Stitch Fix(US:SFIX)2025-09-24 22:02Financial Data and Key Metrics Changes - For FY 2025, net revenue was $1.27 billion, down 3.7% year-over-year, but revenue for the second half of the year grew 2.5% [19] - Q4 net revenue was $311.2 million, up 4.4% year-over-year on an adjusted basis [20] - Adjusted EBITDA for FY 2025 was $49.1 million, or a 3.9% margin, up 170 basis points compared to FY 2024 [20] - Gross margin for FY 2025 was 44.4%, the highest annual gross margin since FY 2021 [19] - Q4 gross margin was 43.6%, down 100 basis points year-over-year [22] Business Line Data and Key Metrics Changes - Both women's and men's lines accelerated revenue growth in Q4, with men's business delivering double-digit revenue growth [7][30] - Average order value (AOV) grew 12% year-over-year, marking the eighth consecutive quarter of AOV growth [6][22] - Revenue per active client was up 3% year-over-year to $549, demonstrating high engagement from retained clients [22] Market Data and Key Metrics Changes - The company gained market share in the U.S. apparel market during Q4, outperforming the overall market [5][36] - Active clients totaled 2.3 million, down 7.9% year-over-year, but the year-over-year comp improved for the fifth consecutive quarter [21][22] Company Strategy and Development Direction - The company is focused on enhancing client experience through investments in generative AI and improving client-stylist relationships [9][10] - Plans for FY 2026 include creating more dynamic engagement methods, increasing Fix flexibility, and strengthening the product assortment [9][14] - The introduction of family accounts and new features like Stylist Connect and Vision aims to enhance client engagement and convenience [12][13][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging macro environment while focusing on sustainable, profitable growth [26][45] - The company anticipates a return to full-year revenue growth in FY 2026, with guidance for total revenue between $1.28 billion and $1.33 billion [24] - Management highlighted the importance of maintaining a disciplined approach to growth investments while adapting to market dynamics [14][25] Other Important Information - The company achieved its highest contribution margin in the last decade and completed FY 2025 with positive free cash flow and no debt [9][20] - The company has added over 50 new brands since the start of FY 2025, enhancing its product assortment [14] Q&A Session Summary Question: Where is the most growth coming from, and how are tariffs impacting AOV? - Management noted that growth is driven by expansion into non-apparel categories and increased demand for footwear and denim, with no impact from tariffs on AOV [30][32] Question: Where do you see you're taking market share from, and how do you plan for the holiday season? - Management indicated that they are gaining market share from retailers that fail to deliver personalized experiences, and they are well-positioned for the holiday season with improved flexibility and assortment [36][39]