Stitch Fix (NASDAQ:SFIX) Posts Quarterly Earnings Results, Beats Expectations By $0.03 EPS

Key Points

• Stitch Fix beat estimates, reporting EPS of ($0.02) vs. a ($0.05) consensus and revenue of $341.3M vs. $334.7M, but the company remains unprofitable with a negative net margin of 2.23% and negative ROE of 14.38%.
• Shares fell about 2.3% to $3.38 on heavy volume (~5.0M vs. 2.2M average); the stock has a market cap of $453.6M and an analyst consensus of "Reduce" with an average target of $5.33 after multiple downgrades and price-target cuts.
• Insiders have been net sellers (191,048 shares sold in the last 90 days, insiders own 16.09%), while institutional ownership is high at 71.04% and several hedge funds recently increased positions.

Stitch Fix (NASDAQ:SFIX - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported ($0.02) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.05) by $0.03, FiscalAI reports. The company had revenue of $341.30 million for the quarter, compared to analyst estimates of $334.74 million. Stitch Fix had a negative net margin of 2.23% and a negative return on equity of 14.38%.

Stitch Fix Stock Down 2.3%

Shares of SFIX stock traded down $0.08 during trading hours on Wednesday, hitting $3.38. 5,019,582 shares of the company's stock traded hands, compared to its average volume of 2,200,655. The stock's 50 day simple moving average is $4.38 and its 200 day simple moving average is $4.65. The stock has a market cap of $453.60 million, a PE ratio of -21.13 and a beta of 2.30. Stitch Fix has a 12 month low of $2.60 and a 12 month high of $5.94.

Analyst Upgrades and Downgrades

A number of analysts have weighed in on the stock. UBS Group decreased their target price on shares of Stitch Fix from $6.00 to $4.00 and set a "neutral" rating on the stock in a research note on Tuesday, March 3rd. Telsey Advisory Group reiterated a "market perform" rating and issued a $6.00 price target on shares of Stitch Fix in a research note on Wednesday, March 4th. Zacks Research downgraded Stitch Fix from a "strong-buy" rating to a "hold" rating in a report on Friday, December 5th. Wall Street Zen cut Stitch Fix from a "buy" rating to a "hold" rating in a report on Saturday, January 3rd. Finally, William Blair reiterated a "mixed" rating on shares of Stitch Fix in a research report on Friday. Four investment analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, Stitch Fix presently has an average rating of "Reduce" and an average target price of $5.33.

Insider Buying and Selling

In other Stitch Fix news, Director Katrina Lake sold 8,835 shares of Stitch Fix stock in a transaction dated Monday, February 2nd. The stock was sold at an average price of $5.01, for a total transaction of $44,263.35. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. Also, insider Casey O'connor sold 19,347 shares of the firm's stock in a transaction dated Tuesday, January 27th. The stock was sold at an average price of $5.68, for a total value of $109,890.96. Following the transaction, the insider owned 542,071 shares of the company's stock, valued at $3,078,963.28. This trade represents a 3.45% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 191,048 shares of company stock valued at $1,003,739 over the last 90 days. 16.09% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in SFIX. Arrowstreet Capital Limited Partnership increased its position in shares of Stitch Fix by 302.9% during the third quarter. Arrowstreet Capital Limited Partnership now owns 2,897,171 shares of the company's stock worth $12,603,000 after buying an additional 2,178,156 shares during the period. Marshall Wace LLP lifted its holdings in Stitch Fix by 4,898.1% in the second quarter. Marshall Wace LLP now owns 2,010,034 shares of the company's stock valued at $7,437,000 after buying an additional 1,969,818 shares during the period. Goldman Sachs Group Inc. grew its holdings in Stitch Fix by 73.3% during the 4th quarter. Goldman Sachs Group Inc. now owns 3,664,995 shares of the company's stock worth $19,241,000 after acquiring an additional 1,549,902 shares during the period. Archon Capital Management LLC acquired a new stake in Stitch Fix during the 4th quarter worth about $7,702,000. Finally, Intrinsic Edge Capital Management LLC acquired a new position in shares of Stitch Fix in the 4th quarter valued at about $6,739,000. Institutional investors own 71.04% of the company's stock.

About Stitch Fix

Stitch Fix, Inc, headquartered in San Francisco, California, is a leading online personal styling service that blends data science with human expertise to deliver curated clothing and accessory selections. Founded in 2011 by Katrina Lake, the company pioneered a subscription-based model in which customers receive periodic “Fixes” tailored to their personal style, size and budget. Each shipment arrives with several handpicked items along with styling notes, allowing clients to review, purchase and return pieces at their convenience.

Clients begin by completing an online style profile that captures their measurements, design preferences and lifestyle needs.

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