Katrina Lake, CEO Stitch Fix
Adam Jeffery | CNBC
Stitch Fix reported a lower-than-expected loss for the last quarter on Monday, but the company missed analysts’ expectations of revenue and prospects as delivery delays and lower customer spending consumed sales.
Shares fell 21% in extended transactions.
The subscription drafting service reduced its revenue forecasts for the current quarter and fiscal year, citing the continuing uncertainty arising from the coronavirus pandemic and the longer purchase cycles resulting from delivery problems.
Here’s what the company reported for the quarter ended Jan. 30 compared to what Wall Street expected, based on a poll conducted by analysts by Refinitiv:
- Loss per share: 20 cents compared to the expected 22 cents
- Revenue: $ 504.1 million compared to $ 512.2 million expected
Stitch Fix reported a net tax loss in the second fiscal quarter of $ 21 million or 20 cents a share, down from a profit of $ 11.4 million or 11 cents a share a year earlier . Analysts surveyed by Refinitiv expected a loss of 22 cents per share.
Net sales increased 12% to $ 504.1 million, falling below expectations of $ 512.2 million. Delivery delays during the holiday season meant that the company was forced to work through a backlog and was unable to record revenue for all boxes shipped in that quarter. Stitch Fix recognizes revenue when customers check items, not when the company ships the order.
The company also said its overall holiday sales were lower than expected as consumers moved from spending money on themselves to buying gifts for others. However, recorded the strongest January recorded.
For the third fiscal quarter, Stitch Fix expects net sales of $ 505 million to $ 515 million, an increase from 36% to 39% and an adjusted loss before interest, taxes, depreciation and amortization from 5 to 9 millions of dollars. Executives said that so far in February there has been a “mixed bag” of shipping and processing delays and the trend is expected to continue for the rest of the third fiscal quarter.
For the full fiscal year 2021, the company now expects revenues to increase between 18% and 20%, down from its previous outlook of 20% to 25%. Wall Street had forecast a 22.6% increase in revenue for the fiscal year.
The company added 110,000 new active customers during the quarter for a total list of almost 3.9 million. Stitch Fix said it added more active customers in the first half of fiscal year 2021 than in the previous fiscal year.
However, customers spend less. Active customers spent an average of $ 467, down 7% from the same period a year ago.
Stitch Fix defines active customers as people who have purchased an item directly from its website in the last 52 weeks of the last day of the quarter.
Read the full shareholders’ letter here.