Investors have struggled to judge the earnings potential ahead for Stitch Fix (SFIX -2.82%) lately. The online apparel retailer's stock price had more than tripled at one point in the past year before collapsing to a 40% year-to-date loss heading into its latest Q4 earnings report. Those swings were a reaction to a few dramatic revisions to management's short-term growth forecast.

But the executive team, headed now by CEO Elizabeth Spaulding, led the company to a solid overperformance in the period that ended in late July. Stitch Fix also telegraphed a potentially strong fiscal year ahead for the business. Let's dive right in.

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Stitch Fix is beating targets

The company gained 643,000 new active clients year over year, to land at just under 4.2 million subscribed shoppers. That 18% boost combined with a slight increase in average spending per client to push overall revenue higher by 29%. Back in early June, management forecast a more modest 21% increase.

Besides beating those targets, the sales spike allowed Stitch Fix to significantly outpace its wider 2021 forecast. Sales rose 23% for the year, compared to the 21% increase executives had predicted three months ago.

That annual forecast had shifted over the last nine months -- in both directions -- but Stitch Fix finished the year on a positive note. "These results reflect strong performance across our business, in Women's, Kids, and the U.K.," said Spaulding, who took over the CEO spot from founder Katrina Lake in August.

No shipping stumbles

Investors were worried heading into the report that Stitch Fix might be tripped up by supply-chain issues. Retailing peers across the industry have described soaring transportation costs and an uptick in delivery bottlenecks. These issues harmed the e-commerce business in early 2021, too.

But there's little evidence that Stitch Fix struggled with these problems through the early summer. The positive sales trends imply steady inventory movement, and gross profit margin rose, even reaching an all-time high for the year. These financial wins add weight to management's bullish thesis that involves pushing into new demographics, new markets, and using a direct-buy option to dramatically expand sales.

Looking out to 2022

Spaulding and her team took a cautious approach to their outlook, predicting that sales will rise by at least 15% for the full 2022 year. That forecast may change as soon as next quarter, though, since management predicted that Q1 sales could land anywhere between $560 million and $575 million. The top of that range translates into 17% gains, which would likely mean the initial 2022 forecast was too low.

Sure, there was enough data in this short-term outlook to appease Wall Street bears, given that Stitch Fix is assuming a growth slowdown even as it pushes deeper into the U.K. market and rolls out its direct-buy feature across its U.S. platform.

Yet the business is entering fiscal 2022 with impressive growth and profitability trends. If it maintains this momentum, mainly by supporting user growth and engagement, then the company has a good shot at outperforming expectations for a second straight fiscal year. That's why investors who don't mind holding through a cloudy growth period might consider buying this stock today.