Stitch Fix, Inc. has recently released its 10-Q report, revealing a decline in net revenue for the three and nine months ended April 27, 2024, amounting to $322.7 million and $1,017.9 million, respectively. The company reported a net loss from continuing operations of $22.0 million and $83.1 million for the same periods, compared to $18.4 million and $130.0 million for the three and nine months ended April 29, 2023. Stitch Fix, Inc. also saw a decline in active clients, with 2,633,000 as of April 27, 2024, representing a year-over-year decline of 19.9%. The net revenue per active client was $525 as of April 27, 2024, indicating an increase of 1.7% year over year.
The company's business model involves personalized shipments of apparel, shoes, and accessories through its website and mobile application, as well as direct purchases based on personalized assortment recommendations. During the first quarter of fiscal 2024, Stitch Fix, Inc. ceased operations of its UK business, meeting the accounting requirements for reporting it as a discontinued operation.
Stitch Fix, Inc. has been focused on retaining current clients, improving the conversion of new clients, and enhancing the overall client experience for new and existing clients. The company also disclosed restructuring activities, including recording $4.8 million and $21.2 million of additional restructuring charges during the three and nine months ended April 27, 2024, respectively. Additionally, the company is evaluating its right-of-use lease asset associated with its San Francisco headquarters for impairment, expecting to record a non-cash impairment charge in the range of $15 million to $20 million during the three months ending August 3, 2024.
The report also included non-GAAP financial measures, such as Adjusted EBITDA and Free Cash Flow, which the company believes provide additional useful information for evaluating its performance. For the three months ended April 27, 2024, Adjusted EBITDA was $6.68 million, and Free Cash Flow was $9.75 million for the nine months ended April 27, 2024. The company's active clients and net revenue per active client were highlighted as key indicators of its growth and overall business health. However, the company stated that its future results of operations will depend on its ability to successfully navigate current business challenges and the overall macroeconomic environment. The market has reacted to these announcements by moving the company's shares 29.4% to a price of $3.46. For more information, read the company's full 10-Q submission here.
