Stitch Fix (SFIX) reported earnings Mon 9 March 20 (a/h)

** charts after earnings **

 

The online provider of personalized apparel reported adjusted earnings of 11 cents per share on revenue of $451.8 million. Wall Street expected earnings of 7 cents a share on revenue of $452.6 million. The earnings report was for the company's fiscal second quarter ended Feb. 1.

Stitch Fix Guidance Disappoints
For the current quarter, Stitch Fix estimated revenue in the range of $465 million to $475 million. That's below analyst estimates for $506.2 million.

For fiscal 2020, Stitch Fix expects revenue in the range of $1.81 billion to $1.84 billion. Analysts predicted $1.92 billion.

RBC Capital Markets analyst Mark Mahaney cut his price target on Stitch Fix stock to 24 from 38, but kept a rating of outperform.

He blamed the lower-then-expected outlook by Stitch Fix on a series of factors. These included "heightened promotional activity across retail that resulted in lower order values, ad channel price inflation, slower than expected ramp for its U.K. offerings due to macro concerns and Covid-19 uncertainty."


Client Numbers Increase
Stitch Fix provides an online styling service that delivers personalized clothing to its members, with free shipping. The company uses data analytics in its decision-making process for selecting apparel.

The company ended the quarter with 3.5 million active clients, an increase of 17% from the year-ago period, according to the Stitch Fix earnings report.

However, the company warned in its report, "We believe that in part due to heightened promotional activity across retail, those clients spent less per Fix in the quarter on average, resulting in lower order values than we anticipated."