Stitch Fix sales fell 9% as coronavirus delayed orders, sees sales growth ahead as backlog clears

Stitch Fix on Monday reported a quarterly sales decline of 9%, and a wider-than-expected net loss, as its business took a hit from fewer people shopping for clothes during the coronavirus pandemic. 

Chief Executive Katrina Lake said, however, the company expects to return to revenue growth by the fourth quarter. 

The online personal styling service’s shares were recently down about 5% in after-hours trading following the report. 

Here’s how Stitch Fix did during its fiscal third quarter ended May 2: 

• Loss per share: 33 cents 
• Revenue: $371.7 million 

Stitch Fix reported a net loss of $33.9 million, or 33 cents per share, compared with earnings of $7 million, or 7 cents a share, a year ago. 

Revenue fell to $371.7 million from $408.9 million a year ago. 

Stitch Fix said its active client base grew 9% year over year, to 3.4 million users. Lake said net revenue per active user was, meantime, up 6% to $498. The company defines active clients as those people who have checked out a Fix, or bought an item directly from its website, in the preceding 52 weeks from the last day of the quarter. 

Analysts were expecting Stitch Fix to report a loss of 16 cents per share during the fiscal third quarter, on revenue of $406.7 million, according to Refinitiv data. However, disruptions related to coronavirus have made some comparisons difficult to make. 

Stitch Fix — which sells boxes of clothes for people to either pay to keep, or return, on a subscription basis — has trimmed its staff as the Covid-19 crisis has weighed on demand. Earlier this month, the company said it would be laying off 1,400 stylists in California between now and the end of September, or about 18% of its workforce. Stitch Fix has said, in turn, that it plans to eventually hire 2,000 stylists in U.S. locations which have a lower cost of living than cities in California — places like Austin, Texas, or Minneapolis. 

As of Monday’s market close, Stitch Fix shares are down about 2.5% this year. It has a market cap of $2.6 billion. 

Find the full earnings press release here.