Stitch Fix Tells Investors to Be Patient
Stitch Fix (NASDAQ: SFIX) earnings are almost always followed by a big swing in the stock, and the latest report was no exception.
Shares of the online personalized styling service tumbled almost 16% following the release, even though the company beat top-line estimates in its fiscal fourth quarter. Adjusted for an extra week in the year-ago period, revenue rose 11% year over year to $443.4 million, well ahead of expectations at $414.9 million. On the bottom line, the company posted a per-share loss of $0.44, which included a special non-cash tax expense of $43.2 million. On an adjusted EBITDA basis, the company's preferred profitability measure, Stitch Fix lost $8.3 million (that figure swung to a profit of $11.8 million when excluding share-based compensation).
Investors seemed to have expected more, and guidance may have also thrown off investors as the company said it expected just mid-to-high single digit revenue growth in the fiscal first quarter. Though new customer growth has been strong with the number of women ordering their first "Fixes" up 25% last quarter, the company is still facing headwinds from a pullback in marketing and demand when the coronavirus lockdowns started in March. As a result, Stitch Fix is not getting the subsequent orders from customers it expects to receive. Management sees that as a headwind lasting through the first half of fiscal 2021, which started on Aug. 2.
Source Fool.com
