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How Stitch Fix Performed in Q4 2018

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Oct. 3 2018, Published 10:21 a.m. ET

Stitch Fix stock fell over 20% after announcing its results

Online retail and personal styling service company Stitch Fix (SFIX) announced its results for the fourth quarter of fiscal 2018 (which ended in July) on October 1. The company’s active users and revenue missed analysts’ estimates, but its adjusted earnings beat expectations.

In the quarter, Stitch Fix generated revenue of $318.3 million, up 23% from the same quarter last year but short of Wall Street’s consensus estimate of $318.6 million.

The company posted net income of $18.3 million, or $0.18 per share, higher than analysts’ estimate of $0.04 per share. For fiscal 2018, the company earned $1.2 billion in net revenue and $44.9 million in net income.

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Stitch Fix’s user base grew less than expected

Meanwhile, the company’s user base grew 25% year-over-year to 2.7 million, but analysts had been expecting over 2.8 million users. The stock fell over 20% in after-hours trading on October 1. Like Netflix (NFLX), investors are more interested in Stitch Fix’s subscriber base growth than its earnings or revenue growth. An online company’s subscriber base is a gauge of its future earnings.

Stitch Fix said that it would be launching Stitch Fix UK, its first-ever market outside the United States, in fall 2019. The company also announced during the release of its fiscal 2018 third-quarter results that it would be launching Stitch Fix Kids.

Despite its fall, the stock is up over 130% since its IPO in October 2017.

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