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Stitch Fix stock surges on strong quarterly earnings report

Stitch Fix founder and Chief Executive Katrina Lake, left, speaks at Vanity Fair's Founders Fair in 2018.
(Dia Dipasupil / Getty Images for Vanity Fair)

Stitch Fix Inc., the apparel company that uses software to predict what customers want, surged after posting earnings results that beat estimates and issuing a better-than-expected sales forecast for the current quarter.

The stock jumped as much as 25% in after-hours trading after Stitch Fix reported fiscal second-quarter adjusted profit of 12 cents per share on sales of $370.3 million. Both exceeded the highest analyst estimates compiled by Bloomberg.

Stitch Fix also projected third-quarter sales that topped the average estimate and said that active clients rose to 3 million during the quarter, an increase of 18% compared with the same period last year.

Interest from short sellers in Stitch Fix had inched up over the last week, with about 33% of shares available to borrow on loan to short sellers on Monday, according to S3 Analytics data. That’s up from 31% a week ago.

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Wall Street has grown less bullish on the company over the last six months as the stock lost more than two-thirds of its value. Three of the 11 analysts covering the company have a buy rating, compared with about half in September, according to Bloomberg data.

Investors had been bracing for a big move after the earnings report, with the options market implying a swing of as much as 18%.


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