Stitch Fix Inc. posted positive profit growth as it released earnings for the first time since its IPO in November, while expecting slightly slower year-over-year revenue growth.
For the first quarter of fiscal 2018 ended Oct. 28, the apparel subscription service posted $13.5 million in net income, up from $13.2 million in the year-ago period. Diluted EPS stood at 4 cents, lower than the 14 cents from a year earlier but still beating the S&P Capital IQ consensus estimate of 3 cents.
The San Francisco-based company also expects net revenue grow by 21% to 24% year over year to between $287 million and $294 million for the fiscal second quarter ending Jan. 27, 2018. It also expects net revenue to grow 20% to 25% to between $1.17 billion and $1.22 billion for full-year fiscal 2018 ending July 28.
The S&P Capital IQ consensus estimate for the company's revenue stands at $291.7 million for the fiscal second quarter and $1.19 billion for fiscal 2018.
During the fiscal first quarter, the company reported that revenue grew to $295.6 million from $236 million a year ago, representing 25.2% year-over-year top-line growth.
Its gross margin, however, dropped to 43.7% from 46.6% in the previous year due to planned investment in new categories such as menswear and plus-size clothing. The company expects gross margins to continue the decline in the near term but to improve as these businesses grow.
Meanwhile, its active client count increased by 549,000 and 29.7% year over year to 2.4 million as of Oct. 28.