Shares of Stitch Fix Inc (NASDAQ: SFIX) tanked more than 15% in extended trading after the personal styling service reported disappointing results for its fiscal third quarter.
Notable figures in Stitch Fix Q3 report
Lost $78 million in Q3 versus the year-ago figure of $18.8 millionPer-share loss of 72 cents was much worse than last year’s 18 centsRevenue slid 8.0% to $492.9 million, as per the earnings press releaseConsensus was for 56 cents of per-share loss on $493.3 million in revenueNet revenue per active client (RPAC) slipped 15% in the recent quarter
Future guidance and clients count
For the current quarter, Stitch Fix forecasts its revenue to fall between $485 million and $495 million – the top end of its range matches analysts’ expectations.
Stitch Fix ended the quarter with 3.9 million clients, down 200,000 on a year-over-year basis and below the experts’ forecast of 3.99 million. The stock down 65% is at its all-time low now.
Stitch Fix to cut jobs
Also on Thursday, Stitch Fix said it will lay off 15% of fits salaried staff to reduce costs amidst red hot inflation.
Most of the reductions are in non-technology corporate roles and styling leadership roles. As a result of this decision and other changes, Stitch Fix expects annual cost savings of $40 million to $60 million in fiscal year 2023.
The company also warned demand for certain items was taking a hit.
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