Stitch Fix posts drop in quarterly revenue amid transformation efforts

Personal styling platform Stitch Fix has posted its financial results for the second quarter of FY24 amid a transformation strategy that is currently underway at the company.

Despite various efforts to improve on results, including ceasing operations in the UK, a move reflected in the latest publication, there was still a notable 18 percent year-on-year decrease in net revenue, to 330.4 million dollars.

The company had further seen a drop in active clients, with figures down 6 percent to just over 2.8 million quarter-over-quarter, and a decrease of 17 percent YoY. The net revenue per active client also fell by 3 percent YoY.

While Stitch Fix’s gross margin rose to 43.4 percent, reflecting an “improved health and transportation leverage”, its net loss from continuing operations came to 35 million dollars. Its adjusted EBITDA for the period sat at 4.4 million dollars, with cost management discipline cited as the cause.

In a release, CEO Matt Baer reaffirmed that the company’s initial vision of providing an easier way for people to shop remained relevant, adding: “Our transformation efforts are grounded in fully realising that vision and include both strengthening the foundation of our company and reimagining our client experience.

“I am encouraged by the progress we continue to make and am confident we have the right strategic priorities in place to set us up to drive sustainable, profitable growth.”

For the Q3 2024 outlook, Stitch Fix is forecasting net revenue to be between 300 and 310 million dollars, a drop between 22 and 19 percent YoY. For FY24, meanwhile, the company envisions net revenue to sit between 1.29 and 1.32 billion dollars, reflecting a decrease of 19 to 17 percent.