Can Stitch Fix Sew Together An Upside Earnings Surprise, Or Will It Miss Estimates For The Fourth Quarter In A Row?

Stitch Fix Inc SFIX is scheduled to report fiscal second-quarter results Tuesday after the bell. Despite being up more than 50% since the start of the year, Stitch Fix shares are still down nearly 55% over a one-year period. 

We've stitched together some clues and come up with an idea of what investors can expect after the close. 

What To Know: Stitch Fix is expected to report a second-quarter loss of 32 cents per share. Analysts expect the online personal styling company to turn in revenue of $393.57 million, according to estimates from Benzinga Pro.

Stitch Fix has missed estimates on both the top and bottom line for three consecutive quarters, which doesn't bode well for the company given that its stock is trading significantly higher than where it was last quarter. 

In the company's most recent quarterly report, Stitch Fix made note of the "difficult macro environment," however the company said it made significant progress on its goals and even raised its fiscal year 2023 adjusted EBITDA forecast.

The company also said that it was positioning itself to achieve profitability in the near term, which could mean an upside earnings surprise is on the horizon.

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Taking a step back and looking at the company's quarterly expectations, Stitch Fix didn't dress up the fact that it anticipates revenue falling around 20% on a year-over-year basis.

Less than a month after reporting fiscal first-quarter results, CEO Elizabeth Spaulding stepped down from her role, clearing the way for founder and former CEO Katrina Lake to return to the helm.

It's possible Lake could have steered the company in the right direction in recent months, however it's unlikely to be seen in the numbers this quarter given some of the commentary around the company's "ambitious transformation." Lake also said in a letter to employees that she was committed to getting the company "on a path" to achieve its mission and vision.

Stitch Fix laId out plans to create a "leaner, more nimble organization" in an effort to set the company up for a return to profitability. But just how soon is the turnaround expected to take? Investors will want to watch for any updates on improved profitability. 

Considering the Street's lowered expectations, a top-line beat looks achievable. Analysts are expecting the company to report its weakest revenue results since the beginning of 2019.

The bar is set relatively low. Analysts that have come out with updates in 2023 have price targets on the stock ranging from $4 to $5 per share.

Related Link: Analyst Ratings for Stitch Fix

SFIX Price Action: Stitch Fix has a 52-week high of $12.64 and a 52-week low of $2.63.

The stock was down 6.24% at $4.74 at the time of writing, according to Benzinga Pro.

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