The Earnings Surprise at Stitch Fix May Not Have Been the Biggest News

By Chris Lange Published Dec 7, 4:17PM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The Earnings Surprise at Stitch Fix May Not Have Been the Biggest News — © Pineapple Studio / Getty Images

When Stitch Fix Inc. (NYSE: SFIX) released its fiscal first-quarter financial results after the markets closed on Monday, the firm said that it had $0.09 in earnings per share (EPS) on $490.4 million in revenue. The consensus estimates had called for a net loss of $0.20 per share and $481.17 million in revenue, and the same period of last year reportedly had breakeven earnings on revenue of $444.82 million.

During the most recent quarter, active clients increased 10% year over year to 3.8 million, and net revenue per active client decreased 4% to $467. Deferred revenue came in at $14.96 million, an increase from $13.06 million at the end of last year’s fiscal first quarter.

On the books, the company had $388.3 million in cash, cash equivalents and short-term investments at the end of the quarter, down from $286.5 million at the end of the previous fiscal year.

Management noted that Stitch Fix achieved several multi-year highs, including its highest sequential client addition on record and the highest level of successful first Fixes in the past five years. CEO Katrina Lake said in particular that the firm’s powerful personalization engine is evolving, and innovations in its Fix and direct buy offerings will expand its addressable market, deepen client engagement and grow wallet share over time.

The company offered no guidance in the earnings report. However, analysts expect $0.03 in EPS and $507.21 million in revenue for the fiscal second quarter.

[nativounit]

Separately, the company announced that Dan Jedda would be joining the company as the CFO, effective December 9. Jedda joins the company from Amazon where he was Vice President and CFO for Digital Video (including Amazon Studios), Digital Music, and the Advertising and Corporate Development organizations. He worked at Amazon for 15 years.

Stitch Fix stock closed Monday at $35.83, in a 52-week range of $10.90 to $42.38. The consensus price target is $34.06. Following the announcement, the stock was up about 20% at $42.99 in early trading indications Wednesday.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.