Stitch Fix stock falls on weak guidance

Stitch Fix (SFIX.US) stock plunged more than 26.0% in the premarket after the online personal styling and shopping service issued disappointing sales outlook as it continues to face challenges in getting customers to sign up for its styling service. 

• Company reported a net loss of  28 cents per share, compared with 20 cents a share loss, a year earlier. Today's figures came in line with market estimates.
• Revenue increased to $516.7 million from $504.1 million a year earlier, topping analysts’ projections of $514.8 million.
• Number of active clients increased 4.0% from the year-ago period,  to slightly above 4 million
• Sales per client jumped to $518, which is an 18% increase year over year. It was the third consecutive quarter that per-client sales were above $500. 
• For the current quarter, the company projects net revenue in the region from$485 million to $500 million, which would represent a decline of 10% to 7% from the prior year. Analysts were expecting sales of $560.5 million.

Stitch Fix (SFIX.US) stock launched today’s session with a bearish price gap, below lows from March 2020 at $11.53. Nevertheless risk-on sentiment returned which helped bulls to erase most losses. If current sentiment prevails, an upward move may accelerate towards resistance at $20.00 which is marked with an upper limit of the 1:1 structure and lower limit of the descending channel. Source: xStation5