Stitch Fix SFIX is expected to report a year-over-year decrease in the top line when it releases second-quarter fiscal 2025 earnings on March 11, after market close. Investors are closely monitoring for insights into the company's performance and strategic direction. 

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $295.2 million, which indicates a decrease of 10.7% from the prior-year reported figure.

However, the bottom line is expected to have improved year over year. In the past 30 days, the Zacks Consensus Estimate for adjusted loss per share has been unchanged at 11 cents, which indicates an improvement of 47.6% from an adjusted loss of 21 cents in the year-ago quarter.

Stitch Fix delivered a trailing four-quarter earnings surprise of 35.3%, on average. In the last reported quarter, the company surpassed the Zacks Consensus Estimate by a margin of 64.3%.

Key Factors Influencing SFIX's Q2 Performance

Stitch Fix faces hurdles in reversing customer declines and sustaining long-term revenue growth. Fiscal second-quarter revenues are likely to have been negatively impacted by a combination of seasonal factors and ongoing challenges in customer acquisition. 

On its last reported quarter’s earnings call, the company hinted about a decline in revenues due to typical post-holiday seasonality and potential softness in consumer spending. While improvements in customer engagement and reactivation efforts have shown progress, active client count has been a headwind, which is likely to have impacted the company’s top line. We expect active clients to decline 15.6% year over year in the fiscal second quarter.

However, key initiatives focused on enhancing customer experiences through AI-driven personalization and reimagining product assortments to better align with evolving client preferences, ensuring a more tailored and engaging shopping experience.

Stitch Fix’s bottom line is likely to have improved in the fiscal second quarter due to continued cost efficiencies, an improved gross margin and higher average order values. The company expects a gross margin between 44% and 45% for the fiscal second quarter, benefiting from optimized pricing and better product margins. We anticipate the gross margin to increase 110 basis points year over year to 44.5% in the fiscal second quarter.

What the Zacks Model Predicts for Stitch Fix

Our proven model does not conclusively predict an earnings beat for SFIX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Stitch Fix currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Stocks With Favorable Combination

Here are some companies, which according to our model, have the right combination of elements to beat on earnings this time around.

BJ’s Wholesale Club BJ has an Earnings ESP of +2.34% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for fiscal first-quarter earnings per share is pegged at 90 cents, which implies a 5.9% year-over-year increase.

You can see the complete list of today’s Zacks #1 Rank stocks here.

BJ’s Wholesale Club’s top line is expected to have increased year over year. The consensus estimate for quarterly revenues is pegged at $5.24 billion, which indicates a rise of 6.5% from the prior-year quarter’s actual. BJ delivered a trailing four-quarter earnings surprise of 12%, on average.

Lululemon athletica LULU presently has an Earnings ESP of +0.29% and a Zacks Rank of 2. The company is slated to register a top-line increase when it reports fiscal fourth-quarter results. The Zacks Consensus Estimate for LULU’s quarterly revenues is pegged at $3.57 billion, which indicates growth of 11.5% from the figure reported in the prior-year quarter.

The consensus estimate for Lululemon athletica’s quarterly earnings has been increased 1 cent in the past 30 days to $5.83 per share. The estimate indicates growth of 10.2% from the year-ago quarter’s reported number. LULU delivered an average earnings surprise of 6.7% in the trailing four quarters.

Columbia Sportswear COLM has an Earnings ESP of +0.10% and a Zacks Rank of 3 at present. The company is anticipated to register a top-line decrease in its first-quarter results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $761.9 billion, which indicates a 1.1% dip from the year-ago quarter’s actual. 

The company’s bottom line is expected to have declined. The consensus estimate for Columbia Sportswear’s earnings is pegged at 69 cents per share, suggesting a 2.8% slip from the year-ago quarter’s actual. COLM delivered a trailing four-quarter earnings surprise of 36.7%, on average.

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Columbia Sportswear Company (COLM) : Free Stock Analysis Report

BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report

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Stitch Fix, Inc. (SFIX) : Free Stock Analysis Report

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