Stitch Fix, Inc.

Q3 revenue was $340.3 million, up 4.7% year over year. Gross margin was 43.7%, contribution margin remained above 30% for the ninth straight quarter, and adjusted EBITDA was $13.2 million, or 3.9% margin. RPAC was $578, up 6.6% year over year, and active clients were 2.3 million, up 21 thousand sequentially. For Q4, management expects revenue of $322 million to $327 million and adjusted EBITDA of $7 million to $10 million. For FY26, Stitch Fix now expects revenue of $1.346 billion to $1.351 billion and adjusted EBITDA of $49 million to $52 million, while still expecting free cash flow positive and full-year gross margin of 43% to 44% and advertising costs of 9% to 10% of revenue.

Matthew Baer framed the quarter as evidence that Stitch Fix’s transformation is working, pointing to stronger client engagement, record RPAC, and market-share gains. He emphasized larger fixes, assortment expansion, private brands, and new categories like activewear, footwear, sunglasses, and accessories as key growth drivers. His tone was confident and strategic, repeatedly stressing that the company is building a healthier, more durable client base and can keep gaining wallet share even in a tougher retail backdrop.

David Aufderhaar said the company translated top-line momentum into better-than-expected profitability through operational efficiency and expense discipline. He cited 43.7% gross margin, contribution margin above 30% for the ninth consecutive quarter, $13.2 million of adjusted EBITDA, $229.4 million in cash and investments, no debt, and $6.5 million of free cash flow. He also noted share repurchases of 4.5 million shares for $15.1 million, leaving $104.9 million remaining under the authorization, and said FY26 guidance was raised while keeping gross margin at 43% to 44% and advertising at 9% to 10% of revenue.

Analysts focused on the drivers of AOV/RPAC, the outlook for active client trends, and how management could raise EBITDA guidance despite a challenged consumer backdrop. Management said larger fixes, improved assortment, and stronger private brands were driving AOV, while Q4 active clients are expected to decline slightly sequentially by about 0.5% to 1% because of seasonality. They also said advertising should remain in the 9% to 10% range, SG&A leverage is improving, and existing clients remain resilient across income cohorts even as acquisition costs may be rising industry-wide.