Stitch Fix to explore exiting UK market in 2024
06/06/2023 23:17
June 6 (Reuters) - Online personalized styling service
firm Stitch Fix SFIX.O said on Tuesday it would explore
exiting the UK market in its fiscal year 2024, blaming a
weakening macro environment and increasing costs.
The company, which is sharpening focus on the United States,
on Tuesday also reported third-quarter revenue above Wall Street
estimates. Its shares jumped about 6% in extended trading.
Stitch Fix made its overseas foray into the UK in early
2019. In the same year, the company broadened its product
categories to include kids, maternity wear, and petite and plus
sizes.
The company, whose fiscal year 2023 ends in July, said that
since its entry into the UK, "the macroeconomic environment and
our business have changed".
The company said the UK would represent about $50 million in
annual revenue in fiscal 2023 and the region would record a $15
million loss before interest, taxes, depreciation, and
amortization.
San Francisco, California-based Stitch Fix also said it
would cut down to three distribution centers from five to have
better inventories available to its stylists.
The company reported net revenue of $394.9 million for the
quarter ended April 29, down nearly 20% from a year earlier, but
above analysts' average estimate of $388.9 million, according to
Refinitiv IBES data.
Stitch Fix also said net loss narrowed to $21.8 million, or
19 cents per share, from $78 million, or 72 cents per share, a
year ago.
However, the company forecast current-quarter sales below
Wall Street estimates.
(Reporting by Anne Florentyna Gnanaraja Sekar and Deborah
Sophia in Bengaluru; Editing by Maju Samuel)
((AnneFlorentyna.GnanarajaSekar@thomsonreuters.com;))