Stitch Fix Outlook Shows Slowdown After a Year of Solid Growth

by · WWD
Matt BaerCourtesy Photo

When Matt Baer stepped in as chief executive officer of Stitch Fix Inc., there was a lot of turnaround work to do at the styling service — a pioneer in personalization that was not able to take advantage of its tech-forward positioning.

Baer’s methodical approach to sharpen the business and give clients more flexibility in how they shop has paid off nicely so far. Revenues for the fiscal year ended Aug. 1 bounced back 6.4 percent to $1.35 billion — returning the top line to growth a year ahead of schedule.

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But now, the CEO is going to have to prove his turnaround can press on even with an outlook for the current fiscal year that predicts outright sales declines or, at the very least, a much slower growth rate.

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Stitch Fix on Wednesday forecast that revenues this year would come in at $1.31 billion to $1.36 billion, a range running from a decline of 2.8 percent to a gain of 0.9 percent.

The company cited two primary factors that would drag down fix volume in the first quarter, including a timing change that pulled some fixes back into the fourth quarter as well as “an unintended change made to the post-checkout offer flow in August that limited the number of clients eligible to request another Fix, which has been corrected.”

“Those two factors are time bound and they are behind us,” Baer told WWD. “We’re now focused on returning to revenue growth and sustaining that revenue growth going forward and confident in our ability to do so.

“The other thing to take into consideration is a continually more challenging macro environment and consumer headwinds that are impacting all discretionary spend and all of retail. The way that manifests for us is nearly exclusively within our ability to acquire new clients as cost effectively as we otherwise would.”

Stitch Fix’s active client count tallied 2.3 million in the fourth quarter, a slip of 1.4 percent from a year earlier. Net losses tallied $2.1 million as revenues gained 4.2 percent to $324.4 million.

With per-customer math that works well for the company as revenue per active client went up 7.8 percent to $592 for the quarter.

“Our core client remains resilient despite the tougher macro environment,” Baer said. “If you look at our business with our current clients and you look at our business across all income cohorts, it actually remains quite strong for us. The headline is the awesome progress that we made, that’s demonstrated by our overall fiscal results in 2026.

“From an active client count perspective, we continue to improve that trend,” he said. “We continue to outperform the total U.S. apparel footwear and accessories market. And I think ultimately we’re continuing to strengthen our position as our client’s retailer of choice. And we know that because we have the highest revenue per active client in the history of the company.”

The CEO attributed that to larger fixes, the option to turn a freestyle e-commerce purchase into a fix, the addition of family accounts and changes to the assortment, which have the company leaning in on categories that were historically under-represented in its offering, like activewear and athleisure, footwear and accessories.