Stitch Fix surges on Q3 sales beat, analysts cheer profitability progress
07/06/2023 16:24
** Shares of online personalized styling services firm
Stitch Fix Inc SFIX.O jump as much as 39% to $5.12, their
highest since April 4
** SFIX is making an impressive push to focus on
profitability and free cash flow, Jefferies says
** Company posted better-than-estimated Q3 revenue after
market hours on Tuesday and announced plans to exit the UK
market in FY24
** Stock set for its biggest intraday pct. gain since Dec. 8
2020, if gains hold
** Roth MKM analyst David Bellinger views UK exit coupled
with distribution center consolidation and other cost-cutting
measures as initial steps to stabilize company's core U.S.
business
** Roth retains "neutral" rating on SFIX stock and PT at $4
as customer exodus drags on
** "We view still-declining customer counts as not yet
bottoming, given advertising dollars are trending down nearly
50% year-on-year at this point" - Roth
** While the stock does seem optically cheap, we think it
will have trouble "breaking out" until the top line inflects,
say Wedbush analysts
** 15 of 17 brokerages rate the stock "hold", 2 "sell";
median PT is $4.30 - Refinitiv
** Stock up about 53% so far this year
(Reporting by Savyata Mishra in Bengaluru)
((Savyata.Mishra@thomsonreuters.com))