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Stitch Fix, Inc., the leading online personal styling service, has announced its financial results for the fourth quarter and full fiscal year 2024, which ended on August 3, 2024. The fiscal year included 53 weeks, with the additional week impacting the quarterly results. The company's CEO, Matt Baer, highlighted the disciplined execution of their transformation strategy and expressed optimism about future growth.
For the fourth quarter of fiscal 2024, Stitch Fix reported net revenue of USD319.6 million, representing a 12.4% decrease year-over-year. When adjusted for the additional week, the year-over-year decline was 18.3%. Despite these challenges, the gross margin improved to 44.6%, up 50 basis points from the previous year, reflecting better transportation leverage.
Stitch Fix experienced a net loss of USD35.7 million, resulting in a diluted loss per share of USD0.29. However, the company maintained a focus on cost management, achieving an adjusted EBITDA of USD9.5 million. The fourth quarter also saw a positive free cash flow of USD4.5 million. Stitch Fix ended the quarter with USD247 million in cash, cash equivalents, and investments, boasting no debt.
For the full fiscal year 2024, Stitch Fix reported net revenue of USD1.34 billion, a 16.0% decrease year-over-year, or 17.4% when adjusted for the extra week. The active client base totaled 2.51 million, a decrease of 125,000 or 4.7% quarter-over-quarter, and a 19.6% decline year-over-year, signaling the challenges faced in client retention.
However, revenue per active client (RPAC) increased by 4.5%, reaching USD533, demonstrating that existing clients are spending more despite the overall decline in active clientele. The gross margin for the year was reported at 44.3%, while the company incurred a net loss of USD118.9 million, translating to a diluted loss per share of USD0.99. Adjusted EBITDA for the full year was USD29.3 million, with free cash flow at USD14.2 million.
Baer emphasized the ongoing transformation at Stitch Fix, stating, “We are executing our transformation strategy with discipline and, during the fourth quarter, we delivered results at the high end of our guidance on both the top and bottom line.” He acknowledged the efforts of the Stitch Fix team and noted their progress in strengthening the company's foundation and reimagining the client experience.
Despite the current challenges, Baer expressed confidence in Stitch Fix’s direction, stating that the company is on track to return to revenue growth by the end of fiscal 2026. The decision to cease operations in the UK has also been reflected in the financial statements, with the UK business reported as a discontinued operation.
Stitch Fix’s fiscal 2024 results illustrate the complexities of navigating a transforming business landscape. While the decline in revenue and active clients presents challenges, the improvements in gross margin and revenue per active client offer signs of resilience. As the company continues to focus on its transformation strategy and client experience, stakeholders remain hopeful for a turnaround in the coming years. With a strong cash position and no debt, Stitch Fix is well-positioned to implement its strategic initiatives and regain momentum in the competitive online retail market.
