SAN FRANCISCO, July 28, 2025 /PRNewswire/ -- Schubert Jonckheer & Kolbe LLP advises Stitch Fix, Inc. (NASDAQ: SFIX) investors that the firm is investigating potential legal claims relating to alleged false statements about the viability of Stitch Fix's Freestyle business segment and significant insider stock sales totaling $132 million. Current shareholders are encouraged to contact the firm. On July 9, 2025, Judge P. Casey Pitts of the U.S. District Court for the Northern District of California ruled that ...

Company Overview - Stitch Fix shares have lost about 5% over the past month, underperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the important drivers of the company's performance [1] Estimates and Revisions - Estimates for Stitch Fix have trended upward during the past month, indicating positive sentiment among analysts [2] - The magnitude of these revisions appears promising, contributing to a Zacks Rank 2 (Buy) for Stitch Fix, suggesting an expectation of above-average returns in the coming months [4] VGM Scores - Stitch Fix has a strong Growth Score of A, but a lower Momentum Score of D, and a value grade of C, placing it in the middle 20% for the value investment strategy [3] - The aggregate VGM Score for Stitch Fix is A, which is significant for investors not focused on a single strategy [3] Industry Performance - Stitch Fix operates within the Zacks Retail - Apparel and Shoes industry, where Capri Holdings has gained 8.3% over the past month [5] - Capri Holdings reported revenues of $1.04 billion for the last quarter, reflecting a year-over-year decline of 15.4%, with an EPS of -$4.90 compared to $0.42 a year ago [5] Future Expectations for Industry Player - Capri Holdings is expected to post earnings of $0.13 per share for the current quarter, indicating a change of +225% from the year-ago quarter [6] - The Zacks Consensus Estimate for Capri Holdings has remained unchanged over the last 30 days, resulting in a Zacks Rank 3 (Hold) and a VGM Score of D [6]

Core Insights - Stitch Fix, Inc. (SFIX) reported a 3.4% adjusted EBITDA margin in Q3 of fiscal 2025, an increase of 130 basis points year over year, with adjusted EBITDA reaching $11 million compared to $6.7 million in the same quarter last year [1][9] Financial Performance - The improved margin was driven by disciplined cost control, particularly in selling, general and administrative (SG&A) expenses, which declined by 10.8% year over year to $153.3 million, accounting for 47.2% of net revenues, down from 53.2% in the prior-year quarter [2] - Revenues per active client grew by 3.2% year over year to $542, supported by a 10% rise in average order value, attributed to more flexible Fix options and expanded trend-right assortments [3] - The contribution margin remained above 30% for the fifth consecutive quarter, providing financial flexibility to manage gross margin fluctuations and reinvest in client experience [4] Strategic Outlook - The company raised its full-year adjusted EBITDA guidance to $43-$47 million, implying a margin of 3.5%-3.8%, an increase from the previously communicated $40-$47 million [5] - SFIX is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.42X, significantly lower than the industry's average of 1.77X and the sector's average of 1.66X, indicating a potential undervaluation [6] Stock Performance - Shares of Stitch Fix have gained 34.8% in the past three months, outperforming the industry's growth of 25.5% [10]

Core Insights - Stitch Fix, Inc. (SFIX) has achieved a 10% year-over-year growth in Average Order Value (AOV) in the third quarter of fiscal 2025, marking the seventh consecutive quarter of growth [1][9] Group 1: AOV Growth Drivers - The introduction of larger Fixes, allowing clients to receive up to eight items, has significantly contributed to AOV growth, with adoption more than doubling since the first quarter [2] - Enhanced product assortment, including on-trend styles and categories like footwear and accessories, has fueled higher AOV, with notable sales increases in athleisure (30% year-over-year) and sneakers (35%) [4][9] - The integration of Freestyle and Fix has improved client engagement, allowing clients to start a Fix based on items discovered on the Freestyle platform [5] Group 2: Client Engagement and Personalization - The flexibility offered by larger Fixes enables clients to refresh their wardrobes according to seasonal trends and personal events, enhancing the overall customer experience [3] - The launch of themed Fixes for specific occasions has further strengthened the service's appeal, helping the company understand new customers' preferences from the outset [3] Group 3: Financial Performance - Revenue per active client increased to $542, reflecting a 3.2% rise from the previous year, attributed to strategic investments in pricing optimization and inventory management [6] - The company anticipates tougher year-over-year comparisons in fiscal 2026 but remains confident in maintaining AOV growth through continued focus on client engagement and product innovations [7] Group 4: Valuation Metrics - SFIX is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.39X, significantly lower than the industry average of 1.69X and below its median P/S level of 0.41X over the past year [8]

Core Viewpoint - Stitch Fix reported mixed results in its latest fiscal quarter, with revenue growth overshadowed by a decline in active clients, raising concerns about long-term growth potential [1][3][5]. Revenue Performance - Fiscal third-quarter revenue increased by 0.7% year over year to $325 million, but total revenue for the first nine months of the fiscal year decreased from approximately $1.06 billion to $956 million [3][4]. - Revenue growth was achieved by increasing net revenue per active client by 3.2% to $542, which is not sustainable in the long term with a declining client base [4][6]. Client Base Trends - Active clients decreased by 10.6% year over year and 0.8% quarter over quarter, indicating a troubling trend for the subscription clothing service [3][5]. - The company has experienced a decline in its client base for three consecutive years, which poses challenges for future revenue growth [5][12]. Future Guidance - For fiscal year 2025, guidance suggests net revenue will be between $1.245 billion and $1.26 billion, reflecting a decline of 5.9% to 6.2% from the previous year [5]. - Analyst estimates predict continued negative earnings, with a projected loss of $0.10 per share in fiscal 2027, indicating a lack of profitability in the near future [11]. Management and Strategy - Under CEO Matt Baer, the company reported revenue growth in the most recent quarter, focusing on increasing personalization, although this strategy has not yet attracted new customers [8][10]. - The challenge remains in executing a model that effectively meets customer preferences and sizing needs to reduce returns and improve client retention [10]. Market Comparison - Stitch Fix's stock has declined by 82% over the last five years, contrasting sharply with a nearly 98% gain for the S&P 500, highlighting the company's struggles in the market [9].

Group 1 - The article reflects on the author's positive experiences with the now-defunct online grocery service Webvan, highlighting the convenience of home delivery [1] - The author emphasizes a belief in the efficiency of financial markets, suggesting that most stocks accurately reflect their current value [1] - The best investment opportunities are identified as those in stocks that are less followed by average investors or those that do not accurately represent existing market opportunities [1]

Part I [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for Q3 FY25 show a slight revenue increase and a significantly narrowed net loss, with the UK business classified as discontinued operations Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | August 3, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $108,915 | $162,862 | | Inventory, net | $114,410 | $97,903 | | Total current assets | $373,276 | $366,710 | | Total assets | $484,748 | $486,864 | | Total current liabilities | $206,820 | $203,551 | | Total liabilities | $284,357 | $299,842 | | Total stockholders' equity | $200,391 | $187,022 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | For the Three Months Ended May 3, 2025 | For the Three Months Ended April 27, 2024 | For the Nine Months Ended May 3, 2025 | For the Nine Months Ended April 27, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $325,016 | $322,731 | $955,944 | $1,017,918 | | Gross profit | $143,558 | $146,978 | $427,224 | $449,561 | | Operating loss | $(9,708) | $(24,840) | $(27,699) | $(91,539) | | Net loss from continuing operations | $(7,381) | $(22,017) | $(20,267) | $(83,144) | | Basic and Diluted Loss per share | $(0.06) | $(0.18) | $(0.16) | $(0.70) | - For the nine months ended May 3, 2025, net cash provided by operating activities from continuing operations was **$18.6 million**, a slight decrease from **$20.0 million** in the prior-year period. Net cash used in investing activities was **$59.7 million**, and net cash used in financing activities was **$12.4 million**[21](index=21&type=chunk) - The company ceased operations of its UK business during the first quarter of fiscal 2024, and the results of the UK business are presented as a discontinued operation for all periods[27](index=27&type=chunk)[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month fiscal 2025 results, highlighting Q3 revenue growth, improved net loss, and sufficient liquidity [Financial Overview & Key Metrics](index=20&type=section&id=Financial%20Overview%20%26%20Key%20Metrics) Q3 FY25 financial performance shows revenue growth, active client decline, and improved net loss and Adjusted EBITDA Key Operating Metrics | Metric | May 3, 2025 | April 27, 2024 | % Change | | :--- | :--- | :--- | :--- | | Active clients (in thousands) | 2,353 | 2,633 | (10.6)% | | Net Revenue per Active Client | $542 | $525 | 3.2% | Adjusted EBITDA Reconciliation (in thousands) | Metric | For the Three Months Ended May 3, 2025 | For the Three Months Ended April 27, 2024 | | :--- | :--- | :--- | | Net loss from continuing operations | $(7,381) | $(22,017) | | Adjusted EBITDA | $11,013 | $6,681 | - Free cash flow for the nine months ended May 3, 2025 was **$6.5 million**, compared to **$9.7 million** in the prior-year period[96](index=96&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q3 FY25 revenue increased, gross margin decreased, and SG&A expenses significantly declined from restructuring efforts - Q3 FY25 revenue increased by **$2.3 million (0.7%)** compared to the prior year, primarily due to an improvement in net revenue per active client from higher average order values, which was partially offset by a decrease in active clients[114](index=114&type=chunk) - Q3 FY25 gross margin decreased by **130 basis points** to **44.2%**, primarily driven by lower product margins. For the nine-month period, gross margin increased by **50 basis points** due to higher average order values and transportation leverage[115](index=115&type=chunk) - SG&A expenses for Q3 FY25 decreased by **$18.6 million (10.8%)** YoY, driven by lower compensation and benefits, depreciation, and facilities costs from restructuring actions. This was partially offset by higher advertising spend[116](index=116&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash, investments, and a credit facility, with no share repurchases in the nine-month period - As of May 3, 2025, the company had **$108.9 million** of cash and cash equivalents and **$133.2 million** of investments[120](index=120&type=chunk) - The company has a **$50.0 million** revolving credit facility maturing in December 2026, with **$31.3 million** of excess availability as of May 3, 2025[121](index=121&type=chunk) - No shares were repurchased during the nine months ended May 3, 2025. **$120.0 million** remained available under the share repurchase program authorization[125](index=125&type=chunk)[74](index=74&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk were reported compared to the 2024 Annual Report on Form 10-K - During the three months ended May 3, 2025, there were no material changes in market risk from the information presented in the 2024 Annual Report on Form 10-K[135](index=135&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of May 3, 2025, with no material changes to internal control - Based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of May 3, 2025[137](index=137&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[138](index=138&type=chunk) Part II [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal matters include a pending securities class action and two related derivative actions concerning the Freestyle offering - A securities class action lawsuit alleges violations of the Securities Exchange Act for allegedly making materially false and misleading statements regarding the Freestyle offering between June 2020 and June 2022. A motion to dismiss the second amended complaint is pending before the court[49](index=49&type=chunk) - Two derivative actions based on the same factual allegations as the securities class action have been filed. One is stayed pending the resolution of the motion to dismiss in the securities case, and the other has not progressed past the initial filing[50](index=50&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section outlines business, industry, and legal risks, including client retention, competition, macroeconomic pressures, and cybersecurity [Business Risks](index=31&type=section&id=Business%20Risks) Key business risks include client retention, inventory management, stylist performance, and potential fraud losses - The company's number of active clients has decreased due to an inability to attract new clients and retain existing ones, which has negatively affected revenue and is expected to continue[153](index=153&type=chunk) - Effective inventory management is crucial; inaccurate demand prediction has previously led to higher inventory levels and increased reserves, and a smaller fulfillment network increases assortment risk[166](index=166&type=chunk)[167](index=167&type=chunk) - The business depends on a strong brand and the effective management of its stylist workforce, which was recently transitioned to a part-time only model[186](index=186&type=chunk)[188](index=188&type=chunk) [Industry, Market, and Economic Risks](index=38&type=section&id=Industry%2C%20Market%2C%20and%20Economic%20Risks) The company faces risks from retail apparel competition, macroeconomic conditions, and operational disruptions at fulfillment centers - The business is subject to macroeconomic conditions impacting consumer discretionary spending, such as inflation, recessionary concerns, and general economic uncertainty[194](index=194&type=chunk) - The retail apparel industry is highly competitive, with rivals potentially having greater resources, infrastructure, and brand recognition[196](index=196&type=chunk)[197](index=197&type=chunk) - Operations are vulnerable to disruptions at fulfillment centers and in the supply chain from natural disasters, public health crises (like the COVID-19 pandemic), or political crises[199](index=199&type=chunk)[200](index=200&type=chunk) [Cybersecurity, Legal, and Regulatory Risks](index=39&type=section&id=Cybersecurity%2C%20Legal%2C%20and%20Regulatory%20Risks) Risks include data security breaches, evolving privacy laws, litigation, and changes in U.S. tax or tariff policies - Compromises of data security, either at the company or its third-party providers, could lead to unexpected expenses, litigation, and material harm to its reputation and operating results[202](index=202&type=chunk)[203](index=203&type=chunk) - Compliance with evolving privacy laws (e.g., CCPA, GDPR) is complex and costly, with non-compliance carrying risks of significant fines, penalties, and litigation[211](index=211&type=chunk)[212](index=212&type=chunk) - Changes in U.S. tax or tariff policy, particularly regarding goods produced in China, could adversely affect the business by increasing merchandise costs and creating uncertainty[223](index=223&type=chunk) [Risks Relating to Ownership of Our Class A Common Stock](index=44&type=section&id=Risks%20Relating%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) Stockholder risks include price volatility, potential dilution, concentrated voting power, no dividend intent, and anti-takeover provisions - The dual-class stock structure, where Class B common stock has ten votes per share, concentrates considerable voting control with certain directors, executive officers, and their affiliates[234](index=234&type=chunk) - The company does not currently intend to pay dividends, so any return on investment will depend on the appreciation of the stock's value[235](index=235&type=chunk) - The company's certificate of incorporation includes provisions that could discourage or delay a change of control, such as a classified board, no stockholder action by written consent, and super-majority voting requirements[236](index=236&type=chunk)[238](index=238&type=chunk) [Other Information (Items 2, 3, 4, 5, 6)](index=50&type=section&id=Item%205.%20Other%20Information) This section covers minor reporting items, including no unregistered sales or defaults, and discloses a Rule 10b5-1 trading plan - Anthony Bacos, Chief Product and Technology Officer, adopted a Rule 10b5-1 trading plan on March 13, 2025, for the potential sale of up to **360,000 shares** of Class A common stock, expiring March 31, 2026[254](index=254&type=chunk) - The company reports no unregistered sales of equity securities or defaults upon senior securities for the period[251](index=251&type=chunk)[252](index=252&type=chunk)

Stitch Fix, Inc. (NASDAQ: SFIX ) reported 3Q25 results in line with the improvements seen over the past two quarters (you can read my articles from 2Q25 and 1Q25 ).Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, an ...

Core Insights - Stitch Fix, Inc. (SFIX) reported third-quarter fiscal 2025 results with both top and bottom lines exceeding Zacks Consensus Estimates, leading to a 7.5% increase in shares during after-market trading [1][9] Financial Performance - The company recorded an adjusted loss of $0.06 per share, which was better than the expected loss of $0.12 and improved from a loss of $0.15 in the same quarter last year [3][9] - Net revenues reached $325 million, surpassing the Zacks Consensus Estimate of $315 million, and reflecting a year-over-year increase of 0.7% due to a rise in net active clients [3][9] - Active clients totaled 2,353,000, representing a year-over-year decline of 10.6%, while average net revenues per active client increased by 3.2% to $542 [4] Margins and Expenses - Gross profit decreased by 2.3% to $143.6 million, with a gross margin decline of 130 basis points to 44.2%, primarily due to lower product margins as the company invested in client experience [5] - Selling, general and administrative expenses (SG&A) fell by 10.8% to $153.3 million, with SG&A as a percentage of net revenues decreasing to 47.2% [6] - Adjusted EBITDA improved to $11 million from $6.7 million in the previous year, with an adjusted EBITDA margin of 3.4%, reflecting effective cost management [7] Cash and Equity Position - At the end of the fiscal third quarter, the company had cash and cash equivalents of $108.9 million, short-term investments of $125.3 million, and no debt, with net inventory at $114.4 million and shareholders' equity of $200.4 million [8] Future Guidance - For the fourth quarter of fiscal 2025, SFIX anticipates net revenues between $298 million and $303 million, indicating a year-over-year decline of 5.2-6.7% [13] - The full-year revenue outlook was raised to $1.25-$1.26 billion, with adjusted EBITDA projected between $43 million and $47 million [14] Stock Performance - SFIX shares have increased by 19.8% over the past three months, outperforming the industry growth of 11% [15]

Personalization is a tool that will help Stitch Fix retain and even gain market share amid any potential external headwinds like tariffs or a slowdown in consumers’ discretionary spending, executives said Tuesday (June 10) during the online personal styling service’s quarterly earning call.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Co ...