What's happening
Shares of Stitch Fix (SFIX 3.46%) were down sharply for a second day after the company reported disappointing quarterly results and slashed its guidance for the full fiscal year. As of 2:30 p.m. EDT, Stitch Fix shares were down about 12.3% from Tuesday's closing price.
So what
Stitch Fix reported mixed results for the quarter ended Feb. 1 after the market closed on Monday. Of note, revenue of $451.8 million fell short of Wall Street estimates, suggesting that the company's growth trajectory may be flattening a bit.
Image source: Stitch Fix.
But there were larger concerns about Stitch Fix's guidance. The company cut its revenue guidance for the full fiscal year by about $10 billion, implying a full-year top-line growth rate of 17% to 19% instead of the 23% to 25% in its earlier guidance.
Now what
Stitch Fix is an online company and might seem likely to avoid the growing virus-driven concerns affecting its brick-and-mortar counterparts. But the company is concerned that the fast-moving outbreak of the COVID-19 virus could affect consumer demand, particularly if the U.S. economy tips into recession. Today's trading suggests that investors share those concerns, as well.
