What to Expect When Stitch Fix Reports After the Close

October 1, 2019 by Chris Lange

Stitch Fix Inc. (NASDAQ: SFIX) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Tuesday. The consensus forecast calls for $0.04 in earnings per share (EPS) and $432.28 million in revenue. The same period of last year reportedly had $0.18 in EPS and $318.3 million in revenue.

The company previously issued guidance calling for net revenues in the range of $425 million to $435 million and adjusted EBITDA of $5 million to $10 million.

During the fiscal third quarter, the company reached 3.1 million active clients, a 16.6% increase year over year, and it grew net revenue by 29.1% in that time.

The growth in net revenue reflected growth in both active clients and net revenue per active client, which were driven largely by healthy year-over-year growth in the Women’s segment and continued scaling of the Men’s segment.

Gross margin was 45.1% for the quarter, compared to 43.6% in the third quarter of last year. This represents the fifth consecutive quarter of year-over-year gross margin improvement. This strength was driven by both lower clearance activity and lower shrink expense year over year.

Excluding Tuesday’s move, Stitch Fix had underperformed the broad markets, with its stock up just over 12% year to date. In the past 52 weeks, the stock was down 54%.

A few analysts weighed in on Stitch Fix ahead of the results:

  • Stifel has a Buy rating with a $28 price target.
  • Goldman Sachs has a Buy rating with a $38 target.
  • RBC has an Outperform rating and a $43 price target.
  • Needham has a Hold rating.
  • SunTrust Banks has a Buy rating with a $44 target price.
  • JPMorgan has a Neutral rating and a $34 target price.

Shares of Stitch Fix traded up about 3% to $19.80 on Tuesday, in a 52-week range of $16.05 to $37.72. The consensus price target is $34.13.