What happened

Shares of Stitch Fix (SFIX 4.72%) fell 37.5% in December, according to data from S&P Global Market Intelligence, after the personal styling specialist announced strong quarterly results but left investors worried with lower-than-expected active user growth.

But Stitch Fix's drop wasn't a straight line. The stock first plunged more than 20% on Dec. 11, 2018, after Stitch Fix's fiscal first-quarter 2019 report hit the wires, then rebounded the following day as some investors scooped it up on the pullback, before finally continued to slide along with the broader market in the subsequent weeks.

Stock market chart in black and white with a yellow arrow indicating losses


So what

Make no mistake, Stitch Fix's headline numbers were strong. Revenue climbed 24% year over year to $366.2 million, while adjusted earnings per share soared 250% to $0.10. Analysts, on average, were modeling earnings of only $0.03 per share on revenue of $358 million.

However, Stitch Fix also told investors that its number of active clients increased 22% year over year, to 2.93 million, falling just barely short of Wall Street's models for 2.95 million. 

Still, Stitch Fix COO Mike Smith insisted the company was "proud" of its performance, adding, "We continue to demonstrate our ability to deliver growth and exceptional client experiences across all of our categories."

Now what

The market may not have loved Stitch Fix's latest showing, but I lean toward agreeing that Stitch Fix had every right to boast about the continued strength of its underlying business. For patient, long-term investors, I believe the pullback should ultimately prove to be an attractive buying opportunity.

Check out the latest Stitch Fix earnings call transcript.