Stitch Fix (SFIX:NSD) witnessed a rise in pre-market trading on Wednesday as the online personal styling service company reported a narrower loss in fiscal Q3. The company’s loss per share decreased to $0.19 compared to $0.72 in the same period last year, surpassing analysts’ expectations of a Q3 loss of $0.31 per SFIX stock share.
While Stitch Fix’s revenues experienced a year-over-year decline of 20% in Q3, reaching $394.9 million, the figure still exceeded consensus estimates of $388.75 million. However, it’s worth noting that the company’s active client base saw a decrease of 11% year-over-year, ending Q3 at 3.45 million.
SFIX Stock-Future Outlook:
Looking ahead, the management anticipates fourth-quarter revenues to range between $365 million and $375 million, representing a drop of 22% to 24%. On an adjusted EBITDA basis, Stitch Fix expects to break even or reach a metric of $10 million in Q4.
SFIX Stock-Analyst Consensus:
Analysts maintain a Hold consensus rating on SFIX stock, with 11 Holds and one Sell recommendation. While the company has shown signs of improvement with narrowed losses and better-than-expected revenues in Q3, investors and analysts remain cautious about its future prospects.
Stitch Fix’s ability to manage losses and exceed revenue expectations indicates progress toward financial stability. However, challenges such as the decline in the active client base warrant further analysis and monitoring. As the company moves forward, it will be important to observe its strategies for customer acquisition and retention, along with efforts to diversify revenue streams.
The Takeaway:
Despite the current cautious sentiment among analysts, Stitch Fix’s performance in Q3 provides a glimmer of hope for investors. With a continued focus on improving key metrics and addressing market challenges, the company has the potential to regain momentum and strengthen its position in the online personal styling industry.
