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Stitch Fix, Inc. (SFIX)

CIK: 0001576942. SIC: 5961 Retail-Catalog & Mail-Order Houses. Latest 10-K as of: 2025-09-25.

SIC breadcrumb: Retail Trade > Miscellaneous Retail > SIC 5961 Retail-Catalog & Mail-Order Houses

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1576942. Latest filing source: 0001628280-25-042782.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue1,267,171,000USD20252025-09-25
Net income-28,739,000USD20252025-09-25
Assets480,622,000USD20252025-09-25

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001576942.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric2016201720182019202020212022202320242025
Revenue977,139,0001,226,505,0001,577,558,0001,711,733,0002,101,258,0002,017,804,0001,592,521,0001,337,468,0001,267,171,000
Net income33,181,000-594,00044,900,00036,881,000-67,117,000-8,876,000-207,121,000-171,973,000-128,840,000-28,739,000
Operating income64,228,00031,640,00043,024,00023,495,000-51,664,000-63,361,000-184,470,000-155,281,000-133,427,000-38,905,000
Gross profit323,249,000434,421,000536,022,000703,129,000754,210,000947,636,000886,672,000675,613,000592,038,000562,939,000
Diluted EPS0.34-0.020.340.36-0.66-0.08-1.90-1.50-1.07-0.22
Operating cash flow73,230,00028,207,00025,575,000
Capital expenditures15,238,00017,130,00016,565,00030,825,00030,207,00035,256,00044,957,00018,863,00013,965,00016,293,000
Share buybacks0.003,557,00039,0000.000.000.0030,042,0000.000.00
Assets257,205,000481,585,000616,066,000769,429,000819,149,000764,535,000614,478,000486,864,000480,622,000
Liabilities153,122,000166,513,000220,066,000368,392,000358,300,000441,884,000367,168,000299,842,000277,644,000
Stockholders' equity49,947,00061,861,000315,072,000396,000,000401,037,000460,849,000322,651,000247,310,000187,022,000202,978,000
Cash and cash equivalents110,608,000297,516,000170,932,000143,455,000129,785,000130,935,000239,437,000162,862,000113,952,000
Free cash flow54,367,00014,242,0009,282,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric2016201720182019202020212022202320242025
Net margin-0.06%3.66%2.34%-3.92%-0.42%-10.26%-10.80%-9.63%-2.27%
Operating margin3.24%3.51%1.49%-3.02%-3.02%-9.14%-9.75%-9.98%-3.07%
Return on equity66.43%-0.96%14.25%9.31%-16.74%-1.93%-64.19%-69.54%-68.89%-14.16%
Return on assets-0.23%9.32%5.99%-8.72%-1.08%-27.09%-27.99%-26.46%-5.98%
Liabilities / equity2.480.530.560.920.781.371.481.601.37
Current ratio1.482.932.642.202.291.611.791.801.81

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001576942.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2023-Q12022-10-29-0.50reported discrete quarter
2023-Q22023-01-28-0.58reported discrete quarter
2023-Q32023-04-29-0.19reported discrete quarter
2023-Q42023-07-29375,798,000-28,659,000derived Q4 = FY annual - nine-month YTD
2024-Q12023-10-28364,785,000-35,490,000-0.30reported discrete quarter
2024-Q22024-01-27330,402,000-35,524,000-0.30reported discrete quarter
2024-Q32024-04-27322,731,000-21,328,000-0.18reported discrete quarter
2024-Q42024-08-03319,550,000-36,498,000derived Q4 = FY annual - nine-month YTD
2025-Q12024-11-02318,818,000-6,256,000-0.05reported discrete quarter
2025-Q22025-02-01312,110,000-6,529,000-0.05reported discrete quarter
2025-Q32025-05-03325,016,000-7,378,000-0.06reported discrete quarter
2025-Q42025-08-02311,227,000-8,576,000derived Q4 = FY annual - nine-month YTD
2026-Q12025-11-01342,127,000-6,362,000-0.05reported discrete quarter
2026-Q22026-01-31341,297,000-2,654,000-0.02reported discrete quarter
2026-Q32026-05-02340,277,000-1,525,000-0.01reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-042504.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-06-11. Report date: 2026-05-02.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with “Special Note Regarding Forward-Looking Statements”, “Risk Factors” included under Part II, Item 1A, and our unaudited condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes included in Part II, Item 8 of our Annual Report on Form 10-K (the “2025 Annual Report”) for the fiscal year ended August 2, 2025, filed with the Securities and Exchange Commission on September 25, 2025.

We use a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday that is closest to July 31 of that year. The fiscal year ending August 1, 2026 (“fiscal 2026”) and August 2, 2025 (“fiscal 2025”) each consist of 52 weeks. Throughout this Quarterly Report, all references to quarters and years are to our fiscal quarters and fiscal years unless otherwise noted.

BUSINESS OVERVIEW

In 2011, Stitch Fix introduced an innovative approach to shopping for clothing and accessories. We were inspired by the opportunity to create a client-first styling experience, offering an alternative to impersonal, time-consuming and inconvenient traditional shopping. We do this through our unique business model that pairs expert Stylists with best-in-class artificial intelligence (“AI”) and recommendation algorithms. It is this combination that enables us to help people discover the styles they will love without having to spend hours browsing stores or sifting through endless choices online.

Clients primarily engage with us by (1) receiving a curated shipment of items informed by our algorithms and chosen by a Stitch Fix Stylist (a “Fix”); or (2) purchasing directly from our website or mobile app based on an individualized assortment of outfit and item recommendations (“Freestyle”). For the Fix experience, clients choose to schedule regular shipments or order a Fix on demand. Then, after receiving a Fix, they can purchase the items they want to keep and return the other items, if any.

Since our inception, Stitch Fix has been powered by data science, and we continue to enhance these capabilities. Our rich data set and our proprietary algorithms fuel our business by enhancing the client experience and driving business model efficiencies. For example, we currently leverage AI and data science to match our Stylists to our clients and aid our Stylists in creating Fixes, help inform merchandise buying and inventory placement in our network, and optimize our approach to pricing and markdowns. Our large and growing data set provides the foundation for our proprietary algorithms. The vast majority of our client data is directly shared by the client, rather than inferred, scraped, or obtained from other sources. We also gather extensive trend data as well as merchandise data, such as inseam, pocket shape, silhouette, and fit. We believe that both the data we have, as well as our algorithms, give us a significant competitive advantage. As our data set has grown, our algorithms have become more powerful, and we expect that to continue.

We offer a wide selection of apparel, shoes, and accessories for Women’s, Men’s, Kids, Petite, Maternity, and Plus categories. To ensure every client can find items they love, we curate merchandise across multiple price points and styles from established brand partners as well as our Owned Private Label Brands, which are created to serve unmet client needs. Our algorithms filter through this broad assortment to recommend a relevant subset of items to our Stylists or clients, who leverage these insights to select or purchase merchandise.

DISCONTINUED OPERATIONS

During the first quarter of fiscal 2024, we ceased operations of our UK business and the accounting requirements for reporting the UK business as a discontinued operation were met. Accordingly, any discussion of historical information in Management’s Discussion and Analysis below reflects the results of the UK business as a discontinued operation, and amounts and disclosures below relate to the Company's continuing operations for all periods presented, unless otherwise noted. Refer to Note 12, “Discontinued Operations” within the Notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for further details.

STITCH FIX, INC. | Q3 2026 FORM 10-Q | 20

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FINANCIAL OVERVIEW

For the three months and nine months ended May 2, 2026, we reported revenue, net of $340.3 million and $1,023.7 million, respectively, representing a year-over-year increase of 4.7% and 7.1%, respectively, compared to the same period in the prior year. As of May 2, 2026, and May 3, 2025, we had approximately 2,309,000 and 2,353,000 active clients, respectively, representing a year-over-year decrease of 1.9%.

During the nine months ended May 2, 2026, we experienced an increase in net revenue year-over-year primarily due to an increase in net revenue per active client, driven by higher average order values and number of items kept per Fix, partially offset by a decline in active clients due to our challenges in acquiring and retaining active clients. Throughout the remainder of fiscal 2026, we expect broader macroeconomic uncertainty and market conditions to negatively impact consumer discretionary spending. However, we project that positive trends in average order values and the number of items kept per Fix will offset any negative impact of lower active client counts on net revenue in the remainder of fiscal 2026. We remain focused on retaining current clients, attracting new clients, improving the conversion of new visitors to our site and app, and enhancing our overall client experience for new and existing clients. Refer to the section titled “Key Financial and Operating Metrics” for information on how we define and calculate active clients.

Net loss from continuing operations for the three months and nine months ended May 2, 2026, was $1.5 million and $10.5 million, respectively, compared to a net loss from continuing operations of $7.4 million and $20.3 million for the same periods in the prior year.

For more information on the components of net loss from continuing operations for three months and nine months ended, refer to the section titled “Results of Operations” below.

KEY FINANCIAL AND OPERATING METRICS

NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA from continuing operations (“Adjusted EBITDA”) is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between continuing operations of companies. We believe free cash flow from continuing operations (“Free Cash Flow”) is an important metric because it represents a measure of how much cash from continuing operations we have available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies.

Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of our non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include:

•Adjusted EBITDA excludes interest income and other (income) expense, net as these items are not components of the core business;

•Adjusted EBITDA does not reflect provision for income taxes, which may increase or decrease cash available;

•Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;

•Adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how the Company attracts and retains employees and a significant recurring expense in its business;

•Adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs attributable to continuing operations that are fundamentally different in strategic nature and frequency from ongoing initiatives. The Company believes exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows;

STITCH FIX, INC. | Q3 2026 FORM 10-Q | 21

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•Adjusted EBITDA excludes non-ordinary course legal fees for specific proceedings that the Company has determined arise outside of the ordinary course of business and are nonrecurring, infrequent, or unusual; and

•Free Cash Flow does not represent the total residual cash flow available for discretionary purposes and does not reflect future contractual commitments.

Adjusted EBITDA

We define Adjusted EBITDA as net loss from continuing operations excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, stock-based compensation expense, restructuring and other one-time costs, and non-ordinary course legal fees related to our continuing operations. The following table presents a reconciliation of net loss from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA, for each of the periods presented:

For the Three Months Ended

For the Nine Months Ended

(in thousands)

May 2, 2026

May 3, 2025

May 2, 2026

May 3, 2025

Net loss from continuing operations

$

(1,525)

$

(7,381)

$

(10,541)

$

(20,267)

Add (deduct):

Interest income

(2,123)

(2,627)

(6,661)

(8,222)

Other (income) expense, net

(438)

59 

(323)

210 

Provision for income taxes

70 

241 

194 

580 

Depreciation and amortization

6,116 

6,860 

18,662 

21,360 

Stock-based compensation expense

11,139 

13,727 

37,040 

43,658 

Restructuring and other one-time costs (1)

— 

134 

— 

3,107 

Non-ordinary course legal fees (2)

— 

— 

4,223 

— 

Adjusted EBITDA

$

13,239 

$

11,013 

$

42,594 

$

40,426 

(1)    For the three months and nine months ended May 3, 2025, restructuring charges were $0.0 million and $1.2 million, respectively, primarily in severance and employee-related benefits and other restructuring costs; and other one-time costs were $0.1 million and $1.9 million, respectively, in one-time bonuses for certain continuing employees.

(2)    Non-ordinary course legal fees for the nine months ended May 2, 2026, include costs related to a specific class action lawsuit.

Free Cash Flow

We define Free Cash Flow as cash flows provided by operating activities from continuing operations, reduced by purchases of property and equipment that are included in cash flows from investing activities from continuing operations. The following table presents a reconciliation of net cash flows used in operating activities from continuing operations, the most comparable GAAP financial measure, to Free Cash Flow for each of the periods presented:

For the Nine Months Ended

(in thousands)

May 2, 2026

May 3, 2025

Free Cash Flow reconciliation:

Net cash provided by operating activities from continuing operations

$

30,009 

$

18,572 

Deduct:

Purchases of property and equipment

(14,564)

(12,065)

Free Cash Flow

$

15,445 

$

6,507 

Net cas

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2025-09-25. Report date: 2025-08-02.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with “Special Note Regarding Forward-Looking Statements”, “Risk Factors” included under Part I, Item 1A, and our consolidated financial statements and related notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K (“Annual Report”).

We use a 52- or 53-week fiscal year, with our fiscal year ending on the Saturday that is closest to July 31 of that year. The fiscal year ending August 2, 2025 (“fiscal 2025”) and July 29, 2023 (“fiscal 2023”) consisted of 52 weeks, and the fiscal year ended August 3, 2024 (“fiscal 2024”) consisted of 53 weeks. Throughout this Annual Report, all references to quarters and years are to our fiscal quarters and fiscal years unless otherwise noted.

In addition, refer to our discussion and analysis of our financial condition and results of operations from fiscal 2024 to fiscal 2023 in Part II, Item 7 in our Annual Report on Form 10-K for the fiscal year ended August 3, 2024, filed with the Securities and Exchange Commission on September 25, 2024.

BUSINESS OVERVIEW

In 2011, Stitch Fix introduced an innovative approach to shopping for clothing and accessories. We were inspired by the opportunity to create a client-first styling experience, offering an alternative to impersonal, time-consuming and inconvenient traditional shopping. Clients primarily engage with us by (1) receiving a curated shipment of items informed by our algorithms and chosen by a Stitch Fix Stylist (a “Fix”); or (2) purchasing directly from our website or mobile app based on an individualized assortment of outfit and item recommendations (“Freestyle”). For the Fix experience, clients choose to schedule regular shipments or order a Fix on demand. Then, after receiving a Fix, they can purchase the items they want to keep and return the other items, if any.

DISCONTINUED OPERATIONS

During the first quarter of fiscal 2024, we ceased operations of our UK business and the accounting requirements for reporting the UK business as a discontinued operation were met. Accordingly, any discussion of historical information in Management’s Discussion and Analysis below reflects the results of the UK business as a discontinued operation, and amounts and disclosures below relate to the Company's continuing operations for all periods presented, unless otherwise noted. Refer to Note 15, “Discontinued Operations” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further details.

FINANCIAL OVERVIEW

For fiscal 2025, we reported $1.3 billion in revenue, net, representing a year-over-year decrease of 5.3%, compared to fiscal 2024. As of August 2, 2025, and August 3, 2024, we had approximately 2,309,000 and 2,508,000 active clients, respectively, representing a year-over-year decline of 7.9%.

During fiscal 2025, we experienced a decline in net revenue year-over-year primarily due to our challenges in acquiring and retaining active clients. In fiscal 2026, we expect broader macroeconomic uncertainty and market conditions to negatively impact consumer discretionary spending, and we will enter the fiscal year with fewer active clients than the start of fiscal 2025. However, we project that positive trends in average order values and the number of items kept per Fix will offset the negative impact of those active client losses on net revenue in fiscal 2026. We remain focused on retaining current clients, attracting new clients, improving the conversion of new visitors to our site and app, and enhancing our overall client experience for new and existing clients.

Net loss from continuing operations for fiscal 2025 was $28.8 million, compared to a net loss from continuing operations of $118.9 million for fiscal 2024.

For more information on the components of net loss from continuing operations for fiscal 2025, refer to the section titled “Results of Operations” below.

STITCH FIX, INC. | 2025 FORM 10-K | 33

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RESTRUCTURING

During fiscal 2025, in furtherance of and as an expansion of the restructuring plan announced in June 2022 (the “2022 Restructuring Plan”), we recorded $1.2 million of additional restructuring charges. As of August 2, 2025, we do not expect any additional cash restructuring charges related to the 2022 Restructuring Plan.

Refer to Note 14, “Restructuring” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further details.

We are continuing to evaluate other fixed and variable operating costs, including further rationalizing our real estate footprint and continuing to optimize and be disciplined in our marketing strategy to better position ourselves for profitability. However, our future results of operations will depend on our ability to successfully navigate current business challenges and the overall macroeconomic environment.

KEY FINANCIAL AND OPERATING METRICS

NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA from continuing operations (“Adjusted EBITDA”) is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between continuing operations of companies. We believe free cash flow from continuing operations (“Free Cash Flow”) is an important metric because it represents a measure of how much cash from continuing operations we have available for discretionary and non-discretionary items after the deduction of capital expenditures. These non-GAAP financial measures may be different than similarly titled measures used by other companies.

Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of our non-GAAP financial measures as compared to the closest comparable GAAP measures. Some of these limitations include:

•Adjusted EBITDA excludes interest income and other (income) expense, net as these items are not components of our core business;

•Adjusted EBITDA does not reflect our provision for income taxes, which may increase or decrease cash available to us;

•Adjusted EBITDA excludes the recurring, non-cash expenses of depreciation and amortization of property and equipment and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;

•Adjusted EBITDA excludes the non-cash expense of stock-based compensation, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;

•Adjusted EBITDA excludes costs incurred related to discrete restructuring plans and other one-time costs attributable to our continuing operations that are fundamentally different in strategic nature and frequency from ongoing initiatives. We believe exclusion of these items facilitates a more consistent comparison of operating performance over time, however these costs do include cash outflows;

•Adjusted EBITDA excludes non-ordinary course legal fees for specific proceedings that we have determined arise outside of the ordinary course of business and are nonrecurring, infrequent, or unusual; and

•Free Cash Flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.

STITCH FIX, INC. | 2025 FORM 10-K | 34

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Adjusted EBITDA

We define Adjusted EBITDA as net loss from continuing operations excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, stock-based compensation expense, restructuring and other one-time costs, and non-ordinary course legal fees related to our continuing operations. The following table presents a reconciliation of net loss from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented:

For the Fiscal Year Ended

(in thousands)

August 2, 2025

August 3, 2024

Net loss from continuing operations

$

(28,844)

$

(118,885)

Add (deduct):

Interest income

(10,709)

(11,250)

Other (income) expense, net

(173)

(1,631)

Provision (benefit) for income taxes

821 

(1,661)

Depreciation and amortization (1)

27,860 

35,489 

Stock-based compensation expense

56,727 

76,756 

Restructuring and other one-time costs (2)

3,228 

50,463 

Non-ordinary course legal fees (3)

229 

— 

Adjusted EBITDA

$

49,139 

$

29,281 

(1)    For fiscal 2024, “Depreciation and amortization” excluded $12.1 million that was reflected in “Restructuring and other one-time costs”.

(2)    Restructuring and other one-time costs includes restructuring charges as described in Note 14, “Restructuring” in the Notes to the Consolidated Financial Statements in Part II, Item 8. Fiscal 2025 includes $2.0 million in one-time bonuses for certain continuing employees. Fiscal 2024 consists of $6.7 million in one-time professional services fees.

(3)    Non-ordinary course legal fees for fiscal 2025 include costs related to a specific class action lawsuit. We estimate we will incur approximately $4.2 million in non-ordinary course legal fees in fiscal 2026 related to said class action lawsuit. Refer to Note 8, “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements in Part II, Item 8.

Free Cash Flow

We define Free Cash Flow as cash flows provided by operating activities from continuing operations, reduced by purchases of property and equipment that are included in cash flows from investing activities from continuing operations. The following table presents a reconciliation of net cash flows used in operating activities from continuing operations, the most comparable GAAP financial measure, to Free Cash Flow for each of the periods presented:

For the Fiscal Year Ended

(in thousands)

August 2, 2025

August 3, 2024

Free Cash Flow reconciliation:

Net cash provided by operating activities from continuing operations

$

25,575 

$

28,207 

Deduct:

Purchases of property and equipment

(16,293)

(13,965)

Free Cash Flow

$

9,282 

$

14,242 

Net cash used in investing activities from continuing operations

$

(59,121)

$

(78,742)

Net cash used in financing activities from continuing operations

$

(14,967)

$

(15,493)

OPERATING METRICS

August 2, 2025

August 3, 2024

Active Clients (in thousands)

2,309 

2,508 

Net Revenue per Active Client

$

549 

$

533 

Active Clients

We believe that the number of active clients is a key indicator of the overall health of our business. We define an active client as a client who checked out a Fix or was shipped an item via Freestyle in the preceding 52 weeks, measured as of the last day of that period. Clients check out a Fix when they indicate what items they are keeping

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through our mobile application or on our website. We consider each Women’s, Men’s, or Kids account as a client, even if they share the same household. A single person could have multiple accounts and count as multiple active clients. We had approximately 2,309,000 and 2,508,000 active clients as of August 2, 2025, and August 3, 2024, respectively, representing a year-over-year decrease of 7.9%. The decrease in active clients is due to dormant clients outpacing client additions during the year, which we largely attribute to client conversion and retention challenges.

Net Revenue per Active Client

We believe that net revenue per active client is an indicator of client engagement and satisfaction. We calculate net revenue per active client based on net revenue over the preceding four fiscal quarters divided by the number of active clients measured as of the last day of the period. Net revenue per active client was $549 and $533 as of August 2, 2025, and August 3, 2024, respectively, or a year-over-year increase of 3.0%.

FACTORS AFFECTING OUR PERFORMANCE

MACROECONOMIC ENVIRONMENT

Our business and operating results are subject to national and global economic conditions and their impact on consumer discretionary spending. As the macroeconomic environment is experiencing inflation, recessionary concerns, and general uncertainty regarding trade policies, including tariffs and other restrictions, and the overall future political and economic environment, we cannot predict whether or when such circumstances may improve or worsen. However, we anticipate that broader macroeconomic uncertainty and market conditions will put increased pressure on consumer discretionary spending in fiscal 2026, which may negatively impact our business.

INVENTORY MANAGEMENT

We leverage our data science to buy and manage our inventory, including merchandise assortment and fulfillment center optimization. Because our merchandise assortment directly correlates to client success, we may at times optimize our inventory to prioritize long-term client success over short-term gross margin impact. To ensure sufficient availability of merchandise, we generally enter into purchase orders well in advance and frequently before apparel trends are confirmed by client purchases. As a result, we are vulnerable to demand and pricing shifts, including due to tariffs, and availability of merchandise at the time of purchase. We incur inventory write-offs and changes in inventory reserves that impact our gross margins. Moreover, our inventory investments will fluctuate with the needs of our business.

CLIENT ACQUISITION AND ENGAGEMENT

To grow our business, we must continue to acquire clients and successfully engage and retain them. Our marketing strategy aims to preserve liquidity and achieve profitability, while simultaneously attracting long-term clients to fuel a return to growth. We utilize both digital and offline channels to attract new visitors to our website or mobile app and subsequently convert them into clients. Our marketing costs are largely composed of advertising, client referrals, and public relations expenses. At any given time, our advertising efforts may include social media marketing, keyword search campaigns, affiliate programs, partnerships, campaigns with celebrities and influencers, display advertising, television, radio, video, content, direct mail, email, mobile “push” communications, SMS, and search engine optimization. Our marketing expenses have varied from period to period and we expect this trend to continue.

Marketing expense is recorded in selling, general, and administrative expenses in the consolidated statements of operations and comprehensive loss. The largest component of our marketing expense is advertising, which was $117.3 million and $111.4 million for fiscal 2025 and fiscal 2024. We will continue to be methodical about our approach when we are making advertising decisions, and may adjust our spending up or down based on performance.

OPERATIONS AND INFRASTRUCTURE

We intend to leverage our data science and deep understanding of our clients’ needs to make targeted investments in technology and product, including continued integration of AI into internal business processes and client facing experiences.

MERCHANDISE MIX

We offer apparel, shoes, and accessories across categories, brands, product types, and price points. We currently serve our clients in the following categories: Women’s, Petite, Maternity, Men’s, Plus, and Kids. We carry a mix of third-party branded merchandise, including premium brands, and our own Owned Private Label Brands. We also

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offer a wide variety of product types, including denim, dresses, blouses, skirts, shoes, jewelry, and handbags. We sell merchandise across a broad range of price points and may further broaden our price point offerings in the future.

Historically, changes in our merchandise mix have not caused significant fluctuations in our gross margin; however, categories, brands, product types, and price points do have a range of margin profiles. For example, our Owned Private Label Brands have generally contributed higher margins than our third-party brands, which have generally contributed lower margins. We continue to evolve our merchandise mix to improve the client experience and attract new active clients. Shifts in merchandise mix will result in fluctuations in our gross margin from period to period.

COMPONENTS OF RESULTS OF OPERATIONS

REVENUE

We generate revenue from the sale of merchandise through our Fix and Freestyle offerings. With our Fix offering, we charge a nonrefundable upfront fee, referred to as a “styling fee,” that is credited towards any merchandise purchased. We offer Style Pass to provide select U.S. clients with an alternative to paying a styling fee per Fix. Style Pass clients pay a nonrefundable annual fee for unlimited styling that is credited towards merchandise purchases. We deduct discounts, sales tax, and estimated refunds to arrive at net revenue, which we refer to as revenue throughout this Annual Report. We also recognize revenue resulting from estimated breakage income on gift cards.

COST OF GOODS SOLD

Cost of goods sold consists of the costs of merchandise, expenses for inbound freight and shipping to and from clients, inventory write-offs and changes in our inventory reserve, payment processing fees, and packaging materials costs, offset by the recoverable cost of merchandise estimated to be returned. We expect our cost of goods sold to increase in fiscal 2026 if tariffs are sustained at heightened levels. We also expect fluctuations in our cost of goods sold as a percentage of revenue primarily due to how we manage our inventory and merchandise mix. Our classification of cost of goods sold may vary from other companies in our industry and may not be comparable.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

Selling, general, and administrative expenses (“SG&A”) consist primarily of compensation and benefits costs, including stock-based compensation expense, for our employees including our Stylists, fulfillment center operations, data analytics, merchandising, engineering, marketing, client experience, and corporate personnel. SG&A also includes marketing and advertising costs, third-party logistics costs, facility costs for our fulfillment centers and office, professional service fees, information technology costs, and depreciation and amortization expense. As a result of our restructuring and cost reduction actions from fiscal 2022 through fiscal 2025, we expect SG&A as a percentage of revenue in fiscal 2026 to continue to decrease as compared to fiscal 2025. Our classification of certain components within SG&A may vary from other companies in our industry and may not be comparable.

INTEREST INCOME

Interest income is generated from our cash, cash equivalents, and investments in available-for-sale securities.

PROVISION FOR INCOME TAXES

Our provision for income taxes from continuing operations consists of an estimate of federal and state income taxes based on enacted federal and state tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, and changes in the valuation of our net federal and state deferred tax assets.

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RESULTS OF OPERATIONS

The following table summarizes our financial results from continuing operations:

For the Fiscal Year Ended

%

(in thousands)

August 2, 2025

August 3, 2024

Change

Revenue, net

$

1,267,171 

$

1,337,468 

(5.3)

%

Cost of goods sold

704,232 

745,430 

(5.5)

%

Gross profit

562,939 

592,038 

(4.9)

%

Selling, general, and administrative expenses

601,844 

725,465 

(17.0)

%

Operating loss

(38,905)

(133,427)

(70.8)

%

Interest income

10,709 

11,250 

(4.8)

%

Other income (expense), net

173 

1,631 

(89.4)

%

Loss before income taxes

(28,023)

(120,546)

(76.8)

%

Provision for income taxes

821 

(1,661)

(149.4)

%

Net loss from continuing operations

$

(28,844)

$

(118,885)

(75.7)

%

 The components of our results from continuing operations as a percentage of revenue were as follows:

For the Fiscal Year Ended

August 2, 2025

August 3, 2024

Revenue, net

100.0 

%

100.0 

%

Cost of goods sold

55.6 

%

55.7 

%

Gross margin

44.4 

%

44.3 

%

Selling, general, and administrative expenses

47.5 

%

54.2 

%

Operating loss

(3.1)

%

(10.0)

%

Interest income

0.8 

%

0.8 

%

Other income (expense), net

— 

%

0.1 

%

Loss before income taxes

(2.2)

%

(9.0)

%

Provision for income taxes

0.1 

%

(0.1)

%

Net loss from continuing operations

(2.3)

%

(8.9)

%

Note: Due to rounding, percentages in this table may not sum to totals.

REVENUE AND GROSS MARGIN

Revenue in fiscal 2025 decreased by $70.3 million, or 5.3%, compared to fiscal 2024, which included a $21.6 million impact of an extra week. Excluding the impact of an extra week, revenue in fiscal 2025 decreased by $48.7 million or 3.7%, compared to fiscal 2024. The decline in revenue was primarily attributable to a 7.9% decrease in active clients from August 3, 2024, to August 2, 2025, which led to a decrease in sales of merchandise. Partially offsetting the revenue decline was an improvement in net revenue per active client, which was driven by higher average order values with the number of items kept by our clients per Fix increasing, and higher average unit retail prices.

Gross margin for fiscal 2025 increased by 10 basis points compared to the prior year period. The increase was primarily driven by higher average order values and transportation leverage due to improvements in carrier mix and rate negotiations with key carriers that offset some of the impact of rising shipping costs, partially offset by lower product margins.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

SG&A in fiscal 2025 decreased by $123.6 million, compared to fiscal 2024. The decrease was primarily driven by lower compensation and benefits expense including lower stock-based compensation expense, lower facilities costs, and lower depreciation and amortization expense, largely driven by our restructuring actions, partially offset by higher advertising spend.

SG&A as a percentage of revenue decreased to 47.5% for fiscal 2025, compared to 54.2% for fiscal 2024. The decrease was primarily driven by lower compensation and benefits expense including lower stock-based

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compensation expense, lower facilities costs, and lower depreciation and amortization expense, largely driven by our restructuring actions, as a percentage of revenue, partially offset by higher advertising spend as a percentage of revenue.

PROVISION FOR INCOME TAXES

The following table summarizes our effective tax rate from loss from continuing operations for the periods presented:

For the Fiscal Year Ended

(in thousands, except percentages)

August 2, 2025

August 3, 2024

Loss from continuing operations before income taxes

$

(28,023)

$

(120,546)

Provision for income taxes

821 

(1,661)

Effective tax rate

(2.9)

%

1.4 

%

Our provision for income taxes increased in fiscal 2025 as compared to fiscal 2024, primarily due to a decrease in pretax losses, partially offset by a decrease in the reversal of stock-based compensation expenses.

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF LIQUIDITY

Our principal sources of liquidity are our cash, cash equivalents, investments, cash flows from continuing operations, and borrowing capacity under our credit facility. As of August 2, 2025, we had $114.0 million of cash and cash equivalents attributable to continuing operations, and $128.8 million of investments. As of August 2, 2025, we had repatriated our remaining cash held outside of the U.S. in the UK.

Credit Facility

On December 4, 2023, we entered into a first lien credit agreement with Citibank, N.A., as agent and lender, which provides for a $50.0 million revolving credit facility maturing on December 4, 2026 (the “2023 Credit Facility”). The 2023 Credit Facility includes a sub-facility that provides for the issuance of letters of credit in an amount of up to $30.0 million. Availability of the 2023 Credit Facility is based upon a borrowing base formula and periodic borrowing base certifications valuing certain of our accounts receivable, credit card receivables, and inventory as reduced by certain reserves, if any. Our borrowing availability based on balances as of August 2, 2025, was $50.0 million, and our excess availability was $31.3 million as a result of outstanding letters of credit, and no outstanding borrowing.

For information on the terms of the 2023 Credit Facility, refer to Note 7, “Credit Facility” within the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

USES OF CASH

Our primary uses of cash include operating costs such as merchandise purchases, lease obligations, compensation and benefits, marketing, and other expenditures necessary to support our business.

We believe our existing cash, cash equivalents, investment balances, and the borrowing available under our 2023 Credit Facility, if needed, will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and beyond.

SHARE REPURCHASES

In January 2022, our Board of Directors authorized a share repurchase program to repurchase up to $150.0 million of our outstanding Class A common stock, with no expiration date (the “2022 Repurchase Program”). We may repurchase shares from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The actual timing, number and value of shares repurchased in the future will be determined by the Company in its discretion and will depend on a number of factors, including price, trading volume, market conditions, and other general business conditions. Repurchases will be funded from the Company’s existing cash and cash equivalents or future cash flow. The repurchase program may be modified, suspended, or terminated at any time. During fiscal 2025 and fiscal 2024, the Company made no repurchases of Class A common stock. As of August 2, 2025, the Company had repurchased an aggregate 2,302,141 shares of Class A common stock for $30.0 million, and $120.0 million remained available under the 2022 Repurchase Program authorization.

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CASH FLOWS

The following table summarizes our cash flows for the periods indicated below:

For the Fiscal Year Ended

(in thousands)

August 2, 2025

August 3, 2024

Net cash provided by operating activities from continuing operations

$

25,575 

$

28,207 

Net cash used in investing activities from continuing operations

(59,121)

(78,742)

Net cash used in financing activities from continuing operations

(14,967)

(15,493)

Net decrease in cash and cash equivalents from continuing operations

$

(48,513)

$

(66,028)

CASH PROVIDED BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS

During fiscal 2025, cash provided by operating activities from continuing operations was $25.6 million, which consisted of a net loss from continuing operations of $28.8 million, adjusted by non-cash charges of $87.2 million and change in net operating assets and liabilities of $32.8 million. The non-cash charges were primarily driven by $56.7 million of stock-based compensation expense and $26.1 million of depreciation, amortization, and accretion. The change in net operating assets and liabilities was primarily due to a $24.8 million increase in gross inventory balances due to higher inventory receipts.

During the fiscal 2024, cash provided by operating activities from continuing operations was $28.2 million, which consisted of a net loss from continuing operations of $118.9 million, adjusted by non-cash charges of $124.6 million and a $22.5 million change in net operating assets and liabilities. The non-cash charges were primarily driven by $76.8 million of stock-based compensation expense and $44.5 million of depreciation, amortization, and accretion, $19.3 million of asset impairment, partially offset by $15.1 million of changes in inventory reserves. The change in net operating assets and liabilities was primarily due to a $47.7 million change in gross inventory balances due to a decline in inventory receipts to bring inventory balances in line with current demand.

CASH USED IN INVESTING ACTIVITIES FROM CONTINUING OPERATIONS

During fiscal 2025, cash used in investing activities from continuing operations was $59.1 million. This was due to purchases of securities available-for-sale of $197.9 million and purchases of property and equipment of $16.3 million, partially offset by sales and maturities of available-for-sale securities of $155.1 million.

During the fiscal 2024, cash used in investing activities from continuing operations was $78.7 million. This was primarily due to purchases of securities available-for-sale of $97.3 million and purchases of property and equipment of $14.0 million, partially offset by the maturities of available-for-sale securities of $32.2 million.

CASH USED IN FINANCING ACTIVITIES FROM CONTINUING OPERATIONS

During fiscal 2025, cash used in financing activities from continuing operations was $15.0 million primarily due to payments for tax withholding related to vesting of restricted stock units of $16.0 million.

During the fiscal 2024, cash used in financing activities from continuing operations was $15.5 million, primarily due to payments for tax withholding related to vesting of restricted stock units of $16.1 million, partially offset by proceeds from the exercise of stock options of $1.0 million.

CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS

Our most significant contractual obligations relate to purchase commitments of inventory and operating lease obligations related to our fulfillment centers and corporate office. As of August 2, 2025, we had remaining commitments of $138.4 million for inventory purchases, predominantly due within one year, and $63.7 million for other service agreements due over the next one to three years.

For information on our contractual obligations for operating leases and other obligations, refer to Note 4, “Leases” and Note 8 “Commitments and Contingencies”, respectively, within the Notes to the Consolidated Financial Statements included in Part II, Item 8 Financial Statements and Supplementary Data of this Annual Report.

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CRITICAL ACCOUNTING ESTIMATES

Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The critical accounting estimates and judgments that we believe to have the most significant impacts to our consolidated financial statements are described below.

INVENTORY, NET

Inventory, net consists of finished goods which are recorded at the lower of cost or net realizable value using the first-in-first-out (“FIFO”) method. We establish a reserve for excess and slow-moving inventory we expect to write off or sell below cost as liquidations based on historical trends, which considers factors such as the age of the inventory and sell through rate for a particular item. In addition, we estimate and accrue shrinkage as a percentage of inventory out to the client and also accrue for damaged items and items we intend to liquidate. Estimates are made to reduce the inventory value for lost, stolen, damaged, or liquidated items to net realizable value. If actual experience differs significantly from our estimates due to changes in client merchandise preferences, client demand, or economic conditions, additional inventory write-downs may be required which could adversely affect our operating results. A 10% change in our inventory reserves estimate as of August 2, 2025, would result in a change in reserves of approximately $2.8 million.

We have not made any material changes to our assumptions included in the calculations of the lower of cost or net realizable value reserves during fiscal 2025 or 2024.

STOCK-BASED COMPENSATION

We grant stock options to our employees and members of our Board of Directors, and recognize stock-based compensation expense based on the fair value of such awards at grant date.

We estimate the fair value of stock options using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model requires us to use certain estimates and assumptions such as:

•Expected volatility of our common stock—based on an even blend of historical and implied volatility of our common stock;

•Expected term of our stock options—the period that our stock options are expected to be outstanding based on historical averages.

•Expected dividend yield—as we have not paid and do not anticipate paying dividends on our common stock, our expected dividend yield is 0%; and

•Risk-free interest rates—based on the U.S. Treasury zero coupon notes in effect at the grant date with maturities equal to the expected terms of the options granted.

We record stock-based compensation expense net of estimated forfeitures so that expense is recorded for only the stock options that we expect to vest. We estimate forfeitures based on our historical forfeiture of stock options. We will revise our estimated forfeiture rate if actual forfeitures differ materially from our initial estimates.

We will continue to use judgment in evaluating assumptions related to our stock-based compensation expense. As we continue to accumulate data related to our common stock, we may have refinements to our estimates and assumptions which could impact our future stock-based compensation expense.

REVENUE RECOGNITION

Revenue is recognized net of sales taxes, discounts, and estimated refunds. We record a refund reserve based on our historical refund patterns. The impact of our refund reserve on our operating results may fluctuate based on changes in client refund activity over time.

We also sell gift cards to clients and establish a liability based on the face value of such gift cards. If a gift card is not used, we will recognize estimated gift card breakage revenue proportionately to customer usage of gift cards over the expected gift card usage period, subject to requirements to remit balances to governmental agencies.

We have not made any material changes to our revenue recognition accounting policies during fiscal 2025 or 2024.

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RECENT ACCOUNTING PRONOUNCEMENTS

For recent accounting pronouncements, refer to Note 2, “Significant Accounting Policies” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.