Q2 2025 Stitch Fix Inc Earnings Call Transcript
Key Points
- Stitch Fix Inc (SFIX) exceeded expectations in Q2 with revenue of $312.1 million and adjusted EBITDA of $15.9 million.
- The company achieved a 710 basis point sequential improvement in year-over-year revenue comps and a contribution margin of 33%, marking the fourth consecutive quarter above 30%.
- Both the Men's business and Freestyle channel returned to year-over-year revenue growth, indicating positive momentum.
- Investments in improving the quality of the assortment and inventory management have led to a 9% year-over-year increase in Average Order Value (AOV).
- The company raised its annual guidance for fiscal 2025, reflecting confidence in continued performance improvements and strategic investments.
- Net revenue for Q2 was down 5.5% year over year and 2% quarter over quarter, indicating ongoing challenges in achieving consistent revenue growth.
- Active clients ended the quarter at 2.4 million, down 16% year over year and 2.6% quarter over quarter, highlighting difficulties in client retention and acquisition.
- Free cash flow was negative $19 million in Q2, attributed to timing of working capital requirements related to inventory purchases.
- The company anticipates continued active client declines into FY26, which could impact future revenue growth.
- Despite improvements, the company faces potential challenges from tariffs and macroeconomic uncertainties, which could affect future performance.
Thank you for joining us today for the Stitch Fix second-quarter fiscal 2025 earnings call. With me on the call are Matt Baer, Chief Executive Officer; and David Aufderhaar, Chief Financial Officer. We have posted complete second quarter 2025 financial results in a press release on the quarterly results section of our website, investors.stitchfix.com. A link to the webcast of today's conference call can also be found on our site.
On today's call, Matt and David will share their prepared remarks. We will then move to Q&A before concluding with Matt's closing remarks.
Before we begin, we would like to remind everyone that we will be making forward-looking statements on this call. which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance.
Please review our filings with the SEC for a discussion of the factors that could cause the results to differ, in
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