SFIX

It has been about a month since the last earnings report for Stitch Fix (SFIX). Shares have added about 23.1% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Stitch Fix due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Stitch Fix, Inc. before we dive into how investors and analysts have reacted as of late. Stitch Fix reported a narrower-than-expected adjusted loss for the fourth quarter of fiscal 2026, while revenues fell slightly short of the Zacks Consensus Estimate. Revenues and revenue per active client increased year over year, but the active-client count declined. Management expects a more challenging consumer environment and higher client acquisition costs to temper growth in fiscal 2027. Its adjusted EBITDA outlook also reflects planned investments in advertising and technology, including artificial intelligence. SFIX reported an adjusted loss of 1 cent per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 6 cents and the year-ago adjusted loss of 7 cents. On a GAAP basis, the company reported a loss of 2 cents per share compared with a loss of 7 cents a year earlier. Net revenues of $324.4 million increased 4.2% from $311.2 million a year earlier, but came in just below the $325 million consensus estimate. The quarter marked the company's sixth consecutive quarter of year-over-year revenue growth. Active clients totaled 2.277 million, down 1.4% both year over year and sequentially. Revenue per active client reached a record $592, up 7.8% from the prior-year quarter. Fix average order value rose 4.9%, supported by more items per Fix and a favorable assortment mix. Both the women's and men's Fix businesses grew, with the men's business posting double-digit growth for the fifth consecutive quarter. Across the women's and men's businesses, activewear and athleisure sales increased 21% year over year, while footwear grew 14%. Client retention improved sequentially for the eighth consecutive quarter. Management said higher acquisition costs weighed on its ability to attract and re-engage clients. In the fiscal fourth quarter, the company's gross profit rose 4.2% year over year to $141.4 million, while gross margin held steady at 43.6%. Stitch Fix said inventory management helped offset higher transportation costs and investments in new merchandise categories. Selling, general and administrative expenses declined to $145.7 million from $146.9 million a year earlier. Advertising represented 9.9% of revenues. The operating loss narrowed to $4.4 million from $11.2 million. Adjusted EBITDA increased to $10.8 million from $8.7 million in the prior-year quarter, exceeding the company's $7-$10 million guidance range. Adjusted EBITDA margin improved to 3.3% from 2.8%. Management attributed the guidance beat largely to lower fixed operating expenses. Stitch Fix ended fiscal 2026 with $220.9 million in cash, cash equivalents and investments, and no debt. The company generated $9.1 million in operating cash flow and $4.4 million in free cash flow during the fourth quarter. SFIX repurchased 2.7 million shares for $11.3 million in the fourth quarter. For fiscal 2026, it bought back 7.2 million shares for $26.4 million, leaving $93.6 million under the existing authorization. Full-year net revenues increased 6.4% to $1.35 billion, marking the company's first full year of revenue growth since fiscal 2021. Gross margin was 43.7%, down 70 basis points year over year. Adjusted EBITDA increased to $53.4 million from $49.1 million, while adjusted EBITDA margin edged up to 4% from 3.9%. The full-year net loss narrowed to $12.6 million from $28.8 million, and free cash flow increased to $19.8 million from $9.3 million. For the first quarter of fiscal 2027, management expects revenues of $323-$328 million, implying a year-over-year decline of 5.6% to 4.1%. Adjusted EBITDA is projected at $3-$6 million. The first-quarter outlook reflects two temporary factors affecting Fix volume. Some shipments were moved from the first quarter of fiscal 2027 into the fourth quarter of fiscal 2026. An unintended August change to the post-checkout offer flow also limited the number of clients eligible to request another Fix. Management said the issue has been corrected and will not affect results beyond the first quarter. For fiscal 2027, Stitch Fix expects revenues to be in the range of $1.31-$1.36 billion, representing a year-over-year change ranging from a 2.8% decline to 0.9% growth. Adjusted EBITDA is forecast at $27-$42 million compared with $53.4 million in fiscal 2026. Management expects gross margin of 43-44% and positive free cash flow for the year. The outlook reflects a lower active-client starting point, a more challenging consumer environment and planned growth investments. In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -92.86% due to these changes. At this time, Stitch Fix has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Stitch Fix has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months. Stitch Fix belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, Zumiez (ZUMZ), has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026. Zumiez reported revenues of $208.96 million in the last reported quarter, representing a year-over-year change of -2.5%. EPS of -$0.17 for the same period compares with -$0.06 a year ago. For the current quarter, Zumiez is expected to post earnings of $0.07 per share, indicating a change of -84.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. Zumiez has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stitch Fix, Inc. (SFIX) : Free Stock Analysis Report Zumiez Inc. (ZUMZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Sept. 23, 2026 - Head of Investor Relations - Cherryl Valenzuela - Chief Executive Officer - Matt Baer - Chief Financial Officer - David Aufderhaar Operator: Hello, everyone. Thank you for joining us, and welcome to the Stitch Fix Fourth Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Cherryl Valenzuela, Head of Investor Relations. Please go ahead. Cherryl Valenzuela: Good afternoon, and thank you for joining us today for the Stitch Fix Fourth Quarter and Full Fiscal Year 2026 Earnings Call. With me on the call are Matt Baer, Chief Executive Officer; and David Aufderhaar, Chief Financial Officer. We have posted complete fourth quarter and full fiscal year 2026 financial results in a press release on the Quarterly Results section of our website, investors.stitchfix.com. A link to the webcast of today's conference call can also be found on our site. We'd like to remind everyone that we will be making forward-looking statements on this call, which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please review our filings with the SEC for a discussion of the factors that could cause the results to differ, in particular, our press release issued and filed today as well as our annual report on Form 10-K for fiscal 2026, which we expect to file later this week. Also note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. Please note that fiscal 2024 was a 53-week year due to an extra week in the fourth quarter. As such, references to consecutive quarters of year-over-year revenue growth rates on this call are based on an adjusted 52-week basis, removing the impact of the extra week to provide a comparison that we believe more accurately reflects our performance. During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial results are provided in the press release on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being webcast on our Investor Relations website, and a replay of this call will be available on the website shortly. And now let me turn the call over to Matt. Matt Baer: Thank you, Cherryl, and good afternoon, everyone. Fiscal 2026 was a pivotal year for Stitch Fix. We advanced our strategy and closed the year as a stronger, healthier business with a more resilient operating foundation and a reimagined client experience. Full year revenue grew 6.4% to $1.35 billion. Active client trends continued to improve with Q4 marking our ninth consecutive quarter of year-over-year improvement in the growth rate. Contribution margin remained above 30% for the full year, while disciplined execution across the business drove adjusted EBITDA and adjusted EBITDA margin above our expectations. Q4 revenue was $324.4 million, representing 4.2% year-over-year growth, our sixth consecutive quarter of positive revenue comps. Stitch Fix again outperformed the total U.S. apparel, footwear and accessories market, which, according to the latest Circana data, was approximately flat over the same period. Full year revenue also outperformed the total U.S. market with growth of 6.4% compared to 1% for the market. Revenue per active client, or RPAC, set another record for the third consecutive quarter, reaching $592 in Q4. Q4 adjusted EBITDA was also better than expected at $10.8 million or a 3.3% margin. As a result of our transformation, we have significantly evolved our client experience with a focus on four pillars: creating new engagement opportunities, deepening client and stylist relationships, introducing enhanced fix flexibility and strengthening our assortment. The enhanced flexibility, particularly the larger fixes we now offer and our broader, more relevant assortment were key drivers of the performance we have delivered over that period. Together, larger fixes and our improved assortment have supported 8 consecutive quarters of growth in both items per fix and average unit retail or AUR. Larger fixes enable clients to address more of their styling needs in a single fix, while our more trend-right assortment across market and private brands, including expanded categories, drove AUR growth through a favorable mix shift instead of broad-based price increases. These sustained gains translated into strong fix AOV in Q4, which was the primary driver of revenue growth. Both our women's and men's fix businesses grew year-over-year during the quarter with men's delivering double-digit growth for the fifth consecutive quarter. Our multi-brand portfolio combines differentiated private brands with a curated selection of market brands. Together, they give us the ability to serve a broad range of wardrobe needs. In Q4, our private brands continue to resonate with our clients. In women's, Market & Spruce, 41 Hawthorn and Montgomery Post were our top 3 brands by revenue for the second consecutive quarter. In men's, 3 of our top 5 brands in the quarter were private brands, specifically 01.Algo, Hawker Rye and Alesbury. We continue to invest in these brands and are regularly launching collections to meet individual client segment needs. For example, in August, we launched a 41 Hawthorn capsule collection for teachers informed by the thousands of teaching-related requests we have received from clients. We are also focused on bringing clients a portfolio of brands that is best in the industry by offering market brands, clients covet and introducing others we believe they'll be excited to discover. Since the start of fiscal '26, we have added more than 80 new brands, including Rhone, Birkenstock, Outdoor Voices and Malbon Golf. More recent additions include FARM Rio, Baggu, Merrell, Jordan Brand, Nike Golf and Mitchell & Ness NFL licensed apparel. Within our market brand assortment, we launched exclusive back-to-school collaborations with Favorite Daughter, Alex Mill and Z Supply in early August. The collections were designed for moms who have told us that they often feel overlooked during the season and early performance across all 3 launches has been encouraging. Category expansion remains a significant opportunity for Stitch Fix, and we continue to build our assortment in areas where we have traditionally been underpenetrated, including activewear and athleisure, footwear and accessories. These categories support our ambition to meet all of our clients' wardrobe needs, and we're seeing strong growth. For example, across women's and men's, activewear and athleisure grew 21% year-over-year and footwear grew 14% in Q4. Turning to active clients. We ended the quarter with 2.277 million active clients. New clients and men's active clients grew year-over-year in FY '26, while the trajectory of women's active clients also improved year-over-year. Client retention rate improved sequentially for the eighth consecutive quarter, and Q4 marked our third straight high in nearly 4 years. These trends reflect the strength and resilience of our current client base, our disciplined focus on acquiring higher LTV clients and organic growth through family accounts, which helps us serve the entire household. Another element of our strategy is reaching client segments with highly specific styling needs that we are uniquely positioned to serve. One example is clients navigating the body and sizing changes associated with GLP-1 medications. All of our stylists are trained to support clients going through body transformation journeys, and we now offer a themed fix with styles for every stage of the transformation. The opportunity is evident both in the broader market and in what we are hearing from new Stitch Fix clients. 20% of our new clients recently told us during onboarding that they are seeking styling guidance as their bodies change, nearly double the penetration of the U.S. population on GLP-1 medications according to a recent Gallup poll, which underscores the particular relevance of Stitch Fix for this need. As always, technology remains at the core of our ability to serve our clients. AI is a powerful accelerator of our strategy and our 15 years of applying proprietary data and algorithms paired with the expertise of our stylists gives us a differentiated foundation for incorporating AI across both the client experience and our operations. Stitch Fix Vision is one client-facing example. We have integrated our style visualization platform more broadly throughout the client experience and are building toward a future where clients can see themselves reflected at every step of their shopping journey. By combining AI with our deep understanding of each client's preferences, Vision provides personalized style inspiration. We continue to see a significant lift in 90-day freestyle spend from clients who engage with it. AI is also helping us operate more efficiently. In styling, we are using generative AI tools to support stylists in the item recommendations for fixes so they can focus more of their time on client service. In our fulfillment centers, AI improves daily labor planning and real-time staff scheduling. And in customer service, AI agents handle more routine requests, helping us resolve inquiries more quickly and enabling our team to focus on outreach that needs a higher touch. As a result, we have more than doubled the share of chats resolved without requiring additional support. Together, these applications improve productivity and lower our cost to serve. As we continue to advance our transformation strategy and efforts to deliver the most personalized and client-centric shopping experience, we recently welcomed Sree Sreedhararaj as our Chief Product and Technology Officer. Sree brings extensive product and technology leadership experience, including in AI integration across prominent retail and consumer brands. We're thrilled to have him on the team. Looking ahead to fiscal 2027, our outlook reflects a more challenging consumer environment. David will speak in more detail to our outlook, including a reduction in fix volume that will only impact Q1. While these conditions affect our near-term outlook, they do not change our strategy or the opportunity ahead. When clients are more intentional about what they buy, the value of a personalized service that makes each purchase more relevant becomes even clearer. Over the past 2 years, we have built the capabilities to deliver on that promise, a more flexible fix experience, more compelling assortment and personalization powered by proprietary client data, AI and the expertise of our stylists. We are actively addressing near-term headwinds through the levers within our control. While we are encouraged by the early performance of many of our recent innovations such as Stitch Fix Vision, family accounts and more flexible fix offerings, there's still ample runway to increase their impact as we continue to enhance these experiences, build awareness and drive penetration, we believe they can support stronger organic revenue and client growth. The financial progress we have made underpins our ability to invest behind these growth initiatives. In closing, fiscal 2026 demonstrated the strength of the business we have built. We significantly improved our client experience and assortment, strengthened client economics and returned to year-over-year revenue growth, all while operating with discipline. The work now is to scale that stronger model, serving more existing and new clients and turning that foundation into sustainable, profitable long-term growth. A special thank you to our entire Stitch Fix Team for your continued dedication and execution. Now I'll pass it to David for a discussion of our financial results and outlook. David Aufderhaar: Thanks, Matt, and good afternoon, everyone. Fiscal '26 demonstrated significant improvement in our financial model. We expanded adjusted EBITDA margin, maintained contribution margins above 30% in each quarter, generated positive free cash flow and ended the year with a strong balance sheet. We also resumed our share repurchase program and returned capital to shareholders. Net revenue for the year reached $1.35 billion, up 6.4% year-over-year. Gross margin was 43.7%, well within our target range of 43% to 44% as our teams did a great job navigating transportation carrier rate increases and tariffs. Overall, SG&A spend was 45.3% of revenue, over 220 basis points lower than last year. As a result, we exceeded our outlook for adjusted EBITDA and expanded our adjusted EBITDA margin year-over-year to 4%. Stock-based compensation was 3.4% of revenue compared with 4.5% last year. Our net loss for the year narrowed to $12.6 million or a loss of $0.09 per share. We generated $19.8 million of free cash flow in fiscal 2026 and ended the year with $220.9 million in cash, cash equivalents and investments and no debt. Turning to Q4. Revenue reached $324.4 million, up 4.2% year-over-year. Active clients were down 1.4%, both year-over-year and sequentially. In addition to seasonality, active clients were softer than expected due to higher client acquisition costs that were a headwind to acquiring and reengaging clients in the quarter. RPAC grew 7.8% to $592, while AOV grew 4.9% year-over-year. Gross margin was 43.6%, flat year-over-year. We offset increases in transportation costs and investments in new merchandise categories with strong inventory management. Advertising was 9.9% of revenue in Q4. Q4 adjusted EBITDA was $10.8 million or a 3.3% margin, up 50 basis points year-over-year. It exceeded our guidance largely due to lower fixed operating expenses. We continued our share repurchases in Q4, buying back 2.7 million shares for $11.3 million. For the year, we bought back 7.2 million shares for $26.4 million. This leaves $93.6 million remaining under our existing authorization. Now turning to our outlook for Q1 and fiscal 2027. For full year FY '27, we expect total revenue to be between $1.31 billion and $1.36 billion. We expect total adjusted EBITDA for the year to be between $27 million and $42 million. And for Q1, we expect total revenue to be between $323 million and $328 million. We expect Q1 adjusted EBITDA to be between $3 million and $6 million. We expect full year gross margin to remain between 43% to 44%, and we expect to generate stronger positive free cash flow for FY '27 compared to last year. As Matt noted, our revenue outlook reflects two factors associated with a more challenging consumer environment. First, as I called out earlier, we saw higher client acquisition costs in Q4, and that has continued into Q1. Those higher costs are a headwind to client growth in FY '27, which we expect will temper revenue growth. And second, existing clients are being more intentional about discretionary purchases outside of their recurring fixes. For Q1 specifically, our outlook also reflects lower expected fix volume from two temporary factors. First, a decision to adjust the timing of some fix shipments in the fourth quarter, which shifted fix volume from the first quarter of fiscal 2027 into the fourth quarter of fiscal 2026. And second, an unintended change made to our post-checkout offer flow in August that limited the number of clients eligible to request another fix, which has been corrected and will not affect results beyond the first quarter. Lastly, our adjusted EBITDA outlook for fiscal 2027 reflects planned investments in advertising and technology, including AI to support long-term growth. We will remain disciplined and judicious in how we make these investments. The stronger foundation we have built through our transformation gives us confidence in our ability to execute against our priorities and invest strategically behind our highest return opportunities. We are proud of our improved cost structure that gives us the optionality to make such investments while still delivering EBITDA profitability, maintaining a strong balance sheet and generating positive free cash flow. With that, operator, we can open the line for Q&A. Operator: [Operator Instructions] Your first question comes from the line of Dylan Carden with William Blair. Dylan Carden: I'm just trying to square the comments on higher CAC and investments this year in advertising. Can you kind of unpack that a little bit? Is that it sounds like two separate things? Or is it just that you are still spending on higher CAC and it's more of a margin drag? David Aufderhaar: Yes. Thanks for the question, Dylan. With CAC, I think we called this out on the last call that we started seeing some headwinds in client acquisition costs in Q4, and that sort of continued throughout the quarter and into Q1. With regard to incremental advertising spend, even within that CAC LTVs with CACs going up, we still feel very comfortable that we're within sort of our guardrails from an advertising perspective. And so with the headwinds that we're seeing from an overall market perspective, we feel pretty comfortable leaning in and still staying within our guardrails and still being able to get the right ROI and bring in healthy active clients. Dylan Carden: Got it. And then any guidance you can give on kind of between the two drivers, how we should think about the shape of the year? And I guess, some pockets of growth within the active client number, but what's still sort of the lingering drag there? David Aufderhaar: For the two drivers for FY '27? Dylan Carden: Yes. David Aufderhaar: Yes. There are a couple of factors there. First is what we called out that was specific around Q1. I think we touched on this in the prepared remarks, but just to give a little bit more color around what we saw in Q1, there were two main factors there. First, our decision to change shipping dates from some customers ended up increasing fix volume in Q4 '26 and decreased volume in Q1 '27. What that really is about is with the longer visibility into the lead times for our recurring fix business, we sometimes move shipments around between weeks for a variety of reasons. This time, though, the impact occurred across the 2 quarters and was just a little bit more significant than what we see on average. So we just wanted to call that out. And then on the second factor, there was an unintended change that was made to the client experience during new feature testing and that disrupted an existing feature. And really, what that is, is some clients receive an offer for an immediate fix after they check out. The unintended change actually reduced the number of clients that received the offer, and that suppressed the number of fixes that were requested in August. Our team identified the issue, and we saw demand rebound, and we're confident that, that impact was isolated to Q1. And we even see that in our monthly comps for Q1, and we expect October comps to be more in line with the implied guide for the rest of the year. And so those were the factors that were the drags on Q1. Adjusting for those factors, Q4 '26 revenue comps would have been roughly in the 2% to 3% range and our Q1 '27 revenue guide would have been a little bit more in line with the implied guide for the rest of the year. And so that's really the drag for Q1. And then from an overall perspective, I think we called out in the prepared remarks, the other drag is sort of the full year is we have seen increased macro pressures on the consumer, increasing gas prices, higher overall inflation, mortgage rates increasing again and the incredibly low consumer sentiment all point to a challenged consumer with increased pressure on their discretionary spend, and we're definitely seeing some of those impacts as well. I think we called that out around active client headwinds that we saw in Q4 that we were just talking about around sort of that acquisition costs. We saw that continue in Q1. Those softer clients have a compounding effect on revenue for the full year. And then we're also seeing some impacts to our existing client activity outside of the core recurring fix business, areas like Freestyle and manual fix demand. With that said, I think we've called this out before, and it's still very true. We do continue to see resilience in our core recurring fix business. We know when we get clients into the experience, they see the value, and you can see that in the RPAC metric, again, sort of at an all-time high. And those are really all of the factors that are included in the guide. I know that was a lot, but I want to make sure we called out sort of what those assumptions were both for Q1 and the full year. And we're actively addressing these growth headwinds through initiatives and investments in technology, merchandising, marketing. We're going to continue to focus on driving healthy new clients, engaging our existing clients in new and creative ways and aggressively capture market share like especially in the challenging environment we're in. Operator: Your next question comes from the line of Owen Rickert with Northland Capital Markets. Owen Rickert: Firstly, on the RPAC durability, with active clients declining in the quarter, RPAC, I'm assuming carried the revenue story. I guess how much of this growth in RPAC is being driven by accessories and footwear penetration versus larger fix sizes? And do you see a ceiling on RPAC expansion if there are some headwinds in the active client base going forward? Matt Baer: Owen, I appreciate the question. It's Matt. As we initiated this transformation about 3 years ago, and we worked to really ensure that we're strengthening the foundation of our business and then rebuilding such that we could deliver profitable and sustainable growth, we saw a very real opportunity in order to increase the revenue per active client that we have or to acquire more wallet share with our existing clients. We had an opportunity to do a better job outfitting them head to toe to meet or exceed their expectations for all of the different use cases in which they came to us. Larger fixes plays a critical role for us in meeting or exceeding our clients' expectations there. We also heard loud and clear from our clients that they wanted to be outfitted head to toe, which required us to really intentionally move into categories that were underpenetrated for us, namely athletic wear and athleisure, footwear and accessories. And if you looked at what our market share was in tops and bottoms at that time and applied that same market share across those other three categories, we saw $1 billion fair share opportunity. And we do continue to drive outsized gains or outsized growth in those categories. As we shared in our prepared remarks, athletic wear and athleisure were up 21% for us in the quarter. Footwear was up 14% for us in the quarter. Accessories also outperformed the overall revenue comp for us in the quarter. Our merchants have done a phenomenal job assorting into those categories, adding leading brands as well as developing our private brands into them. And we've done a great job both in terms of our algorithmic recommendations as well as our stylist training to make sure that we're delivering those items to clients' homes ultimately. From a ceiling perspective, what gives us extreme confidence in our business overall is that opportunity remains a huge one for us. When you look at the Circana data that tells us our implied wallet share for our clients. We have roughly twice the amount of wallet share as the next retailer for our clients, but still an opportunity to increase that client spend with us up to 3 to 4x before we've capped out what that opportunity is. It's why we've been able to deliver -- it's one of the reasons why we've been able to deliver 6 consecutive quarters of revenue growth before we inflect to positive active client growth. And we remain confident in that as one of the perpetual growth drivers that we have at our disposal for years to come, and we intend to continue to lean into that meaningfully going forward. Owen Rickert: Got it. Got it. Super helpful. And then secondly for me, Stitch Fix Vision was a big topic on the last call. It sounded like active users were spending 100% plus or more on Freestyle following their first use. I guess, can you just share since last -- like last quarter, how broadly Vision has been adopted across the active client base? Maybe what percentage of Freestyle revenue is now influenced by Vision interactions? And what's the road map? What's that looking like for further capability expansion throughout fiscal '27? Matt Baer: Vision remains a critical priority for us. When we launched Vision initially, we always intended not just for that to be the final client experience, but that to actually become a platform upon which we continue to build an end-to-end client journey, whereby the client can see themselves realize head-to-toe in Stitch Fix apparel and accessories all the way from onboarding to fix preview to when they're shopping within Freestyle into the post-purchase or checkout experience as well. And we continue to build more and more of these experiences and bring them to life. Since we spoke most recently, we've launched what we call See It On Me, which is now an opportunity for clients as they're browsing our outfit inspirations to actually click on any of them and see those outfits come to life on their likeness. The adoption of Vision continues to be -- exceed our expectations, candidly. The launch of See It On Me helped considerably in terms of further expansion. The increase in Freestyle spend that we are seeing from those clients that have interacted with Vision continues to remain consistent, which is really encouraging. And maybe I'll be -- I'll share with you at this point now since we've launched, we've shared over 22 million Vision images with our client base. So a lot more to come, a lot more development in the works, but we're really encouraged by what we've seen so far. Operator: Your next question comes from the line of Dana Telsey with Telsey Advisory Group. Dana Telsey: As you think about the current consumer landscape and the cadence shift from last quarter to this quarter, was it in categories? Was it in regions besides how you're thinking about the upcoming first quarter? And with the mix shifts that you talked about, can you expand on that and what that means? And just lastly, with the CAC costs, any different cadence throughout this upcoming fiscal year in terms of how you're thinking about the CAC? Matt Baer: Dana, I'll take a stab at the first question and keep me honest if I understood the thesis of the question correctly. In terms of what we saw in the 2 factors that David walked us through, those 2 factors are time-bound, and both of those 2 factors are behind us. And what we see is building on the success of the transformation that we had and the strong results that we were able to deliver in our fiscal '26 with over 6% revenue growth and capping the year with 6 consecutive quarters of revenue growth, improved profitability through our business, the reimagined client experience, and an overhauled assortment of both our private brands and market brand portfolios that we believe will position us to be best-in-class in the industry overall. And all of those factors is ultimately what has enabled us to deliver a record revenue per active client for a third consecutive quarter at nearly $600 with an opportunity to drive that even further. And as we're operating within our -- the last quarter of Q4 and our current quarter of Q1, our focus is returning to that revenue growth. And we remain confident in our ability to deliver revenue growth over the balance of the year and into the future. So that's where the focus remains and how we're thinking about the business overall. From a CAC perspective and the cadence in which we're seeing that, just to reiterate what David answered previously, as we were operating in real time in Q4 and into the first quarter of fiscal '27, as we saw elevated media impression and customer acquisition costs that we believe to be impacting the industry in aggregate, a macro effect of a tougher consumer environment, we continued with our methodical approach to customer acquisition. But what we've also realized to be true is that because of the success of the clients that we bring into the experience, the high revenue per active client, the high customer lifetime value that we continue to deliver, and because of the improvements in the experience and the improvements in the assortment, that gives us the license to go out and be a little bit more aggressive in terms of our advertising spend and to ensure that we're capturing, kind of, that fair share of consumer demand to bring them into our experience. And tangentially, something that has continued to work exceptionally well for us, as an example, is our focus on consumers on a GLP-1 medication. We've -- I believe that we were early to market in terms of seeing what that opportunity was. We leaned into it from a marketing and customer acquisition perspective. We leaned into it in terms of building dedicated experiences for them. And now we have a little bit more proof points to back that up as our onboarding more definitively is able to identify when a client comes in, in the midst of a body transformation, and it's an optional component of onboarding. But even though it's optional, we're still seeing about 20% of all new clients likely on a GLP-1 medication. That's nearly double what we understand to be the overall U.S. population of people on the GLP-1 medication. So we believe that's another great opportunity for us to continue to lean into to continue to invest because of the superiority of our service and our ability to uniquely serve those clients as their bodies are changing. David Aufderhaar: And I think related to that spend, Dana, I think because of that, what just Matt called out, and I think we called this out in some of our prepared remarks as well, that we are leaning in a little bit to marketing. Just from a size perspective, if we're thinking about FY '27, we're probably going to be spending a little bit more in the 10% to 11% range versus the 9% to 10% range that we had in FY '26. And from a quarterly spend perspective, we will have similar seasonality where Q1 and Q3 tend to be stronger acquisition quarters for us, and we lean into marketing spend then. But we're definitely going to be more opportunistic of leaning in, in sort of the positive times that we see it and pulling back when we might see headwinds. Operator: Your next question comes from the line of Jay Sole with UBS. Jay Sole: Can you just help us with the first quarter revenue bridge? You called out 2 discrete impacts to Q1, the Fix volume shifting to Q4 due to shipment timing and the August post-checkout issue that limited repeat Fix requests. Can you quantify the revenue impact from each and clarify the underlying Q1 growth rate, excluding both? David Aufderhaar: Yes. Thanks, Jay. For the 2 different items, when we had talked about a little bit earlier, when you adjust for those factors, Q4 '26 revenue comp would have been roughly in the 2% to 3% range. And the Q1 '27 revenue guide would have been a little bit more in line with the implied guide for the rest of the year. And so that should really help you back into specific numbers there. Jay Sole: Got it. Okay. And then maybe just to elaborate a little bit on the fiscal '27 EBITDA guidance. The forecast is sort of stepping down from where you were in '26. How much of that reflects deliberate investment versus some of the underlying cost pressures that you're talking about? David Aufderhaar: Yes. Thanks. It really is about the conscious decision to reinvest in the business. I think we called out the 2 things. The larger of the 2 is the advertising spend that we just talked about. If you think about sort of the midpoint of that 10% to 11% range, that's still almost 100 basis points more than we spent this year. And that is absolutely something that we feel very comfortable leaning into. And then we also called out that there are some incremental AI investments to help drive growth. And so those were 2 conscious decisions we made to invest some of our EBITDA in growth. If you exclude those additional investments, the EBITDA margin guide would have been much more consistent with last year's margin at the 4% range. Operator: Your next question comes from the line of Jessica Chenyi Tian with AB Bernstein. Chenyi Tian: I have 2. So first one is, last quarter, you reiterated your goal of returning to year-over-year active client growth in fiscal 2027. Today, you've described higher acquisition costs as a headwind to client growth and referenced a lower active client starting point in the 2027 outlook. Has your confidence in returning to year-over-year active client growth during the year changed at all? And what would need to happen for you to achieve that objective? Matt Baer: Yes. Chenyi, I appreciate the question. As David shared previously, one of the things that we have called out is that the macroeconomic pressures that our consumers are facing, I spoke to that as well in the Q&A. And for us, one of the primary influences of that is actually in our ability to acquire new clients. And we actually believe that had those consumer headwinds not continued to elevate over the course of the last 6 months, we would have already returned to active client growth. So we remain equally convicted in terms of our ability to return to active client growth. We're going to continue to stay focused on everything within our control in order to ensure that we're most cost-effectively acquiring as many new clients as we can. And we are continuing to -- as David just noted as well, we're continuing to invest because of the high LTVs that we're able to see from those clients that we bring in. As we also shared in our prepared remarks, our existing client retention continues to perform exceptionally well for us. So we feel really good about the overall health of our active clients, and we remain confident in terms of our ability to return to active client growth in the future. Chenyi Tian: And then one more for me. Can you walk us through how underlying demand progressed through the quarter and also the exit rate coming out of the quarter, excluding the shipment timing shift and also post-checkout offer issue? Q1 to date revenues currently tracking in line with the 2027 sales guide? Or is there some conservatism baked into the outlook? Matt Baer: I think -- Chenyi, maybe to answer that with brevity, the easiest way to think about Q1 performance, as David noted, is that if you look at the quarter, we anticipate our October revenue comp being much more closely aligned to what the implied revenue comp is in Q2 to Q4. And as noted as well, the 2 factors that David walked through, those are time-bound and they're behind us. So they are no longer impacting performance in the quarter. Operator: Your next question comes from the line of David Bellinger with Mizuho. David Bellinger: I want to unpack the more challenged consumer commentary a little bit more. It seems a bit more pronounced than the last few quarters. Could you just tell us when you started to see that turn happen, sort of that role in consumer spending? And even going forward, if you pull out some of these transitory timing issues, can you talk about the underlying engagement from the active client base, whether that's in terms of the website, the app? Just anything that could help us for any type of rebound into Q1 and the rest of the year? David Aufderhaar: Yes. I can start with the first part of that, Dave, and then I'm sure Matt can jump in as well. We definitely started to see this in Q4. It's actually something that we called out on the earnings call last time that we had started to see some headwinds from a client acquisition standpoint, and that was impacting new client acquisition and reengagement. And we really saw that through Q4 and then continuing into Q1. And then late in Q4, we started to see some of the other impacts that I had called out that are in those areas that are a little bit more susceptible to macro like Freestyle or someone asking for a Fix outside of the recurring Fix cycle. And so those are some of the headwinds we started to see at the end of the quarter, and they continued into Q1. And both of those are sort of included in our full year FY '27 outlook. Matt Baer: What I'd add to that, too, and we've talked about this previously, is the Stitch Fix service is one that positions us really well to outperform when the consumer environment gets tough. At the same time, we're not immune when the consumer environment gets exceptionally tough. The reason why our service performed so well is because of the deep and enduring relationship that our clients have with their Stylists. It gives them the opportunity to have frank discussions about what changes there might be in their budget. They have the ability to change the cadence of their Fix shipments, and we're able to meet them where they are at any given time. We obviously stay exceptionally close to our clients. And we hear loud and clear from them that times are getting tougher. But encouragingly, they're actually signaling a desire to spend even more of their wallets with us going forward. It's why we see that resilience. It's why our core client does remain exceptionally resilient. It's why our core sales channel does remain resilient. And encouragingly, that resilience remains for all household income segments that we're able to track within our business. It's also the reason why for 6 consecutive quarters, we've outperformed the overall market and continue to gain market share. And we're confident that going forward, we'll continue to serve those clients exceptionally well and gain market share along the way. David Bellinger: Got it. And then a second question, mainly on a longer-term horizon. I know you've talked about some of these artificial intelligence investments, talking about Stitch Fix Vision. How should we think about the positioning of the business with things like the rise of Meta's Muse app and just a different consumer discoverability going forward? How do we think about Stitch Fix's positioning, whether that's good, bad or neutral, just with things like Meta's Muse coming out? Matt Baer: Yes, David. We believe that we're really well positioned to continue to lead within this environment. In the DNA of Stitch Fix is innovation, is our ability to lean into AI, is the quality, depth, and breadth of the data that we have. At the end of the day, an AI experience, generative or agentic, the quality of that output is premised on the quality of the data that you put into it. What we know about our clients and what we know about the overall market continues to be a competitive advantage for us. So as we're building our proprietary experiences, we're able to uniquely serve clients and serve them in ways that's superior to what others are able to because of how well we know them. Stitch Fix Vision and as we continue to expand it are great examples of that. We're also confident in our ability to play -- to participate appropriately with the rise of agentic shoppers as well. We'll have the ability, whether it's a human client or an agentic shopper, in order to serve them equally well. That being said, we also continue to believe that there are certain categories where agentic shopping are probably better served. If I want to ensure my pantry is perpetually replenished with paper towels, that's something I would happily outsource to my agentic shopper. If I want to ensure that I'm dressing style and trend appropriate with clothes that fit me that align to my budget and that will give me confidence when I walk out the door, there's a lot more nuance in that. And that's where our human Stylists give us a competitive advantage. That's where the ability to build those deep and enduring relationships, we think, will continue to be a competitive moat for us going forward. And as more and more interactions for all consumers generally are taking place by AI, it is actually human connection becomes the scarce resource. And we are the only retailer out there that has continued to invest in this human connection in a meaningful way such that we can serve our clients uniquely, and we believe that will become an even greater competitive advantage for us in the future. Operator: There are no further questions at this time. I will now turn the call back to Matthew Baer for closing remarks. Matt Baer: Thank you all for taking the time to join us today. As we look back on fiscal '26, I just want to reiterate how proud I am of what the team has accomplished. Growing revenue each quarter and revenue up 6.4% for the entirety of the year, expanding our adjusted EBITDA margin and generating positive free cash flow while also continuing to outperform the broader U.S. apparel, footwear, and accessories market. The structural improvements that we've made through our transformation have created a more resilient business model than we had 2 years ago. And as we discussed and while our FY '27 guidance reflects a more challenging consumer backdrop, our strategy and our conviction in the opportunity ahead remains unchanged. As I mentioned earlier, our focus for the year ahead is clear. It's to strengthen our position in the market by growing our active clients, it's to capture a greater share of our clients' spend, and it's to invest in the long-term growth with our continued financial discipline, and we remain confident in our ability to navigate near-term headwinds and build on the capabilities that we've established to deliver sustainable, profitable growth over the long term. And we look forward to updating you on our progress next quarter. Thank you so much. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Stitch Fix, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stitch Fix wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Stitch Fix. The Motley Fool has a disclosure policy. Stitch Fix (SFIX) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Full Year Revenue: $1.35 billion, up 6.4% year-over-year. Q4 Revenue: $324.4 million, up 4.2% year-over-year; sixth consecutive quarter of positive revenue comps. Gross Margin: Full year 43.7%; Q4 43.6%, flat year-over-year. Contribution Margin: Above 30% for the full year and in each quarter. Adjusted EBITDA: Full year margin expanded to 4%; Q4 $10.8 million, or 3.3% margin, up 50 basis points year-over-year. Net Loss: Narrowed to $12.6 million, or a loss of $0.09 per share, for the full year. Free Cash Flow: $19.8 million generated in fiscal 2026. Cash and Investments: $220.9 million in cash equivalents and investments, with no debt. SG&A: 45.3% of revenue, over 220 basis points lower than last year. Stock-Based Compensation: 3.4% of revenue, compared with 4.5% last year. Active Clients: 2.277 million, down 1.4% year-over-year and sequentially. Revenue Per Active Client (RPAC): $592, up 7.8%; record for third consecutive quarter. Average Order Value (AOV): Grew 4.9% year-over-year. Advertising Spend: 9.9% of revenue in Q4. Share Repurchases: 2.7 million shares bought back for $11.3 million in Q4; 7.2 million shares for $26.4 million for the year; $93.6 million remaining under authorization. Category Growth: Activewear and athleisure grew 21% year-over-year; footwear grew 14% in Q4. FY27 Revenue Outlook: $1.31 billion to $1.36 billion. FY27 Adjusted EBITDA Outlook: $27 million to $42 million. Q1 Revenue Outlook: $323 million to $328 million. Q1 Adjusted EBITDA Outlook: $3 million to $6 million. FY27 Gross Margin Outlook: 43% to 44%. Warning! GuruFocus has detected 4 Warning Signs with SFIX. Is SFIX fairly valued? Test your thesis with our free DCF calculator. Release Date: September 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Stitch Fix Inc (NASDAQ:SFIX) achieved full-year revenue growth of 6.4% to $1.35 billion, outperforming the broader US apparel market which grew only 1%. The company reported its sixth consecutive quarter of positive revenue comps, with Q4 revenue up 4.2% year-over-year. Revenue per active client (RPAC) reached a record $592 in Q4, marking the third consecutive quarter of record RPAC. Contribution margin remained above 30% for the full year, and adjusted EBITDA exceeded expectations at $10.8 million in Q4. Stitch Fix Inc (NASDAQ:SFIX) generated $19.8 million in free cash flow for fiscal 2026 and ended with a strong balance sheet of $220.9 million in cash and no debt. Active clients declined 1.4% year-over-year in Q4, with higher client acquisition costs impacting new client acquisition and reengagement. The company faces a more challenging consumer environment, leading to a tempered revenue outlook for fiscal 2027. Q1 FY27 revenue guidance includes temporary factors: shifted fixed shipments from Q1 to Q4 FY26 and an unintended post-checkout offer flow change that reduced fix requests. Adjusted EBITDA guidance for FY27 is $27-$42 million, a step down from FY26, due to planned investments in advertising and technology. Higher client acquisition costs are expected to continue into Q1 FY27, pressuring client growth and revenue. Q: Can you unpack the higher client acquisition costs and the planned increase in advertising spend for FY27 are these separate issues, and how should we think about the shape of the year?A: CFO David Aufderhaar explained that CAC headwinds began in Q4 and continued into Q1, but even with rising CACs, LTVs remain within the company's advertising guardrails, giving Stitch Fix comfort to lean in and still earn the right ROI. For FY27, the two main drags are: (1) a timing shift of some Fix shipments from Q1 FY27 into Q4 FY26, and (2) an unintended August change to the post-checkout offer flow that reduced clients eligible to request another Fix now corrected and isolated to Q1. Adjusting for these, Q4 FY26 revenue comps would have been roughly 2%3% and the Q1 FY27 guide would have been more in line with the implied guide for the rest of the year. The broader drag is macro pressure on the consumer, including higher gas prices, inflation, mortgage rates and low sentiment, which is compounding through softer client acquisition. Q: How durable is RPAC growth, and is there a ceiling given the declining active client base?A: CEO Matt Baer said RPAC reached a record $592, up 7.8%, driven by larger Fixes and category expansion into activewear/athleisure (up 21%), footwear (up 14%) and accessories, which all outperformed. He framed the opportunity as a $1 billion fair-share gap versus the company's market share in tops and bottoms, noting Stitch Fix already has roughly twice the wallet share of the next retailer for its clients but could still grow client spend three to four times before capping out. He called this a perpetual growth driver the company intends to lean into for years. Q: How broadly has Stitch Fix Vision been adopted, what share of Freestyle revenue does it influence, and what's the roadmap for FY27?A: Baer said Vision adoption continues to exceed expectations, with the new "See It On Me" feature helping considerably. The lift in 90-day Freestyle spend from clients who engage with Vision remains consistent, and the company has now shared over 22 million Vision images with clients. He described Vision as a platform for an end-to-end client journey spanning onboarding, Fix preview, Freestyle shopping and post-purchase, with more development in the works. Q: With higher acquisition costs and a lower active client starting point, has your confidence in returning to year-over-year active client growth in FY27 changed?A: Baer said confidence is unchanged, and that absent the elevated consumer headwinds of the past six months, Stitch Fix would have already returned to active client growth. He pointed to exceptionally strong existing client retention, continued investment justified by high LTVs, and a focus on cost-effectively acquiring new clients. He added that 20% of new clients indicate during onboarding they are seeking styling guidance as their bodies change nearly double the US population penetration on GLP-1 medications per Gallup which he sees as a differentiated opportunity. Q: How much of the FY27 EBITDA guidance step-down reflects deliberate investment versus underlying cost pressure?A: Aufderhaar said it is almost entirely a conscious decision to reinvest in the business. The larger piece is advertising, moving to roughly 10%11% of revenue versus 9%10% in FY26 about 100 basis points more at the midpoint plus incremental AI investments to drive growth. Excluding those additional investments, the EBITDA margin guide would have been much more consistent with last year's roughly 4% margin. Q: Can you quantify the two discrete Q1 revenue impacts and clarify the underlying Q1 growth rate excluding both?A: Aufderhaar declined to give exact dollar figures but said that adjusting for the shipment timing shift and the post-checkout offer issue, Q4 FY26 revenue comps would have been roughly 2%3% and the Q1 FY27 revenue guide would have been more in line with the implied guide for the rest of the year. He noted October comps are expected to be much more closely aligned with the implied Q2Q4 comp, and that both factors are time-bound and behind the company. Q: When did you start seeing the more challenged consumer behavior, and what does underlying engagement look like excluding the transitory issues?A: Aufderhaar said the headwinds began in Q4, initially in client acquisition and reengagement, then late in Q4 spread to more macro-sensitive areas like Freestyle and manual Fix demand outside the recurring cycle, continuing into Q1. Baer added that the core recurring Fix business remains resilient because stylist relationships let clients adjust budgets and cadence, and that resilience holds across all household income segments tracked a key reason Stitch Fix has outperformed the broader market for six consecutive quarters. Q: How is Stitch Fix positioned against the rise of AI-driven shopping experiences like Meta's Muse app?A: Baer said Stitch Fix is well positioned, citing its innovation DNA, proprietary data depth and 15 years of algorithms as competitive advantages, since AI output quality depends on input data quality. He said the company can serve both human and agentic shoppers, but argued nuanced apparel decisions fit, style, trend and budget favor human stylists, and that as more interactions become AI-driven, human connection becomes the scarce resource and a growing competitive moat. Q: What drove the Q4 active client decline, and how should we think about the cadence of CAC through FY27?A: Aufderhaar said active clients fell 1.4% year over year and sequentially, softer than expected due to seasonality plus higher client acquisition costs that hindered acquiring and reengaging clients. On cadence, he said FY27 marketing spend will be in the 10%11% range versus 9%10% in FY26, with similar seasonality where Q1 and Q3 are stronger acquisition quarters, and the company will be opportunistic leaning in during positive periods and pulling back amid headwinds. Q: What were the key FY26 financial results and the FY27 outlook?A: Aufderhaar reported FY26 revenue of $1.35 billion, up 6.4%, gross margin of 43.7%, SG&A at 45.3% of revenue (down over For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Fiscal 2026 revenue grew 6.4% to $1.35 billion, outperforming the flat U.S. apparel market by focusing on higher-value client acquisition and assortment relevance. - Revenue per active client (RPAC) reached a record $592, driven by a strategic shift toward larger fixes and successful penetration into under-indexed categories like activewear and footwear. - Operational efficiency improved through AI integration in fulfillment centers for labor planning and generative AI tools that assist stylists in item recommendations. - The multi-brand portfolio strategy, balancing high-performing private brands like Market & Spruce with 80+ new market brands, supported an 8-quarter trend of growth in items per fix and average unit retail. - Management identified a significant growth opportunity in serving clients undergoing body transformations, noting that 20% of new clients seek guidance related to GLP-1 medication impacts. - Customer retention reached a three-year high, which management attributes to deepening stylist relationships and enhanced fix flexibility that allows clients to address more wardrobe needs per shipment. - Full-year revenue guidance of $1.31 billion to $1.36 billion reflects a cautious stance on the consumer environment, including higher inflation and lower consumer sentiment. - Management plans to increase advertising spend to 10%-11% of revenue to combat rising client acquisition costs and capture market share despite macro pressures. - EBITDA margin expectations include deliberate reinvestments in technology and AI, which management believes are necessary to maintain a competitive moat in personalized styling. - The company expects to generate stronger positive free cash flow in FY 2027 compared to the prior year, supported by a disciplined cost structure and inventory management. - Growth initiatives will focus on scaling 'Stitch Fix Vision' to provide end-to-end style visualization, aiming to drive higher engagement and Freestyle spend. - Q1 2027 revenue was impacted by a strategic decision to shift fix shipment timing, which pulled volume into Q4 2026 and created a temporary year-over-year comparison headwind. - An unintended technical change to the post-checkout offer flow in August suppressed fix requests; management confirmed the issue was corrected and impact is isolated to Q1. - Higher client acquisition costs (CAC) emerged as a headwind in Q4 and have persisted into Q1, tempering the near-term trajectory for active client growth. - Management highlighted macro-economic factors, including rising mortgage rates and gas prices, as drivers for increased consumer intentionality regarding discretionary purchases. - Management clarified that while CAC has increased, they are leaning into marketing because client lifetime values remain healthy within their ROI guardrails. - The increased spend is a proactive choice to capture market share during a period of consumer volatility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management believes there is still a 3x to 4x wallet share opportunity before reaching a ceiling, particularly by outfitting clients 'head-to-toe'. - Growth in activewear (up 21%) and footwear (up 14%) validates the strategy of expanding into traditionally underpenetrated categories. - Over 22 million Vision images have been shared with clients, and the new 'See It On Me' feature allows users to visualize outfits on their own likeness. - Engagement with Vision continues to correlate with a significant lift in 90-day Freestyle spend. - Excluding the shipment timing and technical issues, October revenue comps are expected to align with the implied guidance for the remainder of the year. - Management noted that core recurring fix business remains resilient across all household income segments they track. - Management argues that while AI can handle commodity replenishment, the 'human connection' of a stylist remains a scarce and valuable resource for nuanced fashion decisions. - Proprietary data collected over 15 years is viewed as a critical advantage for the quality of their AI-driven recommendations.

Interested in Stitch Fix, Inc.? Here are five stocks we like better. Fiscal 2026 performance improved: Revenue rose 6.4% to $1.35 billion, while adjusted EBITDA margin reached 4% and free cash flow totaled $19.8 million. Stitch Fix ended the year with $220.9 million in cash and no debt, and continued share repurchases. Client spending increased despite fewer active users: Active clients declined 1.4% to 2.277 million, but revenue per client reached a record $592, supported by larger Fixes, broader assortments and strong growth in activewear, footwear and accessories. Fiscal 2027 outlook reflects near-term pressure: Stitch Fix expects revenue of $1.31 billion to $1.36 billion and adjusted EBITDA of $27 million to $42 million, citing higher acquisition costs, cautious discretionary spending and temporary first-quarter issues. The company plans to increase advertising and AI investments while targeting a return to active-client growth. Affirm Stock: Should You Buy the Dip After Walmart Setback? Stitch Fix (NASDAQ:SFIX) reported fiscal 2026 revenue growth and improved profitability, while executives said a more challenging consumer environment, higher client acquisition costs and temporary first-quarter issues are expected to weigh on fiscal 2027 results. For fiscal 2026, revenue rose 6.4% to $1.35 billion. Fourth-quarter revenue increased 4.2% year over year to $324.4 million, marking the company’s sixth consecutive quarter of positive revenue comparisons. Chief Executive Officer Matt Baer said the company outperformed the broader U.S. apparel, footwear and accessories market, which he said was approximately flat during the quarter, citing Circana data. → These 3 AI Stocks Sold Off Hard—Even as Their Outlooks Improved Don’t Bet On A Rally In Stitch Fix, Invest In The Future Stitch Fix ended the fourth quarter with 2.277 million active clients, down 1.4% both year over year and sequentially. However, revenue per active client reached a record $592, up 7.8% from a year earlier, while average order value increased 4.9%. Chief Financial Officer David Aufderhaar said the company maintained contribution margins above 30% in every quarter of fiscal 2026 and expanded adjusted EBITDA margin to 4% for the full year. Gross margin was 43.7%, within Stitch Fix’s target range of 43% to 44%. → Insiders Signal Deep Value In DICK’s Sporting Goods Is There a Reasonable Price to Buy Stitch Fix Stock? Stitch Fix reported a fiscal-year net loss of $12.6 million, or $0.09 per share, narrowing from the prior year. Free cash flow totaled $19.8 million, and the company finished the year with $220.9 million in cash equivalents and investments and no debt. Fourth-quarter adjusted EBITDA was $10.8 million, representing a 3.3% margin and exceeding the company’s guidance, primarily because of lower fixed operating expenses. Fourth-quarter gross margin was 43.6%, flat from a year earlier, as inventory management offset higher transportation costs and investments in new merchandise categories. → Coach’s Momentum Powers Tapestry Despite the Stock’s Sharp Pullback The company also continued repurchasing stock. Stitch Fix bought back 2.7 million shares for $11.3 million in the fourth quarter and 7.2 million shares for $26.4 million during the full year. It had $93.6 million remaining under its repurchase authorization. Baer attributed revenue-per-client growth to larger Fix shipments, a broader assortment and expansion into categories where Stitch Fix had historically been underrepresented. The company has recorded eight consecutive quarters of growth in both items per Fix and average unit retail, he said. Activewear and athleisure sales across women’s and men’s offerings grew 21% year over year in the fourth quarter, while footwear grew 14%. Accessories also outperformed the company’s overall revenue growth rate, according to Baer. Stitch Fix added more than 80 brands during fiscal 2026, including Rhone, Birkenstock, Outdoor Voices and Malbon Golf. More recent additions included Farm Rio, Baggu, Merrell, Jordan Brand, Nike Golf and Mitchell & Ness NFL-licensed apparel. Baer said men’s Fix revenue delivered double-digit growth for the fifth consecutive quarter, while both the women’s and men’s Fix businesses grew year over year. Client retention improved sequentially for an eighth straight quarter, reaching its third consecutive high in nearly four years. The company said it is expanding its use of artificial intelligence across client-facing experiences and operations. Its Stitch Fix Vision platform, which creates personalized style visualization, has now generated more than 22 million images for clients since launch, Baer said. Stitch Fix recently introduced a “See it on me” feature that allows clients viewing outfit inspiration to see looks displayed on their own likeness. Baer said adoption of Vision has exceeded expectations and that clients who interact with the product continue to show elevated Freestyle spending. Operationally, the company is using generative AI to support stylist recommendations, labor planning and customer-service interactions. Baer said the share of chats resolved without additional support has more than doubled. The company also highlighted demand from clients experiencing body changes associated with GLP-1 medications. Baer said 20% of new clients recently indicated during optional onboarding that they were seeking styling guidance as their bodies change. For fiscal 2027, Stitch Fix forecast revenue of $1.31 billion to $1.36 billion and adjusted EBITDA of $27 million to $42 million. The company expects first-quarter revenue of $323 million to $328 million and adjusted EBITDA of $3 million to $6 million. Aufderhaar said the outlook reflects higher client acquisition costs, which emerged in the fourth quarter and continued into the first quarter, as well as more cautious discretionary spending by existing customers outside their recurring Fix shipments. The company expects gross margin to remain between 43% and 44% and expects stronger positive free cash flow than in fiscal 2026. First-quarter results will also be affected by two temporary issues: a shift in the timing of some Fix shipments from the first quarter into the fourth quarter, and an unintended August change to a post-checkout offer that reduced the number of clients eligible to request another Fix. Aufderhaar said the feature issue was corrected and would not affect results beyond the first quarter. Excluding those temporary factors, Aufderhaar said fourth-quarter revenue growth would have been roughly 2% to 3%, while the first-quarter outlook would have been more aligned with the implied growth rate for the remainder of the year. Stitch Fix plans to invest more heavily in advertising and technology, including AI, during fiscal 2027. Advertising is expected to represent roughly 10% to 11% of revenue, compared with 9% to 10% in fiscal 2026. Aufderhaar said the lower adjusted EBITDA outlook primarily reflects deliberate investments in growth rather than underlying cost pressures. Baer said the company remains confident it can return to active-client growth, though management acknowledged that macroeconomic pressures have delayed that objective. He said recurring Fix customers have remained resilient, while areas such as Freestyle and manually requested Fixes have been more exposed to pressure on discretionary spending. Stitch Fix, Inc is an online personal styling company that uses data science, personalization technology and human stylists to recommend apparel and accessories to customers. Its offerings include clothing, shoes and accessories across categories such as women's, men's and children's apparel, with selections tailored to individual preferences, sizes, budgets and lifestyles. The company's primary service, traditionally known as a “Fix,” delivers a curated selection of items for customers to try at home, after which they can purchase the items they want and return the rest. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Stitch Fix Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

SAN FRANCISCO, September 23, 2026--(BUSINESS WIRE)--Stitch Fix, Inc. (NASDAQ: SFIX), the leading online personal styling service, today announced its financial results for the fourth quarter and full fiscal year 2026 ended August 1, 2026. "Fiscal 2026 was a transformative year for Stitch Fix. We closed the year as a significantly healthier business, with a strengthened operating foundation, along with a reimagined client experience and more compelling assortment," said Matt Baer, CEO, Stitch Fix. "Full-year revenue grew 6.4% year-over-year and we continued to gain share in the U.S. apparel, footwear and accessories market. We remain confident in our transformation strategy and ability to advance our efforts to deliver the most personalized and client-centric shopping experience as we navigate a challenging consumer environment." Fourth Quarter Fiscal 2026 Key Metrics and Financial Highlights Net revenue of $324.4 million, an increase of 4.2% year-over-year. Active clients of 2.277 million, a decrease of 1.4% quarter-over-quarter and a decrease of 1.4% year-over-year. Net revenue per active client of $592, an increase of 7.8% year-over-year. Gross margin of 43.6%, flat year-over-year. Net loss of $2.1 million and net loss margin of 0.6%; diluted loss per share of $0.02. Adjusted EBITDA of $10.8 million and Adjusted EBITDA margin of 3.3%. Net cash provided by operating activities of $9.1 million and free cash flow of $4.4 million. Repurchased 2.7 million shares of Class A common stock for $11.3 million. Full Fiscal 2026 Key Metrics and Financial Highlights Net revenue of $1,348.1 million, an increase of 6.4% year-over-year. Gross profit of $588.5 million, an increase of 4.5% year-over-year and gross margin of 43.7%, a decrease of 70 basis points year-over-year. Net loss of $12.6 million and net loss margin of 0.9%; diluted loss per share of $0.09. Adjusted EBITDA of $53.4 million and Adjusted EBITDA margin of 4.0%. Net cash provided by operating activities of $39.1 million and free cash flow of $19.8 million. Cash, cash equivalents, and investments of $220.9 million; and no debt. Financial Outlook Stitch Fix’s revenue outlook for fiscal year 2027 reflects a more challenging consumer environment and a lower active client starting point, which we expect will temper revenue growth. In addition, Stitch Fix’s revenue outlook for the first quarter of fiscal 2027 was impacted by a reduction in Fix volume due to two primary factors: (1) a decision to adjust the timing of some Fix shipments in the fourth quarter, which shifted Fix volume from the first quarter of fiscal 2027 into the fourth quarter of fiscal 2026, and (2) an unintended change made to the post-checkout offer flow in August that limited the number of clients eligible to request another Fix, which has been corrected and will not affect results beyond the first quarter. Stitch Fix’s adjusted EBITDA outlook for fiscal year 2027 reflects strategic investments in advertising and technology, including artificial intelligence, to support long-term growth. Stitch Fix’s financial outlook for the first quarter of fiscal 2027, ending October 31, 2026, is as follows: Stitch Fix’s financial outlook for fiscal year 2027 is as follows: Stitch Fix expects its full fiscal year 2027 gross margin to be between 43% and 44%. Stitch Fix also expects to generate positive free cash flow for the full year. Stitch Fix’s fiscal year is a 52- or 53-week period ending on the Saturday closest to July 31. Fiscal years 2025 and 2026 are 52-week years. Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) or free cash flow outlook to net cash flows used in operating activities from continuing operations because it does not provide an outlook for GAAP net income (loss) or net cash flows used in operating activities from continuing operations due to the uncertainty and potential variability of restructuring and other one-time costs, net other income (expense), provision for income taxes, stock-based compensation expense, or net cash flows used in operating activities from continuing operations, which are reconciling items between the non-GAAP financial measure and the corresponding GAAP measure. Because Stitch Fix cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlooks to the corresponding GAAP measures are not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP net income (loss) and free cash flow. For more information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" below. Discontinued Operations During the first quarter of fiscal 2024, Stitch Fix ceased operations of its UK business and met the accounting requirements for reporting the UK business as a discontinued operation. Accordingly, its unaudited condensed consolidated financial statements reflect the results of the UK business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures relate to its continuing operations. Conference Call and Webcast Information Matt Baer, Chief Executive Officer of Stitch Fix, and David Aufderhaar, Chief Financial Officer of Stitch Fix, will host a conference call at 2:00 p.m. Pacific Time today to discuss the Company’s financial results and outlook. A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at https://investors.stitchfix.com. To access the call by phone, please register at the following link: Dial-In Registration: https://events.q4inc.com/analyst/547153230?pwd=jiyLQm15 Upon registration, telephone participants will receive the dial-in number along with a unique passcode that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.stitchfix.com. About Stitch Fix, Inc. Stitch Fix (NASDAQ: SFIX) is the leading online personal styling service that helps people discover the styles they will love that fit perfectly so they always look - and feel - their best. Few things are more personal than getting dressed, but finding clothing that fits and looks great can be a challenge. Stitch Fix solves that problem. By pairing expert stylists with best-in-class AI and recommendation algorithms, the company leverages its assortment of exclusive and national brands to meet each client's individual tastes and needs, making it convenient for clients to express their personal style without having to spend hours in stores or sifting through endless choices online. Stitch Fix, which was founded in 2011, is headquartered in San Francisco. For more information, please visit https://www.stitchfix.com. Forward-Looking Statements This press release, and the related conference call and webcast, contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward looking, including but not limited to statements regarding our expectations for future financial performance, including our revenue growth, profitability and long-term targets; our outlook on financial results and metrics; our expectations regarding our market and wallet share, market opportunity, client growth, retention, engagement and other trends, our expectation with respect to the impact of our strategies, priorities, and investments, including our transformation strategy and plans for enhancements to our client experience, our financial results and key metrics; our plans and expectations with respect to our product offerings, AI initiatives and our use of AI technologies, and plans for category expansion; our assessment of the impact of tariffs and the macroeconomic environment on our results of operations and future performance; our ability to navigate a dynamic consumer environment; and our expectations regarding future costs and metrics, including transportation costs, gross margin, average order value, inventory levels, and advertising spend. These statements involve substantial risks and uncertainties, including risks and uncertainties related to the current macroeconomic environment; our ability to generate sufficient net revenue to offset our costs; changing consumer behavior; the effect of changes in and uncertainty regarding tariffs or trade policies and our ability to mitigate tariff-related risks; our ability to acquire, engage, and retain clients; our ability to provide offerings and services that achieve market acceptance; our data science and technology, Stylists, operations, marketing initiatives, and other key strategic areas, including the implementation of our transformation strategy; risks related to our inventory levels and management; risks related to our supply chain, sourcing of materials and shipping of merchandise; our ability to forecast our future operating results; our ability to respond to technical incidents and the impact of the same on our financial performance; and other risks described in the filings we make with the SEC. Further information on these and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in filings we make with the SEC from time to time, including in the sections titled "Risk Factors" in our Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2026. These documents are available on the SEC Filings section of the investor relations section of our website at: https://investors.stitchfix.com. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made. Non-GAAP Financial Measures The Company reports its financial results in accordance with generally accepted accounting principles in the United States ("GAAP"). However, management believes that certain non-GAAP financial measures provide users of its financial information with additional useful information in evaluating the Company’s performance. The Company believes that adjusted EBITDA from continuing operations ("Adjusted EBITDA") and Adjusted EBITDA margin, which is defined as Adjusted EBITDA divided by net revenue for the period, are frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between continuing operations of companies. The Company believes free cash flow from continuing operations ("Free Cash Flow") is an important metric because it represents a measure of how much cash from continuing operations the Company has available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of these non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include: Adjusted EBITDA excludes interest income and other (income) expense, net as these items are not components of our core business; Adjusted EBITDA does not reflect provision for income taxes, which may increase or decrease cash available; Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future; Adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain employees and a significant recurring expense in our business; Adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs attributable to continuing operations that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows; Adjusted EBITDA excludes non-ordinary course legal fees for specific proceedings that we have determined arise outside of the ordinary course of business and are nonrecurring, infrequent, or unusual; and Free Cash Flow does not represent the total residual cash flow available for discretionary purposes and does not reflect future contractual commitments. Adjusted EBITDA We define Adjusted EBITDA as net loss from continuing operations excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, stock-based compensation expense, restructuring and other one-time costs, and non-ordinary course legal fees related to our continuing operations. We define Adjusted EBITDA margin as Adjusted EBITDA divided by net revenue for the period. The following table presents a reconciliation of net loss from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA, and net loss margin, the most comparable GAAP financial measure, to Adjusted EBITDA margin, for each of the periods presented: Free Cash Flow We define Free Cash Flow as cash flows provided by operating activities from continuing operations, reduced by purchases of property and equipment that are included in cash flows from investing activities from continuing operations. The following table presents a reconciliation of net cash flows used in operating activities from continuing operations, the most comparable GAAP financial measure, to Free Cash Flow for each of the periods presented: Operating Metrics Active Clients We believe that the number of active clients is a key indicator of the overall health of our business. We define an active client as a client who checked out a Fix or was shipped an item via Freestyle in the preceding 52 weeks, measured as of the last day of that period. Clients check out a Fix when they indicate what items they are keeping through our mobile application or on our website. We consider each Women’s, Men’s, or Kids account as a client, even if they share the same household. A single person could have multiple accounts and count as multiple active clients. Net Revenue per Active Client We believe that net revenue per active client is an indicator of client engagement and satisfaction. We calculate net revenue per active client based on net revenue over the preceding four fiscal quarters divided by the number of active clients measured as of the last day of the period. View source version on businesswire.com: https://www.businesswire.com/news/home/20260923607507/en/ Contacts IR Contact: [email protected] PR Contact: [email protected]

Personalized clothing company Stitch Fix (NASDAQ:SFIX) will be reporting earnings this Wednesday after market close. Here’s what you need to know. Stitch Fix beat analysts’ revenue expectations last quarter, reporting revenues of $340.3 million, up 4.7% year on year. It was a strong quarter for the company, with EBITDA guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates. It reported 2.31 million active clients, down 1.9% year on year. Is Stitch Fix a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Stitch Fix’s revenue to grow 4.3% year on year, a reversal from the 2.6% decrease it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Stitch Fix has a history of exceeding Wall Street’s expectations. Looking at Stitch Fix’s peers in the consumer discretionary - apparel and accessories segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Movado delivered year-on-year revenue growth of 4.9%, beating analysts’ expectations by 3.4%, and PVH reported a revenue decline of 3.2%, in line with consensus estimates. Movado traded down 1.3% following the results while PVH’s stock price was unchanged. Read our full analysis of Movado’s results here and PVH’s results here. Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the consumer discretionary - apparel and accessories stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 9% on average over the last month. Stitch Fix is down 13.2% during the same time and is heading into earnings with an average analyst price target of $4.60 (compared to the current share price of $2.86). ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.