Online personal styling service Stitch Fix, Inc. reported net revenue of $342.1 million in the fiscal 2026 first quarter ended November 1, an increase of 7.3 percent year-over-year (y/y).

The company reported 2.31 million active clients in the fiscal first quarter, a 0.1 percent quarter-over-quarter (q/q) decrease and a 5.2 percent year-over-year decrease.

Net revenue per active client totaled $559, up 5.3 percent year-over-year.

“Q1 was a strong start to the fiscal year. We accelerated year-over-year revenue growth to 7.3 percent and captured considerable market share gains,” said CEO Matt Baer. “As a result of the successful execution of our transformation strategy, we are increasingly becoming the retailer of choice for more of our clients’ apparel and accessories needs. We are doing this by leveraging the latest in GenAI technology, the expertise of our human Stylists, and our assortment of leading brands to deliver the most client-centric and personalized shopping experience.”

Profitability and Expenses
Gross profit was $149.3 million in fiscal Q1, an increase of 3.1 percent y/y, or gross margin of 43.6 percent of revenue, a decrease of 180 basis points year-over-year.

The company posted a net loss of $6.4 million and a net loss margin of 1.9 percent. Diluted loss per share of 5 cents per share.

Adjusted EBITDA equaled $13.4 million, or an Adjusted EBITDA margin of 3.9 percent.

Net cash provided by operating activities totaled $10.9 million in Q1, and free cash flow was $5.6 million.

Cash, cash equivalents, and investments were $244.2 million, and the company had no debt.

Financial Outlook
The company’s fiscal year is a 52-week or 53-week period ending on the Saturday closest to July 31. The fiscal years 2025 and 2026 are 52-week years.

Stitch Fix’s financial outlook for the second quarter of fiscal 2026, ending January 31, 2026, is as follows:

Stitch Fix’s updated financial outlook for fiscal year 2026 is as follows:

The company said it expects the full fiscal year 2026 gross margin to be between 43 percent and 44 percent. It expects the full fiscal year 2026 advertising expense as a percentage of revenue to be between 9 percent and 10 percent. It also expects to be free cash flow positive for the full year.

Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) or free cash flow outlook to net cash flows used in operating activities from continuing operations.

Discontinued Operations
During the first quarter of fiscal 2024, Stitch Fix ceased operations of its U.K. business and met the accounting requirements to report the U.K. business as a discontinued operation.

Accordingly, its unaudited condensed consolidated financial statements reflect the results of the UK business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures relate to its continuing operations. 

Image courtesy Stitch Fix, Inc.