- Revenue Growth: Q1 revenue hit $342.1M (+7.3% YoY), surpassing guidance, driven by women's fall sales (19% YoY growth in sweaters/coats) and men's double-digit growth.
- Adjusted EBITDA: Reached $13.4M (4% of revenue), reflecting improved profitability despite gross margin dip to 43.6% (-180 bps due to transportation costs).
- Client Metrics: 2.3M active clients (high end of guidance) with $559 net revenue per client (+5.3% YoY), fueled by higher items per client and new categories.
- Full-Year Guidance: Raised to $1.32B–$1.35B revenue and $38M–$48M adjusted EBITDA, reflecting confidence in market share gains and holiday sales momentum.
- AI & Innovation: Early success with Stitch Fix Vision (AI/visualization tools) and Family Accounts (92% of women's clients gifting), boosting engagement and client LTV (+17% YoY).
Business Segment Performance
Both women's and men's businesses drove the company's growth, with women's seeing a strong start to fall sales, particularly in sweaters, coats, jackets, and vests, which grew 19% year-over-year, while sneakers grew 63%. Men's delivered a second consecutive quarter of double-digit revenue growth. The company is seeing strength across all income segments, driven by increased client engagement and unit sales, rather than inflation.
Operational Highlights and Guidance
Stitch Fix is focused on delivering growth by leveraging its competitive differentiation in data science and AI. The company is encouraged by the early adoption of its consumer-facing AI and visualization tools, Stitch Fix Vision. For Q2, the company expects revenue to be between $335 million and $340 million, and adjusted EBITDA to be between $10 million and $13 million. The company raised its full-year guidance, expecting total revenue to be between $1.32 billion and $1.35 billion, and total adjusted EBITDA to be between $38 and $48 million.
Valuation and Outlook
With a P/S Ratio of 0.52, the market appears to have a relatively modest expectation for Stitch Fix's revenue growth. Analysts estimate next year's revenue growth at 6.2%. Given the company's strong Q1 performance and raised full-year guidance, it is well-positioned to potentially exceed these expectations. However, with an EV/EBITDA ratio of -104.2, the market has high expectations for the company's future profitability. The company's focus on delivering a superior retail experience with convenience, personalization, service, inspiration, and innovation is likely to drive its long-term growth.