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Stitch Fix, DocuSign stocks tumble after earnings misses

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Yahoo Finance markets reporter Emily McCormick details Stitch Fix's Q3 earnings miss and its employee lay-offs, along with DocuSign's losses following its Q1 earnings miss.

Video Transcript

- There's some earnings out right now from Stitch Fix and DocuSign. Emily, start us off.

- Well, Seana, I'll start off here with shares of Stitch Fix. Now, this stock had closed lower by more than 10% today. Shares are trading slightly lower in the after-hours session as well. That's after the company reported third-quarter losses that were wider than expected at $0.72 a share versus the $0.53 per share loss that Wall Street had been anticipating.

Now, on the top line, third-quarter net revenue was just a hair above estimates, coming in at 492.9 million versus the $492.7 million that had been expected. Now, these quarterly results from Stitch Fix do come after CNBC reported first earlier today that the company would be laying off 15% of its salaried employees. Now, CNBC had cited an internal memo for that report. And Stitch Fix did confirm this reporting in the company's 10-Q filing that just dropped now.

The company is saying that this is, quote, "in light of our recent business momentum and an uncertain macroeconomic environment." The company went on to say, quote, "This restructuring plan reduces our workforce by approximately 15% of salaried positions and represents approximately 4% of our roles in total. In connection with the restructuring plan, we expect to incur cash charges related to termination benefits and other one-time cash charges of approximately $15 million to $20 million which will be recognized in the fourth quarter of fiscal 2022."

So Stitch Fix really becoming the latest of a number of tech companies, and major companies in general, to be implementing hiring freezes or conducting layoffs-- and again, those shares closing lower today and also trading lower in the after-hours session.

Then also want to shift gears and take a look at shares of DocuSign-- this company also just dropping results now after market close. That stock is also tumbling in the after-hours session. First-quarter revenue was a beat at $588.7 million, ahead of the 581.8 million expected. However, adjusted earnings per share were a miss at $0.38 cents per share.

The company also maintained its full-year revenue guidance for between 2.47 billion to 2.48 billion on the top line. The estimate on Wall Street was for 2.48 billion. So the midpoint of that range did actually miss those expectations. So shares of DocuSign, again, down in after-hours trading and adding to year-to-date losses, guys.