Stitch Fix Jumps in After Hours Trading after Beating on Earnings

Shares of Stitch Fix were exploding in after-hours trading on Wednesday as the company reported stellar third quarter financial results.

The stock rose 26% as Wall Street digested the results.

For the third quarter ended April 27, Stitch Fix reported earnings per share of 7 cents while analysts expected a loss of 3 cents. Revenue at $408.9 million was ahead of the $394.9 million that was expected. This is now the seventh consecutive quarter that the company has seen more than 20% growth in revenue.

Stitch Fix said that the company’s net income dropped to $7 million, or 7 cents a share, from $9.5 million, or 9 cents a share, a year ago.

The company also said that it had 3.1 million active clients in the third quarter, representing an increase of over 17% YOY.

“These results demonstrate our ability to attract new clients and to serve our existing clients well,” Stitch Fix founder and CEO Katrina Lake stated. “The continued strength of our Women’s category and the growth of our Men’s category give us even more confidence in our ability to scale new categories and geographies. As I look forward, I’m excited about the opportunities ahead to delight even more clients around the world.”

In a letter to shareholders, Stitch Fix has said that it used predictive algorithms to better reach female clients “who possess attributes that drive long-term relationships.”

Looking ahead, the company has upped its outlook for revenue for 2019 to a range of $1.57 billion to $1.58 billion. Previously the company had expected $1.53 billion to $1.56 billion. For the fourth quarter, revenue will be between
$425 million and $435 million.

Adjusted EBITDA will be between $5 million and $10 million in the fourth quarter and between $38 million and $43 million for the year.

Shares of the stock have seen gains of 38% this year so far.

Disclaimer: We have no position in Stitch Fix Inc. (NASDAQ: SFIX) and have not been compensated for this article.