Stitch Fix (NASDAQ:SFIX) shares soared Monday, after the company reported a surprise profit and revenue growth of 10% from a year ago.
For its fiscal first quarter ended Oct. 31, Stitch Fix reported earnings of nine cents per share on revenue of $490.4 million, topping estimates for a loss of 20 cents per share on revenue of $481.2 million.
Its base of active clients grew to nearly 3.8 million, up 10.2% from a year ago. Stitch Fix defines active clients as people who have bought an item directly from its website, called a"fix," in the preceding 52 weeks from the last day of the quarter.
"While the apparel industry is currently contracting, we expect to take share and drive higher new client sign-ups as the relevance of our model of personalized discovery and convenience grows," the company told shareholders.
Stitch Fix said, given its recent momentum, it expects revenue to grow between 20% and 25% in fiscal 2021.
During the latest quarter, it said it delivered a record success rate across its business, which measures the percentage a given item is purchased by users of the styling service. That means its algorithm-based recommendation engine, which helps create "fixes" for customers, is getting smarter, and fewer items are being returned.
As of Monday’s market close, Stitch Fix shares are up nearly 40% year to date, bringing its market cap to $3.7 billion. They opened Tuesday up $15.60, or 43.5%, to $51.43.
