Stitch Fix (NASDAQ:SFIX) reported fiscal 2026 revenue growth and improved profitability, while executives said a more challenging consumer environment, higher client acquisition costs and temporary first-quarter issues are expected to weigh on fiscal 2027 results.
For fiscal 2026, revenue rose 6.4% to $1.35 billion. Fourth-quarter revenue increased 4.2% year over year to $324.4 million, marking the company’s sixth consecutive quarter of positive revenue comparisons. Chief Executive Officer Matt Baer said the company outperformed the broader U.S. apparel, footwear and accessories market, which he said was approximately flat during the quarter, citing Circana data.
Profitability and Capital Returns
Chief Financial Officer David Aufderhaar said the company maintained contribution margins above 30% in every quarter of fiscal 2026 and expanded adjusted EBITDA margin to 4% for the full year. Gross margin was 43.7%, within Stitch Fix’s target range of 43% to 44%.
Stitch Fix reported a fiscal-year net loss of $12.6 million, or $0.09 per share, narrowing from the prior year. Free cash flow totaled $19.8 million, and the company finished the year with $220.9 million in cash equivalents and investments and no debt.
Fourth-quarter adjusted EBITDA was $10.8 million, representing a 3.3% margin and exceeding the company’s guidance, primarily because of lower fixed operating expenses. Fourth-quarter gross margin was 43.6%, flat from a year earlier, as inventory management offset higher transportation costs and investments in new merchandise categories.
The company also continued repurchasing stock. Stitch Fix bought back 2.7 million shares for $11.3 million in the fourth quarter and 7.2 million shares for $26.4 million during the full year. It had $93.6 million remaining under its repurchase authorization.
Assortment, Larger Fixes Drive Client Spending
Baer attributed revenue-per-client growth to larger Fix shipments, a broader assortment and expansion into categories where Stitch Fix had historically been underrepresented. The company has recorded eight consecutive quarters of growth in both items per Fix and average unit retail, he said.
Activewear and athleisure sales across women’s and men’s offerings grew 21% year over year in the fourth quarter, while footwear grew 14%. Accessories also outperformed the company’s overall revenue growth rate, according to Baer.
Stitch Fix added more than 80 brands during fiscal 2026, including Rhone, Birkenstock, Outdoor Voices and Malbon Golf. More recent additions included Farm Rio, Baggu, Merrell, Jordan Brand, Nike Golf and Mitchell & Ness NFL-licensed apparel.
Baer said men’s Fix revenue delivered double-digit growth for the fifth consecutive quarter, while both the women’s and men’s Fix businesses grew year over year. Client retention improved sequentially for an eighth straight quarter, reaching its third consecutive high in nearly four years.
AI Initiatives and Client Experience
The company said it is expanding its use of artificial intelligence across client-facing experiences and operations. Its Stitch Fix Vision platform, which creates personalized style visualization, has now generated more than 22 million images for clients since launch, Baer said.
Stitch Fix recently introduced a “See it on me” feature that allows clients viewing outfit inspiration to see looks displayed on their own likeness. Baer said adoption of Vision has exceeded expectations and that clients who interact with the product continue to show elevated Freestyle spending.
Operationally, the company is using generative AI to support stylist recommendations, labor planning and customer-service interactions. Baer said the share of chats resolved without additional support has more than doubled.
The company also highlighted demand from clients experiencing body changes associated with GLP-1 medications. Baer said 20% of new clients recently indicated during optional onboarding that they were seeking styling guidance as their bodies change.
Fiscal 2027 Outlook Reflects Consumer Pressures
For fiscal 2027, Stitch Fix forecast revenue of $1.31 billion to $1.36 billion and adjusted EBITDA of $27 million to $42 million. The company expects first-quarter revenue of $323 million to $328 million and adjusted EBITDA of $3 million to $6 million.
Aufderhaar said the outlook reflects higher client acquisition costs, which emerged in the fourth quarter and continued into the first quarter, as well as more cautious discretionary spending by existing customers outside their recurring Fix shipments. The company expects gross margin to remain between 43% and 44% and expects stronger positive free cash flow than in fiscal 2026.
First-quarter results will also be affected by two temporary issues: a shift in the timing of some Fix shipments from the first quarter into the fourth quarter, and an unintended August change to a post-checkout offer that reduced the number of clients eligible to request another Fix. Aufderhaar said the feature issue was corrected and would not affect results beyond the first quarter.
Excluding those temporary factors, Aufderhaar said fourth-quarter revenue growth would have been roughly 2% to 3%, while the first-quarter outlook would have been more aligned with the implied growth rate for the remainder of the year.
Stitch Fix plans to invest more heavily in advertising and technology, including AI, during fiscal 2027. Advertising is expected to represent roughly 10% to 11% of revenue, compared with 9% to 10% in fiscal 2026. Aufderhaar said the lower adjusted EBITDA outlook primarily reflects deliberate investments in growth rather than underlying cost pressures.
Baer said the company remains confident it can return to active-client growth, though management acknowledged that macroeconomic pressures have delayed that objective. He said recurring Fix customers have remained resilient, while areas such as Freestyle and manually requested Fixes have been more exposed to pressure on discretionary spending.
About Stitch Fix (NASDAQ:SFIX)
Stitch Fix, Inc is an online personal styling company that uses data science, personalization technology and human stylists to recommend apparel and accessories to customers. Its offerings include clothing, shoes and accessories across categories such as women’s, men’s and children’s apparel, with selections tailored to individual preferences, sizes, budgets and lifestyles.
The company’s primary service, traditionally known as a “Fix,” delivers a curated selection of items for customers to try at home, after which they can purchase the items they want and return the rest.
