Stitch Fix cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlooks to the corresponding GAAP measures are not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP net income (loss) and free cash flow. For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below. Discontinued Operations 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 relate to our continuing operations. 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-conf.media-server.com/register/BI448c56148705472fac17f419082e20d6 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 and 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 fourth quarter and full fiscal year of 2025; the impact of our transformation strategy and the continuation of certain positive trends in our financial results and metrics; that the execution of our strategy and priorities will enable us to achieve long-term, sustainable, and profitable growth and positive free cash flow; 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 expanded Fix options, including larger Fixes or themed Fixes, will become an important driver of long-term engagement; that our investments to strengthen client-Stylist relationships and our product assortment will lead to improved client engagement and retention; our expectations with respect to the impact of tariffs on client prices or margins in the remainder of the fiscal year; our assessment of how tariffs and the macroeconomic environment may impact our performance in fiscal year 2026; that we will continue to build a stronger operational foundation that will enable us to scale and move toward growth; and our expectations regarding future costs and metrics, including warehouse costs, transportation costs, gross margin, average order value, 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; changing consumer behavior; the effect of changes in and uncertainty regarding tariffs or trade policies and our ability to mitigate tariff-related risks; 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, including the implementation of our transformation strategy; risks related to our inventory levels and management; risks related to our supply chain, sourcing of materials and shipping of merchandise; risks related to our real estate leases and sub-leases; 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 Quarterly Report on Form 10-Q for the fiscal quarter ended February 1, 2025. 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) May 3, 2025 August 3, 2024Assets Current assets: Cash and cash equivalents$108,915 $162,862 Short-term investments 125,305 84,106 Inventory, net 114,410 97,903 Prepaid expenses and other current assets 24,646 21,839 Total current assets 373,276 366,710 Long-term investments 7,881 — Property and equipment, net 44,857 51,517 Operating lease right-of-use assets 54,230 63,780 Other long-term assets 4,504 4,857 Total assets$484,748 $486,864 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable$89,155 $87,058 Operating lease liabilities 22,333 21,817 Accrued liabilities 75,159 73,007 Gift card liability 6,569 6,749 Deferred revenue 9,022 9,217 Other current liabilities 4,582 5,201 Current liabilities, discontinued operations — 502 Total current liabilities 206,820 203,551 Operating lease liabilities, net of current portion 76,930 95,685 Other long-term liabilities 607 606 Total liabilities 284,357 299,842 Commitments and contingencies 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 718,290 684,650 Accumulated other comprehensive income (loss) (443) (335)Accumulated deficit (487,416) (467,253)Treasury stock, at cost (30,042) (30,042)Total stockholders’ equity 200,391 187,022 Total liabilities and stockholders’ equity$484,748 $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 For the Nine Months Ended May 3, 2025 April 27, 2024 May 3, 2025 April 27, 2024Revenue, net$325,016 $322,731 $955,944 $1,017,918 Cost of goods sold 181,458 175,753 528,720 568,357 Gross profit 143,558 146,978 427,224 449,561 Gross margin 44.2% 45.5% 44.7% 44.2%Selling, general, and administrative expenses 153,266 171,818 454,923 541,100 Operating loss (9,708) (24,840) (27,699) (91,539)Interest income 2,627 3,002 8,222 7,923 Other income (expense), net (59) (9) (210) 980 Loss before income taxes (7,140) (21,847) (19,687) (82,636)Provision for income taxes 241 170 580 508 Net loss from continuing operations (7,381) (22,017) (20,267) (83,144)Net income (loss) from discontinued operations, net of income taxes 3 689 104 (9,198)Net loss (7,378) (21,328) (20,163) (92,342)Other comprehensive income (loss): Change in unrealized gains and losses on available-for-sale securities, net of tax (91) (66) (108) 104 Foreign currency translation — — — (1,129)Total other comprehensive income (loss), net of tax (91) (66) (108) (1,025)Comprehensive loss$(7,469) $(21,394) $(20,271) $(93,367)Loss per share from continuing operations attributable to common stockholders: Basic$(0.06) $(0.18) $(0.16) $(0.70)Diluted$(0.06) $(0.18) $(0.16) $(0.70)Earnings (loss) per share from discontinued operations attributable to common stockholders: Basic$0.00 $0.01 $0.00 $(0.08)Diluted$0.00 $0.01 $0.00 $(0.08)Loss per share attributable to common stockholders: Basic$(0.06) $(0.18) $(0.16) $(0.78)Diluted$(0.06) $(0.18) $(0.16) $(0.78)Weighted-average shares used to compute loss per share attributable to common stockholders: Basic 129,792,798 121,268,047 127,916,643 118,986,077 Diluted 129,792,798 121,268,047 127,916,643 118,986,077 Stitch Fix, Inc.Condensed Consolidated Statements of Cash Flow(Unaudited)(In thousands) For the Nine Months Ended May 3, 2025 April 27, 2024Cash Flows from Operating Activities from Continuing Operations Net loss from continuing operations$(20,267) $(83,144)Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities from continuing operations: Change in inventory reserves 2,984 (12,929)Stock-based compensation expense 43,658 59,911 Depreciation, amortization, and accretion 19,956 36,462 Other 54 (675)Change in operating assets and liabilities: Inventory (19,491) 29,010 Prepaid expenses and other assets (2,520) 249 Operating lease right-of-use assets and liabilities (8,689) (6,288)Accounts payable 1,699 2,450 Accrued liabilities 2,181 (2,684)Deferred revenue (195) (1,038)Gift card liability (180) (315)Other liabilities (618) (1,002)Net cash provided by operating activities from continuing operations 18,572 20,007 Cash Flows from Investing Activities from Continuing Operations Proceeds from sale of property and equipment — 308 Purchases of property and equipment (12,065) (10,259)Purchases of securities available-for-sale (164,101) (47,893)Sales of securities available-for-sale 5,468 — Maturities of securities available-for-sale 111,009 18,295 Net cash used in investing activities from continuing operations (59,689) (39,549)Cash Flows from Financing Activities from Continuing Operations Proceeds from the exercise of stock options, net 7 — Payments for tax withholdings related to vesting of restricted stock units (12,346) (11,393)Other (93) (424)Net cash used in financing activities from continuing operations (12,432) (11,817)Net decrease in cash and cash equivalents from continuing operations (53,549) (31,359)Cash Flows from Discontinued Operations Net cash used in operating activities from discontinued operations (398) (10,453)Net cash used in financing activities from discontinued operations — (171)Net decrease in cash and cash equivalents from discontinued operations (398) (10,624)Effect of exchange rate changes on cash and cash equivalents — (947)Net decrease in cash and cash equivalents (53,947) (42,930)Cash and cash equivalents at beginning of period 162,862 239,437 Cash and cash equivalents at end of period$108,915 $196,507 Supplemental Disclosure Cash paid for income taxes$621 $1,236 Supplemental Disclosure of Non-Cash Investing and Financing Activities Purchases of property and equipment included in accounts payable and accrued liabilities$1,134 $1,236 Capitalized stock-based compensation$2,321 $3,687 Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that Adjusted EBITDA from continuing operations (“Adjusted EBITDA”) and Adjusted EBITDA margin, which is defined as Adjusted EBITDA divided by net revenue for the period, are frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between continuing operations of companies. We believe free cash flow from continuing operations (“Free Cash Flow”) is an important metric because it represents a measure of how much cash from continuing operations we have available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies. Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of our non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include: Adjusted EBITDA excludes interest income and other (income) expense, net as these items are not components of our core business;Adjusted EBITDA does not reflect our provision for income taxes, which may increase or decrease cash available to us;Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;Adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;Adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs attributable to our continuing operations that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows; andFree Cash Flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments. Adjusted EBITDA We define Adjusted EBITDA as net loss from continuing operations excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, stock-based compensation expense, and restructuring and other one-time costs related to our continuing operations. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue for the period. The following table presents a reconciliation of net loss from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA, and net loss margin, the most comparable GAAP financial measure, to Adjusted EBITDA margin, for each of the periods presented: For the Three Months Ended For the Nine Months Ended(in thousands) May 3, 2025 April 27, 2024 May 3, 2025 April 27, 2024Net loss from continuing operations $(7,381) $(22,017) $(20,267) $(83,144)Add (deduct): Interest income (2,627) (3,002) (8,222) (7,923)Other (income) expense, net 59 9 210 (980)Provision for income taxes 241 170 580 508 Depreciation and amortization (1) 6,860 8,443 21,360 27,283 Stock-based compensation expense 13,727 18,944 43,658 59,911 Restructuring and other one-time costs (2) 134 4,134 3,107 24,103 Adjusted EBITDA $11,013 $6,681 $40,426 $19,758 Revenue, net $325,016 $322,731 $955,944 $1,017,918 Net loss margin (2.3)% (6.8)% (2.1)% (8.2)%Adjusted EBITDA margin 3.4% 2.1% 4.2% 1.9% (1) For the three and nine months ended April 27, 2024, depreciation and amortization excluded $1.6 million and $9.2 million, respectively, reflected as restructuring charges within restructuring and other one-time costs.(2) For the three and nine months ended May 3, 2025, restructuring charges were $0.0 million and $1.2 million, respectively, primarily in severance and employee-related benefits and other restructuring costs; and other one-time costs were $0.1 million and $1.9 million, respectively, in one-time bonuses for certain continuing employees. For the three and nine months ended April 27, 2024, restructuring charges were $4.8 million and $21.2 million, respectively. For the nine months ended April 27, 2024, other one-time costs were comprised of $2.9 million in one-time professional services fees. Free Cash Flow We define Free Cash Flow as net cash flows used in operating activities from continuing operations, reduced by purchases of property and equipment that are included in cash flows from investing activities from continuing operations. The following table presents a reconciliation of net cash flows used in operating activities from continuing operations, the most comparable GAAP financial measure, to Free Cash Flow for each of the periods presented: For the Three Months Ended For the Nine Months Ended(in thousands) May 3, 2025 April 27, 2024 May 3, 2025 April 27, 2024Free Cash Flow reconciliation: Net cash provided by operating activities from continuing operations $20,516 $21,743 $18,572 $20,007 Deduct: Purchases of property and equipment (4,518) (2,832) (12,065) (10,259)Free Cash Flow $15,998 $18,911 $6,507 $9,748 Net cash used in investing activities from continuing operations $(20,715) $(48,113) $(59,689) $(39,549)Net cash used in financing activities from continuing operations $(4,239) $(3,087) $(12,432) $(11,817) Operating Metrics May 3, 2025 February 1, 2025 November 2, 2024 August 3, 2024 April 27, 2024Active clients (in thousands) 2,353 2,371 2,434 2,508 2,633Net Revenue per Active Client $542 $537 $531 $533 $525 Active Clients We define an active client as a client who checked out a Fix or was shipped an item via Freestyle in the preceding 52 weeks, measured as of the last day of that period. Clients check out a Fix when they indicate what items they are keeping through our mobile application or on our website. We consider each Women’s, Men’s, or Kids account as a client, even if they share the same household. Net Revenue per Active Client We calculate net revenue per active client based on net revenue over the preceding four fiscal quarters divided by the number of active clients measured as of the last day of the period. IR Contact:ir@stitchfix.comPR Contact:media@stitchfix.com

Stitch Fix Announces Third Quarter of Fiscal Year 2025 Financial Results

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