September 28, 2022

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Stitch Fix cuts jobs, revenue forecasts fail sends stocks lower

Stitch Fix cuts jobs, revenue forecasts fail sends stocks lower

Stitch Fix Inc. does the cutting About 15% of jobs are salaried as part of a plan to return to profitability.

shares Online personal design services company 16% after hours.

Stitch Fix logo arranged on a smartphone in Hastings-on-Hudson, New York. (Photo: Tiffany Hagler-Geard/Bloomberg via Getty Images/Getty Images)

Revenue in the quarter ending in April was down 8% from a year earlier.

company Expected net revenue Between $485 million and $495 million for the fourth quarter, compared with estimates of $495.1 million, according to Refinitiv data.

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layoffs calculation for approximately 4% of the company’s total workforce, or about 330 jobs in total.

The majority of jobs are in non-tech companies and design roles, according to CEO Elizabeth Spaulding.

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“[The decision] Spaulding wrote in a letter to Stitch Fix employees, “We had to do to position ourselves for profitable growth…There will be tough choices along the way, and this is one of those choices.”

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SFIX STITCH FIX INC. 7.78 -0.91 -10.47%

Job cuts and other changes are expected to save $40 million to $60 million in costs in fiscal 2023. The company will also incur $15-20 million in fees in the fourth quarter.

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The company lost $78 million in the third quarter of the fiscal year. On a stock basis, the San Francisco-based company said it had a loss of 72 cents, which is more than the expected loss of 57 cents a share.

Reuters contributed to this report.

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