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Stitch Fix (SFIX) to Post Q4 Earnings: What's in the Offing?

·5 min read

Stitch Fix, Inc. SFIX is expected to register a decrease in both its top and bottom line from the year-ago fiscal quarter’s reported figure when it releases fourth-quarter fiscal 2022 earningson Sep 20, after market close. The Zacks Consensus Estimate for quarterly revenues currently stands at $489 million, suggesting a fall of 14.3% from the year-ago fiscal quarter’s tally.

The Zacks Consensus Estimate for the fiscal fourth quarter’s loss is pegged at 60 cents. The year-earlier fiscal quarter delivered earnings per share of 19 cents. The consensus estimate has been stable over the past 30 days.

A glimpse of this online personal-styling service provider’s performance shows that it delivered an earnings surprise of 73.5% in the trailing four quarters, on average.

Factors at Play

Stitch Fix’s quarterly performance might have been hurt by a tough macroeconomic environment, including headwinds like supply-chain issues, global inflationary pressures and potential shifts in customer demand. Any deleverage in selling, general and administrative expenses might have affected SFIX’s bottom line in the fiscal fourth quarter. In addition, elevated investments toward the Freestyle drive and new channels are concerning.

On its last earnings call, management had projected net revenues of $485-$495 million for the fiscal fourth quarter, indicating a decline of 13-15% from the year-ago fiscal quarter’s reported figure. Stitch Fix anticipated adjusted EBITDA between a negative $25 million and a negative $30 million, with a margin contraction of 5-6%.

However, Stitch Fix has been expanding its digital capabilities and personalized shopping for a while to offer clients the best-in-class service. SFIX’s Freestyle drive offering quite a distinct shopping experience is encouraging. This platform allows customers to discover and buy curated items according to their style, preferences, fit and size.

What Does the Zacks Model Say?

Our proven model does not conclusively predict a beat for Stitch Fix 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’s not the case here as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Stitch Fix currently has a Zacks Rank #3, its Earnings ESP of 0.00% in the combination together makes surprise prediction difficult.

Stocks With Favorable Combination

Here are three companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this season:

Dave & Buster's Entertainment PLAY currently has an Earnings ESP of +2.97% and a Zacks Rank #3. PLAY is likely to register a year-over-year decline in the bottom line when it reports third-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 8 cents suggests a decline of 61.9% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here..

Dave & Buster's Entertainment’s top line is expected to increase from the year-ago fiscal quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $480 million, indicating an increase of 50.6% from the figure reported in the prior-year fiscal quarter. PLAY has a trailing four-quarter earnings surprise of 9.3%, on average.

Costco COST currently has an Earnings ESP of +0.22% and a Zacks Rank of 3. COST is likely to register a bottom-line improvement year over year when it reports fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the fiscal quarterly earnings per share of $4.11 suggests an improvement from $3.90 reported in the year-ago fiscal quarter.

Costco's top line is expected to rise from the year-ago fiscal quarter’s reported number. The Zacks Consensus Estimate for fiscal quarterly revenues is pegged at $71.8 billion, implying an improvement of 14.6% from the figure reported in the prior-year fiscal quarter. COST has a trailing four-quarter earnings surprise of 9.7%, on average.

Chipotle Mexican Grill CMG currently has an Earnings ESP of +1.63% and is Zacks #3 Ranked. CMG is likely to register an increase in the bottom line from the last year’s quarterly reading when it reports third-quarter 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $9.06 suggests an increase of 29.1% from the year-ago quarter’s reported number.

Chipotle Mexican Grill’s top line is expected to increase from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.2 billion, suggesting growth of 14.4% from the prior-year quarter’s actuals. CMG has a trailing four-quarter earnings surprise of 6.2%, on average.

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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report

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

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