Stitch Fix’s first earnings report disappoints; shares fall
NEW YORK (AP) — Stitch Fix’s first earnings report as a public company disappointed Wall Street on Tuesday and its shares plunged in after-hours trading.
The online-based clothing styling service also said it expects profit from some of the boxes of clothes it sends customers to decline as it grows into new categories. It said gross margins were already hurt by its newer men’s and plus size clothes, due to rising shipping costs and having fewer products available in distribution centers.
The San Francisco-based company, which has 2.4 million active users, ships shoppers clothing to try on at home before they buy. Customers pay $20 to receive five items and they can ship back whatever they don’t like. They’re charged for anything they keep, minus the $20 fee. The company had its initial public offering a month ago, and its stock is up 65 percent from its IPO price of $15.
Stitch Fix Inc. reported earnings per share of 4 cents in the three months of Oct. 28, missing analyst expectations by a penny, according to FactSet. First-quarter revenue came to $295.6 million. Analysts expected $295 million.
Its shares closed at $24.76 on Tuesday, but fell 11 percent in after-hours trading.