Personalized clothing company Stitch Fix (NASDAQ:SFIX) reported Q3 CY2025 results beating Wall Street’s revenue expectations , with sales up 7.3% year on year to $342.1 million. On top of that, next quarter’s revenue guidance ($337.5 million at the midpoint) was surprisingly good and 9.6% above what analysts were expecting. Its GAAP loss of $0.05 per share was in line with analysts’ consensus estimates.

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Stitch Fix (SFIX) Q3 CY2025 Highlights:

• Revenue: $342.1 million vs analyst estimates of $337.2 million (7.3% year-on-year growth, 1.5% beat)

• EPS (GAAP): -$0.05 vs analyst estimates of -$0.04 (in line)

• Adjusted EBITDA: $13.43 million vs analyst estimates of $10.1 million (3.9% margin, 33% beat)

• The company lifted its revenue guidance for the full year to $1.34 billion at the midpoint from $1.31 billion, a 2.3% increase

• EBITDA guidance for the full year is $43 million at the midpoint, above analyst estimates of $36.97 million

• Operating Margin: -2.5%, in line with the same quarter last year

• Free Cash Flow Margin: 1.6%, down from 3.1% in the same quarter last year

• Active Clients: 2.31 million, down 127,000 year on year

• Market Capitalization: $601.3 million

Company Overview

One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Stitch Fix’s demand was weak and its revenue declined by 6% per year. This wasn’t a great result and is a sign of poor business quality.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Stitch Fix’s recent performance shows its demand remained suppressed as its revenue has declined by 7.7% annually over the last two years.

Stitch Fix also discloses its number of active clients, which reached 2.31 million in the latest quarter. Over the last two years, Stitch Fix’s active clients averaged 14.3% year-on-year declines. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen.

This quarter, Stitch Fix reported year-on-year revenue growth of 7.3%, and its $342.1 million of revenue exceeded Wall Street’s estimates by 1.5%. Company management is currently guiding for a 8.1% year-on-year increase in sales next quarter.