What Happened?
Shares of personalized clothing company Stitch Fix (NASDAQ: SFIX) fell 16.8% in the morning session after the company reported its second-quarter 2025 financial results, which revealed a drop in revenue and a shrinking active client base.
For its second quarter, the online personal styling service announced that net revenue fell 2.6% from the previous year to $311.2 million. More concerning for investors was the continued decline in its user base, as active clients dropped by 7.9% year-over-year to 2.31 million. This decrease in customers seemed to outweigh the company's positive forecast for the next quarter. Stitch Fix provided revenue guidance with a midpoint of $335.5 million for the third quarter of 2025, which was well above analyst expectations. Despite the strong outlook and a nearly 6% rise in revenue per active client, the shrinking customer base signaled potential long-term challenges that prompted investor concern.
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What Is The Market Telling Us
Stitch Fix’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. But moves this big are rare even for Stitch Fix and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 2.3% after investors bid up the stock ahead of its fourth-quarter earnings results.
The online personal styling company was scheduled to release its financial figures after the market opened. Analysts expected the company to report a quarterly loss of 10 cents per share, which represented a slight increase from the 9-cent loss reported in the same quarter of the previous year.
Stitch Fix is up 6.8% since the beginning of the year, but at $4.67 per share, it is still trading 29.7% below its 52-week high of $6.64 from December 2024. Investors who bought $1,000 worth of Stitch Fix’s shares 5 years ago would now be looking at an investment worth $177.78.
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