Stitch Fix (SFIX) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue grew 7.3% year-over-year to $342.1 million, outpacing the U.S. apparel market and driven by higher average order values and improved client engagement through AI and stylist expertise.

• Adjusted EBITDA was $13.4 million (3.9% margin), exceeding expectations, while net loss was $6.4 million with a diluted loss per share of $0.05.

• Active clients ended at 2.307 million, down 5.2% year-over-year, but net revenue per active client rose 5.3% to $559.

• Ended Q1 with $244.2 million in cash, cash equivalents, and investments, and no debt.

• Strategic focus on AI, client engagement, and expanded assortment drove higher AOV, market share gains, and improved client metrics.

Financial highlights

• Gross margin was 43.6%, down 180 basis points year-over-year, but within FY26 guidance.

• Free cash flow was $5.6 million, down from $9.9 million in the prior year.

• SG&A as a percentage of revenue was 46.2%, down from 48.2% year-over-year.

• Cash and short-term investments totaled $244.2 million; no debt.

• Inventory was $141.5 million, up 18.8% year-over-year.

Outlook and guidance

• FY26 revenue expected between $1.32 and $1.35 billion; Adjusted EBITDA between $38 and $48 million; free cash flow positive for the year.

• Q2 FY26 revenue guidance: $335–$340 million; Adjusted EBITDA: $10–$13 million.

• Full-year gross margin expected at 43%–44%; advertising costs at 9%–10% of revenue.

• Guidance reflects headwinds from consumer confidence, inflation, and tougher AOV comps in the back half.

• Liquidity and credit facility expected to cover working capital and capex needs for at least 12 months.