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Is It Time For Investors To Buy Shares In Stitch Fix

The world wants to become more efficient, and that includes our wardrobes, which is why Stitch Fix appears to be killing it lately.

Stitch Fix (NASDAQ: SFIX) investors breathed a sigh of relief following a knockout fiscal Q4 earnings report, which helped boost the company’s share price up an impressive 16% last week.

Following a difficult 2021 so far for the fashion subscription service, is this the turning point for Stitch Fix? 

Is it time to invest in Stitch Fix?

With Stitch Fix revealing strong earnings on Tuesday, its share price rose throughout the week. Here were some highlights:

  • Earnings per share of $0.19
  • Revenue grew 19% from last year to $571 million
  • Active clients rose 4.2 million
  • Revenue per customer hit $505

Good results, but why all the excitement?

Well, recently appointed CEO Elizabeth Spaulding has finally rebranded its direct-buy option to ‘Stitch Fix Freestyle’, which significantly increases the total audience that Stitch Fix can reach. The revamped service will allow all clients to buy specific items from the company without ordering a Fix — essentially like any online clothing store, with the added bonus of having all the data necessary to give customers exactly what they want. 

Spaulding was not shy on highlighting the companies ambitions, stating:

“Our vision is to become the global destination for personalized shopping, styling, and inspiration, supporting clients across all categories and occasions.”

So, can Stitch Fix achieve these lofty goals? Investors will need to keep an eye on revenue growth now that subscribers no longer need to order specific boxes of clothing. Already, the company has eased growing fears around slowing growth via last week’s earnings, but as it kicks off fiscal 2022, it will need to keep growth up. 

However, with a top-tier management team leading the charge, a tried and tested business model that operates like a well-oiled machine, and market-leading positions in high-margin, niche products, the future looks bright.

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