Net revenue

Stitch Fix Cuts 15% of Hired Workforce as Third Quarter Net Revenue Drops 8%

As it released third quarter 2022 results which included a 8% a decrease in net income year-on-year and a 5% decrease in the number of active customers, stitch correction announced that he would let go 15% of its salaried workforce, primarily in non-tech business and styling leadership roles. Staff reductions, which will contribute to a $40-60 million savings in fiscal year 2023, represent approximately 4% of the company’s total workforce.

“While third quarter results, as well as the number of active customers, were broadly in line with our expectations, we know that we still have work to do,” Elizabeth Spaulding, CEO of Stitch Fix, said in a statement. “This quarter, we made progress in improving the overall customer experience to position Stitch Fix for profitable growth and value creation over time. We are encouraged by the activity we are seeing within the extended Stitch Fix ecosystem, including our sixth consecutive quarter of revenue growth per active customer.

Spaulding also cited the addition of the company’s Freestyle service, a personalized shopping experience open to non-subscribers that launched in September 2021, as part of a “powerful combination [that] meets all the personalized shopping needs. »

The company’s results and announcement of layoffs dragged down Stitch Fix’s already depressed share price, which was trading at $6.56 per share as of June 10, 2022, compared to more than $68 per share a year ago, according to CNBC. The company’s financial outlook for the fourth quarter, which ends July 30, 2022, probably didn’t help: Stitch Fix forecast net sales of $485–495 millionwhich would represent a 13% to 15% Annual decline.

Results for the third quarter of 2022, which ended April 30, 2022, included:

  • Net income of $492.9 millionalmost down 8% of $535.5 million in the third quarter of 2021
  • 3,907,000 active customers, a decrease of 200,000 Where 5% YoY; and
  • Net revenue per active customer of $553a 15% Increase year over year.