By Dhirendra Tripathi
Investing.com – Stitch Fix stock (NASDAQ:SFIX) plummeted around 24% in Wednesday’s premarket trading as the company cut its annual guidance for both revenue and margin.
The company slipped into a loss in its first quarter. The online personal styling service had booked an income tax benefit in the first quarter of last year, boosting its profits then.
The company now expects its net revenue for the year ending July 30 to grow by around 9%, a sharp climbdown from the over 15% growth it had projected in September.
The company that uses algorithms to help customers style their wardrobe faces increasing competition including from the likes of Amazon (NASDAQ:AMZN).
The company said it continues to expand its personalized shopping offering while also catering to more occasions to serve more customers.
Stitch’s revenue per active client topped $500 for the second quarter in a row, reaching a record $524 across nearly 4.2 million clients. The active client base grew 11% year-on-year.
Net revenue rose 19% year-on-year to $581 million, driven by continued momentum in women’s and children’s segments. Revenue in the U.K. nearly doubled, the company said.
Adjusted loss per share was 2 cents against a profit per share of 9 cents in the first quarter of last year.
In the current quarter, it expects revenue to be around $513 million at the center of its guidance range. The EBITDA margin could slip below zero and will at best be 1%, according to the company.