Stitch Fix announced that it will lay off 15% of its staff, most of whom are in management and design positions, in an attempt to reduce expenses amid exacerbating inflation and declining consumer demand for certain products. The company also published its financial results report for the quarter ending on April 30.
The company stated that it expects to save 40-60 million dollars during the fiscal year of 2023 through this step, and believes that the restructuring will cost it – in addition to some other expenses – about 15-20 million dollars, the impact of which will appear during the next fourth quarter report.
Moreover, the company delivered a pessimistic outlook for its fourth fiscal quarter, forecasting revenue of $485-495 million, which is down 15% from levels in the same period last year.
Stitch Fix revealed a third-quarter net loss of $78 million, or 72 cents per share, compared to a loss of $18.8 million, or 18 cents a year ago, and as for revenue, it fell 8% to $492.9 million from $535.6 million. During the same period last year.
Stitch Fix shares fell by 11% to close trading at $7.78 before collapsing by 15% during extended trading, while the stock was trading at $68.15 a year ago, and since the beginning of 2022 until now, the stock is recording a decrease of 58%, pushing the market value of the company to less of 1 billion dollars. Read more [Stitch Fix Posts Revenue And Profits More Than Expectations].