Katrina Lake, founder and CEO of Stitch Fix Inc.
Patrick T. Fallon | Bloomberg | Getty Images
Stitch Fix's shares rose Monday after the company posted surprising earnings and sales growth of 10% year over year.
The share last rose more than 33% after close of trading.
For the first quarter ended October 31, Stitch Fix reported earnings of 9 cents per share on sales of $ 490.4 million, beating estimates for a loss of 20 cents per share on sales of 481.2 million Million dollars according to data from Refinitiv.
The number of active customers rose by 10.2% over the previous year to almost 3.8 million. Stitch Fix defines active customers as those who, in the 52 weeks from the last day of the quarter, have purchased an item directly from the website called a "fix".
"While the apparel industry is currently shrinking, we expect that as our model of personalized discovery and convenience becomes more relevant, we will attract and attract more new customers," the company said in a letter to shareholders.
During the coronavirus pandemic, dozens of retailers have filed for bankruptcy, including J.Crew, Brooks Brothers, and Francesca & # 39; s, and thousands of stores have closed. Fewer consumers visit malls to buy clothes. Many do not need to get dressed for work and other social gatherings severely constrained by this year's health crisis. At the same time, more sales are shifting online.
Given the recent momentum, Stitch Fix expects sales to grow between 20% and 25% in fiscal year 2021.
Last quarter, the company announced that it had a record success rate across its business, which measures the percentage that a given item is purchased by users of the styling service. This means that the algorithmic recommendation engine that is used to "make fixes" for customers gets smarter and fewer items are returned.
Along with the earnings report, she announced the appointment of Dan Jedda, formerly VP and CFO for digital video at Amazon, as CFO effective Wednesday.
At the close of trading on Monday, Stitch Fix shares were up nearly 40% year-to-date, translating into a market cap of $ 3.7 billion.
The full results publication and presentation of Stitch Fix can be found here.