By Levi Sumagaysay
Stitch Fix Inc. shares plunged after hours Tuesday after issuing guidance below expectations, citing an evolution in its business and continued port congestion and supply-chain issues.
Stitch Fix /zigman2/quotes/208173073/composite SFIX +11.05% reported an increase in active clients, better-than-expected fiscal first-quarter revenue and a narrower loss, but its shares sank 18% in extended trading after rising more than 4.6% in the regular session to close at $24.97.
The company, which sells clothing through subscriptions and more, is undergoing what it calls a long-term transition as it expands its business beyond subscriptions. Chief Executive Elizabeth Spaulding said on the company’s earnings call that the company is in a “major learning phase.”
Meanwhile, Chief Financial Officer Dan Jedda said on the call that the company has been experiencing shipping delays of one to four weeks, and that he expected that to continue in the second quarter and beyond.
Stitch Fix reported a first-quarter net loss of $1.8 million, or 2 cents a share, compared with net income of $9.5 million, or 9 cents a share, in the year-ago period. Adjusted Ebitda was $38.2 million. Revenue rose to $581.2 million from $490.4 million in the year-ago quarter.
Analysts surveyed by FactSet had forecast a net loss of 14 cents a share on revenue of $570.8 million, and adjusted Ebitda of $17.5 million.
Stitch Fix expects second-quarter revenue of $505 million to $520 million, and adjusted Ebitda of between negative-$5 million and $5 million. Analysts had forecast a loss of 24 cents a share on revenue of $585 million, and adjusted Ebitda of $5.5 million.
The company also lowered its full-year 2022 guidance — its fiscal year ends July 30 — saying it expects revenue growth at a high single-digit rate and adjusted Ebitda margin to be between 1% and 2%.
Shares of Stitch Fix have declined nearly 57% year to date, while the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.28% has risen about 25% so far this year.