Financial Data and Key Metrics Changes - The company achieved over 7% revenue growth in the last quarter, significantly outperforming the apparel, accessories, and footwear market, which only grew 1% during the same period [6] - Gross margins improved by 200 basis points, and contribution margins increased by over 500 basis points as a result of operational efficiencies [4] - Average order value grew nearly 10% in the last quarter, marking nine consecutive quarters of growth [6][12] Business Line Data and Key Metrics Changes - The women's accessories business grew over 40%, women's sneakers business increased over 60%, and jewelry business rose over 25% in the last quarter, indicating strong performance across new categories [21] - The company has seen a significant reduction in client churn, with clients that left the service down 17% year over year, the lowest in over five years [6] Market Data and Key Metrics Changes - Only 10% of U.S. consumers enjoy shopping for apparel and accessories in person, and only 15% prefer online shopping, indicating a large untapped market for the company [8] - The company has identified a $1 billion fair share opportunity in active wear, accessories, and footwear, with ongoing success in these categories [20] Company Strategy and Development Direction - The company is focused on a three-phase transformation strategy: rationalization, rebuilding, and growth, aiming to create a sustainable and profitable business model [4] - A new brand platform called Retail Therapy was launched to differentiate the Stitch Fix service and target specific client segments effectively [9] - The company is leveraging generative AI innovations to enhance client experiences and operational efficiencies [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue capturing market share and achieving revenue growth, with guidance for another consecutive quarter of accelerated revenue growth [36][37] - The company is methodically approaching customer acquisition to ensure sustainable growth, focusing on high-quality client retention and engagement [15] Other Important Information - The company has made significant investments in CRM and MarTech capabilities to better understand and engage clients, enhancing the overall customer experience [19] - The role of human stylists remains critical, as they build deep relationships with clients, adding value beyond AI capabilities [31] Q&A Session Summary Question: What is the company's strategy for customer acquisition? - The company emphasizes a methodical approach to customer acquisition, ensuring that new client cohorts continue to spend at or above prior levels before increasing marketing investments [15] Question: How does the company view its growth potential in new categories? - The company is actively adding new categories and deepening penetration in existing ones, with a significant revenue opportunity identified in active wear and accessories [26] Question: What is the importance of the stylist role in the business model? - Stylists play a crucial role in building client relationships and enhancing loyalty, complementing the company's AI capabilities [31]

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]