Shares of Stitch Fix, an e-commerce company, are down 92% from all-time highs but remain vulnerable to macroeconomic shocks like inflation.
Stitch Fix (NASDAQ: SFIX) is a company that went public back in November 2017. It has significantly underperformed the broader markets in this period as SFIX stock is down 43% since its initial public offer.
However, Stitch Fix's stock rose from $15.15 per share in November 2017 to $97 per share in January 2021. Its currently trading at $8.63, valuing the company at $935 million by market cap.
Let's see if SFIX stock can move higher after this week's upcoming quarterly results.
When is Stitch Fix's earnings date?
Stitch Fix is scheduled to report its earnings for fiscal Q3 of 2022 (ended in April) on Thursday, June 9th at 5:00 pm Eastern Time.
How can I listen to Stitch Fix's earnings call?
To listen to the call and access the earnings transcript, as well as the shareholder's letter and the company's financial statements for the quarter, all you need to do is go to Stitch Fix's investor relations page.
What to expect from Stitch Fix's Q3 earnings?
Stitch Fix is the leading online personal styling service globally. It aims to integrate data science with human judgment to deliver apparel, shoes, and accessories personalized to the taste, budget, and lifestyle of its clients.
Stitch Fix has increased sales from $1.22 billion in fiscal 2018 to $2.1 billion in fiscal 2021, which ended last July. In Q3 of fiscal 2022, analysts expect the company to report revenue of $439.26 million with an adjusted loss of $0.55 per share. Stitch Fix reported revenue of $535.58 million and an adjusted loss of $0.18 per share in the year-ago period.
Analysts expect Stitch Fix's sales to decline by a marginal 0.6% year-over-year in fiscal 2022 to $2.09 billion, while its adjusted loss per share might widen to $1.34 compared to $0.08 in fiscal 2021.
Stitch Fix estimates online sales in the U.S. and the U.K. across verticals such as footwear, apparel, and accessories to increase from $167.3 billion in 2021 to $258.3 billion in 2026, providing it with enough opportunities to expand its top-line going forward.
Despite these attractive projections, Stitch Fix is struggling to fuel its revenue growth consistently. For example, in Q2 of fiscal 2022, its new-user count grew by just 4%, compared to 11% in Q1.
In addition to macro-economic headwinds, Stitch Fix is wrestling with changes to Apple's privacy policies, making it difficult to target and acquire potential users. So, Stitch Fix decided to reduce its marketing spending, which has led to a revenue decline for the company.
While Stitch Fix is unable to acquire and onboard new users at a rapid pace, it will have to ensure existing customers are increasing spending on the platform. In Q2, existing customers spent $549 in the last 12 months, which was a new record for the company. Stitch Fix ended Q2 with 4.01 million clients, which was lower compared to the 4.16 million clients reported at the end of fiscal 2021.
SFIX stock is valued at 0.44 times forward sales which might seem really cheap. However, the company is expected to report a revenue decline in fiscal 2022 and widening losses for the year. Stitch Fix's free cash flow metrics have also deteriorated from $47.76 million in fiscal 2019 to -$31.2 million in Q2 driving the stock price lower in the last 15-months.
Wall Street expects SFIX stock to rise by more than 40% in the next 12-months.
