Stitch Fix Stock Earnings Reports

Stitch Fix reported a return to year-over-year revenue growth in Q3 FY25, with net revenue of $325M and adjusted EBITDA of $11M (3.4% margin). Key operational drivers were AOV growth (+10% YoY, seventh consecutive quarter of AOV expansion), higher items per Fix, improved keep rates and AUR. The company cited success from its transformation strategy—particularly larger Fix options (up to 8 items), themed Fixes, better assortment (notably athleisure and footwear) and tighter stylist + AI integration—which helped Freestyle and Men's lines grow and drove two consecutive quarters of new client growth. Net active clients were 2.4M (down 10.6% YoY, -0.8% QoQ), while revenue per active client was $542 (+3.2% YoY). Gross margin was 44.2% (-130 bps YoY) due to assortment investments; contribution margin remained healthy (north of 30% for the fifth consecutive quarter). Advertising was 10.2% of revenue as the company reinvests in growth; inventory was $114.4M and turns improved. Cash was $242M, no debt, and Q3 free cash flow was $16M. Management raised FY25 guidance: revenue $1.254B–$1.259B and adjusted EBITDA $43M–$47M, with Q4 revenue guided to $298M–$303M and Q4 adjusted EBITDA $3M–$7M. They expect Q4 gross margin toward the low end of the 44%–45% range and full-year advertising at the high end of 8%–9%. Risks include tariff-driven cost pressure (expected to be more meaningful in FY26), macro uncertainty and ongoing active-client declines, though management believes its private brands, multi-brand sourcing flexibility, data/AI and operational improvements position the company to gain share.