Stitch Fix Announces Fourth Quarter and Full Fiscal Year 2024 Financial Results
SAN FRANCISCO, Sept. 24, 2024 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ:SFIX), the leading online personal styling service, today announced its financial results for the fourth quarter and full fiscal year 2024, ended August 3, 2024. Fiscal 2024 included 53 weeks, with the additional week occurring in the fourth quarter.
"We are executing our transformation strategy with discipline and, during the fourth quarter, we delivered results at the high end of our guidance on both the top and bottom line," said Matt Baer, Chief Executive Officer, Stitch Fix. "I am proud of the Stitch Fix team's efforts this past fiscal year and encouraged by the progress we have already made to strengthen the foundation of our business and reimagine our client experience. While there is a lot of work still to do, I am confident we are on the right path to continue to improve the trajectory of our business which includes returning to revenue growth by the end of FY26."
During the first quarter of fiscal 2024, we ceased operations of our UK business and met the accounting requirements for reporting the UK business as a discontinued operation. Accordingly, our unaudited condensed consolidated financial statements reflect the results of the UK business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures below relate to our continuing operations.
Fourth Quarter Fiscal 2024 Key Metrics and Financial Highlights
Net revenue of $319.6 million, a decrease of 12.4% year-over-year, or a decrease of 18.3% year-over-year adjusted for the impact of the extra week in Q4'24.
Gross margin of 44.6%, an increase of 50 basis points year-over-year, which reflects improved transportation leverage.
Net loss of $35.7 million and diluted loss per share of $0.29.
Adjusted EBITDA of $9.5 million, which reflects continued cost management discipline.
Free cash flow was $4.5 million in the fourth fiscal quarter.
We ended the quarter with $247.0 million of cash, cash equivalents, and investments; and no debt.
Full Year Fiscal 2024 Key Metrics and Financial Highlights
Net revenue of $1.34 billion, a decrease of 16.0% year-over-year, or a decrease of 17.4% year-over-year adjusted for the impact of the extra week in 2024.
Active clients of 2,508,000, a decrease of 125,000, or 4.7%, quarter-over-quarter; and a decrease of 613,000, or 19.6%, year-over-year.
Net revenue per active client ("RPAC") of $533, an increase of 4.5% year-over-year.
Gross margin of 44.3%.
Net loss of $118.9 million and diluted loss per share of $0.99.
Adjusted EBITDA of $29.3 million.
Free cash flow was $14.2 million for the full fiscal year.
Financial Outlook
Our financial outlook for the first quarter of fiscal 2025 ending November 2, 2024, is as follows:
Q1 2025
Net Revenue
$303 million - $310 million
(17)% - (15)% YoY
Adjusted EBITDA
$5 million - $9 million
1.7% - 2.9% margin
Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to July 31. The fiscal year 2025 is a 52-week year and the fiscal year 2024 is a 53-week year, with the extra week occurring in the fourth quarter ending August 3, 2024.
Our financial outlook for fiscal year 2025 is as follows:
Fiscal Year 2025
Net Revenue
$1.11 billion - $1.16 billion
(17)% - (13)% YoY
(16)% - (12)% YoY adjusted to a 52-week period(1)
Adjusted EBITDA
$14 million - $28 million
1.3% - 2.4% margin
(1) Full fiscal year 2024 net revenue from continuing operations has been adjusted to remove the impact of the 53rd week for year-over-year comparative purposes.
Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) because it does not provide an outlook for GAAP net income (loss) due to the uncertainty and potential variability of restructuring and other one-time costs, net other income (expense), provision for income taxes, and stock-based compensation expense, which are reconciling items between Adjusted EBITDA and GAAP net income (loss). Because Stitch Fix cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" below.
Conference Call and Webcast Information
Matt Baer, Chief Executive Officer of Stitch Fix, and David Aufderhaar, Chief Financial Officer of Stitch Fix, will host a conference call at 2:00 p.m. Pacific Time today to discuss the Company's financial results and outlook. A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at https://investors.stitchfix.com.
To access the call by phone, please register at the following link:
Dial-In Registration: https://register.vevent.com/register/BI5cb9532858bb46068cf7d1fe2aea4df8
Upon registration, telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.stitchfix.com.
About Stitch Fix, Inc.
Stitch Fix (NASDAQ:SFIX) is the leading online personal styling service that helps people discover the styles they will love that fit perfectly so they always look - and feel - their best. Few things are more personal than getting dressed, but finding clothing that fits and looks great can be a challenge. Stitch Fix solves that problem. By pairing expert stylists with best-in-class AI and recommendation algorithms, the company leverages its assortment of exclusive and national brands to meet each client's individual tastes and needs, making it convenient for clients to express their personal style without having to spend hours in stores or sifting through endless choices online. Stitch Fix, which was founded in 2011, is headquartered in San Francisco. For more information, please visit https://www.stitchfix.com.
Forward-Looking Statements
This press release, the related conference call, and webcast contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward looking, including but not limited to statements regarding our expectations for future financial performance, including our profitability and long-term targets; guidance on financial results and metrics for the first quarter and full fiscal year of 2025; that the execution of our strategy and priorities will enable us to achieve long-term, sustainable, and profitable growth and positive free cash flow; our expectation to return to revenue growth by the end of fiscal year 2026 and achieve a quarter-over-quarter increase in active clients during fiscal year 2026; that the changes we have made to our client experience will help us acquire, retain, and reactivate highly engaged clients over time and better serve our clients in the future; that the introduction of StyleFile will be a valuable tool that will drive meaningful engagement and client conversion; that our actions to make Stylists more visible to our clients will deepen relationships between clients and Stylists and increase client engagement; that the changes we are making to the traditional Fix model will increase revenue; our expectations to triple the amount of newness as a percentage of our broader assortment by the end of fiscal year 2025; that our refreshed brand identity will deepen connections and engagement with our clients; that the introduction of new private label brands will help us better meet the trend needs of our current clients and will extend the Stitch Fix experience to new client segments; and our expectations regarding warehouse costs, transportation costs, gross margin, inventory levels, and advertising spend. These statements involve substantial risks and uncertainties, including risks and uncertainties related to the current macroeconomic environment; our ability to generate sufficient net revenue to offset our costs; consumer behavior; our ability to acquire, engage, and retain clients; our ability to provide offerings and services that achieve market acceptance; our data science and technology, Stylists, operations, marketing initiatives, and other key strategic areas; risks related to our inventory levels and management; risks related to our supply chain, sourcing of materials and shipping of merchandise; our ability to forecast our future operating results; and other risks described in the filings we make with the SEC. Further information on these and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in filings we make with the SEC from time to time, including in the section titled "Risk Factors" in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 27, 2024. These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.stitchfix.com. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management's beliefs and assumptions only as of the date such statements are made.
Stitch Fix, Inc.Condensed Consolidated Balance Sheets(Unaudited)(In thousands, except per share amounts)
August 3, 2024
July 29, 2023
Assets
Current assets:
Cash and cash equivalents
$
162,862
$
239,437
Short-term investments
84,106
18,161
Inventory, net
97,903
130,548
Prepaid expenses and other current assets
21,839
27,692
Current assets, discontinued operations
—
9,623
Total current assets
366,710
425,461
Property and equipment, net
51,517
79,757
Operating lease right-of-use assets
63,780
104,533
Other long-term assets
4,857
2,681
Long-term assets, discontinued operations
—
2,046
Total assets
$
486,864
$
614,478
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
87,058
$
96,730
Operating lease liabilities
21,817
28,210
Accrued liabilities
73,007
69,893
Gift card liability
6,749
10,328
Deferred revenue
9,217
11,366
Other current liabilities
5,201
8,802
Current liabilities, discontinued operations
502
12,782
Total current liabilities
203,551
238,111
Operating lease liabilities, net of current portion
95,685
125,418
Other long-term liabilities
606
3,639
Total liabilities
299,842
367,168
Stockholders' equity:
Class A common stock, $0.00002 par value
1
1
Class B common stock, $0.00002 par value
1
1
Additional paid-in capital
684,650
615,236
Accumulated other comprehensive income (loss)
(335
)
527
Accumulated deficit
(467,253
)
(338,413
)
Treasury stock at cost
(30,042
)
(30,042
)
Total stockholders' equity
187,022
247,310
Total liabilities and stockholders' equity
$
486,864
$
614,478
Stitch Fix, Inc.Condensed Consolidated Statements of Operations and Comprehensive Loss(Unaudited) (In thousands, except share and per share amounts)
For the Three Months Ended
For the Twelve Months Ended
August 3, 2024
July 29, 2023
August 3, 2024
July 29, 2023
Revenue, net
$
319,550
$
364,739
$
1,337,468
$
1,592,521
Cost of goods sold
177,073
203,867
745,430
916,908
Gross profit
142,477
160,872
592,038
675,613
Gross margin
44.6
%
44.1
%
