1 Safe harbor statement This presentation is provided for informational purposes only and should not be construed as an oer, commitment, promise or obligation on behalf of Stitch Fix, Inc. ("Stitch Fix" or the "Company") to sell securities or deliver any products, services, functionalities or other features. This presentation contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward looking, includin ...

Financial Data and Key Metrics Changes - Revenue for Q1 Fiscal 2026 was $342.1 million, representing a 7.3% year-over-year increase, exceeding expectations [5][17] - Adjusted EBITDA was $13.4 million, or 3.9% of revenue, outperforming expectations [17] - Average order value (AOV) rose 9.6% year-over-year, marking the ninth consecutive quarter of AOV growth [17][18] - Revenue per active client (RPAC) reached $559, up 5.3% year-over-year, indicating increased client engagement [17][18] - Gross margin was 43.6%, consistent with the FY26 range of 43%-44% [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 [8] - Men's business delivered double-digit revenue growth, with fleece and outerwear growing 57% combined [9] - Non-apparel categories are contributing to growth, capturing a greater share of client spending [8][10] Market Data and Key Metrics Changes - The company's 7.3% revenue growth significantly outpaced the broader U.S. apparel market's estimated 1% growth [8] - Active clients reached 2.3 million, marking the sixth consecutive quarter of improvement in year-over-year growth rates [10][18] Company Strategy and Development Direction - The company is focused on enhancing client engagement through AI technology and personalized shopping experiences [5][12] - Strategic expansion into non-apparel categories aims to capture a larger share of client spending [8][10] - The introduction of family accounts and gifting options is expected to drive further engagement and sales [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, citing strong demand and positive trends in client engagement [19][22] - The company anticipates some headwinds in the latter half of the year due to consumer confidence and inflation impacts [20] - Full-year revenue guidance has been raised to between $1.32 and $1.35 billion [19] Other Important Information - The company ended Q1 with $244.2 million in cash and short-term investments, with no debt [18] - Inventory increased by 18.8% year-over-year to $141.5 million, reflecting investments in larger Fix offerings [18] Q&A Session Summary Question: Insights on new customer behavior and stickiness - Management noted nine consecutive quarters of improving lifetime value (LTV) for new clients, with increased engagement and spending from re-engaged clients [25][26] Question: Market share gains and gifting performance - Market share gains are attributed to delivering a personalized shopping experience, with gifting becoming more significant due to family accounts [29][33] Question: Early adoption of consumer-facing AI tools - Early adoption of Stitch Fix Vision has exceeded expectations, with clients engaging in various ways, including sharing on social media [39][40] Question: Gross margin performance and expectations - The decline in gross margin is attributed to transportation costs, investments in lower-margin categories, and tariffs, with expectations for Q2 margins to remain stable [43][45] Question: Opportunities with different brands and active client demographics - The company is attracting brands by providing a personalized experience, leading to improved average order values and client LTV [51][53]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $312.1 million, down 5.5% year-over-year and 2% quarter-over-quarter, but above guidance due to sustained strength in Average Order Value (AOV) which was up 9% year-over-year and 4% quarter-over-quarter [31][38] - Adjusted EBITDA for Q2 was $15.9 million, representing a margin of 5.1%, up 380 basis points year-over-year and 90 basis points quarter-over-quarter [38] - Gross margin for Q2 was 44.5%, up 110 basis points year-over-year, driven primarily by AOV upside and improved product margins [35] Business Line Data and Key Metrics Changes - The men's business and Freestyle channel returned to year-over-year revenue growth, with men's category seeing significant improvements in Cashmere and performance workwear, up over 400% and nearly 150% respectively [10][16] - Women's category growth was led by dresses and denim, with workwear dresses generating a positive year-over-year sales comp of more than 60% [16] - The contribution margin in Q2 was 33%, marking the fourth consecutive quarter above the historical range of 25% to 30% [36] Market Data and Key Metrics Changes - Active clients ended the quarter at 2.4 million, down 16% year-over-year and down 2.6% quarter-over-quarter, in line with expectations [33] - Revenue per active client (RPAC) for the quarter was $537, up 4% year-over-year and relatively flat sequentially [34] - The company noted that January was a particularly positive month, benefiting from a well-positioned assortment to meet client needs [31] Company Strategy and Development Direction - The company is focused on enhancing client experience through improved inventory management, AI merchandising tools, and strengthening stylist-client relationships [12][20] - Investments in Freestyle, the personalized direct e-commerce platform, are expected to complement the fixed offering and capture greater wallet share [21][60] - The company is raising its annual revenue and EBITDA guidance based on the strength seen in Q2, indicating confidence in returning to overall revenue growth during FY '26 [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the macroeconomic environment and does not expect tariffs to impact client prices or margins in the second half of the fiscal year [25][26] - The company is optimistic about the momentum in business performance, with improvements in client metrics and a focus on long-term sustainable growth [29][106] - Management highlighted the importance of adapting to consumer sentiment and maintaining a strong value proposition to attract clients across various income levels [52][56] Other Important Information - The company ended Q2 with net inventory of $109.6 million, down 13% year-over-year and down 8% quarter-over-quarter due to improved inventory management [38] - Free cash flow was negative $19 million in Q2, in line with expectations due to timing of working capital requirements related to inventory purchases [39] Q&A Session Summary Question: Customer demographics and market size - Management noted that the client base spans various household income levels and emphasized the importance of providing solutions for shopping challenges [48][49] - Freestyle is seen as critical for expanding the total addressable market (TAM) and capturing greater wallet share [56][60] Question: Impact of tariffs on pricing and brand mix - A tariff task force is in place to mitigate the impact of tariffs, with a focus on maintaining profitability within private brands [66][68] - The company will continue to be client-led in balancing private and national brands based on demand [70][72] Question: Outlook for gross margins and trends - Management indicated that gross margins are expected to remain in the range of 44% to 45% for the full year, with typical seasonality affecting Q2 [82] - Positive trends in February and March were noted, with expectations for continued momentum [84][90] Question: AOV and active client growth - AOV has been a strong driver, but future growth may face challenges due to higher comps [99][100] - Management sees opportunities for growth in both active client engagement and spend per client [102][103]