Stitch Fix Stock Surges: Shares Rise Nearly 50%

Investment in Stitch Fix, the online personalized styling service for clothing, is increasing following the company’s announcement of financial results that surpassed forecasts.

The company’s stock price rose by $16.86, representing a 47.05% increase, during the initial hours of trading on the Nasdaq.

Stitch Fix announced first-quarter earnings of 9 cents per share, covering the period ending October 31. The company generated $490.4 million in revenue, exceeding analyst predictions of $481.2 million and a projected loss of 20 cents per share, as detailed in CNBC’s report of Refinitiv data.

“During the first quarter, we achieved a net revenue of $490 million, demonstrating a 10% increase compared to the same period last year, and expanded our active customer base to approximately 3.8 million, also a 10% year-over-year increase,” stated Katrina Lake, the company’s CEO. “We are encouraged by the positive trends in our business, optimistic about future performance, and anticipate full-year growth between 20% and 25%.”

While conventional retail businesses are facing challenges due to measures implemented to control the COVID-19 pandemic, online retail is gaining a larger portion of the overall market. Stitch Fix is benefiting from this trend.

“At a time when many established physical stores continue to report significant year-over-year revenue declines, we added more than 240,000 net new active customers compared to the previous quarter, and we’ve returned to double-digit year-over-year growth in active customers, a trend we anticipate will continue throughout this fiscal year,” Lake explained in a communication to investors.