Stitch Fix (NASDAQ:SFIX) is slated to report its results for the first quarter of fiscal 2021, which ended Oct. 31, after the market close on Monday, Dec. 7. A conference call is scheduled for that day at 5 p.m. EST.

Many investors are probably feeling apprehensive about the online personalized apparel retailer's report. The company has missed Wall Street's earnings expectations in the last two quarters, or since the COVID-19 pandemic officially began. Moreover, while last quarter it beat analysts' modest top-line consensus estimate, it fell significantly short of revenue expectations in the two prior quarters. Shares dropped 25.2%, 5.5%, and 8.8% the day after the release of results for Q2, Q3, and Q4 of fiscal 2020, respectively.

With this type of post-earnings release track record, it's not surprising that some investors -- or most likely, short-term traders -- decided to take some profits off the table before the upcoming release. Shares fell more than 6% on Friday. Still, the stock has performed well so far this year, up 38.6% through Friday, compared with the S&P 500's 16.5% return over this period. 

Here's what to watch in the company's upcoming report. 

Close-up of a Stitch Fix package leaning against a bright yellow door surrounded by white trim.

Image source: Stitch Fix.

Key numbers

Metric Fiscal Q1 2020 Result Stitch Fix's Fiscal Q1 2021 General Guidance  Wall Street's Fiscal Q1 2021 Consensus Estimate Wall Street's Projected Change YOY

Revenue

$444.8 million

Mid- to high-single-digit growth.

$481.2 million

8.2%

Earnings per share (EPS)

$0.00

N/A

($0.20) N/A. Result expected to go from break-even to negative.

Data sources: Stitch Fix and Yahoo! Finance. Fiscal Q1 period ended on Oct. 31. YOY = year over year. Note: Stitch Fix doesn't provide earnings guidance. 

Stitch Fix's year-over-year sales growth has slowed considerably in the last two quarters because the pandemic has depressed overall demand for apparel and other consumer discretionary products. People who are sheltering in place don't need many new clothes. That said, the company has gained market share because of the crisis-driven shift to online shopping.

Its year-over-year earnings had been declining before the pandemic, driven by its investing in growth initiatives.

For context, last quarter, Stitch Fix's sales rose 2.6% year over year to $443.4 million, exceeding the $414.3 million Wall Street had expected. Sales grew 11% when adjusted for the difference in the quarter's length relative to the year-ago period. Net loss landed at $44.5 million, or $0.44 per share, compared with net income of $7.2 million, or $0.07 per share, in the year-ago period. Wall Street was looking for a loss per share of $0.16, so the company missed this expectation by a wide margin.

Key customer metrics

Investors should continue to focus on the two key metrics driving revenue growth: total number of active clients and average annual revenue per client. Stitch Fix defines an "active client" as a customer who has bought at least one item from it in the last 52 weeks. 

Last quarter, the number of active clients increased 8.8% year over year to 3.5 million. Adjusting for the one less week in the quarter relative to the year-ago period, average net annual revenue per client rose about 2% year over year to $486. 

Guidance for fiscal Q2 (the holiday quarter)

Management's outlook will be especially important since the market looks ahead. It seems probable that management won't provide official revenue guidance for the fiscal second quarter, but offer a ballpark revenue growth expectation, as it did last quarter.

For fiscal Q2, Wall Street is modeling for revenue to rise 12% year over year to $507.2 million, and expects EPS to drop 73% to $0.03.

Can Stitch Fix grow revenue 12% year over year and also turn a profit in the holiday quarter? Absent the recent good news on the COVID-19 vaccine front, I'd feel wary of the Street's expectations, given the company's generally underwhelming performance this year. However, the great news from Pfizer and its partner BioNTech and  from Moderna could notably boost consumer optimism. This, in turn, could drive many folks to start spending more money on clothing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.