Stitch Fix Announces Second Quarter of Fiscal Year 2023 Financial Results: Raises Full Year FY23 Adj. EBITDA Guidance; Announces CFO Transition

March 7, 2023 4:05 PM EST

SAN FRANCISCO, March 07, 2023 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ: SFIX), the trusted online personal stylist, today announced its financial results for the second quarter of fiscal year 2023 ended January 28, 2023.

Stitch Fix Interim CEO Katrina Lake said, “This quarter, we continued to execute on our plan to achieve profitability and preserve liquidity, delivering adjusted EBITDA of $3.8 million, which is at the high end of our guidance range. Looking forward, we will continue to invest in the advanced data science and machine learning capabilities combined with personalized styling expertise that have set us apart for more than a decade. This strategic re-focusing on our styling-first model will deliver clarity to the client experience and drive efficiency in our marketing spend. We’re proud to have helped millions of clients find clothes that make them feel their best, and we’re confident that this path will ensure that we’re attracting long-term clients to Stitch Fix and paving the way for a return to growth.”

Second Quarter Key Metrics and Financial Highlights

  • Net revenue of $412.1 million, a decrease of 20% year over year
  • Active clients of 3,574,000, a decrease of 445,000 or 11% year over year
  • Net revenue per active client (RPAC) of $516, a decrease of 6.0% year over year
  • Net loss of $65.6 million and diluted loss per share of $0.58
  • Adjusted EBITDA of $3.8 million

Key Business Updates

  • Executed restructuring plan and other initiatives to realize our $135 million of cost reduction targets for FY23: raising Full Year FY23 Adj. EBITDA and tightening range to between $0 million and $10 million
  • Operating cash flow for the quarter was $21.1 million and free cash flow for the quarter was positive $15.4 million: our first quarter of positive free cash flow since Q1 of FY22
  • Dan Jedda to step down as CFO to pursue another opportunity: to be succeeded by David Aufderhaar, SVP of Finance, Stitch Fix effective April 3

Financial Outlook

Our financial outlook for the third quarter of fiscal 2023, which ends on April 29, 2023, is as follows:

Net Revenue$385 million - $395 million(22)% - (20)% YoY decline
Adjusted EBITDA$(5) million - $5 million(1)% - 1% margin

For the fiscal year ending July 29, 2023, we expect net revenue to be between $1.625 billion and $1.645 billion, and adjusted EBITDA to be between breakeven and $10 million.

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 other income (expense), net, 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

Katrina Lake, Interim Chief Executive Officer of Stitch Fix, and Dan Jedda, 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. Also joining the call is David Aufderhaar, SVP Finance, Stitch Fix. A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at

To access the call by phone, please register at the following link:

Dial-In Registration:

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

About Stitch Fix, Inc.

Stitch Fix combines the human touch of expert stylists with the precision of advanced data science to make online personal styling accessible to everyone. Stitch Fix helps millions of clients across the United States and United Kingdom find clothing and accessories they love through a unique model that can extend far beyond the closet to define the future of shopping. For more, visit

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 third quarter and full fiscal year of 2023; that we can continue to lead the way in personalization and achieve greater impact in years to come; our ability to achieve our goals of liquidity and profitability; that our cost-cutting measures will allow us to more nimbly execute; our ability to evolve our marketing strategy and diversify into under-penetrated marketing channels; that our client retention and re-engagement strategies will increase engagement and optimize CPAs; that our marketing strategy, combined with our efforts to maximize the client experience and improve retention, will maximize return-on-investment in the short term and set the stage for a return to growth; that our strategies will drive long-term value, enable us to optimize cash flow and profitability in the short term, and position us for an eventual return to growth; that we will responsibly manage our cost structure; our ability to achieve positive adjusted EBITDA and be free cash flow positive in the near term; and that the improvements we have made in our cost structure will allow us to invest in growth as we continue to focus on improving our client experience and that over time, the improved client experience will enable us to grow our net active clients, revenue, and free cash flow. 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; the growth of our market and 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; risks related to our supply chain, sourcing of materials and shipping of merchandise; risks related to international operations; 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 October 29, 2022. These documents are available on the SEC Filings section of the Investor Relations section of our website at: 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 share and per share amounts)

  January 28, 2023 July 30, 2022
Current assets:    
Cash and cash equivalents $138,979  $130,935 
Short-term investments  82,620   82,049 
Inventory, net  158,927   197,251 
Prepaid expenses and other current assets  32,979   39,456 
Income tax receivable  921   27,561 
Total current assets  414,426   477,252 
Long-term investments  2,288   17,713 
Income tax receivable, net of current portion  26,091   26,091 
Property and equipment, net  92,434   103,375 
Operating lease right-of-use assets  119,831   132,179 
Other long-term assets  5,528   7,925 
Total assets $660,598  $764,535 
Liabilities and Stockholders’ Equity    
Current liabilities:    
Accounts payable $104,715  $143,934 
Operating lease liabilities  32,413   29,014 
Accrued liabilities  91,859   94,416 
Gift card liability  12,489   10,551 
Deferred revenue  13,428   14,441 
Other current liabilities  6,045   3,214 
Total current liabilities  260,949   295,570 
Operating lease liabilities, net of current portion  139,644   141,334 
Other long-term liabilities  4,728   4,980 
Total liabilities  405,321   441,884 
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  575,129   522,658 
Accumulated other comprehensive loss  (1,883)  (3,527)
Accumulated deficit  (287,929)  (166,440)
Treasury stock at cost  (30,042)  (30,042)
Total stockholders’ equity  255,277   322,651 
Total liabilities and stockholders’ equity $660,598  $764,535 

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 Six Months Ended
  January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022
Revenue, net $412,118  $516,724  $867,711  $1,097,968 
Cost of goods sold  243,001   283,920   506,833   592,247 
Gross profit  169,117   232,804   360,878   505,721 
Selling, general, and administrative expenses  235,827   263,502   482,718   538,269 
Operating loss  (66,710)  (30,698)  (121,840)  (32,548)
Interest income  706   171   1,479   505 
Other income (expense), net  652   (45)  (632)  (154)
Loss before income taxes  (65,352)  (30,572)  (120,993)  (32,197)
Provision for income taxes  219   340   496   542 
Net loss $(65,571) $(30,912) $(121,489) $(32,739)
Other comprehensive income (loss):        
Change in unrealized gain (loss) on available-for-sale securities, net of tax  941   (654)  755   (969)
Foreign currency translation  2,501   (848)  889   (1,451)
Total other comprehensive income (loss), net of tax  3,442   (1,502)  1,644   (2,420)
Comprehensive loss $(62,129) $(32,414) $(119,845) $(35,159)
Net loss attributable to common stockholders:        
Basic $(65,571) $(30,912) $(121,489) $(32,739)
Diluted $(65,571) $(30,912) $(121,489) $(32,739)
Loss per share attributable to common stockholders:        
Basic $(0.58) $(0.28) $(1.07) $(0.30)
Diluted $(0.58) $(0.28) $(1.07) $(0.30)
Weighted-average shares used to compute loss per share attributable to common stockholders:        
Basic  113,928,081   109,178,086   113,143,991   108,776,998 
Diluted  113,928,081   109,178,086   113,143,991   108,776,998 

Stitch Fix, Inc.Condensed Consolidated Statements of Cash Flow(Unaudited)(In thousands)

  For the Six Months Ended
  January 28, 2023 January 29, 2022
Cash Flows from Operating Activities    
Net loss $(121,489) $(32,739)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Change in inventory reserves  (6,413)  445 
Stock-based compensation expense  57,581   64,713 
Depreciation, amortization, and accretion  22,095   17,374 
Asset impairment  16,874    
Other  1,067   7 
Change in operating assets and liabilities:    
Inventory  44,896   28,100 
Prepaid expenses and other assets  8,938   (5,755)
Income tax receivables  26,640   43 
Operating lease right-of-use assets and liabilities  (111)  4,855 
Accounts payable  (38,678)  51,296 
Accrued liabilities  (3,840)  (4,267)
Deferred revenue  (1,016)  (3,699)
Gift card liability  1,938   3,261 
Other liabilities  2,578   1,298 
Net cash provided by operating activities  11,060   124,932 
Cash Flows from Investing Activities    
Purchases of property and equipment  (11,886)  (30,900)
Purchases of securities available-for-sale  (258)  (77,532)
Sales of securities available-for-sale  4,144   4,690 
Maturities of securities available-for-sale  11,210   76,109 
Net cash provided by (used in) investing activities  3,210   (27,633)
Cash Flows from Financing Activities    
Proceeds from the exercise of stock options, net  154   1,365 
Payments for tax withholdings related to vesting of restricted stock units  (6,969)  (23,372)
Repurchase of common stock     (9,996)
Other  (117)   
Net cash used in financing activities  (6,932)  (32,003)
Net increase in cash and cash equivalents  7,338   65,296 
Effect of exchange rate changes on cash and cash equivalents  706   (1,203)
Cash and cash equivalents at beginning of period  130,935   129,785 
Cash and cash equivalents at end of period $138,979  $193,878 
Supplemental Disclosure    
Cash paid for income taxes $178  $389 
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Purchases of property and equipment included in accounts payable and accrued liabilities $1,430  $3,040 
Capitalized stock-based compensation $3,409  $3,682 
Repurchase of common stock included in accrued liabilities $  $1,000 

Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between companies. We believe free cash flow is an important metric because it represents a measure of how much cash from operations we have available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies.

Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of our non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include:

  • adjusted EBITDA excludes interest income and other income (expense), net, as these items are not components of our core business;
  • adjusted EBITDA does not reflect our provision for income taxes, which may increase or decrease cash available to us;
  • adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
  • adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business; and
  • adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows;
  • free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.

Adjusted EBITDA

We define adjusted EBITDA as net loss excluding interest income, other income (expense), net, provision for income taxes, depreciation and amortization, stock-based compensation expense, and restructuring and other one-time costs. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented:

  For the Three Months Ended For the Six Months Ended
(in thousands) January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022
Net loss $(65,571) $(30,912) $(121,489) $(32,739)
Add (deduct):        
Interest income  (706)  (171)  (1,479)  (505)
Other (income) expense, net  (652)  45   632   154 
Provision for income taxes  219   340   496   542 
Depreciation and amortization  9,879   8,439   19,719   16,179 
Stock-based compensation expense  25,867   32,390   57,581   64,713 
Restructuring and other one-time costs(1)  34,742      40,897    
Adjusted EBITDA $3,778  $10,131  $(3,643) $48,344 

(1) For the three months ended January 28, 2023, restructuring charges were $34.6 million and other one-time costs were $0.1 million. For the six months ended January 28, 2023, restructuring charges were $35.5 million and other one-time costs were $5.4 million in retention bonuses for continuing employees.

Free Cash Flow

We define free cash flow as cash flows provided by (used in) operating activities reduced by purchases of property and equipment that are included in cash flows provided by (used in) investing activities. The following table presents a reconciliation of cash flows provided by operating activities, the most comparable GAAP financial measure, to free cash flow for each of the periods presented:

  For the Three Months Ended For the Six Months Ended
(in thousands) January 28, 2023 January 29, 2022 January 28, 2023 January 29, 2022
Free cash flow reconciliation:        
Cash flows provided by operating activities $21,108  $(16,724) $11,060  $124,932 
Purchases of property and equipment  (5,743)  (14,508)  (11,886)  (30,900)
Free cash flow $15,365  $(31,232) $(826) $94,032 
Cash flows provided by (used in) investing activities $5,467  $(20,096) $3,210  $(27,633)
Cash flows used in financing activities $(3,062) $(18,305) $(6,932) $(32,003)

Operating Metrics

  January 28, 2023 October 29, 2022 July 30, 2022 April 30, 2022 January 29, 2022
Active clients (in thousands) 3,574 3,709 3,795 3,907 4,019

Active Clients

We define an active client as a client who checked out a Fix or was shipped an item via Freestyle in the preceding 52 weeks, measured as of the last day of that period. A client checks out a Fix when she indicates what items she is keeping through our mobile application or on our website. We consider each Women’s, Men’s, or Kids account as a client, even if they share the same household.

Net Revenue per Active Client

We calculate net revenue per active client based on net revenue over the preceding four fiscal quarters divided by the number of active clients, measured as of the last day of the period. Net revenue per active client was $516 and $549 as of January 28, 2023, and January 29, 2022, respectively.

IR Contact:[email protected] PR Contact:[email protected] 


Primary Logo

Source: Stitch Fix, Inc.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Globe Newswire, Press Releases

Related Entities

Earnings, Definitive Agreement