Stitch Fix’s second quarter results drew a negative market reaction, with shares falling sharply after the report. Management attributed quarterly performance to continued progress in its transformation strategy, highlighting improvements in client experience and assortment, particularly the strength in its men’s business and expansion into non-apparel categories. CEO Matt Baer emphasized that both women’s and men’s lines saw accelerated revenue growth, driven by higher average order values and the addition of recognized brands. The company also noted that improvements in retention and client engagement led to year-over-year growth in revenue per active client for the sixth consecutive quarter, but active client numbers continued to decline.
Is now the time to buy SFIX? Find out in our full research report (it’s free).
Stitch Fix (SFIX) Q2 CY2025 Highlights:
- Revenue: $311.2 million vs analyst estimates of $304 million (2.6% year-on-year decline, 2.4% beat)
- Adjusted EPS: -$0.06 vs analyst estimates of -$0.10 (38.7% beat)
- Adjusted EBITDA: -$4.36 million vs analyst estimates of $6.73 million (-1.4% margin, significant miss)
- Revenue Guidance for Q3 CY2025 is $335.5 million at the midpoint, above analyst estimates of $296.7 million
- EBITDA guidance for the upcoming financial year 2026 is $37.5 million at the midpoint, below analyst estimates of $43.1 million
- Operating Margin: -3.6%, up from -13.1% in the same quarter last year
- Active Clients: 2.31 million, down 199,000 year on year
- Market Capitalization: $573.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Stitch Fix’s Q2 Earnings Call
- Dana Telsey (Telsey Advisory Group) asked about sources of growth beyond apparel and the impact of tariffs on average order value. CEO Matt Baer emphasized footwear and athleisure demand, and said tariff impacts were largely mitigated by supplier negotiations.
- Dana Telsey (Telsey Advisory Group) followed up asking where Stitch Fix is taking market share and how the company is planning for the holiday period, especially given industry volatility. Baer said Stitch Fix is gaining share from retailers unable to deliver on personalization, and is leveraging new features and assortment to prepare for holiday demand.
- No additional analyst questions on the call.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will monitor (1) whether new AI-powered features and platforms like Stylist Connect lead to improved client retention and engagement, (2) the impact of expanded assortment and Family Accounts on active client growth, and (3) the company’s ability to maintain gross margins amid rising transportation costs and ongoing investments. Results from holiday promotional activity and further brand partnerships will also be important signposts.
Stitch Fix currently trades at $4.37, down from $5.64 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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