Stitch Fix Returns to Full-Year Revenue Growth, Sets Fiscal 2027 Outlook

Stitch Fix Inc. (NASDAQ: SFIX) returned to full-year revenue growth in fiscal 2026 for the first time since fiscal 2021, as higher spending per client offset a smaller active-client base. Fourth-quarter revenue increased for a sixth consecutive quarter, while the online personal-styling company maintained positive adjusted EBITDA and free cash flow.

Net revenue for the fourth quarter ended Aug. 1, 2026, rose 4.2% year over year to $324.4 million. Both the Women’s and Men’s Fix businesses grew, with Men’s posting double-digit growth. Revenue per active client reached a record $592, up 7.8% year over year.

The gains came despite a 9% year-over-year decline in active clients to 2.277 million. Stitch Fix said its active-client growth rate improved by nearly 700 basis points from a year earlier, marking a ninth consecutive quarter of improvement. Client retention also improved sequentially for an eighth straight quarter and reached its third consecutive high in nearly four years.

Fourth-quarter adjusted EBITDA was $10.8 million, representing a 3.3% margin. The company said the result exceeded its guidance range and reflected continued expense discipline. Gross margin was 43.6%, while selling, general and administrative expenses totaled $145.7 million. Advertising represented 9.9% of revenue.

Free cash flow, a non-GAAP measure, was $4.4 million for the quarter. Stitch Fix ended the fiscal year with $220.9 million in cash, cash equivalents and investments and no debt.

Fiscal 2026 returns to growth

For the full year, net revenue increased 6.4% to $1.348 billion, ending a run of annual revenue declines that began after fiscal 2021. Gross margin was 43.7%.

Adjusted EBITDA rose to $53.4 million from $49.1 million in fiscal 2025, and the adjusted EBITDA margin widened to 4.0% from 3.9%. On a GAAP basis, the net loss from continuing operations narrowed to $12.6 million from $28.8 million, with the net loss margin improving to 0.9% from 2.3%.

SG&A expenses equaled 45.3% of annual revenue, more than 220 basis points below the prior year. Stock-based compensation declined to $46.4 million from $56.7 million.

Full-year free cash flow increased to $19.8 million from $9.3 million, as net cash provided by continuing operations reached $39.1 million and property and equipment purchases totaled $19.2 million. Cash and investments declined from $242.7 million at the end of fiscal 2025, while working capital fell to $112.6 million from $167.6 million.

Product and technology priorities

Stitch Fix is continuing a transformation centered on combining human stylists, curated merchandise and recommendation technology. Current initiatives include larger Fix orders, occasion- and trend-based themed Fixes, family accounts and an option that allows clients to select a Freestyle item and ask a stylist to build a Fix around it.

The company is also expanding its use of artificial intelligence. Its visualization tools allow clients to explore recommended outfits using generated images, while its merchandising team is using proprietary data and client feedback to develop private-label products. Stitch Fix said the AI-supported design process can reduce development time from several months to about one week.

Fiscal 2027 outlook

For the first quarter of fiscal 2027, management expects net revenue of $323 million to $328 million and adjusted EBITDA of $3 million to $6 million.

For the full year, Stitch Fix projects revenue of $1.31 billion to $1.36 billion, a gross margin of 43% to 44%, and adjusted EBITDA of $27 million to $42 million. The presentation did not provide annual free-cash-flow guidance.

The outlook remains subject to uncertainty around consumer demand, tariffs and trade policy, client acquisition and retention, inventory management, supply-chain conditions and merchandise shipping. Stitch Fix also identified risks tied to the execution of its transformation strategy, acceptance of its products and services, forecasting, and potential technical incidents. The company noted that fiscal 2024 contained an extra week; its references to consecutive year-over-year revenue and active-client growth rates therefore use an adjusted 52-week comparison.