Buy SFIX?
Read management/analysts’ comments on quarterly reports
It would make sense to keep it on the watch-list for the time being and wait for further updates before buying/selling the stock. A clearer picture should emerge before the next earnings release. Meanwhile, experts believe Stitch Fix’s long-term prospects are intact and predict double-digit growth this year.
Unique Model
With its disruptive business model, the company redefined fashion retail by offering personalized styling supported by advanced technology. The unique approach drives demand growth across all business segments, including Kids’, Women’s, and the U.K., which gives the company an advantage over rivals. Its addressable market expanded further after the launch of Stich Fix Freestyle in August this year, which allows customers to make direct purchases.
Elizabeth Spaulding, who took over as Stich Fix’s CEO a few months ago, said, “Our vision is to become the global destination for personalized shopping, styling and inspiration, supporting clients across all categories and occasions. In a world where authentic human touch and the ability to know me matters more than ever, we help clients to build confidence in discovering items and looks that they otherwise would not have considered. Our continued success serving clients in the U.S., as well as the U.K., also gives us conviction in our opportunity to build this ecosystem on a global scale.”
Strong Q4
The company returned to profitability in the fourth quarter of fiscal 2021, after staying in the negative territory in the trailing two quarters. Net revenues climbed 29% annually to $571.2 million and topped the market’s projection. That translated into earnings of $0.19 per share, which marked an improvement from last year’s loss of $0.44 per share. The bottom-line topped expectations in every quarter during the fiscal year. Encouraged by the solid outcome, the management is currently projecting around 15% revenue growth for the first quarter and fiscal 2022.
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Stitch Fix’s shares gained about 16% since Tuesday’s earnings announcement and maintained the uptrend throughout Wednesday and closed the session sharply higher. The stock has gained about 58% in the past twelve months.