Personalized clothing company Stitch Fix (NASDAQ: SFIX) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 9.4% year on year to $341.3 million. On the other hand, next quarter’s revenue guidance of $332.5 million was less impressive, coming in 0.6% below analysts’ estimates. Its GAAP loss of $0.02 per share was 60.9% above analysts’ consensus estimates.
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Stitch Fix (SFIX) Q4 CY2025 Highlights:
- Revenue: $341.3 million vs analyst estimates of $335.7 million (9.4% year-on-year growth, 1.7% beat)
- EPS (GAAP): -$0.02 vs analyst estimates of -$0.05 (60.9% beat)
- Adjusted EBITDA: $15.93 million vs analyst estimates of $11.1 million (4.7% margin, 43.5% beat)
- The company slightly lifted its revenue guidance for the full year to $1.34 billion at the midpoint from $1.34 billion
- EBITDA guidance for the full year is $46 million at the midpoint, above analyst estimates of $42.27 million
- Operating Margin: -1.4%, up from -2.9% in the same quarter last year
- Free Cash Flow was $3.35 million, up from -$19.44 million in the same quarter last year
- Active Clients: 2.29 million, down 83,000 year on year
- Market Capitalization: $465 million
Company Overview
One of the original subscription box companies, Stitch Fix (NASDAQ: SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Stitch Fix struggled to consistently generate demand over the last five years as its sales dropped at a 6.1% annual rate. This was below our standards and suggests it’s a low quality business.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Stitch Fix’s annualized revenue declines of 4.4% over the last two years suggest its demand continued shrinking. 
We can better understand the company’s revenue dynamics by analyzing its number of active clients, which reached 2.29 million in the latest quarter. Over the last two years, Stitch Fix’s active clients averaged 10.2% year-on-year declines. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Stitch Fix reported year-on-year revenue growth of 9.4%, and its $341.3 million of revenue exceeded Wall Street’s estimates by 1.7%. Company management is currently guiding for a 2.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below the sector average.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Stitch Fix’s operating margin has risen over the last 12 months, but it still averaged negative 4.6% over the last two years. This is due to its large expense base and inefficient cost structure.
Stitch Fix’s operating margin was negative 1.4% this quarter. The company's consistent lack of profits raise a flag.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Although Stitch Fix’s full-year earnings are still negative, it reduced its losses and improved its EPS by 26.3% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.
In Q4, Stitch Fix reported EPS of negative $0.02, up from negative $0.05 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Stitch Fix to improve its earnings losses. Analysts forecast its full-year EPS of negative $0.19 will advance to negative $0.14.
Key Takeaways from Stitch Fix’s Q4 Results
It was good to see Stitch Fix beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its EBITDA guidance for next quarter missed. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 1% to $3.42 immediately following the results.
Stitch Fix put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
