Stitch Fix, Inc. SFIX reported fourth-quarter fiscal 2025 results, wherein the top and bottom lines beat the Zacks Consensus Estimate. The top line declined from the year-earlier quarter. Meanwhile, the bottom line fared better year over year.
The company’s progress was driven by the successful execution of its transformation strategy, highlighted by enhancements to client experience and product assortment. Investments in AI capabilities, a broader selection of leading brands and the personalized service of its Stylists further strengthened the platform, supporting higher engagement and positioning Stitch Fix for continued growth.
Stitch Fix, Inc. price-consensus-eps-surprise-chart | Stitch Fix, Inc. Quote
SFIX reported an adjusted loss of 7 cents per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 13 cents. The metric was also narrower than the loss of 12 cents incurred in the year-ago quarter.
Stitch Fix recorded net revenues of $311.2 million, which surpassed the Zacks Consensus Estimate of $301 million. However, the metric decreased 2.6% from the year-ago quarter.
The number of active clients engaged in ongoing operations was 2,309,000, marking a year-over-year decline of 7.9%. The average net revenues generated per active client (RPAC) from ongoing operations were $549, representing an increase of 3% from the previous year, surpassing our estimate of $545. This marks the sixth straight quarter of year-over-year revenue per active customer growth, underscoring the strong engagement of clients who are joining and staying with the platform.
Fix average order value (AOV) increased 12% year over year, marking the eighth consecutive quarter of growth. This growth was fueled by a higher number of items per Fix, reflecting greater adoption of larger Fix offerings, as well as a 7.6% year-over-year increase in average unit retail, supported by the introduction of fresh, trend-right merchandise across the assortment.
In the fiscal fourth quarter, this Zacks Rank #3 (Hold) company’s gross profit declined 4.7% to $135.7 million from $142.5 million in the year-ago period. Also, the gross margin decreased 100 basis points (bps) year over year to 43.6%. The year-over-year decrease was primarily attributable to higher transportation costs stemming from carrier rate increases, including those from USPS, as well as a mix shift toward non-apparel categories. We expected the gross profit to decline 7.1% year over year to $132.4 million.
Selling, general and administrative expenses (SG&A) declined 20.3% from $184.4 million in the prior-year quarter to $146.9 million. SG&A expenses, as a percentage of net revenues, were 47.2%, down significantly from 57.7% in the prior-year quarter. We anticipated SG&A expenses to decline 17.2% year over year in the fiscal fourth quarter.
Advertising expense represented 9.5% of revenues in the fourth quarter, up 50 basis points from the prior-year period, reflecting the company’s broader reinvestment in revenues and active client growth while maintaining a disciplined approach to spending.
Stitch Fix reported an adjusted EBITDA of $8.7 million compared with $9.5 million in the year-ago quarter, reflecting its ongoing cost-management discipline. We note that the adjusted EBITDA margin declined 20 bps year over year to 2.8% in the quarter under review.
