With apparel personalization comes sales and profits.
Stitch Fix President and Chief operating officer Mike Smith tells Yahoo Finance the company is on track to hit $2 billion in sales in 2020. Importantly, Smith said the upstart apparel personalization site will be profitable despite investments in marketing, the hiring of data scientists and new U.K. operations. Smith spoke to Yahoo Finance on the sidelines of the National Retail Federation’s NRF 2020 conference on Monday.
Smith points out Stitch Fix (SFIX) has been profitable since 2014.
Wall Street is currently looking for Stitch Fix to reach $1.92 billion in sales this fiscal year and drive earnings of 7 cents a share, according to Yahoo Finance Premium data. The upbeat outlook by Smith will probably go a long way to supporting Stitch Fix shares, which have surged 40% in the past year.
Stitch Fix being a profitable retailer is about what you would expect. The company doesn’t operate any stores and is sending out personalized products in boxes. Stitch Fix is finding early success in men’s and kids products after gaining its street cred in retail serving women.
The company is fresh off opening its seventh distribution facility in the U.K. Smith says other locations internationally are in the cards over time. Moreover, Stitch Fix has launched a program called direct buy — at its core it should help the company sell more product to loyal customers.
Goldman Sachs retail analyst Heath Terry remains Buy rated on Stitch Fix shares in large part on the efficiencies the company could drive by selling a greater amount of product. In light of that, Terry thinks Stitch Fix stock’s valuation is still attractive even after the strong upside move of the past year.