Stitch Fix (SFIX 0.47%) reported the results of its fiscal third quarter (ended May 1) after the market closed Monday, and investors cheered the better-than-expected performance, driving share up as much as 17% in after-hours trading.
Net revenue of $535.6 million grew 44% year over year, easily surpassing the 39% growth at the high end of management's forecast, while also eclipsing the 12% growth it generated in Q2. The bottom line also got a boost, as its loss per share of $0.18 improved from a loss of $0.33 in the prior-year quarter. For context, analysts' consensus estimates were calling for revenue of $510.6 million, resulting in a loss of $0.27.
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The results appear to corroborate management's assertion last quarter that carrier and client delays, though temporary, were responsible for Stitch Fix's softer-than-anticipated performance in the second quarter.
Stitch Fix also reported robust customer growth, with an increase of 689,000, bringing the total to 4.1 million active clients, a 20% year-over-year increase. The company said that first-time and reactivated clients drove Stitch Fix's second highest quarter-over-quarter customer additions on record. Net revenue per client of $481 slipped 3% year over year, as it lapped strong growth at the start of the global pandemic.
The company expanded its Fix Preview to all its U.K. customers and half of U.S. customers. The new tool gives clients the chance to view prospective items and work with a stylist to tweak them before they ship. Roughly 75% of clients opted into the new service, resulting in higher outcomes and increased order values.
Stitch Fix also raised its full-year forecast to roughly 21% year-over-year revenue growth at the midpoint of its guidance, solidly ahead of the 19% growth analysts expected.
