Stitch Fix: Transformation strategy drives Q4 revenue growth

Stitch Fix, the online personal styling service, reported its financial results for the fourth quarter and full fiscal year 2025, highlighting a second consecutive quarter of year-over-year revenue growth on an adjusted basis. For the fourth quarter, net revenue was 311.2 million dollars, a 4.4 percent increase when adjusted for the extra week in the prior fiscal year. Full fiscal year 2025 net revenue was 1.27 billion dollars, a 3.7 percent decrease on an adjusted basis.

The company's focus on cost management helped deliver strong profitability metrics, with fourth-quarter adjusted EBITDA at 8.7 million dollars (2.8 percent margin) and full fiscal year adjusted EBITDA at 49.1 million dollars (3.9 percent margin). Net revenue per active client (RPAC) increased by 3 percent to 549 dollars, however, the number of active clients decreased by 7.9 percent to 2.309 million. Fourth-quarter gross margin was 43.6 percent, a 100-basis-point decrease.

CEO Matt Baer stated that the positive momentum was driven by the successful execution of the company's transformation strategy, including improvements to the client experience and assortment.

Looking ahead, the company is leveraging the power of AI, its assortment of brands, and the human connection of its stylists to deliver a client-centric and personalised shopping experience. For the first quarter of fiscal year 2026, Stitch Fix projects net revenue between 333 million dollars and 338 million dollars, representing a year-over-year growth of 4.4 percent to 6 percent. For the full fiscal year 2026, the company expects net revenue between 1.28 billion dollars and 1.33 billion dollars (1 percent to 5 percent growth) and anticipates being free cash flow positive.