Shares of online personal styling service provider Stitch Fix, Inc. (NASDAQ:SFIX) sank over 2% in yesterday’s after-hours trading on the company’s reporting worse-than-expected first-quarter Fiscal 2023 results.
Additionally, the company’s active clients declined 11% year-over-year to 3,709,000, while the net revenue per client remained relatively flat. What’s worse, the company’s forecasted revenue fell below analysts’ expectations. Shares even fell 8.9% in normal trading hours as investors braced for a weak quarterly performance.
The pandemic helped Stitch Fix’s online offerings soothe customers’ needs, while the economic downturn that followed dampened the demand for its services. 2022 has been a difficult year for Stitch Fix, as it has been struggling to attract customers and meet the Street’s expectations. Year to date, the SFIX stock has lost about 81%.
A Glimpse of Stitch Fix’s Quarterly Results
Stitch Fix reported a diluted loss of $0.50 per share, three cents worse than analysts’ expected loss of $0.47 per share. In the prior year period, the company had reported a narrower loss of $0.02 per share.
Moreover, net revenue of $455.59 million fell 22% year-over-year and also missed the consensus estimate of $459.44 million.
Looking ahead, Stitch Fix expects Q2FY23 net revenues to fall in the range of $410 million to $420 million, much lower than the consensus estimate of $444.96 million. The net revenue projection also shows a roughly 20% year-over-year decline. Furthermore, full-year Fiscal 2023 net revenue is forecasted to fall in the range of $1.6 billion to $1.7 billion.
Stitch Fix CEO Elizabeth Spaulding said, “By enhancing our client experience, rightsizing our cost structure, evolving our marketing, and deepening our differentiators of fit, discovery, and human relationships, we are positioning ourselves well to achieve profitability in the near term and a return to growth in the future.”
Is SFIX a Good Stock to Buy?
On TipRanks, SFIX stock has a Hold consensus rating based on 13 Holds and one Sell rating. The average Stitch Fix price target of $5.22 implies 42.2% upside potential to current levels.
