Another Rough Quarter For Stitch Fix
Stitch Fix, Inc. sells a range of apparel, shoes, and accessories through its Website and mobile app in the United States. It offers denim, dresses, blouses, skirts, shoes, jewelry, and handbags for men and women under the Stitch Fix brand. Just like Netflix disrupted the at home movie streaming market, Stitch Fix is disrupting apparel retail by allow you to choose your own clothes from a selection of clothing. Stitch Fix is your own stylist on a budget. They send you five items at a time based on an interface through which you select your style preferences, budget, and fit. Customers only pay for what they want to keep and return the rest for a service fee which goes towards the purchase.
Similar to Netflix who uses technology to get to know their customers, Stitch Fix has put their spin on technology as well with an interactive, mobile and web-based game with clients that we call Style Shuffle.
Stitch Fix was launched in 2011. The company has seen significant growth since, with over 3 million customers and more than $1 billion in revenue. The person running Stitch Fix is founder Katrina Lake and is the youngest woman ever to take a company public.
Speaking of Netflix, Eric Colson leads a team of 80+ Data Scientists who are altering fashion retailing through data science. His team is responsible for an extensive collection of algorithms that are applied to nearly every function of the company: merchandising, inventory, marketing, forecasting & demand, operations, and the styling recommender system. Prior to joining Stitch Fix, he was the Vice President of Data Science & Engineering at Netflix.
Stitch Fix’s algorithms are able to gauge the types of things you’ll want but also uses the millions of different data points from other customers to ensure it recommends the right items for you to try and buy.
Last year, Stitch Fix made its launch in England as its first international market. Why England, English shoppers are tech-savvy and shop online more than people in the US. But the US style is very different from UK style, which poses a different type of challenge.
Stitch Fix’s earning results have been over the past year has been all over the place. And yesterday was no different.
Stitch Fix Inc. plunged almost 40% in extended trading after the online personal styling service cut its full-year sales and profit forecast on lower order values, rising costs and the potential impact of coronavirus.
“Now that we’ve seen a few company-specific, but also macro themes, play out in Q2 ’20, we’re leaning more conservatively in the back half of 2020 and shifting our full-year outlook,” the company said Monday in a statement. While coronavirus hasn’t had a material impact on the business yet, Stitch Fix called the spreading virus a “dynamic situation” and said “it’s reasonable to expect that we’ll see some impact.”
Stitch Fix also attributed part of its weaker guidance to lower-than-expected revenue from the U.K. and the “macroeconomic climate” tied to Brexit, which has lasted longer than the company anticipated.
The stock price is retesting the weekly demand, but the chart suggest to wait for price to show you some strength before deciding to go long or not.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted via Steemleo
