Why Is Stitch Fix (SFIX) Down 2.9% Since Last Earnings Report?

Core Viewpoint - Stitch Fix reported a narrower-than-expected loss in Q4 fiscal 2025, driven by AI investments and a transformation strategy, although revenues declined year-over-year [2][3]. Financial Performance - The adjusted loss was 7 cents per share, better than the Zacks Consensus Estimate of a 13-cent loss and the 12-cent loss from the previous year [4]. - Net revenues were $311.2 million, exceeding the Zacks Consensus Estimate of $301 million, but down 2.6% from the previous year [4]. - Active clients numbered 2,309,000, a decline of 7.9% year-over-year, while revenue per active client (RPAC) increased by 3% to $549 [5]. Engagement and Growth Metrics - Average order value (AOV) rose 12% year-over-year, marking the eighth consecutive quarter of growth, driven by larger Fix offerings and a 7.6% increase in average unit retail [6]. - Gross profit decreased by 4.7% to $135.7 million, with a gross margin of 43.6%, down 100 basis points year-over-year due to higher transportation costs [7]. Cost Management - Selling, general and administrative expenses (SG&A) fell 20.3% to $146.9 million, with SG&A as a percentage of net revenues dropping to 47.2% from 57.7% [8]. - Adjusted EBITDA was $8.7 million, down from $9.5 million in the previous year, with an adjusted EBITDA margin of 2.8% [9]. Financial Position - As of the end of Q4, the company had cash and cash equivalents of $114 million, short-term investments of $120.9 million, and no debt [11]. - Free cash flow for the quarter was $2.8 million [11]. Future Guidance - For Q1 fiscal 2026, Stitch Fix expects net revenues between $333 million and $338 million, indicating a year-over-year growth of 4.4-6% [12]. - Full-year revenue guidance for fiscal 2026 is projected between $1.28 billion and $1.33 billion, reflecting a 1-5% increase over the prior year [13]. Analyst Sentiment - Analysts have not made any earnings estimate revisions recently, with the consensus estimate shifting by 22.22% [14]. - Stitch Fix holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [16].