Market Overview

Stitch Fix Announces Fourth Quarter and Full Fiscal Year 2019 Financial Results

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SAN FRANCISCO, Oct. 01, 2019 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ:SFIX), the leading online personal styling service, has released its financial results for the fourth quarter and full fiscal year 2019 ended August 3, 2019, and posted a letter to its shareholders on its investor relations website. Fiscal year 2019 included 53 weeks, with the additional week occurring in the fourth quarter.

Fourth quarter highlights

  • Active clients of 3.2 million, an increase of 18% year over year
  • Net revenue of $432.1 million, an increase of 36% year over year
  • Net income of $7.2 million and adjusted EBITDA of $6.4 million
  • Diluted earnings per share of $0.07

Full year highlights

  • Net revenue of $1.6 billion, an increase of 29% year over year
  • Net income of $36.9 million and adjusted EBITDA of $39.6 million
  • Diluted earnings per share of $0.36

"Q4 was another strong quarter for us, delivering net revenue of $432.1 million, representing 36% year-over-year growth," said Stitch Fix founder and CEO Katrina Lake. "We grew our active clients to 3.2 million, an increase of 18% year over year. For the full year, we grew net revenue 29% year over year to $1.6 billion and captured more of our large addressable client base by adding nearly half a million active clients in 2019. In addition, we consistently demonstrated our ability to deliver great client experiences, growing revenue per active client in every quarter of fiscal 2019, including 9% year over year in Q4. These gains are a testament to the strength of our data science capabilities."

Lake continued, "In our second year as a public company I'm proud of how much we've accomplished, and the opportunities we've created for future growth across categories and geographies. We have built a personalization engine with incredible potential, and I'm excited to expand on our platform in new and innovative ways."

Please visit the Stitch Fix investor relations website at https://investors.stitchfix.com to view the financial results included in the letter to shareholders. The Company intends to continue to make future announcements of material financial and other information through its investor relations website. The Company will also, from time to time, disclose this information through press releases, filings with the Securities and Exchange Commission, conference calls, or webcasts, as required by applicable law.

Conference Call and Webcast Information

Katrina Lake, Founder and Chief Executive Officer of Stitch Fix, Paul Yee, Chief Financial Officer of Stitch Fix, and Mike Smith, President and Chief Operating 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 will be accessible on Stitch Fix's investor relations website at investors.stitchfix.com. Interested parties can also access the call by dialing (800) 458-4121 in the U.S. or (786) 789-4772 internationally, and entering conference code 6009320.

A telephonic replay will be available through Tuesday, October 8, 2019, at (888) 203-1112 or (719) 457-0820, passcode 6009320. An archive of the webcast conference call will be available shortly after the call ends at https://investors.stitchfix.com.

About Stitch Fix, Inc.

Stitch Fix is reinventing the shopping experience by delivering one-to-one personalization to our clients, through the combination of data science and human judgment. Stitch Fix was founded in 2011 by CEO Katrina Lake. Since our founding, we've helped millions of men, women, and kids discover and buy what they love through personalized shipments of apparel, shoes, and accessories, hand-selected by Stitch Fix stylists and delivered to our clients' homes.

Forward-Looking Statements

This press release and 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 future financial performance, including our guidance on financial results for the first quarter and full year of fiscal 2020; market trends, growth, and opportunity; profitability; competition; the timing and success of expansions to our offering and penetration of our target markets, such as the launch of our offering in the United Kingdom and the launch of Shop New Colors and Shop Your Looks; our ability to leverage our engineering and data science capabilities to drive efficiencies in our business and enhance our ability to personalize; our plans to continue to roll out new features to extend our personalization platform and drive an even stronger personalized eCommerce model; our ability to continue to increase success rates; our plans related to client acquisition, including any impact on our costs and margins and our ability to continue to generate payback on our marketing investments and determine optimal marketing and advertising methods; and our ability to successfully acquire, engage, and retain clients. These statements involve substantial risks and uncertainties, including risks and uncertainties related to our ability to generate sufficient net revenue to offset our costs; the growth of our market and consumer behavior; 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; risks related to international operations; and other risks described in the filings we make with the Securities and Exchange Commission ("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 section titled "Risk Factors" in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 27, 2019. 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.


Stitch Fix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)

    August 3, 2019   July 28, 2018
Assets        
Current assets:        
Cash and cash equivalents   $ 170,932     $ 297,516  
Restricted cash       250  
Short-term investments   143,276      
Inventory, net   118,216     85,092  
Prepaid expenses and other current assets   49,980     34,148  
Total current assets   482,404     417,006  
Long-term investments   53,372      
Property and equipment, net   54,888     34,169  
Deferred tax assets   22,175     14,107  
Restricted cash, net of current portion       12,600  
Other long-term assets   3,227     3,703  
Total assets   $ 616,066     $ 481,585  
Liabilities and Stockholders' Equity        
Current liabilities:        
Accounts payable   $ 90,883     $ 79,782  
Accrued liabilities   69,734     43,037  
Gift card liability   7,233     6,814  
Deferred revenue   11,997     8,870  
Other current liabilities   2,784     3,729  
Total current liabilities   182,631     142,232  
Deferred rent, net of current portion   24,439     15,288  
Other long-term liabilities   12,996     8,993  
Total liabilities   220,066     166,513  
Stockholders' equity:        
Class A common stock, $0.00002 par value   1     1  
Class B common stock, $0.00002 par value   1     1  
 Additional paid-in capital   279,511     235,312  
Accumulated other comprehensive income   (187 )    
Retained earnings   116,674     79,758  
Total stockholders' equity   396,000     315,072  
Total liabilities and stockholders' equity   $ 616,066     $ 481,585  
                 

Stitch Fix, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(In thousands, except share and per share amounts)

    For the Three Months Ended   For the Fiscal Year Ended
    August 3, 2019   July 28, 2018   August 3, 2019   July 28, 2018
Revenue, net   $ 432,149     $ 318,295     $ 1,577,558     $ 1,226,505  
Cost of goods sold   241,785     176,877     874,429     690,483
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