Stitch Fix’s Q3 FY25: Revenue Goes Up, Client Base Declines

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Stitch Fix, Inc., the leading online personal styling service in the US, announced a return to year-over-year revenue growth for the third quarter (Q3) of fiscal 2025 (FY25), which concluded on May 3, 2025. The net revenue increased by 0.7 percent to reach $325 million, surpassing expectations as the company implemented its transformation strategy.

However, despite the revenue increase, Stitch Fix experienced a decline in its active client base, which dropped by 10.6 percent year-over-year to 2.35 million. The net revenue per active client rose by 3.2 percent to $542. Nevertheless, the gross margin decreased by 130 basis points to 44.2 percent, primarily due to reduced product margins. The company reported a net loss of $7.4 million, equating to $0.06 per diluted share, as noted in a media release.

The adjusted EBITDA was reported at $11 million, with a margin of 3.4 percent, while the free cash flow amounted to $16 million. At the end of the quarter, Stitch Fix had $242.1 million in cash and no debt.

“Stitch Fix delivered strong third quarter results, marked by our overall return to year-over-year revenue growth,” said Matt Baer, CEO of Stitch Fix. “Our performance, which exceeded expectations, is the direct result of the strength of the Stitch Fix value proposition and the team’s disciplined execution of our strategy. Now in the growth phase of our transformation, we are focused on cementing our role as the retailer of choice for apparel and accessories by consistently delivering the most client-centric and personalised shopping experience.”

Looking forward, Stitch Fix projects Q4 revenue to be between $298 million and $303 million, representing a decline of 5.2–6.7 percent year-over-year, or flat when adjusting for the additional week in FY24. The anticipated full-year net revenue is expected to fall between $1.254 billion and $1.259 billion, a decrease of 5.9–6.2 percent (or 4.3–4.7 percent on a 52-week adjusted basis). The company forecasts adjusted EBITDA for FY25 to be between $43 million and $47 million, while remaining free cash flow positive.

Stitch Fix expects its full-year gross margin to be in the mid-range of 44 to 45 percent, with advertising expenses projected at the higher end of 8–9 percent of revenue.

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