Stitch Fix: The Worries Are Multiplying

Nov. 09, 2022 12:57 PM ETStitch Fix, Inc. (SFIX)5 Comments
Gary Alexander profile picture
Gary Alexander
25.32K Followers

Summary

  • Stitch Fix, already down ~80% year to date, continues to hover around year-to-date lows on little hope for a turnaround.
  • The company expects revenue declines to decelerate to -20% y/y in fiscal Q1.
  • Losses are piling up as well, as Stitch Fix faces margin pressures and can't cut staff faster than its revenue declines.
  • With liquidity also declining and capital markets tight, Stitch Fix may be in quite a difficult situation.

Woman choosing sweater on rack against white background, closeup

Liudmila Chernetska/iStock via Getty Images

For the most part, I view the current tech correction as a temporary situation. The majority of software and internet companies are seeing setbacks from lower enterprise and consumer spending, but the bulk of the YTD declines

Chart
Data by YCharts

Stitch Fix key metrics

Stitch Fix key metrics (Stitch Fix Q4 earnings deck)

Stitch Fix outlook

Stitch Fix outlook (Stitch Fix Q4 earnings deck)

Stitch Fix adjusted EBITDA

Stitch Fix adjusted EBITDA (Stitch Fix Q4 earnings deck)

Stitch Fix balance sheet snapshot

Stitch Fix balance sheet snapshot (Stitch Fix Q4 earnings deck)

This article was written by

Gary Alexander profile picture
25.32K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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