Stitch Fix, Inc. narrowed its loss in the fiscal third quarter ended May 3 while showing its first quarterly sales gain since the second quarter of 2022. The styling service lifted its guidance for the year.

“Stitch Fix delivered strong third-quarter results, marked by our overall return to year-over-year revenue growth,” said CEO Matt Baer. “Our performance, which exceeded expectations, is the direct result of the strength of the Stitch Fix value proposition and the team’s disciplined execution of our strategy. Now in the growth phase of our transformation, we are focused on cementing our role as the retailer of choice for apparel and accessories by consistently delivering the most client-centric and personalized shopping experience.”

Third Quarter Fiscal 2025 key metrics and financial highlights include:

  • Net revenue of $325.0 million, an increase of 0.7 percent year-over-year.
  • Active clients of 2,353,000, a decrease of 18,000, or 0.8 percent, quarter-over-quarter, and a reduction of 280,000, or 10.6 percent, year-over-year.
  • Net revenue per active client (RPAC) of $542, an increase of 3.2 percent year-over-year.
  • Gross margin of 44.2 percent, a decrease of 130 basis points year-over-year, driven primarily by lower product margins.
  • Net loss of $7.4 million and net loss margin of 2.3 percent; diluted loss per share of 6 cents. In the year-ago period, the net loss was $21.3 million, or 18 cents a share.
  • Adjusted EBITDA of $11.0 million and Adjusted EBITDA margin of 3.4 percent, which reflect continued cost management discipline. In the year-ago period, adjusted EBITDA was $6.7 million.
  • Net cash provided by operating activities of $20.5 million and free cash flow of $16.0 million in the third fiscal quarter.
  • Stitch Fix ended the quarter with $242.1 million of cash, cash equivalents and investments and no debt.

Results exceeded Stitch Fix’s guidance, which called for sales in the range of $311 million to $316 million and adjusted EBITDA in the range of $7 million to $10 million.

Financial Outlook
Stitch Fix’s updated financial outlook for the fourth quarter of fiscal 2025, ending August 2, 2025, is as follows:

Previously, guidance called for sales in the range of $1.225 billion to $1.240 billion and adjusted EBITDA between $40 million and $47 million.

Stitch Fix stated that it expects its fourth-quarter gross margin to be at the lower end of the 44 percent to 45 percent range and its full fiscal year 2025 gross margin to be in the middle of that same range.

The company expects full fiscal year 2025 advertising expenses, as a percentage of revenue, to be at the high end of the 8 percent to 9 percent range provided last quarter. Stitch Fix expects to be free cash flow positive for the full year.

Image courtesy Stitch Fix