Stitch Fix’s meteoric rise is apparently still on an upward trajectory: According to its fiscal first-quarter report, the company broke analysts’ expectations, proving yet again that female-led fashion operations can be big business.
During the quarter, sales for the San Francisco-based personalized styling service jumped 24 percent to $366 million, beating expectations of $358 million, and earnings clocked in at 10 cents a share adjusted instead of the 3 cents expected.
But Wall Street wanted more. Active clients missed the mark, with the company reporting 2.9 million active clients, falling short of analysts’ prediction of 2.95 million. Shares grew as much as 6 percent Monday before the report, but plunged 11 percent in after-market trading.
Even so, active clients still increased 22 percent. The e-commerce outfit credits the reason why customers stick with Stitch Fix to a series of savvy retail moves and partnerships. The company brought in new brands, such as Michael Kors, Bonobos, Converse and Madewell, and expanded its plus-size offerings for women and men, with the latter options going up to 3XL.
“All of our assortment investments are deeply rooted in direct feedback from clients, so we’re confident they’re going to love our new additions,” president and chief operating officer Mike Smith said in a statement.
It is that sort of data and more that differentiates the company. Stitch Fix’s blend of technology and fashion is evident in its deep investments in artificial intelligence and its work with 3,900 part-time stylists. The shipments are filled with machine- and human-curated selections, and the company crunches the data from returns, fit and other preference information.
Its sources of data also appear to be growing. This year the company rolled out a game that allows users to rate merchandise, giving Stitch Fix even more insight into their preferences.
The firm, which has long considered itself a tech company, plays on its own field. At Code Conference, chief executive officer and founder Katrina Lake said she’s never held serious talks with Amazon about an acquisition deal or merger — which is meaningful, considering the 35-year-old once had difficulty appealing to male venture capitalists, as she admitted at NPR’s How I Built This summit.
Now she runs one of the most successful e-commerce fashion start-ups, whose upward rise seemingly has yet to reach its apex.