- Shares of online personal style company Stitch Fix soared as much as 27% on Thursday after the company beat Wall Street sales estimates.
- Watch Stitch Fix trade live.
Stitch Fix, the online personal style company, beat expectations for revenue and earnings in the third quarter. The firm also raised its revenue outlook for 2019.
The report sent shares soaring as much as 27%, although the stock pared gains slightly in the afternoon, trading roughly 15% higher as of 1:45 p.m. ET.
Revenue for the quarter came in at $US409 million, 3% above Wall Street consensus analyst expectations, as compiled by Bloomberg. Adjusted earnings suprised analysts at $US0.07 per share, beating expectations of a loss of $US0.03.
The company slightly raised its revenue outlook for fiscal 2019, increasing its top-end of the range 1% to $US1.58 billion. The company crossed the critical $US1 billion revenue mark in fiscal year 2018.
Stitch Fix is an fashion-based subscription services that combines personal styling with algorithms to customise clothing deliveries. The company cemented its status as a tech “unicorn” with its 2018 IPO valuing the company at over $US1.5 billion.
The company’s customers fill out a detailed questionnaire about their style and pay a $US20 styling fee. Stylists then pick out outfits to match a customer’s style and are only charged for clothes they keep after delivery. The styling fee is applied to any purchase.
The company was founded by Erin Morrison Flynn, a former J. Crew buyer, and Katrina Lake, who reportedly came up with the idea while attending Harvard Business School. Lake remains CEO of the company, with a stake worth more than $US300 million, while Flynn is no longer affiliated with the company.
Before Stitch Fix, Lake worked at the tech company Polyvore and the management-consulting firm The Parthenon Group.
Lake told the Star Tribune that her fashion sense was “classic with a twist,” adding, “I want to feel comfortable and confident and don’t want to have to think too much about what I wear every day.
Stitch Fix is now up more than 55% year to date.
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