Shares of Stitch Fix (SFIX +2.98%) popped on Thursday after the online personal styling service delivered quarterly results that exceeded investors' projections.
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Customer gains and strengthening financials
Stitch Fix's ret revenue rose 4.7% year over year to $340 million in its fiscal 2026 third quarter, which ended on May 2.
At 2.3 million, the clothing curator's active clients declined by 1.9% year over year but increased by 0.9% compared to the second quarter.
Additionally, Stitch Fix's net revenue per active client climbed 6.6% compared to the prior-year period to $578.
"Over the last several years, we have significantly enhanced the breadth and depth of our assortment to more fully meet client needs and capture more wallet share," CEO Matt Baer said during a conference call with analysts. "Our strategy has been anchored on optimizing our portfolio of market brands, investing in our own private brands, and expanding into new categories to better offer head-to-toe outfitting."
NASDAQ: SFIX
Key Data Points
All told, the company's net loss narrowed to $1.5 million, or $0.01 per share, from $7.4 million, or $0.06 per share, in the year-ago quarter.
Better still, Stitch Fix generated $6.5 million in free cash flow -- and its earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 20% to $13.2 million.
Management raised the midpoint of its guidance
Based on these strong results, Stitch Fix now projects full-year revenue of roughly $1.35 billion, adjusted EBITDA of $49 million to $52 million, and positive free cash flow in fiscal 2026.
This improved cash generation -- combined with a debt-free balance sheet with $229 million in cash reserves -- is enabling Stitch Fix to buy back its own stock, with 4.5 million shares repurchased in the third quarter alone. These repurchases should support further stock price appreciation if Stitch Fix can hit its earnings targets.
