As it reported Q3 2022 results that included a nearly 8% slide in year-over-year net revenue and a 5% decrease in its number of active clients, Stitch Fix announced it would let go of 15% of its salaried workforce, mostly in non-technology corporate and styling leadership roles. The personnel cuts, which will contribute to an expected $40 to $60 million in savings in FY2023, represent approximately 4% of the company’s total workforce.
“While third quarter top-line results, as well as active client counts, were largely within our expectations, we know we still have work to do,” said Elizabeth Spaulding, CEO of Stitch Fix in a statement. “This quarter we made progress on improving the overall client experience in order to position Stitch Fix for profitable growth and value creation over time. We are encouraged by the activity we are seeing inside the expanded Stitch Fix ecosystem, including our sixth consecutive quarter of revenue per active client growth.”
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] addresses the full continuum of personalized shopping needs.”
The company’s results and the announcement of layoffs pushed down an already depressed stock price for Stitch Fix, which was trading at $6.56 per share on June 10, 2022, compared to more than $68 per share one year ago, according to CNBC. The company’s financial outlook for Q4, which ends July 30, 2022, likely didn’t help: Stitch Fix is forecasting net revenue of $485 to $495 million, which would represent a 13% to 15% YoY decline.
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Results for Q3 2022, which ended April 30, 2022, included:
- Net revenue of $492.9 million, down nearly 8% from $535.5 million in Q3 2021
- 3,907,000 active clients, a decrease of 200,000 or 5% YoY; and
- Net revenue per active client of $553, a 15% YoY increase.
