Stitch Fix (SFIX) Q4 2024 earnings summary

Executive summary

• Delivered Q4 FY24 results at the high end of guidance for both revenue and adjusted EBITDA, reflecting disciplined execution of a multi-phase transformation strategy focused on operational efficiency and client experience enhancements.

• Exited the UK, closed two fulfillment centers, and right-sized corporate headcount, resulting in over $100 million in SG&A savings in FY24; UK business now reported as discontinued operations.

• Launched new client engagement features, expanded private brands, and refreshed brand identity to drive future growth.

• Added two experienced retail leaders to the board to support ongoing transformation.

• Focus remains on strengthening business foundation and reimagining client experience, with a goal to return to revenue growth by end of FY26.

Financial highlights

• FY24 net revenue was $1.34 billion, down 16% year over year; Q4 net revenue was $319.6 million, down 12.4% year over year (18% on a 52-week basis).

• Gross margin for FY24 was 44.3%, up 190 basis points year over year; Q4 gross margin was 44.6%, up 50 basis points year over year.

• Adjusted EBITDA for FY24 was $29.3 million (2.2% margin); Q4 adjusted EBITDA was $9.5 million (3% margin).

• Ended FY24 with $247 million in cash, cash equivalents, and investments, and no debt.

• Free cash flow for FY24 was $14.2 million; Q4 free cash flow was $4.5 million.

Outlook and guidance

• FY25 revenue expected between $1.11 billion and $1.16 billion; adjusted EBITDA between $14 million and $28 million.

• Q1 FY25 revenue expected between $303 million and $310 million; adjusted EBITDA between $5 million and $9 million.

• Gross margin for Q1 and full year FY25 expected at 44%-45%; advertising at 8%-9% of revenue.

• Free cash flow positive for FY25, with some quarterly variability.

• Sequential improvement in revenue and active client trends expected in FY25; return to year-over-year revenue growth and active client growth projected by end of FY26.