Earnings call
https://edge.media-server.com/m6/p/d4vx87vwShareholder letter, earnings slides, and financials
https://investors.stitchfix.com/static-files/dbfc1359-c683-4b73-b27f-07e5370cfda2Encouraging earnings report and super informative conference call Q&A. Revenue grew 29%, gross margin improved, balance sheet is solid, Style Pass has increased client spend, Style Shuffle has given them a ton of data and helped them retain more first-time Fixers, plus the part in the call about them being quicker to adapt to trends because of better insights and higher inventory turnover was interesting from a competitive standpoint. I also liked how they're taking a conservative approach to the UK and think it's great that Kids is performing well given how quickly little folk tend to grow out of clothes. That could become a nice vertical for them.
That said, I've sold some of my position. It was 25% or so of my portfolio on January 1st and it has returned 70% since. Currently I'm more bearish at a market-level on growth and tech stocks than I have been for years, so I've been raising cash and limiting equity exposure. It's still my largest position and I like it long-term, but for now I think it's prudent to cut back so I've trimmed quite a bit. I also have one or two questions about whether clients might decrease Stitch Fix spending in a recessionary environment and how the stock price would react. I'm not crazily concerned because I think the average Fixer is less price-sensitive than folks at the budget end of the market, but it's something I keep in mind.
Anyway, so far this has been a decent investment for me and I'm still confident in management and their ability to continuously evolve and adapt the business model over time.
