Stitch Fix Q4 Fiscal 2022 Earnings Preview: What Investors Should Watch for SFIX

Stitch Fix Inc. [SFIX] is poised to deliver disappointing results when the company reports its fourth-quarter fiscal 2022 earnings on September 20, with both revenue and profitability likely to contract year-over-year. The consensus view calls for quarterly revenues of $489 million—a 14.3% drop compared to the same period last year. More concerning for shareholders, the company is forecast to swing to a loss of $0.60 per share versus earnings of $0.19 per share a year ago. Wall Street consensus on these estimates has remained unchanged over the last month.

Interestingly, Stitch Fix has historically demonstrated strong earnings surprise capability, posting an average beat of 73.5% over the trailing four quarters. However, this earnings season may prove different.

Headwinds Weighing on SFIX Performance

Several macro-level challenges appear to be pulling down Stitch Fix’s recent performance. Supply chain disruptions, persistent inflation, and shifting consumer spending patterns have all created a difficult backdrop for the personal styling service provider. Beyond external pressures, management’s elevated spending on its Freestyle platform and expansion into new sales channels is also pressuring profitability.

During the last earnings call, Stitch Fix management guided for Q4 revenues between $485-$495 million, implying a 13-15% year-over-year decline. The company projected adjusted EBITDA to be negative, ranging from negative $25 million to negative $30 million, with margin compression of 5-6 percentage points.

Despite these headwinds, Stitch Fix continues investing in digital innovation and personalized shopping capabilities. The Freestyle offering has become a bright spot—allowing customers to browse and purchase curated selections based on their individual style, fit preferences, and size. This differentiated approach has the potential to drive long-term engagement.

What the Zacks Predictive Model Reveals

The Zacks earnings forecasting model suggests SFIX faces a challenging path to a positive surprise this earnings season. While the company holds a Zacks Rank #3 (Hold), its Earnings ESP (Expected Surprise Prediction) stands at exactly 0.00%, indicating the market has already priced in current analyst expectations. This neutral combination of metrics makes predicting an upside surprise difficult.

Other Notable Earnings Plays Worth Tracking

For investors seeking companies with stronger fundamentals heading into earnings, three stocks present more attractive risk-reward profiles based on the Zacks model:

Dave & Buster’s Entertainment [PLAY] carries an Earnings ESP of +2.97% alongside a Zacks Rank #3. The casual dining and entertainment operator is expected to see bottom-line softness, with consensus EPS of $0.08 reflecting a 61.9% year-over-year decline. However, the top line tells a different story—revenues are forecast at $480 million, up 50.6% from the year-ago quarter. PLAY has delivered an average earnings surprise of 9.3% over the past four quarters.

Costco Wholesale [COST] offers an Earnings ESP of +0.22% with a Zacks Rank of 3. The warehouse retailer is anticipated to post bottom-line improvement, with consensus fiscal Q4 EPS of $4.11 versus $3.90 in the prior year. Revenue growth also appears solid, with guidance of $71.8 billion representing 14.6% growth versus the year-ago quarter. COST has demonstrated a 9.7% average earnings surprise historically.

Chipotle Mexican Grill [CMG] rounds out the trio with an Earnings ESP of +1.63% and a Zacks Rank #3 rating. The fast-casual restaurant operator is on track to post meaningful bottom-line growth, with consensus Q3 2022 EPS of $9.06—up 29.1% year-over-year. Top-line expansion is also expected, with revenue estimates of $2.2 billion reflecting 14.4% growth. CMG has posted a 6.2% average earnings surprise.

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