Shares of Stitch Fix Inc. fell after hours on Tuesday after the online clothing-selection and styling service offered up a weaker-than-expected sales forecast.
And in the latest executive shake-up for the company, Stitch Fix
SFIX,
said that Dan Jedda would step down as chief financial officer “to pursue another opportunity.” He will be replaced by David Aufderhaar, current senior vice president of finance, on April 3.
For its second quarter, Stitch Fix reported a net loss of $65.6 million, or 58 cents a share, compared with $30.9 million, or 28 cents a share, in the same quarter that ended a year earlier. Revenue fell to $412.1 million, compared with $516.7 million in the prior-year quarter.
Active clients — or users who checked out or bought clothes over the past 52 weeks — fell 11% to 3.57 million.
Analysts polled by FactSet expected Stitch Fix to report a per-share loss of 34 cents, on revenue of $413 million. They expected active clients of 3.6 million.
Executives forecast third-quarter sales of between $385 million and $395 million, compared with FactSet forecasts for $394 million. For its full fiscal year, which ends on July 29, they forecast sales of $1.625 billion to $1.645 billion. Wall Street was expecting $1.647 billion.
Shares fell 4.2% after hours.
The company reported after announcing in January that it would cut salaried positions by 20% and close its Salt Lake City distribution center. At that time, Stitch Fix said that Elizabeth Spaulding was stepping down as chief executive. Katrina Lake — the company’s founder and onetime chief executive — is temporarily replacing Spaulding at the top spot.
Those layoffs followed cuts last year, as Stitch Fix tries to return to profitability. The company has dealt with subscriber losses, steady drop in its stock price, waning e-commerce demand, recession and inflation-wary consumers — along with competition from traditional retailers lobbing markdowns at shoppers.
Spaulding, during Stitch Fix’s quarterly earnings call in December, said that discounting among retailers — who were cutting prices to rid their shelves of unwanted clothing as consumers tried to cover more-expensive essentials like groceries and gas bills — led to lower spending and engagement among Stitch Fix’s own customers.
Stitch Fix, whose stylists ship customers clothing that they can keep or return, has also been trying to grow its “Freestyle” business, which allows users to buy clothing directly from Stitch Fix online based on personalized recommendations. Spaulding, during the call in December, noted more “softness” in the Freestyle segment than expected.
Shares of Stitch Fix have fallen 52.7% over the past 12 months. By comparison, the S&P 500 index
SPX,
has fallen 5% over that time.
