Stitch Fix (NASDAQ:SFIX) shares were up as much as 15% in premarket trading Tuesday (June 8) after the online shopping and styling service reported a narrower-than-expected loss in its fiscal third quarter.
Sales topped analysts’ estimates, driven by consumers refreshing their wardrobes for summer vacations and a return to the office.
Stitch Fix also raised its forward guidance for full year revenue after previously lowering it due to uncertainty stemming from the pandemic. The company offered a better-than-expected sales outlook for its fiscal fourth quarter.
Stitch Fix’s loss narrowed to $18.8 million U.S, or 18 cents U.S. per share, compared with a loss of $33.9 million U.S., or 33 cents U.S. per share, a year earlier. Revenue grew 44% to $535.6 million U.S. from $371.7 million U.S. a year earlier, topping analysts’ estimates for $511 million U.S.
The company’s active client count grew 20% year-over-year to 4.1 million and was up 234,000 from the previous quarter. Stitch Fix defines active clients as people who have bought an item directly from its website in the previous 52 weeks from the last day of the quarter.
Revenue per active client came in at $481 U.S., down 3% from a year earlier but up 3% from the previous quarter.
For fiscal 2021, Stitch Fix is now calling for revenue to be in the range of $2.07 billion U.S. to $2.08 billion U.S., which would imply year-over-year growth of 20.9% to 21.5%. Analysts had been looking for year-over-year revenue growth of 19.1%.
Before the end of this year, Stitch Fix will launch its direct-buy service, which allows customers to purchase items individually from its app. Currently, only subscribers can use the direct-buy service. Stitch Fix has said the direct-buy offering is an evolution of its business that should help it to continue to grow sales and reach new users.
Despite Tuesday’s jump, Stitch Fix’s stock price is down about 1% year- to-date at $57.94 U.S. per share. The company’s market cap now stands at $6.2 billion U.S.