Online personal styling service provider SFIX stock (SFIX:NSD) is dealing with a substantial decline in its price during pre-market trading today, following a dull fourth-quarter performance that fell short of investor expectations. The company’s financial outlook also left shareholders disappointed.
Q4 Revenue Beats Estimates:
In the fourth quarter, SFIX stock reported a total revenue of $375.8 million, marking a 22% decline year-over-year. However, this figure managed to slightly surpass estimates by $3.8 million.
Bottom-Line Falters:
Despite this revenue surprise, the company’s net loss per share amounted to $0.24, which was $0.03 wider than market expectations.
Stitch Fix’s Year in Review:
Throughout the year, Stitch Fix witnessed a 13% reduction in its active client base, with approximately 3.3 million clients remaining. Concurrently, net revenue per active client saw a 9% decrease, settling at $497. The full-year net loss reached $172 million. Additionally, Stitch Fix announced its exit from the U.K. market, with plans to categorize its U.K. business as a discontinued operation starting from the first quarter.
Gloomy Outlook for Fiscal Year 2024
Looking ahead to the full Fiscal year 2024, Stitch Fix anticipates net revenue to range between $1.3 billion and $1.37 billion, reflecting a substantial 18% to 14% decline. The adjusted EBITDA for the year is expected to fall within the range of $5 million to $30 million.
First Quarter Projections:
For the upcoming first quarter, SFIX predicts generating adjusted EBITDA in the range of $2 million to $7 million on net revenue between $355 million and $365 million.
Broader Market Sentiment:
Analysts’ ratings paint a clear picture of the impact of this decline on SFIX stock as;
Barclays analysts lowered the target from Equal Weight and adjusted the target price from USD 4 to USD 3
Analysts at Canaccord Genuity maintain a Hold rating while lowering the target price from USD 5 to USD 4
Analysts at Telsey Advisory Group maintain a Market Perform rating and lower its target price from USD 5 to USD 4.
Analyst Insights on SFIX Stock:
Analyzing the SFIX stock, a consensus of six analysts places the average target price at $3.72 over the next 12 months. The average analyst rating for the stock is “Hold.” Stock Target Advisor’s analysts are “Slightly Bearish,” based on three positive signals and seven negative signals.
Recent Performance:
As of the last closing, Stitch Fix’s stock price was $3.05, having experienced a significant decline of -21.99% over the past week, -18.88% over the past month, and a substantial -36.19% drop over the last year.
Conclusion:
Stitch Fix’s fourth-quarter results and its somber outlook for the fiscal year ahead have put significant downward pressure on its stock value. The challenges of retaining active clients and declining net revenue per client continue to pose hurdles for the online personal styling service provider. Investors will closely monitor the company’s efforts to turn the tide and regain market confidence in the quarters to come.
