Stitch Fix Reports 5.5% Revenue Decline and Improved Net Loss in Q2 Fiscal 2025

Stitch Fix, Inc. reported a decline in financial performance for the second quarter of fiscal 2025, with net revenue of $312.1 million, down 5.5% from $330.4 million in the same period last year. For the first half of the fiscal year, revenue decreased by 9.2% to $630.9 million compared to $695.2 million in the prior year. The company also recorded a net loss from continuing operations of $6.6 million for the quarter, a significant improvement from a loss of $35.0 million in the same quarter of the previous year. For the six-month period, the net loss was $12.9 million, compared to $61.1 million in the prior year.

The decrease in revenue was primarily attributed to a 15.5% decline in active clients, which fell to approximately 2.37 million from 2.81 million year-over-year. This decline reflects ongoing challenges in client acquisition and retention, which the company anticipates will continue to negatively impact revenue throughout fiscal 2025. Despite the drop in client numbers, Stitch Fix reported an increase in net revenue per active client, which rose to $537 from $515, indicating improved engagement among existing customers.

In terms of operational efficiency, Stitch Fix has made strides in reducing selling, general, and administrative expenses (SG&A), which decreased by 18.5% to $147.9 million for the quarter, down from $181.5 million a year earlier. This reduction is largely due to lower compensation and benefits expenses, including stock-based compensation, as well as decreased facility costs resulting from restructuring efforts. The company’s operating loss also improved significantly, decreasing by 76.3% to $9.0 million for the quarter.

Stitch Fix has been actively restructuring its operations to enhance efficiency and reduce costs. The company has implemented a restructuring plan that has included workforce reductions and the closure of certain fulfillment centers. As of February 1, 2025, the company reported total assets of $472.6 million, down from $486.9 million at the end of the previous fiscal year, while total liabilities decreased to $274.9 million from $299.8 million. The company’s cash and cash equivalents stood at $113.2 million, down from $162.9 million, reflecting ongoing investments in inventory and operational adjustments.

Looking ahead, Stitch Fix remains focused on improving client retention and enhancing the overall customer experience. The company is also evaluating its marketing strategies to better position itself for profitability amid a challenging macroeconomic environment. The management anticipates that the ongoing efforts to streamline operations and improve client engagement will be crucial for navigating the current business landscape and achieving future growth.