0001628280-26-017247
SEC filingRevenue grew 9.4% YoY driven by higher revenue per active client, despite a 3.5% decline in active clients, improving net loss.
For the three months ended January 31, 2026, Stitch Fix reported revenue of $341.3 million, a 9.4% increase year-over-year. Gross profit rose 7.3% to $148.9 million, though gross margin contracted 90 basis points to 43.6%. The margin compression was driven by higher transportation costs and inventory health management, partially offset by improved product margins. Operating loss improved 47.5% to $4.7 million, benefiting from revenue growth and cost discipline. Net loss from continuing operations narrowed 59.9% to $2.7 million. The improvement was primarily attributable to higher net revenue per active client (up 7.4% to $577), which offset a 3.5% decline in active clients to 2.288 million. Adjusted EBITDA was essentially flat at $15.9 million, representing a margin of 4.7%.
SG&A expenses increased 3.9% to $153.7 million but declined as a percentage of revenue to 45.0% from 47.4% a year ago. The decrease was driven by lower stock-based compensation, partially offset by higher advertising spend. Advertising expense for the quarter was $28.9 million, up from $24.4 million in the prior year.
Stitch Fix operates as a single reporting segment; the MD&A does not provide further segment-level breakdown. The company noted that improvements in net revenue per active client came from higher average order values and an increase in items kept per Fix. Active client decline continued due to client conversion and retention challenges, partially offset by higher engagement among existing clients.
Management expects broader macroeconomic uncertainty and market conditions to negatively impact consumer discretionary spending in the remainder of fiscal 2026. However, they project that positive trends in average order values and items kept per Fix will offset any negative impact from lower active client counts on net revenue. The company remains focused on retaining current clients, attracting new clients, and improving conversion. No specific numeric guidance was provided, but cost discipline and efficiency improvements are expected to continue, with SG&A as a percentage of revenue declining further. Inventory management and merchandise mix will remain areas of focus, with expectations for increased cost of goods sold due to investments in inventory assortment and rising transportation costs.
As of January 31, 2026, Stitch Fix held cash equivalents (money market funds) of $70,695k and total available-for-sale investments of $121,737k, comprising U.S. Treasury securities, corporate bonds, asset-backed securities, and Yankee bonds. The company maintains a $50.0 million revolving credit facility (amended in December 2025, maturing December 2028) with no outstanding borrowings and $33.1 million in excess availability after letters of credit. Current liabilities include a $32.0 million settlement accrual for a securities class action, but this amount is fully covered by insurance receivables recorded in prepaid expenses. Deferred revenue totaled $7,728k, predominantly from upfront styling fees and Style Pass annual fees.
Beyond the credit facility and operating lease liabilities (shown on the balance sheet), the Notes disclose no material purchase commitments. The primary contractual obligation is the settlement of the Securities Class Action for $32.0 million, which is within insurance policy limits and subject to court approval. The company also has indemnification obligations in the ordinary course, but no material costs have been incurred.
Stitch Fix did not repurchase shares or pay dividends during the period. No debt was issued or repaid. Capital expenditures are not detailed in the Notes (only in the cash flow statement), but the company's focus remains on liquidity preservation and operational improvements. Stock-based compensation was $14.4 million for the quarter, with $40.6 million in unrecognized compensation cost expected to be recognized over 1.13 years.
The company operates as a single reportable segment: online personal styling services in the United States. The UK business was classified as discontinued operations in fiscal 2024 and had no activity in the current period. Segment revenue was $341,297k for the three months ended January 31, 2026, with cost of goods sold of $192,352k and significant expenses including advertising ($28,901k) and stock-based compensation ($14,405k). No further geographic or segment-level operating income is disclosed.
The cash flow statement for Stitch Fix, Inc. was not included in the provided document excerpt. Therefore, no cash flow analysis can be performed.