INVESTOR PRESENTATION December 4, 2025 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 co ...

Core Viewpoint - Stitch Fix, Inc. is facing legal scrutiny regarding alleged false statements about its Freestyle business segment and significant insider stock sales totaling $132 million, which may have misled investors and inflated stock prices [1][2][3] Legal Developments - A U.S. District Court judge ruled that claims in a securities fraud lawsuit against Stitch Fix and its former CEO can proceed, indicating that the company may have misled investors about the Freestyle segment's impact on its core business [2] - The lawsuit alleges that from June 2020 to June 2022, Stitch Fix made false statements regarding the Freestyle segment, which purportedly led to artificially inflated stock prices [2] Financial Impact - Following the revelation in June 2022 that the Freestyle segment had negatively affected potential new Fix customers and the announcement of a 15% workforce reduction, Stitch Fix's stock price dropped by 27% [2]

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]

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]