Stitch Fix (SFIX) Q4 Earnings Results Missed Investor Expectations After Difficult Quarter
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Summary:
- SFIX reported lower-than-expected sales for Q4.
- High inflation and deteriorating retail environment.
SFIX share price down after missing Q4 earnings expectations
After the company reported lower-than-expected sales for the current quarter, offered weaker-than-expected sales guidance, and reported a decline in active clients, shares declined in after-hours trading. Revenue for the fourth quarter of Stitch Fix came to $481.9 million, falling shy of the Street's forecast of $489.4 million. The full-year sales forecast was trimmed to a range of $1.76 billion to $1.86 billion, while the first-quarter revenue projection was cut to $455 million to $465 million. $2.1 billion was the forecast on Wall Street.
Elizabeth Spaulding, SFIX CEO wrote in the earnings release, “Today’s macroeconomic environment and its impact on retail spending has been a challenge to navigate, but we remain committed to working through our transformation and returning to profitability.” Stitch Fix shares have declined -75% year-to-date.
Spaulding indicated during her address that they had faced an increasingly difficult fourth quarter, notably in June and July, due to the realities of high inflation levels and a deteriorating retail environment, which led to decreased discretionary spending in the garment industry. Because of a 9% year-over-year reduction in net active clients, which finished FY '22 at 3.8 million, Q4 net revenue fell 16% to $482 million. The quarter's adjusted EBITDA was negative $31.8 million.
The company's CFO, Dan Jedda indicated during his address that SFIX had reported net revenue of $482 million, a 16% decrease from the previous year. This decline was caused by slowness in the volume of Fixes, which was largely offset by demand for Freestyle.
In the wake of the financial report SFIX share price fell almost 10% in pre-market trading and 5.79% at close of market on September 20.
SFIX Price Chart
Sources: finance.yahoo.com, fool.com
