Stitch Fix Announces Fourth Quarter and Full Fiscal Year 2024 Financial Results
Stitch Fix (NASDAQ: SFIX) announced its Q4 and full fiscal year 2024 financial results. Key highlights include:
- Q4 net revenue of $319.6 million, down 12.4% year-over-year
- Q4 gross margin of 44.6%, up 50 basis points year-over-year
- Q4 net loss of $35.7 million
- Full year net revenue of $1.34 billion, down 16.0% year-over-year
- Active clients decreased 19.6% year-over-year to 2,508,000
- Net revenue per active client increased 4.5% to $533
The company provided Q1 2025 guidance with net revenue expected between $303-$310 million and Adjusted EBITDA between $5-$9 million. For fiscal year 2025, net revenue is projected at $1.11-$1.16 billion with Adjusted EBITDA of $14-$28 million.
Stitch Fix (NASDAQ: SFIX) ha annunciato i risultati finanziari del quarto trimestre e dell'intero anno fiscale 2024. I punti salienti includono:
- Ricavi netti del Q4 di 319,6 milioni di dollari, in calo del 12,4% rispetto all'anno precedente
- Margine lordo del Q4 del 44,6%, in aumento di 50 punti base rispetto all'anno precedente
- Perdita netta del Q4 di 35,7 milioni di dollari
- Ricavi netti per l'intero anno di 1,34 miliardi di dollari, in calo del 16,0% rispetto all'anno precedente
- Clienti attivi diminuiti del 19,6% rispetto all'anno precedente a 2.508.000
- Ricavi netti per cliente attivo aumentati del 4,5% a 533 dollari
La società ha fornito indicazioni per il Q1 2025, con ricavi netti previsti tra 303-310 milioni di dollari e EBITDA rettificato tra 5-9 milioni di dollari. Per l'anno fiscale 2025, i ricavi netti sono previsti tra 1,11-1,16 miliardi di dollari con EBITDA rettificato di 14-28 milioni di dollari.
Stitch Fix (NASDAQ: SFIX) anunció sus resultados financieros del cuarto trimestre y del año fiscal completo 2024. Los aspectos más destacados incluyen:
- Ingresos netos del Q4 de 319,6 millones de dólares, una disminución del 12,4% interanual
- Margen bruto del Q4 de 44,6%, un aumento de 50 puntos básicos interanuales
- Pérdida neta del Q4 de 35,7 millones de dólares
- Ingresos netos del año completo de 1,34 mil millones de dólares, una disminución del 16,0% interanual
- Clientes activos disminuídos un 19,6% interanual a 2.508.000
- Ingresos netos por cliente activo aumentaron un 4,5% a 533 dólares
La empresa proporcionó una guía para el Q1 2025, con ingresos netos esperados entre 303-310 millones de dólares y EBITDA ajustado entre 5-9 millones de dólares. Para el año fiscal 2025, se proyectan ingresos netos entre 1,11-1,16 mil millones de dólares con EBITDA ajustado de 14-28 millones de dólares.
Stitch Fix (NASDAQ: SFIX)가 2024 회계연도 4분기 및 전체 재무 결과를 발표했습니다. 주요 내용은 다음과 같습니다:
- 4분기 총 수익 3억 1960만 달러, 전년 대비 12.4% 감소
- 4분기 총 마진 44.6%, 전년 대비 50bp 증가
- 4분기 순손실 3570만 달러
- 전체 연도 총 수익 13억 4천만 달러, 전년 대비 16.0% 감소
- 활성 클라이언트 수가 전년 대비 19.6% 감소하여 2,508,000
- 활성 클라이언트당 순수익이 4.5% 증가하여 533 달러
회사는 2025년 1분기 지침을 제공했으며, 총 수익은 3억 30만에서 3억 10만 달러 사이로 예상되며, 조정 EBITDA는 500만에서 900만 달러 사이로 예상됩니다. 2025 회계연도에 대한 총 수익은 11억 1천만에서 11억 6천만 달러로 예상되며 조정 EBITDA는 1400만에서 2800만 달러로 예상하고 있습니다.
Stitch Fix (NASDAQ: SFIX) a annoncé ses résultats financiers pour le quatrième trimestre et pour l'ensemble de l'exercice fiscal 2024. Les faits marquants incluent :
- Revenu net du T4 de 319,6 millions de dollars, en baisse de 12,4 % par rapport à l'année précédente
- Marge brute du T4 de 44,6 %, en hausse de 50 points de base par rapport à l'année précédente
- Perte nette du T4 de 35,7 millions de dollars
- Revenu net pour l'année entière de 1,34 milliard de dollars, en baisse de 16,0 % par rapport à l'année précédente
- Clients actifs en baisse de 19,6 % par rapport à l'année précédente à 2.508.000
- Revenu net par client actif augmentant de 4,5 % à 533 dollars
L'entreprise a fourni des prévisions pour le T1 2025, avec un revenu net prévu entre 303-310 millions de dollars et un EBITDA ajusté entre 5-9 millions de dollars. Pour l'exercice fiscal 2025, le revenu net est projeté entre 1,11-1,16 milliard de dollars avec un EBITDA ajusté de 14-28 millions de dollars.
Stitch Fix (NASDAQ: SFIX) hat seine finanziellen Ergebnisse für das vierte Quartal und das gesamte Geschäftsjahr 2024 veröffentlicht. Zu den wichtigsten Punkten gehören:
- Nettoumsatz im Q4 von 319,6 Millionen Dollar, ein Rückgang von 12,4% im Jahresvergleich
- Bruttomarge im Q4 von 44,6%, ein Anstieg um 50 Basispunkte im Jahresvergleich
- Nettoverlust im Q4 von 35,7 Millionen Dollar
- Nettoumsatz für das gesamte Jahr von 1,34 Milliarden Dollar, ein Rückgang von 16,0% im Jahresvergleich
- Aktive Kunden sind im Jahresvergleich um 19,6% auf 2.508.000 gesunken
- Nettoumsatz pro aktivem Kunden stieg um 4,5% auf 533 Dollar
Das Unternehmen gab eine Prognose für Q1 2025 ab, mit einem erwarteten Nettoumsatz zwischen 303-310 Millionen Dollar und einem bereinigten EBITDA zwischen 5-9 Millionen Dollar. Für das Geschäftsjahr 2025 wird ein Nettoumsatz von 1,11-1,16 Milliarden Dollar mit einem bereinigten EBITDA von 14-28 Millionen Dollar prognostiziert.
- Q4 gross margin increased by 50 basis points year-over-year to 44.6%
- Net revenue per active client (RPAC) increased 4.5% year-over-year to $533
- Q4 Adjusted EBITDA of $9.5 million, reflecting continued cost management discipline
- Free cash flow was $4.5 million in Q4 and $14.2 million for the full fiscal year
- Company ended the quarter with $247.0 million in cash, cash equivalents, and investments, with no debt
- Q4 net revenue decreased 12.4% year-over-year to $319.6 million
- Full year net revenue decreased 16.0% year-over-year to $1.34 billion
- Q4 net loss of $35.7 million and full year net loss of $118.9 million
- Active clients decreased by 19.6% year-over-year to 2,508,000
- Projected revenue decline of 17% to 13% year-over-year for fiscal year 2025
Insights
Stitch Fix's Q4 and FY2024 results show a company in transition, with mixed signals for investors. The 12.4% year-over-year revenue decline to
Looking at the full year, the
The cash position of
Stitch Fix's performance reflects broader challenges in the personalized online retail sector. The 19.6% year-over-year decline in active clients to 2,508,000 suggests shifting consumer preferences or increased competition. However, the company's ability to increase revenue per active client indicates potential for improved customer value extraction.
The company's strategy to "reimagine our client experience" will be important in reversing the trend of client losses. The market will be watching for innovations in personalization technology and service offerings that could differentiate Stitch Fix from competitors. The projected revenue decline of 13-17% for FY2025 indicates a challenging near-term outlook, but the focus on maintaining positive adjusted EBITDA suggests a balanced approach to growth and profitability.
Investors should consider Stitch Fix's performance in the context of changing retail landscapes, e-commerce trends and consumer spending patterns. The company's ability to adapt its business model and leverage data analytics for personalization will be key factors in its potential turnaround and long-term viability in the competitive online fashion retail market.
SAN FRANCISCO, Sept. 24, 2024 (GLOBE NEWSWIRE) -- Stitch Fix, Inc. (NASDAQ: SFIX), the leading online personal styling service, today announced its financial results for the fourth quarter and full fiscal year 2024, ended August 3, 2024. Fiscal 2024 included 53 weeks, with the additional week occurring in the fourth quarter.
“We are executing our transformation strategy with discipline and, during the fourth quarter, we delivered results at the high end of our guidance on both the top and bottom line,” said Matt Baer, Chief Executive Officer, Stitch Fix. “I am proud of the Stitch Fix team’s efforts this past fiscal year and encouraged by the progress we have already made to strengthen the foundation of our business and reimagine our client experience. While there is a lot of work still to do, I am confident we are on the right path to continue to improve the trajectory of our business which includes returning to revenue growth by the end of FY26.”
During the first quarter of fiscal 2024, we ceased operations of our UK business and met the accounting requirements for reporting the UK business as a discontinued operation. Accordingly, our unaudited condensed consolidated financial statements reflect the results of the UK business as a discontinued operation for all periods presented. Unless otherwise noted, amounts and disclosures below relate to our continuing operations.
Fourth Quarter Fiscal 2024 Key Metrics and Financial Highlights
- Net revenue of
$319.6 million , a decrease of12.4% year-over-year, or a decrease of18.3% year-over-year adjusted for the impact of the extra week in Q4’24. - Gross margin of
44.6% , an increase of 50 basis points year-over-year, which reflects improved transportation leverage. - Net loss of
$35.7 million and diluted loss per share of$0.29 . - Adjusted EBITDA of
$9.5 million , which reflects continued cost management discipline. - Free cash flow was
$4.5 million in the fourth fiscal quarter. - We ended the quarter with
$247.0 million of cash, cash equivalents, and investments; and no debt.
Full Year Fiscal 2024 Key Metrics and Financial Highlights
- Net revenue of
$1.34 billion , a decrease of16.0% year-over-year, or a decrease of17.4% year-over-year adjusted for the impact of the extra week in 2024. - Active clients of 2,508,000, a decrease of 125,000, or
4.7% , quarter-over-quarter; and a decrease of 613,000, or19.6% , year-over-year. - Net revenue per active client (“RPAC”) of
$533 , an increase of4.5% year-over-year. - Gross margin of
44.3% . - Net loss of
$118.9 million and diluted loss per share of$0.99 . - Adjusted EBITDA of
$29.3 million . - Free cash flow was
$14.2 million for the full fiscal year.
Financial Outlook
Our financial outlook for the first quarter of fiscal 2025 ending November 2, 2024, is as follows:
Q1 2025 | ||
Net Revenue | (17)% - (15)% YoY | |
Adjusted EBITDA | ||
Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to July 31. The fiscal year 2025 is a 52-week year and the fiscal year 2024 is a 53-week year, with the extra week occurring in the fourth quarter ending August 3, 2024.
Our financial outlook for fiscal year 2025 is as follows:
Fiscal Year 2025 | ||
Net Revenue | (17)% - (13)% YoY | |
(16)% - (12)% YoY adjusted to a 52-week period(1) | ||
Adjusted EBITDA | ||
(1) Full fiscal year 2024 net revenue from continuing operations has been adjusted to remove the impact of the 53rd week for year-over-year comparative purposes. | ||
Stitch Fix has not reconciled its Adjusted EBITDA outlook to GAAP net income (loss) because it does not provide an outlook for GAAP net income (loss) due to the uncertainty and potential variability of restructuring and other one-time costs, net other income (expense), provision for income taxes, and stock-based compensation expense, which are reconciling items between Adjusted EBITDA and GAAP net income (loss). Because Stitch Fix cannot reasonably predict such items, a reconciliation of the non-GAAP financial measure outlook to the corresponding GAAP measure is not available without unreasonable effort. We caution, however, that such items could have a significant impact on the calculation of GAAP net income (loss). For more information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” below.
Conference Call and Webcast Information
Matt Baer, Chief Executive Officer of Stitch Fix, and David Aufderhaar, Chief Financial Officer of Stitch Fix, will host a conference call at 2:00 p.m. Pacific Time today to discuss the Company’s financial results and outlook. A live webcast of the call will be accessible on the investor relations section of the Stitch Fix website at https://investors.stitchfix.com.
To access the call by phone, please register at the following link:
Dial-In Registration: https://register.vevent.com/register/BI5cb9532858bb46068cf7d1fe2aea4df8
Upon registration, telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call. A replay of the webcast will also be available for a limited time at https://investors.stitchfix.com.
About Stitch Fix, Inc.
Stitch Fix (NASDAQ: SFIX) is the leading online personal styling service that helps people discover the styles they will love that fit perfectly so they always look - and feel - their best. Few things are more personal than getting dressed, but finding clothing that fits and looks great can be a challenge. Stitch Fix solves that problem. By pairing expert stylists with best-in-class AI and recommendation algorithms, the company leverages its assortment of exclusive and national brands to meet each client's individual tastes and needs, making it convenient for clients to express their personal style without having to spend hours in stores or sifting through endless choices online. Stitch Fix, which was founded in 2011, is headquartered in San Francisco. For more information, please visit https://www.stitchfix.com.
Forward-Looking Statements
This press release, the related conference call, and webcast contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact could be deemed forward looking, including but not limited to statements regarding our expectations for future financial performance, including our profitability and long-term targets; guidance on financial results and metrics for the first quarter and full fiscal year of 2025; that the execution of our strategy and priorities will enable us to achieve long-term, sustainable, and profitable growth and positive free cash flow; our expectation to return to revenue growth by the end of fiscal year 2026 and achieve a quarter-over-quarter increase in active clients during fiscal year 2026; that the changes we have made to our client experience will help us acquire, retain, and reactivate highly engaged clients over time and better serve our clients in the future; that the introduction of StyleFile will be a valuable tool that will drive meaningful engagement and client conversion; that our actions to make Stylists more visible to our clients will deepen relationships between clients and Stylists and increase client engagement; that the changes we are making to the traditional Fix model will increase revenue; our expectations to triple the amount of newness as a percentage of our broader assortment by the end of fiscal year 2025; that our refreshed brand identity will deepen connections and engagement with our clients; that the introduction of new private label brands will help us better meet the trend needs of our current clients and will extend the Stitch Fix experience to new client segments; and our expectations regarding warehouse costs, transportation costs, gross margin, inventory levels, and advertising spend. These statements involve substantial risks and uncertainties, including risks and uncertainties related to the current macroeconomic environment; our ability to generate sufficient net revenue to offset our costs; consumer behavior; our ability to acquire, engage, and retain clients; our ability to provide offerings and services that achieve market acceptance; our data science and technology, Stylists, operations, marketing initiatives, and other key strategic areas; risks related to our inventory levels and management; risks related to our supply chain, sourcing of materials and shipping of merchandise; our ability to forecast our future operating results; and other risks described in the filings we make with the SEC. Further information on these and other factors that could cause our financial results, performance, and achievements to differ materially from any results, performance, or achievements anticipated, expressed, or implied by these forward-looking statements is included in filings we make with the SEC from time to time, including in the section titled “Risk Factors” in our Quarterly Report on Form 10-Q for the fiscal quarter ended April 27, 2024. These documents are available on the SEC Filings section of the Investor Relations section of our website at: https://investors.stitchfix.com. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made.
Stitch Fix, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except per share amounts) | ||||||||
August 3, 2024 | July 29, 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 162,862 | $ | 239,437 | ||||
Short-term investments | 84,106 | 18,161 | ||||||
Inventory, net | 97,903 | 130,548 | ||||||
Prepaid expenses and other current assets | 21,839 | 27,692 | ||||||
Current assets, discontinued operations | — | 9,623 | ||||||
Total current assets | 366,710 | 425,461 | ||||||
Property and equipment, net | 51,517 | 79,757 | ||||||
Operating lease right-of-use assets | 63,780 | 104,533 | ||||||
Other long-term assets | 4,857 | 2,681 | ||||||
Long-term assets, discontinued operations | — | 2,046 | ||||||
Total assets | $ | 486,864 | $ | 614,478 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 87,058 | $ | 96,730 | ||||
Operating lease liabilities | 21,817 | 28,210 | ||||||
Accrued liabilities | 73,007 | 69,893 | ||||||
Gift card liability | 6,749 | 10,328 | ||||||
Deferred revenue | 9,217 | 11,366 | ||||||
Other current liabilities | 5,201 | 8,802 | ||||||
Current liabilities, discontinued operations | 502 | 12,782 | ||||||
Total current liabilities | 203,551 | 238,111 | ||||||
Operating lease liabilities, net of current portion | 95,685 | 125,418 | ||||||
Other long-term liabilities | 606 | 3,639 | ||||||
Total liabilities | 299,842 | 367,168 | ||||||
Stockholders’ equity: | ||||||||
Class A common stock, | 1 | 1 | ||||||
Class B common stock, | 1 | 1 | ||||||
Additional paid-in capital | 684,650 | 615,236 | ||||||
Accumulated other comprehensive income (loss) | (335 | ) | 527 | |||||
Accumulated deficit | (467,253 | ) | (338,413 | ) | ||||
Treasury stock at cost | (30,042 | ) | (30,042 | ) | ||||
Total stockholders’ equity | 187,022 | 247,310 | ||||||
Total liabilities and stockholders’ equity | $ | 486,864 | $ | 614,478 |
Stitch Fix, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except share and per share amounts) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | |||||||||||||
Revenue, net | $ | 319,550 | $ | 364,739 | $ | 1,337,468 | $ | 1,592,521 | ||||||||
Cost of goods sold | 177,073 | 203,867 | 745,430 | 916,908 | ||||||||||||
Gross profit | 142,477 | 160,872 | 592,038 | 675,613 | ||||||||||||
Gross margin | 44.6 | % | 44.1 | % | 44.3 | % | 42.4 | % | ||||||||
Selling, general, and administrative expenses | 184,365 | 183,815 | 725,465 | 830,894 | ||||||||||||
Operating loss | (41,888 | ) | (22,943 | ) | (133,427 | ) | (155,281 | ) | ||||||||
Interest income | 3,327 | 2,027 | 11,250 | 5,841 | ||||||||||||
Other income (expense), net | 651 | 1,018 | 1,631 | (25 | ) | |||||||||||
Loss before income taxes | (37,910 | ) | (19,898 | ) | (120,546 | ) | (149,465 | ) | ||||||||
Provision (benefit) for income taxes | (2,169 | ) | 421 | (1,661 | ) | 871 | ||||||||||
Net loss from continuing operations | (35,741 | ) | (20,319 | ) | (118,885 | ) | (150,336 | ) | ||||||||
Net loss from discontinued operations, net of income taxes | (757 | ) | (8,340 | ) | (9,955 | ) | (21,637 | ) | ||||||||
Net loss | $ | (36,498 | ) | $ | (28,659 | ) | $ | (128,840 | ) | $ | (171,973 | ) | ||||
Other comprehensive income (loss): | ||||||||||||||||
Change in unrealized loss on available-for-sale securities, net of tax | 163 | 251 | 267 | 1,738 | ||||||||||||
Foreign currency translation | — | 908 | (1,129 | ) | 2,316 | |||||||||||
Total other comprehensive income (loss), net of tax | 163 | 1,159 | (862 | ) | 4,054 | |||||||||||
Comprehensive loss | $ | (36,335 | ) | $ | (27,500 | ) | $ | (129,702 | ) | $ | (167,919 | ) | ||||
Loss per share from continuing operations, attributable to common stockholders: | ||||||||||||||||
Basic | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.99 | ) | $ | (1.31 | ) | ||||
Diluted | $ | (0.29 | ) | $ | (0.17 | ) | $ | (0.99 | ) | $ | (1.31 | ) | ||||
Loss per share from discontinued operations, attributable to common stockholders: | ||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.19 | ) | ||||
Diluted | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.19 | ) | ||||
Loss per share attributable to common stockholders: | ||||||||||||||||
Basic | $ | (0.30 | ) | $ | (0.24 | ) | $ | (1.07 | ) | $ | (1.50 | ) | ||||
Diluted | $ | (0.30 | ) | $ | (0.24 | ) | $ | (1.07 | ) | $ | (1.50 | ) | ||||
Weighted-average shares used to compute loss per share attributable to common stockholders: | ||||||||||||||||
Basic | 123,635,392 | 117,006,653 | 120,214,198 | 114,684,980 | ||||||||||||
Diluted | 123,635,392 | 117,006,653 | 120,214,198 | 114,684,980 |
Stitch Fix, Inc. Condensed Consolidated Statements of Cash Flow (Unaudited) (In thousands) | ||||||||
For the Twelve Months Ended | ||||||||
August 3, 2024 | July 29, 2023 | |||||||
Cash Flows from Operating Activities from Continuing Operations | ||||||||
Net loss from continuing operations | $ | (118,885 | ) | $ | (150,336 | ) | ||
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities from continuing operations: | ||||||||
Change in inventory reserves | (15,094 | ) | (17,919 | ) | ||||
Stock-based compensation expense | 76,756 | 102,072 | ||||||
Depreciation, amortization, and accretion | 44,489 | 42,122 | ||||||
Asset impairment | 19,283 | 16,874 | ||||||
Other | (869 | ) | 1,884 | |||||
Change in operating assets and liabilities: | ||||||||
Inventory | 47,739 | 76,047 | ||||||
Prepaid expenses and other assets | 3,096 | 11,257 | ||||||
Income tax receivables | 431 | 52,978 | ||||||
Operating lease right-of-use assets and liabilities | (11,935 | ) | (2,996 | ) | ||||
Accounts payable | (9,746 | ) | (40,366 | ) | ||||
Accrued liabilities | 5,304 | (19,698 | ) | |||||
Deferred revenue | (2,150 | ) | (2,824 | ) | ||||
Gift card liability | (3,579 | ) | (205 | ) | ||||
Other liabilities | (6,633 | ) | 4,340 | |||||
Net cash provided by operating activities from continuing operations | 28,207 | 73,230 | ||||||
Cash Flows from Investing Activities from Continuing Operations | ||||||||
Proceeds from sale of property and equipment | 350 | 842 | ||||||
Purchases of property and equipment | (13,965 | ) | (18,863 | ) | ||||
Purchases of securities available-for-sale | (97,322 | ) | (258 | ) | ||||
Sales of securities available-for-sale | — | 6,524 | ||||||
Maturities of securities available-for-sale | 32,195 | 76,231 | ||||||
Net cash provided by (used in) investing activities from continuing operations | (78,742 | ) | 64,476 | |||||
Cash Flows from Financing Activities from Continuing Operations | ||||||||
Proceeds from the exercise of stock options, net | 1,028 | 161 | ||||||
Payments for tax withholdings related to vesting of restricted stock units | (16,090 | ) | (15,129 | ) | ||||
Other | (431 | ) | (117 | ) | ||||
Net cash used in financing activities from continuing operations | (15,493 | ) | (15,085 | ) | ||||
Net increase (decrease) in cash and cash equivalents from continuing operations | (66,028 | ) | 122,621 | |||||
Cash Flows from Discontinued Operations | ||||||||
Net cash used in operating activities from discontinued operations | (9,687 | ) | (15,400 | ) | ||||
Net cash used in investing activities from discontinued operations | — | (150 | ) | |||||
Net cash used in financing activities from discontinued operations | (172 | ) | (454 | ) | ||||
Net decrease in cash and cash equivalents from discontinued operations | (9,859 | ) | (16,004 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (688 | ) | 1,885 | |||||
Net increase (decrease) in cash and cash equivalents | (76,575 | ) | 108,502 | |||||
Cash and cash equivalents at beginning of period | 239,437 | 130,935 | ||||||
Cash and cash equivalents at end of period | $ | 162,862 | $ | 239,437 | ||||
Supplemental Disclosure | ||||||||
Cash paid for income taxes | $ | 1,457 | $ | 1,111 | ||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||||||||
Purchases of property and equipment included in accounts payable and accrued liabilities | $ | 1,258 | $ | 1,226 | ||||
Capitalized stock-based compensation | $ | 4,979 | $ | 6,421 | ||||
Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA from continuing operations (“Adjusted EBITDA”) is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between continuing operations of companies. We believe free cash flow from continuing operations (“Free Cash Flow”) is an important metric because it represents a measure of how much cash from continuing operations we have available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies.
Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of our non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include:
- Adjusted EBITDA excludes interest income and net other (income) expense as these items are not components of our core business;
- Adjusted EBITDA does not reflect our provision for income taxes, which may increase or decrease cash available to us;
- Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
- Adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
- Adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs attributable to our continuing operations that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows; and
- Free Cash Flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.
Adjusted EBITDA
We define Adjusted EBITDA as net loss from continuing operations excluding interest income, net other (income) expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, and restructuring and other one-time costs related to our continuing operations. The following table presents a reconciliation of net loss from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented:
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
(in thousands) | August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | ||||||||||||
Net loss from continuing operations | $ | (35,741 | ) | $ | (20,319 | ) | $ | (118,885 | ) | $ | (150,336 | ) | ||||
Add (deduct): | ||||||||||||||||
Interest income | (3,327 | ) | (2,027 | ) | (11,250 | ) | (5,841 | ) | ||||||||
Other (income) expense, net | (651 | ) | (1,018 | ) | (1,631 | ) | 25 | |||||||||
Provision (benefit) for income taxes | (2,169 | ) | 421 | (1,661 | ) | 871 | ||||||||||
Depreciation and amortization (1) | 8,210 | 9,633 | 35,489 | 38,375 | ||||||||||||
Stock-based compensation expense | 16,845 | 23,649 | 76,756 | 102,072 | ||||||||||||
Restructuring and other one-time costs (2) | 26,356 | 2,772 | 50,463 | 45,749 | ||||||||||||
Adjusted EBITDA | $ | 9,523 | $ | 13,111 | $ | 29,281 | $ | 30,915 | ||||||||
(1) For the three and twelve months ended August 3, 2024, depreciation and amortization excluded | ||||||||||||||||
(2) Restructuring charges for the three and twelve months ended August 3, 2024, were | ||||||||||||||||
Free Cash Flow
We define Free Cash Flow as net cash flows provided by (used in) operating activities from continuing operations, reduced by purchases of property and equipment that are included in cash flows from investing activities from continuing operations. The following table presents a reconciliation of net cash flows provided by (used in) operating activities from continuing operations, the most comparable GAAP financial measure, to Free Cash Flow for each of the periods presented:
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
(in thousands) | August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | ||||||||||||
Free Cash Flow reconciliation: | ||||||||||||||||
Net cash provided by operating activities from continuing operations | $ | 8,200 | $ | 22,550 | $ | 28,207 | $ | 73,230 | ||||||||
Deduct: | ||||||||||||||||
Purchases of property and equipment from continuing operations | (3,706 | ) | (3,999 | ) | (13,965 | ) | (18,863 | ) | ||||||||
Free Cash Flow | $ | 4,494 | $ | 18,551 | $ | 14,242 | $ | 54,367 | ||||||||
Net cash provided by (used in) investing activities from continuing operations | $ | (39,193 | ) | $ | 28,176 | $ | (78,742 | ) | $ | 64,476 | ||||||
Net cash used in financing activities from continuing operations | $ | (3,676 | ) | $ | (4,702 | ) | $ | (15,493 | ) | $ | (15,085 | ) | ||||
Operating Metrics
August 3, 2024 | April 27, 2024 | January 27, 2024 | October 28, 2023 | July 29, 2023 | |||||||||||
Active Clients (in thousands) | 2,508 | 2,633 | 2,805 | 2,989 | 3,121 | ||||||||||
Net Revenue per Active Client | $ | 533 | $ | 525 | $ | 515 | $ | 506 | $ | 510 | |||||
Active Clients
We define an active client as a client who checked out a Fix or was shipped an item via Freestyle in the preceding 52 weeks, measured as of the last day of that period. A client checks out a Fix when she indicates what items she is keeping through our mobile application or on our website. We consider each Women’s, Men’s, or Kids account as a client, even if they share the same household.
Net Revenue per Active Client
We calculate net revenue per active client based on net revenue over the preceding four fiscal quarters divided by the number of active clients, measured as of the last day of the period. Net revenue per active client was
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