2023-03-08 14:50:08 ET
A mixed earnings result and soft sales guidance offered on Tuesday evening sent shares of Stitch Fix ( NASDAQ: SFIX ) sliding.
The company posted a wider than expected loss for the fiscal third quarter despite rising above revenue expectations. Additionally, a steep decline in active customers raised concerns on the trajectory of the company.
On Wednesday, analysts were not eager to jump to the company’s defense.
“There's not a lot of silver linings here. They're bleeding customers, revenues are sharply negative (and worsening on a multi-year stack basis), gross margins are under heavy pressure (-410bps YoY) and there's uncertainty in the C-suite,” Wedbush analyst Tom Nikic wrote in a reaction note on Thursday. “And though cost cuts are driving an improvement in EBITDA this year, it's hard to cost cut one's way to prosperity, and it could require reinvestment to reinvigorate the top line.”
While Stifel analyst Lamont Williams indicated a return to the core business and away from Freestyle is a wise move, it will take time to win back customers after shedding clients for 5 consecutive quarters. He maintained a Neutral rating on the name, awaiting more visibility on the planned turnaround.
Shares of Stitch Fix ( SFIX ) slid 7.65% in afternoon trading on Wednesday.
Read the earnings call transcript .
For further details see:
Stitch Fix stock slumps as analysts voice disappointment with earnings results