Stitch Fix quarterly losses widen, reduces workforce to save on costs
Stitch Fix announced on Thursday revenues for the third quarter fell by 8%, on the back of a decline in the firm's active customer numbers causing losses to widen, as the company looks to reduce in its workforce.
The San Francisco-based company said revenues for the third quarter ending April 30 declined to $492.9 million compared to $535.5 million, while active client numbers totalled 3.907 million, a decrease of 200,000 or 5% year over year.
Despite the dip in numbers, net revenue per active client came in at $553, an increase of 15% year over year. The company saw losses widened, however, reporting a net loss of $78 million and diluted loss per share of $0.72 for the three month period, compared to a loss of $18 million last year.
In light of the lacklustre earnings update and "an uncertain macroeconomic environment," Stitch Fix said it has undertaken a review of its business and has decided to cull a chunk of its salaried workforce.
"In light of Stitch Fix’s recent business momentum and an uncertain macroeconomic environment, the company undertook a detailed review of its business and what is required to build for the future," said Stitch Fix in a statement.
"As a result, the company shared the difficult decision to reduce its workforce. This reduction includes approximately 15% of salaried positions, and represents approximately 4% of roles in total. Most of the reductions are in non-technology corporate roles and styling leadership roles," added the company.
Looking ahead, Stitch Fix said it now predicts second quarter revenues to be between $485 million and $495 million for a 15% to 13% decline year on year.
Copyright © 2023 FashionNetwork.com All rights reserved.