Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $342.1 million, representing a 7.3% year-over-year increase, exceeding expectations [5][15] - Adjusted EBITDA was $13.4 million, or 3.9% of revenue, outperforming expectations [5][16] - Average order value (AOV) rose 9.6% year-over-year, marking the ninth consecutive quarter of AOV growth [15][16] - Revenue per active client reached $559, up 5.3% year-over-year, indicating the seventh consecutive quarter of growth [15][16] - Gross margin was 43.6%, consistent with the FY26 range of 43%-44% [16][18] Business Line Data and Key Metrics Changes - Women's business saw a 19% year-over-year growth in key seasonal categories such as sweaters and coats [7] - Men's business delivered double-digit revenue growth, with fleece and outerwear growing 57% combined [8] - Sneakers grew 63% year-over-year, driven by brands like New Balance and Adidas [8] - The company is expanding into non-apparel categories, which is further accelerating growth [7] Market Data and Key Metrics Changes - The company's 7.3% revenue growth significantly outpaced Circana's estimated 1% growth for the broader U.S. apparel market [7] - Active clients reached 2.3 million, at the high end of expectations, marking the sixth consecutive quarter of improvement in active client growth rates [9][15] Company Strategy and Development Direction - The company is focused on enhancing client engagement, cultivating client-stylist relationships, and offering a best-in-class assortment [6] - Strategic expansion into non-apparel categories aims to capture a greater share of clients' spending [7] - The company is leveraging generative AI technology to enhance the client experience and drive engagement [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of client demand and the positive trends observed in Q1 and early Q2 [17][19] - The company anticipates some headwinds in the latter half of the year due to inflation and tougher AOV comparisons [18] - Full-year revenue guidance has been raised to between $1.32 and $1.35 billion, reflecting strong performance [17] Other Important Information - The company ended Q1 with $244.2 million in cash and short-term investments, with no debt [16] - Inventory was $141.5 million, up 18.8% year-over-year, reflecting investments in larger Fix offerings [16] Q&A Session Summary Question: Insights on new customer behavior and stickiness - Management noted nine consecutive quarters of improving lifetime value (LTV) for new client acquisition and a decrease in dormant clients [21][22] Question: Market share gains and gifting performance - Market share gains are attributed to delivering a personalized shopping experience, with gifting becoming a stronger use case due to family accounts [25][30] Question: Consumer-facing AI and visualization tools - Early adoption of Stitch Fix Vision has exceeded expectations, with clients engaging in various ways, including sharing images on social media [35][36] Question: Gross margin performance - The decline in gross margin is attributed to transportation expenses, investments in lower-margin categories, and minor tariff impacts [38][39] Question: Opportunities with different brands - The company provides a unique value proposition for third-party brands, leading to improved partnerships and brand engagement [43][46]