Stitch Fix Delivers First Revenue Growth In Years, Analysts See Progress Toward Subscriber Comeback

Stitch Fix SFIX stock is trading lower after the company reported better-than-expected third-quarter financial results and guidance.

Stitch Fix reported quarterly losses of six cents per share, which beat the analyst consensus estimate of losses of 11 cents per share. Quarterly revenue reached $325.02 million, beating the $314.44 million consensus estimate.

The company expects fourth-quarter revenue of $298 million-$303 million, versus the $288.57 million estimate. Stitch Fix raised its fiscal 2025 revenue guidance from $1.23 billion-$1.24 billion to $1.25 billion-$1.26 billion, versus the $1.23 billion estimate.

Also Read: Stitch Fix Stock Soars On Q2 Earnings Beat, Strong Revenue Guidance

Telsey Advisory Group analyst Dana Telsey maintained Stitch Fix with a Market Perform and a $6 price target.

Telsey noted that Stitch Fix’s momentum continued into the second half, with another healthy beat in the fiscal third quarter. This was driven by better-than-expected revenue and expense control, partially offset by slightly greater gross margin deleverage.

Encouragingly, despite another period of double-digit active client declines YoY, the QoQ decrease narrowed to 0.8% (from down 2.6% last quarter), a nice progression towards the company’s target of positive sequential growth by fiscal 2026, the analyst said.

Additionally, the better active client result and a strong response to the company’s customer-facing initiatives helped to drive growth in women’s and the fix channel, as well as men’s and freestyle, she said. AOV sequentially improved to +10% (from +9% last quarter). It was driven by increases across items per fix, keep rates, and AUR for the second consecutive period.

In all, these solid underlying revenue-driving metrics helped to deliver the first quarter of positive overall topline growth since 2Q22, ahead of the company’s prior goal of achieving revenue growth by the end of fiscal 2026, the analyst said.

Another Solid Revenue And EBITDA Beat On The Books

Stitch Fix raised its topline guide ahead of the prior consensus, Telsey said. The low end of its prior adjusted EBITDA guide increased, but it still bracketed the prior consensus.

While management refrained from offering formal fiscal 2026 guidance, the analyst said tariffs will likely pressure costs, while an uncertain consumer environment could further weigh in the coming quarters.

While the company’s transformation efforts continue to resonate and bear fruit, he noted that visibility to the return to subscriber growth and continued growth in the current macro-operating environment remains challenging.

Price Action: SFIX stock is down 5.74% at $4.52 at last check Wednesday.

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