Stitch Fix cuts jobs, revenue forecast miss sends shares plunging
The company forecast net revenue between $485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million
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Stitch Fix Inc is cutting around 15% of salaried positions as part of a plan to return to profitability. That some to 330 positions.
Shares of the online personalized styling service firm plunged 16% after hours.
The Stitch Fix logo on a smartphone arranged in Hastings-on-Hudson, New York. (Photographer: Tiffany Hagler-Geard/Bloomberg via Getty Images / Getty Images)
Revenue in the April-ended quarter fell 8% from a year earlier.
The company forecasted net revenue between $485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million, according to Refinitiv data.
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The majority of the jobs are in non-technology corporate and styling leadership roles, according to Chief Executive Officer Elizabeth Spaulding.
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"[The decision] was one we needed to make to position ourselves for profitable growth... There will be tough choices along the way, and this is one of those," Spaulding wrote in a message to Stitch Fix employees.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SFIX | STITCH FIX INC. | 3.37 | +0.12 | +3.69% |
The job cuts and other changes are expected to save $40 million to $60 million in costs in fiscal 2023. The company will also incur charges of around $15 million to $20 million in the fourth quarter.
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The company lost $78 million in its fiscal third quarter. On a per-share basis, the San Francisco-based company said it had a loss of 72 cents, which was larger than the expected loss of 57 cents per share.
Reuters contributed to this report.