Stich Fix Q3 Earnings. Should you Buy, Sell or Hold?

 

 

Stitch Fix, Inc. (NASDAQ:SFIX), the leading online personal styling service, has released its financial results for the third quarter of fiscal year 2021 ended May 1, 2021. 

 

Stitch Fix President and incoming CEO Elizabeth Spaulding said, “In Q3 we delivered $536 million in net revenue, reflecting 44% year- over-year growth, and grew our active client count to more than 4.1 million, reflecting 20% year-over-year growth and our second highest quarter-over-quarter active client additions ever. We’re pleased with our performance this quarter and are excited to meet the needs and enthusiasm of more and more clients as the world continues to reopen and the apparel retail backdrop improves. As we look ahead, we are inspired to be building an ecosystem of personalized shopping experiences, designed with universal appeal, to meet every need and occasion.” 

 

Third Quarter Key Metrics and Financial Highlights 

  • Net revenue of $535.6 million, an increase of 44% year over year 
  • Active clients of 4.1 million, an increase of 689,000 or 20% year over year, and 234,000 clients quarter over quarter 
  • Net revenue per active client of $481, a decrease of 3% year over year, and an increase of 3% quarter over quarter 
  • Net loss of $18.8 million and diluted loss per share of $0.18 
  • Adjusted EBITDA of $11.6 million 

Third Quarter Business Highlights 

  • Experienced strong demand for our Fix offering from first-time and reactivated clients that resulted in our second highest quarter over quarter client additions on record 
  • Increased success rates both year over year as well as quarter over quarter across our Women’s, Men’s and Kids categories 
  • Scaled availability of Fix Preview to our entire U.K. client base and to over half of our U.S. clients with strong engagement and approximately three quarters of clients opting in, resulting in improved outcomes and higher average order values 
  • Launched Shop by Category to existing clients, enabling them to easily shop by department, trend or their favorite brands and enjoy personalized recommendations within each Category 

Financial Outlook 

Our financial outlook for the fourth quarter and full year of fiscal 2021, which ends on July 31, 2021, is as follows: 

 

  Q4’21   
Net Revenue  $540 million – $550 million  21.8%  24.0% YoY growth 
Adjusted EBITDA  $15 million  $20 million  2.8%  3.6% margin 

 

 

  FY’21   
Net Revenue  $2.070 billion – $2.080 billion  20.9%  21.5% YoY growth 
Adjusted EBITDA  $25 million  $30 million  1.2%  1.4% margin 

 

CWEB Analysts have initiated a BUY Rating for  Stitch Fix, Inc. (NASDAQ:SFIX) and potential upside of $69 by end of 2021. Net revenue of $535.6 million, an increase of 44% year over year we boost the company reporting in Q4. We believe that Q4 will bring higher profit margin and also increase of revenue compare to Q4 of year earlier. 

 

 

 


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