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Author: Alan LittleDate: 2020-12-09

Stitch Fix (SFIX) soars 42% after posting fiscal Q1 profit

Stitch Fix (SFIX) shares skyrocketed 42.07% on Tuesday after the online personal styling service posted a surprise fiscal Q1 profit and analysts lined up to offer price target upgrades.

After Monday’s close, Stitch Fix came in with nine cents per share net income, which was considerably better than the net loss of 20 cents per share forecast by Wall Street.

Revenue for the three months to 31st October also climbed 10% to $490.4m to beat the pre-report consensus of $481.17m.

Since its $1.6bn IPO back in 2017, Stitch Fix has been steadily growing its customer base around its core offering of personalising clothing via algorithms and data science.

CEO and founder Katrina Lake said that Q1 saw its highest sequential client addition ever.

Stitch Fix had 3.76 million active clients during the quarter and the average net revenue for each of those was $467.

Lake added: “Our powerful personalization engine is evolving, and innovations in our Fix and direct buy offerings will expand our addressable market, deepen client engagement and grow wallet share over time.”

Stitch Fix’s rebound to a profit pleased investors and analysts alike on Tuesday with the latter ratifying a string of price target upgrades.

RBC Capital Markets’ Mark Mahaney expects Stitch Fix to continue to benefit from the recent surge in online shopping after adding $14 to a new $64 PT and reiterating an outperform rating.

Those sentiments were echoed by Goldman Sachs’ Heath Terry, who pivoted from a $34 to $58 PT.

The bullish outlook for Stitch Fix translated into huge share gains on Tuesday.

The San Francisco-based company soared out of the gate and was trading 42.07% higher at $50.91 at around 2pm ET on the Nasdaq.




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