Why Stitch Fix Stock Is Trading Higher Wednesday

Stitch Fix Inc SFIX shares are trading higher Wednesday after the company reported better-than-expected financial results.

What Happened: Stitch Fix said fiscal third-quarter revenue decreased 20% year-over-year to $394.91 million, which beat the consensus estimate of $388.94 million, according to Benzinga Pro.

The company reported a quarterly loss of 19 cents per share, which beat analyst estimates for a loss of 30 cents per share. 

Active clients fell by 431,000 (11%) year-over-year to 3.476 million. Net revenue per client decreased 9% year-over-year. 

"We continue to focus on delivering profitability and preserving cash flow, and I'm proud of how far we've come. This quarter we delivered adjusted EBITDA of $10.1 million, exceeding our guidance range and significantly expanding our free cash flow," said Katrina Lake, interim CEO of Stitch Fix.

Stitch Fix expects fourth-quarter revenue to be between $365 million and $375 million. Fourth-quarter adjusted EBITDA is expected to be flat to $10 million.

The company said it identified an opportunity to optimize its operations while enhancing the client experience in the third quarter. Stitch Fix plans to continue to focus on ways to drive efficiencies across the business.

Following the company's quarterly results, Telsey Advisory Group analyst Dana Telsey reiterated Stitch Fix with a Market Perform rating and a price target of  $5.

See Also: US Stocks Set To Open Flat As Uncertainty Prevails: Analyst Says 'Makes Sense To Be A Bit Careful Here'

SFIX Price Action: Stitch Fix shares were up 29.1% at $4.75 at the time of publication, according to Benzinga Pro.

Photo: Pexels from Pixabay.