Stitch Fix Inc. (NASDAQ:SFIX): Stitch Fix shares reached an all-time high of $32 last Friday after popping 33% due to robust financial performance.
The SFIX stock grew more than 110% since its IPO event last year; the stock currently has a 52-week trading range of $14.48 – $32.42. Traders are showing confidence in its business strategies, as well as its business model of offering personal style service for men and women.
Following the sharp rally over the last two quarters, analysts believe that the stock has further upside potential considering the year-over-year increase in its financial numbers and active clients.
Stitch Fix Shares: Double-Digit Revenue and Earnings Growth Supports Share Price Gains
The company has topped third-quarter estimates by a wide margin of $10 million and $0.06 per share. On top of that, its third-quarter revenue jumped 29% since the same period last year, thanks to strong growth across its men’s and women’s categories. The third quarter marks the fifth straight quarter of more than 20% sales growth.
Stitch Fix claims that its business strategy of expanding its relationship with existing clients, escalating wallet share, and attracting new clients through marketing and brand awareness programs has been allowing them to generate sustainable double-digit revenue growth.
The company has been witnessing positive impacts of business strategies. Its number of active customers increased 30% year-over-year in the third quarter, and the company is planning to expand its reach to children clothing.
CEO Katrina Lake says, “Our new Stitch Fix Kids offering is a testament to the scalability of our platform.”
Outlook is Solid
Stitch Fix has enlarged its sales and earnings guidance for the full year after generating better-than-expected results in the third quarter. The company expects its FY18 revenue to stand in the range of $1.22B to $1.23B compared to an earlier estimate of $1.19B to $1.22B and the analysts’ consensus estimate for $1.21B. Stitch Fix’s management claim they are in a stable position to generate more than 20% revenue growth in the next year.
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