Stitch Fix Stock Plunges 38% on Revenue Miss and Guidance Cut

Stitch Fix (NASDAQ: SFIX) reported second-quarter results for fiscal 2020 after the market closed on Monday, March 9. Investors in need of a good-news fix amid the market's coronavirus-driven sell-off didn't get it from the online personalized apparel retailer.

While the company managed to beat the Wall Street consensus estimate on the bottom line, it missed on the top line -- and sales growth is particularly important at this early stage in Stitch Fix's life as a public company. (Stitch Fix held its initial public offering just over two years ago, in November 2017.) Moreover, the company's third-quarter revenue outlook came in lighter than analysts had been expecting, and it lowered its full-year revenue guidance. Even in the best of times, the market often reacts with fury when companies pare back their previously issued outlooks.

I had a feeling a full-year guidance cut was coming. I ended my Stitch Fix earnings preview on this note: "In the midst of the market's coronavirus sell-off, expect Stitch Fix stock to get slammed if the company's Q3 revenue outlook is weaker than expected or if it pares back its full-year revenue guidance."

Source Fool.com