AI Innovation Drives Stitch Fix's Revenue Per Active Client Growth

Stitch Fix, Inc. SFIX closed fiscal 2025 with encouraging momentum, highlighted by a consistent increase in revenue per active client (“RPAC”). In the fiscal fourth quarter, RPAC grew 3% year over year to $549, marking the sixth consecutive quarter of improvement. This trend underscores the company’s ability to attract and retain highly engaged clients even as overall active client counts remain pressured.

Artificial intelligence has been central to this momentum. The launch of the AI Style Assistant has helped clients communicate preferences more effectively, while stylist recommendations are refined through real-time data and generative AI imagery. Similarly, the Vision tool allows clients to visualize themselves in shoppable outfits, boosting confidence in purchases and driving order frequency.

AI has also transformed product assortment. By analyzing billions of client interactions, Stitch Fix identifies emerging trends faster and accelerates private brand development. This ensures a steady flow of relevant, on-trend items that resonate with clients, lifting average order values and contributing directly to RPAC growth.

Looking ahead, Stitch Fix plans to deepen these capabilities in fiscal 2026. The introduction of Stylist Connect, which allows continuous collaboration between clients and stylists, along with Family Accounts, is expected to broaden household engagement and spending.

Stitch Fix expects fiscal 2026 revenues between $1.28 billion and $1.33 billion, a 1-5% increase from the prior year. For the first quarter of fiscal 2026, Stitch Fix anticipates net revenues between $333 million and $338 million, representing year-over-year growth of 4.4-6%. The company anticipates further gains in RPAC as innovations in generative AI styling tools and visual try-on capabilities improve conversion and client satisfaction.

By integrating advanced AI tools with its human stylist expertise, Stitch Fix is redefining the personalized shopping experience. The steady rise in RPAC demonstrates not only stronger client relationships but also the long-term potential of AI to fuel sustainable and profitable expansion.

Stitch Fix’s Price Performance & Valuation

Shares of Stitch Fix have gained 9.3% year to date against the industry’s decline of 7.3%.

From a valuation standpoint, Stitch Fix trades at a forward price-to-sales ratio of 0.49X, down from the industry’s average of 1.90X. It has a Value Score of B.

Stitch Fix currently carries a Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks in the retail space are Genesco Inc. GCO, Deckers Outdoor Corporation DECK and Tilly's, Inc. TLYS.

Genesco is a Nashville-based specialty retail and branded company that sells footwear and accessories in retail stores. It currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GCO’s fiscal 2026 earnings and sales implies growth of 67% and 3%, respectively, from the year-ago actuals. Genesco delivered a trailing four-quarter average earnings surprise of 28.1%.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It carries a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Deckers’ current fiscal-year sales indicates growth of 9% from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 39.5%.

Tilly's is a specialty retailer in the action sports industry, selling clothing, shoes and accessories. It has a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for Tilly's current fiscal-year earnings indicates growth of 8.8% from the year-ago actual. TLYS delivered a trailing four-quarter average earnings surprise of 60.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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