Stitch Fix Reports Q2 2025 Earnings: Key Takeaways

Stitch Fix's Q2 2025 results exceeded expectations, showing positive momentum in revenue and client engagement. The company forecasts further growth due to strategic improvements and increased client satisfaction.

Date: 12-03-2025

AI Rating: 6

Earnings Performance Overview
Stitch Fix reported second-quarter revenue of $312.1 million, reflecting a 5.5% decline year-over-year, yet it surpassed the guidance range. The adjusted EBITDA was $15.9 million with a margin of 5.1%, reflecting a positive trend compared to the previous year's performance.

Revenue Growth Factors
While net revenue decreased, AOV (Average Order Value) demonstrated an encouraging increase of 9% year over year, attributed to higher keep rates, AUR, and items per Fix.

Profit Margins
The gross margin improved by 110 basis points year-over-year, finishing at 44.5%, mainly due to enhanced AOV and refined product margins. The contribution margin was reported at 33%, maintaining their historical range above 30% for four consecutive quarters, indicating sound financial health.

Client Metrics
Despite the annual decline in active clients by 16%, the company noted the smallest sequential decline in three years, which signals a potential turnaround in client acquisition strategies.

Future Outlook
Management raised the annual revenue and EBITDA guidance, expecting total revenue between $1.225 billion and $1.240 billion for the full fiscal year, signaling confidence in their strategic transformation and market position. The emphasis on improving the client experience, alongside effective inventory management, positions Stitch Fix for sustained growth moving forward.

Stocks: SFIX