Katrina Lake, Stitch Fix CEO
Adam Jeffery | CNBC
Stitch Fix reported a lower-than-expected loss on Monday in its last quarter, but the company did not live up to analysts’ expectations regarding revenues and prospects, as delays in shipments and lower customer spending affected The sales.
The shares plunged 21% in the trading period.
The subscription-style service has lowered its revenue forecast for the current quarter and fiscal year, citing the continuing uncertainty stemming from the coronavirus pandemic and longer purchasing cycles resulting from delivery problems.
Here’s what the company released for the quarter ended January 30, compared to what Wall Street expected, based on a survey of analysts at Refinitiv:
- Loss per share: 20 cents vs. 22 cents expected
- Revenue: $ 504.1 million versus expected $ 512.2 million
Stitch Fix reported a net tax loss of $ 21 million in the second quarter, or 20 cents per share, compared with a profit of $ 11.4 million, or 11 cents per share, a year earlier. Analysts polled by Refinitiv had expected a 22-cent loss per share.
Liquid sales rose 12% to $ 504.1 million, falling short of expectations of $ 512.2 million. Shipping delays during the holiday season meant that the company was forced to work with an order book and was unable to record revenue for all boxes shipped during the quarter. Stitch Fix recognizes revenue when customers check out items, not when the company ships the order.
The company also said that general year-end sales were weaker than expected, as consumers stopped spending money on themselves and went on to buy gifts for third parties. However, it saw its strongest January on record.
For the third fiscal quarter, Stitch Fix expects net sales of $ 505 million to $ 515 million, representing growth of 36% to 39%, and an adjusted loss before interest, taxes, depreciation and amortization of $ 5 million to $ 9 million. Executives said it has been a “mess” in shipping and processing delays so far in February, and they expect the trend to continue for the rest of the third fiscal quarter.
For the entire fiscal year 2021, the company now expects revenue to grow 18% to 20%, compared to its previous forecast of 20% to 25%. Wall Street foresaw a 22.6% revenue growth for the fiscal year.
The company added 110,000 new active customers during the quarter to a total list of almost 3.9 million. Stitch Fix said it added more active customers in the first half of fiscal 2021 than in the previous fiscal year.
Customers are spending less, on average, however. Active customers spent $ 467 on average, down 7% compared to the same period last year.
Stitch Fix defines active customers as people who purchased an item directly from your website in the past 52 weeks from the last day of the quarter.
Read the full letter to shareholders here.