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Summary
- Stitch Fix is an innovative company that offers virtual personal styling service in the US.
- The active client count of the company surpassed the 4 million-mark.
- Stich Fix plans to launch a direct-buy service to allow customers to purchase items individually.
Stocks of Stitch Fix Inc. (NASDAQ:SFIX, SFIX:US) climbed 11 per cent on Tuesday morning, June 8, due to the company's better-than-expected third-quarter fiscal 2021 results. The shares were trading at US$ 64.48 apiece at 11.53 AM EDT on Tuesday, June 8.
Stitch Fix is an innovative company that offers a virtual personal styling service in the US. Using data science and recommendation algorithms, the company sells personalized clothes based on size, style, and the budget of the customer.
In Q3 FY 21, its net revenue was US$ 536 million, representing a growth of 44 per cent year-over-year (YoY). Interestingly, the apparel brand also raised its revenue outlook for the full year and claimed that it will post total revenues between US$ 2.07 billion to US$ 2.08 billion.
Previously, the company had lowered its revenue outlook due to the COVID-19 pandemic. But now it claims that sales could increase by 24 per cent YoY in the fourth quarter of this year, an increase of 2.2 per cent increase from the previous estimate.
Stitch Fix’s active client count surpassed the 4 million-mark in the latest quarter, up 20 per cent YoY. Addressing the stockholders, Stitch Fix President Elizabeth Spaulding said that the company hopes to meet the needs of its customers and expects to increase the number of active clients this year.
In the third-quarter results, Stitch Fix managed to narrow down its loss to US$18.8 million from US$33.9 million in Q3 2020. The company beat analysts' estimate of 27 cent loss per share as its loss per share was 18 cents.
Should You Invest In Stitch Fix (NASDAQ:SFIX) Stock?
Before the fiscal year ends, the company plans to launch a direct-buy service to allow customers to purchase items individually from the company's mobile application. Presently, only subscribers can use this service. This move could help the company to grow sales and reach new customers.
One-year chart of stock performance, volume and moving average exponential of Stitch Fix (Source: EODHD/Others)
The SFIX share prices have returned 163 per cent to its stockholders in the past year and it grew by about 12 per cent year-to-date (YTD).
As per TMX data, the company’s market cap is C$ 4.4 billion and its price-to-book (P/B) ratio is 15.7.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from EODHD/Others.
