Stitch Fix (SFIX) Stock Forecast & Price Target

Stitch Fix Inc anticipates revenue growth for FY26, projecting sales between $1.28 billion and $1.33 billion, indicating a year-over-year increase of 1% to 5%. In the first quarter of FY26, the company reported total revenue of $342 million, surpassing analyst expectations and reflecting a 7.3% increase compared to the prior year, attributed to a refreshed merchandise mix that led to a 7.6% rise in average order value (AOV). Additionally, the positive trend in the women's segment, particularly with a 19% year-over-year increase in sales of sweaters, coats, jackets, and vests, signals robust consumer demand and supports the overall optimistic revenue outlook.

Stitch Fix Inc. has experienced a decline in key financial metrics, with the first quarter adjusted EBITDA margin contracting to 3.9%, down from 4.2% year-over-year, indicating underlying operational challenges. Additionally, the company's active client base decreased by 5.2% year-over-year to 2.307 million, reflecting weak customer engagement, while gross margins fell by 180 basis points to 43.6%, which is below expectations. Furthermore, the adjusted EBITDA margin forecast suggests a troubling downward trajectory, anticipated to range between 2.3% and 3.4%, marking a significant decline from prior levels and signaling potential ongoing difficulties in profitability.