Key takeaways:
- Stitch Fix reported Q3 fiscal 2026 net revenue of $340.3 million, up 4.7% year over year.
- Stitch Fix estimates activewear, footwear and accessories represent a $1 billion incremental revenue opportunity within its existing client base.
- Stitch Fix’s Vision AI tool is driving more than 100% lift in Freestyle spending for clients who engage with it.
Stitch Fix is moving aggressively to expand its brand roster and category footprint, adding Outdoor Voices, Malbon Golf, Spiritual Gangster and Cotopaxi to its activewear offering and launching women’s sunglasses with brands including Le Specs, Aire and Quay, executives said on the company’s third-quarter earnings call last week.
The company estimates that activewear, footwear, and accessories could generate approximately $1 billion in incremental revenue if it achieves fair share with its existing client base, CEO Matt Baer said on the call.
New Brands, New Categories
The push is showing early results, Baer said. Women’s activewear and athleisure grew a combined 50% year over year in the third quarter of fiscal 2026, and the Men’s business grew double digits for a fourth consecutive quarter, with warm-weather categories, including shorts, short-sleeve woven tops and casual shoes each up more than 30%.
The company is also deepening its footwear assortment with new brands like Frye while seeing growth from established partners including adidas and New Balance, he said.
The category strategy is central to Stitch Fix’s broader effort to grow wallet share among its existing clients. Revenue per active client, or RPAC, reached $578 in the quarter, up 6.6% year over year and the highest level the company has reported to date, according to Stitch Fix.
Five Consecutive Quarters of Revenue Growth
The expansion coincides with improving financial momentum. The company reported net revenue of $340.3 million for the quarter ended May 2, a 4.7% year-over-year increase and the fifth consecutive quarter of year-over-year revenue growth, the company said.
Active clients grew sequentially by 21,000 to 2.309 million, what Baer called a “significant milestone.”
“These results reflect our team’s consistent execution of our strategy and underscore that the improvements we’ve made to our client experience and assortment are resonating,” he said.
Client Quality Improving Alongside Count
New clients grew more than 10% year over year for the third consecutive quarter, with new client lifetime values nearly double what they were three years ago, Baer said on the call. Retention hit its highest rate in four years, he said.
AI Accelerates Design and Engagement
On the technology side, Stitch Fix’s Vision AI styling tool continues to show a more than 100% lift in Freestyle spending over 90 days for clients who use it, Baer said.
The company is also applying AI to its private brand product development process.
“In private brand product development we’re using AI to fundamentally transform the process and we can now design a full assortment for an individual private brand in about one week, compared to the traditional multi-month design cycle,” Baer said.
Q3 Bottom Line and Outlook
Net loss for the quarter was $1.5 million, or $0.01 per diluted share, a significant improvement from a net loss of $7.4 million, or $0.06 per diluted share, in the same period a year ago, the company reported.
Stitch Fix ended the quarter with $229.4 million in cash and investments and no debt, and repurchased 4.5 million shares for $15.1 million during the quarter, according to the press release.
According to Circana data cited by Baer on the call, Stitch Fix’s year-over-year revenue growth rate outperformed the total U.S. apparel, footwear and accessories market in the most recent quarter by more than four times.
For the fourth quarter, the company forecast net revenue of $322 million to $327 million and adjusted EBITDA of $7 million to $10 million.
For the full fiscal year, Stitch Fix raised the midpoints of both guidance ranges, now forecasting revenue of $1.346 billion to $1.351 billion and adjusted EBITDA of $49 million to $52 million, according to the press release.
