US' Stitch Fix projects revenue of $311-$316 mn in Q3 FY25

For full FY25 ending closest to July 31, 2025, the company anticipates net revenue between $1.225 billion and $1.240 billion, marking a YoY decline of 8.4 per cent to 7.3 per cent, or 6.9 per cent to 5.8 per cent when adjusted for the extra week in fiscal 2024.

Adjusted EBITDA for the year is forecast between $40 million and $47 million, with a margin of 3.3 per cent to 3.8 per cent. The gross margin for both Q3 and FY25 is expected to remain between 44 per cent and 45 per cent, while advertising expenses for the full fiscal are projected to be at the higher end of the previously stated 8 per cent to 9 per cent range.

Financial overview of second quarter (Q2) FY25

The company reported net revenue of $312.1 million in Q2 FY25 ended February 1, 2025, reflecting a 5.5 per cent YoY decline. Gross margin improved by 110 basis points (bps) to 44.5 per cent, driven by higher average order values and improved product margins.

The company reported a net loss of $6.6 million, with a diluted loss per share of $0.05 in Q2. Adjusted EBITDA stood at $15.9 million, with an adjusted EBITDA margin of 5.1 per cent, reflecting continued cost management efforts. Net cash used in operating activities amounted to $16.2 million, while free cash flow was negative $19.4 million for the quarter. The company ended the quarter with $229.8 million in cash, cash equivalents, and investments, with no outstanding debt.

“Our team delivered another strong quarter, once again exceeding our expectations as we further advanced our transformation strategy,” said Matt Baer, chief executive officer (CEO) at Stitch Fix. “Our clients are responding to the improvements we have made to our experience, including the increased newness in our assortment, expanded fix flexibility, and investments in stronger client-stylist relationships. We are encouraged by our progress and remain focused on successfully executing our strategy so we can realise our vision to be the most client-centric and personalised shopping experience.

Fibre2Fashion News Desk (SG)