Stitch Fix stock rallies as results beat, and company takes further steps to pare back

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Shares of Stitch Fix Inc. rose after hours after the online clothing-selection and styling service reported better-than-expected third-quarter results.

Shares of Stitch Fix Inc. rose after hours on Tuesday after the online clothing-selection and styling service reported better-than-expected third-quarter results and announced plans to scale back operations as it tries to refocus on its styling business in the U.S.

In the latest effort to shake up operations, executives said they would close the company’s Dallas distribution center next year and let the lease on another distribution center expire this year. They also said they would “explore exiting” the U.K., which Stitch Fix SFIX entered four years ago. Active clients, or customers who checked out or bought clothes over the past 52 weeks, fell 11% to 3.48 million.

Stitch Fix said it expected fourth-quarter sales of between $365 million and $375 million, below FactSet forecasts for $379 million.Stitch Fix shares have fallen 57% over the past 12 months, as the company deals with a more cautious consumer who is less willing to shell out money for clothes. Prices for clothing, in turn, has fallen, as retailers try harder to entice consumers — putting pressure on profits.

 

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