0001628280-26-042504
SEC filingRevenue grew 4.7% YoY to $340.3M driven by higher net revenue per active client, offsetting active client decline; net loss narrowed to $1.5M.
For the three months ended May 2, 2026, net revenue rose 4.7% YoY to $340.3 million, driven by a 6.6% increase in net revenue per active client, which reached $578. This improvement was fueled by higher average order values and more items kept per Fix. Active clients declined 1.9% to 2,309,000, reflecting ongoing challenges in client acquisition and retention. Gross margin contracted 50 basis points to 43.7%, primarily due to elevated transportation costs, partially offset by enhanced inventory health management. Selling, general and administrative expenses (SG&A) as a percentage of revenue improved to 44.9% from 47.2%, driven by lower compensation and benefits. Operating loss narrowed to $4.0 million from $9.7 million, a 58.6% improvement. Net loss from continuing operations decreased to $1.5 million from $7.4 million, a 79.3% reduction. Adjusted EBITDA increased to $13.2 million from $11.0 million, while free cash flow for the nine-month period rose to $15.4 million from $6.5 million.
Stitch Fix operates as a single reportable segment. The core business model—combining AI-driven recommendations with personal stylists—drove improvements in client engagement through higher average order values and retention of items per Fix. The decline in active clients was attributed to conversion and retention difficulties, but the increase in net revenue per client partially mitigated the impact. Merchandise mix shifts, including a focus on Owned Private Label Brands, contributed to margin dynamics, though the benefit was overshadowed by cost pressures.
Management expects broader macroeconomic uncertainty to continue pressuring 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 the negative impact of lower active client counts on net revenue. The company remains focused on retaining existing clients, attracting new ones, and improving conversion rates. No specific numerical guidance was provided. Capital allocation priorities include continued investment in technology and AI, as well as share repurchases under the existing $150 million program (with $104.9 million remaining as of May 2, 2026).
The Notes disclose a strong liquidity position with no debt. The $50 million revolving credit facility remains undrawn, with excess availability of $33.1 million as of May 2, 2026. Marketable securities (available-for-sale) totaled $142.1 million at fair value, composed primarily of corporate bonds and U.S. Treasury securities. Deferred revenue of $8.3 million and a gift card liability of $6.3 million represent contractual obligations to clients. The company has a $32.0 million accrual for a securities class action settlement, but this amount is fully covered by insurance, as recorded in prepaid expenses and other current assets.
No material purchase commitments are disclosed in the Notes. The only significant contingency is the securities class action settlement, which is within insurance limits and subject to final court approval. Other derivative actions are stayed or dismissed, with no additional accruals. The company has no operating lease obligations beyond those already recognized (total lease liabilities of $74.5 million, with $21.3 million current).
The Board authorized a $150 million share repurchase program in 2022. During the nine months ended May 2, 2026, the company repurchased 4,519,841 shares, leaving $104.9 million remaining authorization. No dividends were declared or paid. No debt was issued or repaid; the credit facility remains undrawn. Capital expenditures are not explicitly disclosed in the Notes (the cash flow statement shows $14.6 million for the nine months, but that is outside the Notes section).
Stitch Fix operates as a single reportable segment. For the three months ended May 2, 2026, revenue was $340.3 million, cost of goods sold was $191.4 million, and net loss from continuing operations was $(1.5 million). The segment disclosure includes advertising expense of $34.9 million, stock-based compensation of $11.1 million, and depreciation of $6.1 million. No geographic breakdown is provided, as the UK business was discontinued in fiscal 2024.
No cash flow data available.