Stitch Fix (NASDAQ:SFIX) reported what management described as “another strong quarter” in its fiscal second quarter of 2026, highlighting its fourth consecutive quarter of year-over-year revenue growth as the company continues executing a transformation focused on assortment improvements, greater service flexibility, and new AI-enabled features.
Quarterly results exceeded outlook as revenue and profitability improved
Revenue rose 9.4% year-over-year to $341.3 million, which management said exceeded its outlook and was supported by “broad-based demand” that remained resilient across income cohorts. The company reported revenue per active client (RPAC) of $577, up 7.4% year-over-year and described as the highest RPAC the company has reported as a public company.
Stitch Fix ended the quarter with $240.5 million in cash and investments and no debt. Inventory was $122.1 million, up 11.4% year-over-year, which management said reflected investments in the client experience and increased demand. Advertising expense was 8.5% of revenue, below the company’s expected range of 9% to 10%, as management emphasized a deliberate approach to marketing focused on efficiency and long-term client quality.
Fix channel drove growth as average order value and AUR increased
Management said growth was “anchored by the Fix channel,” citing stronger head-to-toe outfitting and category expansion. Stitch Fix said both its women’s and men’s Fix businesses grew double digits and contributed to a nearly 10% year-over-year increase in Fix average order value (AOV), its 10th consecutive quarter of growth. CFO David Aufderhaar added that Fix AOV increased 9.8% in Q2, driven by more items per Fix and higher average unit retail (AUR).
Stitch Fix pointed to increased service flexibility as an important demand driver, including adoption of “larger Fixes” offering up to eight items, themed Fixes, and Fixes built around a specific Freestyle item a client selects. Management said these newer formats, in aggregate, carry an average order value nearly double that of a traditional five-item Fix.
AUR increased 7.7% year-over-year, the sixth consecutive quarter of growth. CEO Matt Baer said the increase was primarily driven by a more compelling assortment and favorable mix, adding that external pricing factors such as tariffs were “not a significant driver” of the change.
Category and brand mix shifts supported demand, with notable holiday momentum
In merchandising, the company highlighted strength in several categories during the quarter:
- Outerwear (women’s and men’s combined) up 26%
- Denim up 17%
- Activewear and athleisure (combined) up 37%
- Special occasion / night-out styles up 46%
- Footwear up 33%, with sneakers up 46%
- Accessories up 51%
Management reiterated a longer-term opportunity in activewear, athleisure, footwear, and accessories, estimating that “fair share” penetration of these categories within its existing client base represents roughly $1 billion in incremental revenue opportunity.
Stitch Fix also discussed private-brand performance. Baer cited Market & Spruce, Montgomery Post, 41 Hawthorn, and WeWander, saying revenue from each was up more than 35% year-over-year. He also noted the company has continued to add market and national brands to fill “white space.”
Looking back at the holiday season that fell within the quarter, management said it benefited from seasonally relevant merchandise and a strategic promotional cadence. The company reported “record Freestyle sales” during the Black Friday/Cyber Monday period and said momentum continued through the end of the calendar year, while maintaining discipline in the Fix business through Freestyle-exclusive promotional capabilities.
Active client trends improved, with management targeting sequential net adds in Q3
Stitch Fix ended Q2 with 2.3 million active clients, in line with expectations. Baer said the quarter marked the seventh consecutive quarter of improvement in year-over-year active client growth rates. He added that the men’s business returned to year-over-year active client growth in Q2 after returning to sequential growth in the prior quarter.
Management highlighted several client health indicators, including that new clients grew year-over-year for the second consecutive quarter, three-month LTV for new clients increased year-over-year for the 10th consecutive quarter and remained at three-year highs, and re-engaged clients grew year-over-year for the second consecutive quarter. The company also said it just completed a quarter with its highest retention rate in nearly four years.
Aufderhaar said Stitch Fix expects sequential active client growth in Q3, likely “a little less than 1%” quarter over quarter, while reiterating a goal to return to year-over-year active client growth in fiscal 2027.
The company also pointed to early results from new initiatives, including family accounts (positioned as a lower-cost way to grow household wallet share and enable gifting behavior) and Stylist Connect, a platform designed for near real-time collaboration between clients and stylists. Baer said early signals from Stylist Connect show clients who engage with it are “significantly more likely” to request the same stylist for their next Fix.
AI tools and marketing segmentation highlighted; guidance raised and tightened
Management repeatedly emphasized AI as a differentiator, citing proprietary data, algorithms, and “billions of data points” used to personalize styling. Baer highlighted the company’s AI Style Assistant, which helps clients articulate preferences and provides richer signals to stylists, as well as “Stitch Fix Vision,” an AI-powered platform that provides personalized imagery and shoppable outfit recommendations. He said 75% of clients who engage with Vision return in subsequent months, and the company saw “over 100% lift” in Freestyle spend over a 90-day period for clients who used the feature.
In the Q&A, management said sales from “new styles” were up roughly 50% year-over-year in the second quarter, describing continued investment in newness, style, and trend as part of the transformation.
Stitch Fix also discussed macro considerations. Aufderhaar cited consumer sentiment, jobs data, and rising gas prices as potential headwinds, noting gas is non-discretionary and can reduce wallet share for apparel spending. However, Baer said the company’s stylist relationships and broad price-point assortment help it adjust to shifting budgets, and he expressed confidence the company can continue gaining market share even if the consumer becomes more challenged.
Regarding GLP-1-related weight loss, Baer said the company has marketed its service to consumers undergoing body transformations and highlighted internal signals: mentions of weight loss in Fix request notes have tripled over two years and surged 75% year-over-year in the most recent quarter.
For outlook, Stitch Fix raised and tightened its full-year guidance. The company now expects fiscal 2026 revenue of $1.33 billion to $1.35 billion and Adjusted EBITDA of $42 million to $50 million, while continuing to expect full-year free cash flow to be positive. For Q3, it guided to revenue of $330 million to $335 million and Adjusted EBITDA of $7 million to $10 million. Management said growth rates may moderate as the company laps a strong AOV “stack,” and it characterized the back-half assumptions as reflecting both underlying momentum and realism about the environment ahead.
About Stitch Fix (NASDAQ:SFIX)
Stitch Fix, Inc, headquartered in San Francisco, California, is a leading online personal styling service that blends data science with human expertise to deliver curated clothing and accessory selections. Founded in 2011 by Katrina Lake, the company pioneered a subscription-based model in which customers receive periodic “Fixes” tailored to their personal style, size and budget. Each shipment arrives with several handpicked items along with styling notes, allowing clients to review, purchase and return pieces at their convenience.
Clients begin by completing an online style profile that captures their measurements, design preferences and lifestyle needs.
