The Earnings Surprise at Stitch Fix May Not Have Been the Biggest News

When Stitch Fix Inc. (NYSE: SFIX) released its fiscal first-quarter financial results after the markets closed on Monday, the firm said that it had $0.09 in earnings per share (EPS) on $490.4 million in revenue. The consensus estimates had called for a net loss of $0.20 per share and $481.17 million in revenue, and the same period of last year reportedly had breakeven earnings on revenue of $444.82 million.

During the most recent quarter, active clients increased 10% year over year to 3.8 million, and net revenue per active client decreased 4% to $467. Deferred revenue came in at $14.96 million, an increase from $13.06 million at the end of last year’s fiscal first quarter.

On the books, the company had $388.3 million in cash, cash equivalents and short-term investments at the end of the quarter, down from $286.5 million at the end of the previous fiscal year.

Management noted that Stitch Fix achieved several multi-year highs, including its highest sequential client addition on record and the highest level of successful first Fixes in the past five years. CEO Katrina Lake said in particular that the firm’s powerful personalization engine is evolving, and innovations in its Fix and direct buy offerings will expand its addressable market, deepen client engagement and grow wallet share over time.

The company offered no guidance in the earnings report. However, analysts expect $0.03 in EPS and $507.21 million in revenue for the fiscal second quarter.

Separately, the company announced that Dan Jedda would be joining the company as the CFO, effective December 9. Jedda joins the company from Amazon where he was Vice President and CFO for Digital Video (including Amazon Studios), Digital Music, and the Advertising and Corporate Development organizations. He worked at Amazon for 15 years.

Stitch Fix stock closed Monday at $35.83, in a 52-week range of $10.90 to $42.38. The consensus price target is $34.06. Following the announcement, the stock was up about 20% at $42.99 in early trading indications Wednesday.

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