Stitch Fix Q3 FY2025 – Revenue Up 0.7%, Active Clients Down 280K

By Ahmed Jameison • Wednesday, June 11 06:04 • Permanent Link

Stitch Fix, Inc. (NASDAQ: SFIX) has released its financial results for the third quarter of fiscal year 2025, ended May 3, 2025. The company reported a net revenue of $325.0 million, representing a 0.7% increase year-over-year.

However, the number of active clients decreased by 18,000 quarter-over-quarter, and by 280,000 year-over-year, standing at 2,353,000. Despite this, the net revenue per active client ("RPAC") increased by 3.2% year-over-year to $542.

The gross margin was reported at 44.2%, reflecting a decrease of 130 basis points year-over-year, primarily driven by lower product margins.

Stitch Fix reported a net loss of $7.4 million, with a net loss margin of 2.3% and diluted loss per share of $0.06. The adjusted EBITDA was $11.0 million, with an adjusted EBITDA margin of 3.4%, demonstrating continued cost management discipline.

The company ended the quarter with $242.1 million of cash, cash equivalents, and investments, and no debt. It also reported net cash provided by operating activities of $20.5 million and free cash flow of $16.0 million in the third fiscal quarter.

Looking ahead, Stitch Fix provided its updated financial outlook for the fourth quarter of fiscal 2025, expecting a net revenue of $298 million * $303 million, representing a decrease of 6.7% * 5.2% year-over-year. The adjusted EBITDA for the fourth quarter is projected to be $3 million * $7 million, with a margin of 1.0% * 2.3%.

For the full fiscal year 2025, the company expects a net revenue of $1.254 billion * $1.259 billion, reflecting a decrease of 6.2% * 5.9% year-over-year. The adjusted EBITDA for the full fiscal year is estimated to be $43 million * $47 million, with a margin of 3.5% * 3.8%.

Stitch Fix has also provided some guidance for the gross margin and advertising expense for the fourth quarter and full fiscal year 2025, as well as its expectation to be free cash flow positive for the full year.

It's important to note that Stitch Fix has not reconciled its adjusted EBITDA outlook to GAAP net income (loss) or free cash flow outlook to net cash flows used in operating activities from continuing operations due to the uncertainty and potential variability of certain costs and expenses.

Today the company's shares have moved -1.48% to a price of $4.66. For the full picture, make sure to review Stitch Fix's 8-K report.

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