Fashion subscription service Stitch Fix has reported disappointing sales for its second quarter, revealing a net loss of $21 million. Although the company experienced a 12% increase in net sales compared to the previous year, it fell short of the Refinitiv forecast. While Stitch Fix’s active customer base grew by 12% to approximately 3.9 million, the net revenue per active client dropped by 7% to $467. The company attributed these lower-than-expected revenues to shipping delays during the holiday season, which resulted in a backlog of orders. Stitch Fix’s revenue recognition policy also played a role, as the company recognizes revenues when clients check out items rather than when they are shipped. This impacted the ability to record all revenue from the shipments made during the quarter.

Despite these disappointing results, CEO Katrina Lake remains optimistic about the long-term prospects of Stitch Fix. She highlights the strong demand for personalized discovery and convenience in the retail landscape as a driving force behind the company’s potential growth. Looking ahead, Stitch Fix expects net sales to range between $505 million and $515 million in the next quarter. Furthermore, the company predicts a full-year revenue growth rate between 18% and 20%.

Useful links:
1. Stitch Fix Official Website
2. Fashion E-commerce Statistics