The Stitch Fix app for download from the Apple App Store for smartphones is hosted in Hastings-on-Hudson, NY, USA on Saturday, June 5, 2021. Stitch Fix Inc. plans to release earnings on June 7th.
Tiffany Hagler-Gird | Bloomberg | Getty Images
Stitch Fix shares tumbled in extended trading on Tuesday after the online styling service provided weak guidance for its fiscal third quarter and cut its full-year guidance as it struggles to grow its subscriber base.
In the most recent quarter, the company said it was having trouble attracting new customers and converting customers. Stitch Fix reported a loss per share in line with analyst estimates and revenue slightly above expectations for the three-month period ending Jan. 29.
However, looking ahead, Stitch Fix is much more cautious about future growth. Chief Executive Elizabeth Spalding said the company’s active customer numbers were not up to par with her expectations.
Here’s how the retailer fared in the second fiscal quarter compared to what Wall Street expected, according to an analyst poll conducted by Refinitiv:
- Loss per share: 28 cents vs. expected 28 cents
- Income: $516.7 million vs $514.8 million expected
In the third quarter, Stitch Fix expects net revenue to be between $485 million and $500 million, down 5-7% year-over-year. Analysts had expected sales of $560.5 million.
For the fiscal year ending July 30, Stitch Fix’s revenue will be flat or slightly down year-over-year, assuming no change in active customer numbers through the end of the 12-month period. Analysts had expected revenue to rise 8.1% for the year.
The company said it is actively evaluating its marketing spend to better manage onboarding and conversion improvements. As a result, the company said it had withdrawn its earlier forecast of adjusted earnings for the full year before interest, taxes and depreciation.
The full press release for Stitch Fix can be found here.
This story is evolving. Please stay tuned for updates.