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What happened
Actions of Stitch Fix (NASDAQ: SFIX) were up today after the online style service outpaced its own forecasts and analyst estimates in its second quarter earnings report, easing concerns from critics regarding the growth in the number of 39; users. The company has also raised its forecasts for the year.
As a result, the stock recovered a portion of its losses on the sale from its previous two reports and its shares rose 28.5% at 10:51 am EDT Tuesday.
Source of the image: Stitch Fix.
So what
Stitch Fix said revenue for the quarter was up 25.1 percent to $ 370.3 million, exceeding the company's forecast of $ 360 million to $ 368 million. millions of dollars, and the consensus of analysts, to 364.8 million dollars.
Active customer growth continued to slow, reaching 2.96 million, up 18.1%, but the company offset a 6.1% increase in revenue per active customer, which reached $ 463.
On the cost side, gross margin increased by 110 basis points to 44.1% as a result of better inventory management and lower sales on sale. However, commercial, general and administrative expenses increased from 37.8% of sales to 39.9% as the company hired in the field of data science and engineering and was preparing for its launch in the United Kingdom during the fourth quarter of its financial year. Advertising costs, which are included in selling, general and administrative expenses, decreased 20 basis points to 6.5% of sales.
Adjusted EBITDA increased from $ 18.2 million to $ 19.2 million, exceeding management's guidance of $ 8 million to $ 12 million. With a lower tax rate, adjusted earnings per share increased from $ 0.07 to $ 0.12, much better than estimates at $ 0.05.
CEO Katrina Lake seemed optimistic: "Since becoming a publicly traded company, we have had six consecutive quarters of growth above 20%, demonstrating our ability to drive consistent sales performance. 3 million people around the world, and stay focused on the pleasure of satisfying our existing customers and extending our reach. "
Now what
The company also raised its guidance for the full year, expecting revenue of $ 1.53 billion to $ 1.56 billion, a 25% to 27% increase from 1.49 to $ 1.53 billion. Management also recognized adjusted EBITDA of $ 33 million to $ 43 million, better than its previous guidance of $ 20 million to $ 40 million.
Although concerns about the long-term growth of its users remain, the strong revenue growth of the quarter shows that the Stitch Fix model resonates with its customers and that its performance is improving. Although investors keep an eye on the growth in the number of users, the latest results should give them confidence that the company is on the right track.
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