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Stitch Fix Posts Q3 2026 Revenue Growth, Adjusted EBITDA Above Guidance
On June 10, 2026, Stitch Fix Inc. (NASDAQ: SFIX) released its third‑quarter fiscal 2026 results, extending a five‑quarter streak of revenue growth. Year‑over‑year sales climbed 4.7 percent to $340.3 million, while the active‑client base edged up to 2.3 million—a 21,000‑client increase from the previous quarter. Revenue per active client (RPAC) hit a record $578, underscoring the firm’s focus on higher‑value shoppers.
The quarter’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $13.2 million, translating into a 3.9 percent margin. Gross margin stood at 43.7 percent, and contribution margin exceeded 30 percent for the ninth straight quarter. Advertising spend represented 10.2 percent of revenue, in line with expectations. Cash and investments totaled $229.4 million, and free cash flow amounted to $6.5 million. The company also repurchased 4.5 million shares for $15.1 million under its share‑repurchase program.
Operational momentum came from a 6.4 percent year‑over‑year rise in average order value (AOV), driven by larger Fix orders and higher average unit retail (AUR). The Fix channel—Stitch Fix’s curated apparel, footwear and accessories service—recorded growth across both women’s and men’s lines. Activewear and athleisure categories expanded 50 percent year‑over‑year, buoyed by private‑brand offerings from Montgomery, Post, 41, Hawthorne, Market, Spruce, Aylesbury, Travis Mathew, Vuori and Bonobos.
Stitch Fix also spotlighted its household‑account feature, which lets a primary client add family members to a single account. The tool has accelerated organic adoption and is expected to broaden wallet share. The firm continues to pour resources into AI‑driven tools, such as Stitch Fix Vision for personalized outfit visualizations and machine‑learning models that accelerate private‑brand assortment development.
Looking ahead, the company projects fourth‑quarter revenue between $322 million and $327 million and adjusted EBITDA between $7 million and $10 million. Full‑year guidance has been tightened: revenue is now projected between $1.346 billion and $1.351 billion, and adjusted EBITDA between $49 million and $52 million. Gross margin guidance remains 43–44 percent, and advertising expense guidance is 9–10 percent of revenue.
Management noted that active‑client growth is expected to slow slightly in Q4, with a forecasted sequential decline of about 0.5 to 1 percent. Nevertheless, year‑over‑year active‑client growth is projected to continue, and the firm expects AOV growth to stay above 6 percent year‑over‑year in Q4, reflecting the momentum built in the first half of the year.
The balance sheet stays solid, with no debt and a cash position that supports ongoing investment in client experience, assortment expansion and AI initiatives. Inventory at quarter‑end was $132.2 million, up 15.6 percent year‑over‑year, reflecting higher demand for larger Fix orders.
Stitch Fix’s strategy centers on three growth levers: expanding activewear, footwear and accessories; deepening client engagement through AI and household accounts; and maintaining disciplined cost management. The firm’s FY26 outlook signals confidence that these initiatives will sustain revenue growth, improve margins and ultimately move the business toward net‑income profitability.
Investor reactions were muted, with shares trading within a narrow range after the call. Analysts highlighted the company’s disciplined expense management and continued focus on high‑value clients as key strengths heading into the remainder of the year.
In short, Stitch Fix delivered a solid third quarter, surpassing revenue and adjusted EBITDA guidance, and reinforced its long‑term strategy of leveraging data and AI to grow a high‑value client base while maintaining profitability.
The quarter’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $13.2 million, translating into a 3.9 percent margin. Gross margin stood at 43.7 percent, and contribution margin exceeded 30 percent for the ninth straight quarter. Advertising spend represented 10.2 percent of revenue, in line with expectations. Cash and investments totaled $229.4 million, and free cash flow amounted to $6.5 million. The company also repurchased 4.5 million shares for $15.1 million under its share‑repurchase program.
Operational momentum came from a 6.4 percent year‑over‑year rise in average order value (AOV), driven by larger Fix orders and higher average unit retail (AUR). The Fix channel—Stitch Fix’s curated apparel, footwear and accessories service—recorded growth across both women’s and men’s lines. Activewear and athleisure categories expanded 50 percent year‑over‑year, buoyed by private‑brand offerings from Montgomery, Post, 41, Hawthorne, Market, Spruce, Aylesbury, Travis Mathew, Vuori and Bonobos.
Stitch Fix also spotlighted its household‑account feature, which lets a primary client add family members to a single account. The tool has accelerated organic adoption and is expected to broaden wallet share. The firm continues to pour resources into AI‑driven tools, such as Stitch Fix Vision for personalized outfit visualizations and machine‑learning models that accelerate private‑brand assortment development.
Looking ahead, the company projects fourth‑quarter revenue between $322 million and $327 million and adjusted EBITDA between $7 million and $10 million. Full‑year guidance has been tightened: revenue is now projected between $1.346 billion and $1.351 billion, and adjusted EBITDA between $49 million and $52 million. Gross margin guidance remains 43–44 percent, and advertising expense guidance is 9–10 percent of revenue.
Management noted that active‑client growth is expected to slow slightly in Q4, with a forecasted sequential decline of about 0.5 to 1 percent. Nevertheless, year‑over‑year active‑client growth is projected to continue, and the firm expects AOV growth to stay above 6 percent year‑over‑year in Q4, reflecting the momentum built in the first half of the year.
The balance sheet stays solid, with no debt and a cash position that supports ongoing investment in client experience, assortment expansion and AI initiatives. Inventory at quarter‑end was $132.2 million, up 15.6 percent year‑over‑year, reflecting higher demand for larger Fix orders.
Stitch Fix’s strategy centers on three growth levers: expanding activewear, footwear and accessories; deepening client engagement through AI and household accounts; and maintaining disciplined cost management. The firm’s FY26 outlook signals confidence that these initiatives will sustain revenue growth, improve margins and ultimately move the business toward net‑income profitability.
Investor reactions were muted, with shares trading within a narrow range after the call. Analysts highlighted the company’s disciplined expense management and continued focus on high‑value clients as key strengths heading into the remainder of the year.
In short, Stitch Fix delivered a solid third quarter, surpassing revenue and adjusted EBITDA guidance, and reinforced its long‑term strategy of leveraging data and AI to grow a high‑value client base while maintaining profitability.
