Stitch Fix,Inc。(SFIX) 首席执行官 Katrina Lake 于 2019年 第三季度业绩 - 收益电话会议记录

Stitch Fix, Inc. (NASDAQ:SFIX) Q3 2019 Results Earnings Conference Call June 5, 2019 5:00 PM ET

Stitch Fix,Inc。(纳斯达克股票代码:[SFIX])2019年第3季度业绩收益电话会议2019年6月5日美国东部时间下午5:00


David Pearce - Head, IR
Katrina Lake - CEO
Mike Smith - President & COO
Paul Yee - CFO

  • 大卫皮尔斯 - IR负责人
  • 卡特里娜湖 - 首席执行官
  • 迈克史密斯 - 总裁兼首席运营官
  • Paul Yee - 首席财务官


Doug Anmuth - JPMorgan
Ross Sandler - Barclays
Mark Mahaney - RBC Capital Markets
Heath Terry - Goldman Sachs
Ralph Schackart - William Blair
Edward Yruma - KeyBanc Capital Markets
Eric Johnson - Piper Jaffray
Youssef Squali - SunTrust
Ike Boruchow - Wells Fargo
Adrienne Yih - Wolfe Research
Janet Kloppenburg - JJK Research

  • Doug Anmuth - 摩根大通
  • 罗斯桑德勒 - 巴克莱
  • Mark Mahaney - 加拿大皇家银行资本市场
  • 希思特里 - 高盛
  • Ralph Schackart - William Blair
  • Edward Yruma - KeyBanc Capital Markets
  • Eric Johnson - Piper Jaffray
  • Youssef Squali - SunTrust
  • Ike Boruchow - 富国银行
  • Adrienne Yih - 沃尔夫研究
  • 珍妮特克洛彭堡 - JJK研究


Good day, everyone. Welcome to the Stitch Fix Third Quarter 2019 Earnings Call. Today's conference is being recorded.
At this time, I'd like to turn things over to David Pearce. Please go ahead sir.

今天是个好日子。 欢迎来到Stitch Fix 2019年第三季度收益电话会议。 今天的会议正在录制中。

在这个时候,我想把事情交给David Pearce。 请继续先生。


Thank you for joining us on the call today to discuss the results for our third quarter of fiscal 2019. Joining me on today's call are Katrina Lake, Founder and CEO of Stitch Fix; Mike Smith, President and COO; and Paul Yee, our CFO. We have posted complete Q2 financial results in our shareholder letter on the IR section of our website, A link to the webcast of today's conference call can also be found on our site.
We would like to remind everyone that we will be making forward-looking statements on this call which involve risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please review our filings with the SEC for a discussion of the factors that could cause our results to differ.
Also, note that the forward-looking statements on this call are based on the information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law.
During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our IR website. These non-GAAP measures are not intended to be a substitute for our GAAP result.
Finally, this call in its entirety is being webcast on our IR website and a replay of this call will be available on the website shortly.
I'd now like to turn the call over to Katrina.

感谢您今天致电我们,讨论我们2019财年第三季度的业绩。今天与我联系的是Stitch Fix创始人兼首席执行官Katrina Lake


Thanks, David. And thank you for joining us. After the market closed today, we issued our quarterly shareholder letter with more details on our results, which I encourage you to read. I'm excited to share our third quarter results which demonstrate our commitment to delivering strong topline growth while making measured strategic investments for the long term. We're also raising our revenue guidance for the fourth quarter reflecting our expectations for continued momentum in our business as we close the year.
As I reflect on the third quarter, I remain very excited by our position within the retail ecosystem, as well our resulting ability to capitalize on future opportunities. Personalization is at the very core of what we do at Stitch Fix and we feel we are highly differentiated. In an environment where many retailers face growth challenges, we remain confident in our ability to deliver personalization at scale using our unique combination of human judgment and data science to continue delighting clients and growing our business.
Now I'll discuss our Q3 results, provide an update on the continued momentum we're driving across our Women's and Men's categories and share what this means for our newest categories over time.
In the third quarter we generated net revenue of $409 million exceeding our guidance and representing 29% year-over-year growth. We delivered $7 million in net income and negative $0.3 million in adjusted EBITDA. We grew our active client count to 3.1 million as of April 27, 2019, a 17% increase year-over-year. These results reflect our continued execution across three of our growth pillars; expanding relationships with existing clients, attracting new clients, and growing our market opportunities.
On the third pillar, I am pleased to announce we officially launched in the U.K. just last month and are excited to introduce our personalization capabilities to our newest client. Over the past several quarters we've discussed the seeds we planted in newer markets such as Kid's and the U.K., which we believe will contribute less from our revenue and client perspective near-term to represent nice longer-term levers for our business.
These categories are small today, but have significant potential in the years ahead as we continue to drive strong topline growth and capture more and more share within our $430 billion market opportunities. While these new categories are exciting for us as we think about our multiyear outlook, our Women's category continues to have so much opportunity and we've been pleased with our recent results.
We shared in Q1 that we deliver the highest keep rate on record in Women's and in Q2 that we drove strong repeat client demand. This quarter we continue to delight existing clients, but also demonstrate improvement in our ability to attract new high quality clients we can serve well from the outset. Through predictive algorithms we believe we are better able to reach clients who are a good fit for our service and who we are able to retain for a longer period.


正如我在第三季度所反映的那样,我对零售生态系统中的地位以及我们利用未来机会的能力感到非常兴奋。个性化是我们在Stitch Fix所做工作的核心,我们认为我们是高度差异化的。在许多零售商面临增长挑战的环境中,我们对使用人类判断和数据科学的独特组合大规模提供个性化的能力充满信心,以继续满足客户需求并发展业务。



One measure we look at is the number of clients who keep at least one item in their Fix and tell us that they are looking forward to their next Fix. This number grew 8% year-over-year in Women's in Q3 which is the fourth consecutive quarter of year-over-year growth. This is a sign that the client was satisfied in finding an item that they loved and also excited about the opportunity to build a long-term relationship with us.
And surprisingly we found these positive first Fix experiences are often indicative of stronger client retention, stronger revenue per client, and higher engagement. As evidenced, Women's clients who joined us in fiscal 2019 year-to-date have demonstrated higher retention rates than the comparable 2018 cohort. We're excited to drive enhancements like this in Women's not only because it is our largest category, but also because these learnings can often be applied to our other offerings.
I'd now like to turn to Men's, which has graduated from the early seed stage of Kid's in the U.K. today and is now at a point where has scaled into a category we're excited to discuss in a more specific way. Men's, which we launched in September 2016, continues to benefit from strong product/market fit and increasing scale, both of which are factors in driving favorable business results.
In the last 12 months we have significantly improved Men's gross margins and we expect to drive further improvement as we continue to grow. Our improved Men's assortment reflects rich client feedback from our growing male client base. Most recently, we used this data to enhance our Activewear and Tailored assortment. In Activewear, we responded to style profile feedback by expanding our assortment versatility from workout attire to everyday use. In addition, we incorporating affordable and accessible performance attributes, such as moisture wicking and UV protection.
Another opportunity we saw was in Men’s workwear and special occasion which we call our Tailored offering, where we've used client fit feedback to revise our Exclusive Brand fit blocks, which resulted in higher fit and style scores. Our ongoing improvements in Men’s have resulted in year-over-year increases in keep rate in every quarter going back to the launch of our Men's category in Q1’17.
The success of our Exclusive Brand offering, which now comprises more than a third of our Men's revenue, also contributed to gross margin improvement in Q3. We’ve created multiple brands that look and feel like standalone brands, each with its own identity and strong point of view. Each brand was created to address specific gaps in the market, both in style and price and we're thrilled at how successful these brands have become. Our Exclusive Brands have very high sell through which drives rapid inventory turn that contributes to its stronger gross margin profile.
In addition, we've expanded the number of U.S. warehouses that carry Men's merchandise from two to three improving shipping costs and benefiting gross margins as well. Our enhanced ability to attract and retain high quality clients and quickly scale categories gives us confidence as we execute on our newer opportunities like Kids and the U.K.








Before I hand it over to Paul, I'd like to spend a moment to provide an update on Style Pass. As you know, we are constantly looking for new ways to engage and delight our customers and Style Pass which just celebrated its first anniversary is a great example of that. Today, our one-year renewal rates have exceeded 70% across both Men's and Women's clients.
In addition, as of Q3 2019, Style Pass has continued to reduce friction from the client experience and delivered better client and business outcomes. Specifically, the program improved client retention and increased average revenue per client, and client satisfaction as compared to non-Style Pass clients. We will continue to rollout Style Pass to clients in a disciplined manner to ensure that the program benefits both our clients and our business.
I'll now turn the call over to Paul who will discuss our financial performance and outlook.

在我交给保罗之前,我想花一点时间提供关于Style Pass的更新。 如您所知,我们一直在寻找新的方式来吸引和满足我们的客户,而刚刚庆祝成立一周年的Style Pass就是一个很好的例子。 今天,男士和女士客户的一年续费率已超过70%。

此外,自2019年第3季度起,Style Pass继续减少客户体验的摩擦,并提供更好的客户和业务成果。 具体而言,与非Style Pass客户相比,该计划改善了客户保留率并提高了每位客户的平均收入和客户满意度。 我们将继续以严谨的方式向客户推出Style Pass,以确保该计划有利于我们的客户和我们的业务。


Paul Yee

Thank you, Katrina. Our Q3 results reflect both strong execution by the team and continued commitment to our long-term growth strategy. We delivered net revenue above our guidance range, healthy gross margins and positive free cash flow. At the same time, as planned we made strategic investments that will fuel our future growth, including brand marketing capabilities, U.K. expansion, and talent. Looking ahead we see topline momentum continuing in Q4 leading us to raise our full year revenue guidance.
Our Q3 net revenue of $409 million represents 29% growth year-over-year, topping our guidance of 22% to 26% growth. We saw healthy growth in both Women's and Men's and continue to ramp our Kid's category. Active clients grew to 3.1 million or 17% year-over-year driven by our investments in performance marketing and in inventory, which enabled us to better serve new clients.
Net revenue per active client growth 8% year-over-year representing our fourth consecutive quarter of growth, even with the higher mix of Men's and Kid's clients. This growth is the result of our continued focus on attracting high quality clients, improving our personalization capabilities and driving stronger retention in our Women's category.
Q3 gross margin was 45.1% representing a 150 basis point improvement from 43.6% last year. This gain was driven by both lower clearance activity and lower shrink expense year-over-year. Our improved gross margin is net of the impact of our newer categories. As Katrina discussed, we've also seen gross margin improvement in our Men's category with this increasing scale, enhanced assortments and continued success with Exclusive Brands.
Advertising was 12.3% of net revenue. As we shared last quarter, we plan to invest more heavily in marketing in the second half of this year with a specific focus on brand advertising. Brand spend comprised $16 million in the quarter or 3.9% of net revenue. Other SG&A excluding advertising was 33.9% of net revenue in the quarter compared to 32.6% in last year's Q3. These results reflect the build out of U.K. capabilities as well as payroll and SBC investments to track and retain top talent. As a reminder, we include SBC in our EBITDA results. This expense totaled $9.1 million in the quarter. Our strong data science and engineering teams are key differentiators in our business and we believe SBC is an important lever as we invest in these teams. As a result we expect continued impact from SBC in the quarters ahead.
Q3 adjusted EBITDA was negative $0.3 million or negative 0.1% of net revenue. This was at the higher end of our guidance range of negative for the positive $1 million. Q3 net income was $7.0 million and diluted EPS was $0.07. These results reflect certain one-time tax benefits that we'll recognize in the third quarter. Year-to-date we have delivered free cash flow of $51 million compared to $49 million in the same period last year and ended Q3 with zero debt and $367 million in cash, cash equivalents, and highly rated securities. Quarter end inventory grew 34% year-over-year compared with 29% at the end of Q2, reflecting our planned second half investments to meet higher demand.







Moving on to our outlook. For Q4 2019 we are raising our net revenue guidance to $425 million $435 million, representing growth of 34% to 37% year-over-year. This compares to our prior range of 29% to 35% growth and is driven by expectations for continued momentum in net revenue per active client along with consistent active client growth. We also expect to return to positive EBITDA in Q4 and are projecting adjusted EBITDA in the range of $5 million to $10 million or an adjusted EBITDA margin of 1.2% to 2.3%.
For full year fiscal 2019 we're raising our net revenue range to $1.57 billion to $1.58 billion or growth of 28% to 29% year-over-year. This compares to our prior range of $1.53 billion to $1.56 billion or 25% to 27% growth. We are raising the lower end of our adjusted EBITDA range to $38 million to $43 million, reflecting an adjusted EBITDA margin of 2.4% to 2.7%. This compares to our prior range of $33 million to $43 million. As a reminder, 2019 is a 53-week fiscal year and Q4 2019 includes 14 weeks. Our full year and Q4 guidance reflects the impact of this additional week. This guidance also includes our continued investment in the U.K. which I noted last quarter as totaling approximately $12 million of SG&A expense in the second half of the year.
With that, we're ready to open up for questions. Operator, over to you.





Thank you. [Operator Instructions] We'll hear first today from Doug Anmuth with JPMorgan.

谢谢。 [操作员说明]我们今天将首先听听Doug Anmuth和摩根大通的讲话。

Doug Anmuth

Great, thanks for taking the questions. First, just want to ask about the brand marketing campaign, you talked about the $16 million of spending, it would be great to hear about how you are thinking about the results that you saw there and how we should we think about that tying to client growth in the quarter? And then I think you highlighted the higher quality clients especially in Women's through predicted algorithms, I'm wondering if there is anymore color you can give us there in terms of how you are identifying these clients and what is kind of really driving the difference in your higher quality clients and better retention that you're seeing? Thanks.

太棒了,谢谢你提出问题。 首先,只想问一下品牌营销活动,你谈到了1600万美元的支出,听听你如何看待你在那里看到的结果以及我们应该如何考虑与客户建立联系将会很棒 本季度增长? 然后我认为你通过预测的算法强调了更高质量的客户,尤其是女性,我想知道是否有更多的颜色,你可以给我们在那里你如何识别这些客户,什么是真正推动差异的 您所看到的更高质量的客户和更好的保留? 谢谢。


Great, absolutely. Brand marketing and so in the last quarter we spent $16 million in brand marketing and that's very different from our kind of normal bread and butter performance marketing which is what we really look at in terms of driving client growth results within the quarter, and so in terms of the question around tying brand marketing to client growth, that's not the way that we think about that spend.
And the key metrics around what we're looking for success metrics on the brand marketing are really round understanding of the brand, awareness of the brand, affinity to the brand, and those are metrics that are longer term metrics that I think right now we're still close to the campaign to be able to have a really accurate read.
Though what I can say I think is, overall we're really optimistic and excited about the opportunity to have brand marketing as a lever and it's something that we see as an opportunity and certainly on the higher level metrics we talked about also around reengagement and driving this longer term love for the brand and so we're excited about what we're seeing so far and hopeful about kind of what results we'll see eventually.
On the Women's side, in terms of what we're [indiscernible] tactics that we're using around kind of acquiring customers and our performance marketing is really that we're able to better understand what is some attributes that are likely to lead to successful fixes. And so, what that means is that we're better able to identify clients that are likely to generate a lot of LTV for us over time and so it gives us the [indiscernible] that we would be happy to pay $100 for because we are able to have a really great read that that client is going to deliver $500 plus in LTV. And so that type of nuance is helping us to be able to acquire better clients that are better fit for the service and that contributes to the great revenue per client numbers that we're seeing in this last quarter.





Doug Anmuth

Great, thank you.



We'll hear next from Ross Sandler with Barclays.



Hi, can you guys hear me?



We can.



Okay, great. So thanks for the color on the Men's gross margin, I guess you guys are probably not willing to disclose the current Men's GM very Women's GM, but I guess, can you talk generally around like how wide are we around the 45% average between Men's and Women's or Women's and all other?
And then can you talk about, you mentioned the Exclusive Brands is a big driver in terms of that mix going up within Men's, what's the general range of gross margin between the Exclusive Brands and kind of regular and kind of how do you see this on a sustainable trend that can last multiple quarters, are we at the point where the curve has kind of reached closer to parity and you're not expecting as much from the Men's gross margin improvement is what you're seeing right now? Thanks a lot.

好,太棒了。 所以感谢Men's毛利率的颜色,我猜你们可能不愿意透露当前Men's GM非常女性的GM,但我想,你能否大致谈论我们在Men's之间平均45%的平均值 和女人或女人和所有其他人?

然后你可以谈谈,你提到过,独家品牌是男装内部混合的一个重要推动因素,独家品牌之间的一般毛利率范围是什么,有点常规,你怎么看这个 一个可持续多个季度的可持续发展趋势,我们是否已经达到了接近平价的曲线,而你对男性毛利率改善的期望并不是你现在所看到的那么多? 非常感谢。

Paul Yee

Hi Ross, this is Paul. Thanks for your question. Without sharing the specific margins between Men's and Women's, I can say that where Men's is right now in terms of its scale and size, it's equivalent gross margins of where Women's was [indiscernible]. So we're very pleased where Men's is at and the progression it is making over the course of its past two and a half years. And you kind of note on kind of the key levers in our toolkit to help expand gross margins of Men's just into the scaling getting better purchasing power with our brand partners.
EB, we've seen extensive success today and we are continuing to [indiscernible] Exclusive Brands and those do have higher gross margins, but really the lens is how do we ensure we're giving products our clients really enjoy and fit their needs. And [indiscernible] meant that our three out of our five distributions centers. So we still have opportunity from the shipping cost standpoint to optimize.
So I think on the whole, we're very pleased with Men's expansion. We still see opportunity for us to get the benefit of scale and then in return through higher gross margins in years to come. So higher level we are very pleased with the progress and we're going to see continued improvement over time.


EB,我们今天看到了广泛的成功,我们继续[音频不清晰]独家品牌和那些确实具有更高毛利率,但真正的镜头是我们如何确保我们给予客户真正喜欢的产品并满足他们的需求。 [音频不清晰]意味着我们的五个发行中心中的三个。因此,我们仍然有机会从运输成本的角度进行优化。



We'll hear next from Mark Mahaney with RBC Capital Markets.

我们接下来会听到RBC Capital Markets的Mark Mahaney。


Okay great. Kathy, two or three quick questions. Last quarter we talked about, or you talked a lot about inventory optimization and the impact of that. I know that wasn’t a one and done. I assume that that's something that continues to build and that also bled through into these results. So just talk a little bit about that. I think there was a series of initiatives. It wasn’t just in the last quarter that are ongoing, so just talk about that impact?
Secondly, could you provided any more clarity or color on the detail on brand advertising, when you say that are there particular brand advertising channels that have been promising for you, I don’t know if you'll get into that, but I'm -- I have to ask you?
And then third, on the U.K., I know it's still very early days, but could you just provide any more color on what you're seeing there, any particular early lessons from that, anything that makes you, as you've looked at this trajectory of Women's and Men's in the U.S. like does it look fat, is it too early to say whether that ramp could build faster or slower than what you saw in the U.S.? I know there's a bunch of factors you talked about before that made that market particularly attractive, so is there -- are the learnings already indicating that you could see a fast adoption curve in the U.K. than in the U.S.? Thanks a ton.


其次,您是否可以在品牌广告的细节上提供更多的清晰度或颜色,当您说有特定的品牌广告渠道对您有所帮助时,我不知道您是否会参与其中,但我我 - 我要问你?

然后第三,在英国,我知道它还处于早期阶段,但是你能不能提供更多关于你在那里看到的颜色,任何特别的早期教训,任何使你成为的东西,正如你所看到的那样女性和男性在美国的这种轨迹就像它看起来很胖,现在说这种坡道是否能比你在美国看到的更快或更慢,还为时尚早?我知道你之前谈到的一系列因素使得这个市场特别具有吸引力,那么有没有 - 这些经验表明你可以看到英国的采用曲线比美国快吗?万分感谢。


Great, thanks for the question and I'll have Mike talk about inventory and then I'll pick it up for brand advertising in the U.K.



Yes, hi Mark, it's Mike. Yes, there are -- I think you see it most in revenue per client as Paul talked about and the increasing revenue per client that we've seen kind of year-over-year. We do think it is still early days and the attributes that will help us even do a better job with matching using that inventory algorithm. So there is so much that we can do and I'd say it's still very early innings and so we're not near [indiscernible] algorithm in particular.

是的,嗨马克,这是迈克。 是的,有 - 我认为你在保罗所谈到的每个客户的收入中看到的最多,而且我们看到的每个客户的收入也在逐年增加。 我们确实认为现在还处于早期阶段,这些属性将帮助我们更好地利用库存算法进行匹配。 所以我们可以做很多事情,我会说它仍然是非常早期的局,因此我们并没有特别接近[音频不清晰]算法。


And then in terms of the brand advertising, we did a really -- lot of activation that were really focused on -- was focused around the time with the Oscars were really broad in terms of channels and the types of things that we did. And so, we are able to do some in person, we did some out of home, and we did some TV advertising that was focused on some channels. And so, I think at this point we're excited to learn about it and overall I think we felt like having the Oscars and having kind of a social moment that meant something to a lot of people, that was an effective way to think about brand advertising, but I think it's still a little bit early to tell in terms of any specific channel learnings or what that will look like in future quarters.
And then the U.K., I mean it is just really too early in the U.K. as well. We launched a month ago I guess and I was just out there and what I can share is that it seems like there is a lot of excitement from the market. I think there are some differences in terms of the audiences and a lot of similarities, but a lot of differences. And I think our approach of really being respectful of those differences and really localizing our merchandise and our service to fit that audience specifically is a strategy that we think is going to be successful. So more to come, but as with all of our kind of seasoning businesses, we're really taking a launch and learn strategy here and so it's definitely early days, but we're optimistic.

然后就品牌广告而言,我们做了很多真正关注的激活 - 专注于时间,奥斯卡在频道和我们所做的事情类型方面非常广泛。所以,我们可以亲自做一些事情,我们做了一些不在家的事情,我们做了一些专注于某些频道的电视广告。所以,我认为在这一点上我们很高兴能够了解它并且整体而言我认为我们感觉就像拥有奥斯卡并且有一种对许多人来说意味着什么的社交时刻,这是一种有效的思考方式。品牌广告,但我认为从任何具体的渠道学习或未来几个季度的情况来看,现在还有点早。



Okay. Thank you, Katrina. Thank you, Mike.

好的。 谢谢你,卡特里娜。 谢谢你,迈克。


Thank you.



Thanks Mark.



We'll hear next from Heath Terry with Goldman Sachs.

接下来我们将听听Heath Terry与高盛的谈话。


Great, thanks. I was just wondering if you could just give us a sense, when we look at the acceleration growth in revenue per customer, is there a breakdown that we should be thinking about in terms of keep rate product - average product price, frequency of fix that you would say is behind the level of acceleration or just a way to sort of disaggregate the components within that? And then given the comment that you had around the initial success of Style Pass, any thoughts on sort of when or what your decision process will be like as far as making that more available to your existing customers?

十分感谢。 我只是想知道你是否可以给我们一个感觉,当我们看看每个客户的收入增长加速时,是否存在我们应该考虑的保持率产品 - 平均产品价格,修复频率的细分 你会说是加速水平的背后还是只是一种分解其中的组件的方式? 然后,鉴于您对Style Pass的初步成功所做的评论,是否有任何关于何时或何种决策过程的想法,以便为现有客户提供更多可用信息?

Paul Yee

Hi, Heath, this is Paul. I'll take the first question and then I'll turn it over to Mike to talk about Style Pass in more detail. So let me give you some color about the drivers of the growth in our revenue per client metric which was 8% in Q3, our fourth quarter of acceleration to kind of give you some color behind this trend. I would say there are the two major buckets of this improvement. The first is we're getting better at attracting quality clients.
Katrina talked about our ability to better target clients who are right fit for our service. And as a result, we're seeing better outcome for the first fixes which in turn translates to retention. So that's one driver we're seeing with our new core of new clients of Women's staying with us longer and hence that's helping drive revenue per client.
The second is more broader around our ability to personalize Stitch Fix. We've talked about our investments in inventory and our breadth there. Style Shuffle is a game now where 80% of our clients are playing and we've now generated 2 billion ratings to date.
So I believe to understand our client base and therefore be able to deliver fixes that are curated for them is translating into higher revenue per client. Meaning frankly, the highest keep rate that we saw in Q1 for Women's and the ability to give clients what they're looking for.
So those are the two key drivers are manifesting in this momentum we're seeing in Q3 and then that's reflective of the raised guidance that I gave for Q4.

嗨,希思,这是保罗。我将接受第一个问题,然后我将把它转交给迈克更详细地讨论Style Pass。因此,让我给你一些关于我们每个客户收入指标增长的驱动因素的颜色,这个指标在第三季度为8%,这是我们加速推出的第四季度,为您带来这种趋势的一些色彩。我想说这个改进有两个主要方面。首先,我们在吸引优质客户方面做得越来越好。


第二个是围绕我们个性化Stitch Fix的能力更广泛。我们已经谈到了我们对库存和广度的投资。 Style Shuffle现在是一款游戏,80%的客户正在玩游戏,我们现在已经产生了20亿的评级。




Hi, Heath, this is Mike. I think we will continue to take a very disciplined approach to Style Pass, we're excited about the capability, we've lapped a year. We're also very excited about the renewal rate. As you can imagine, as we show that we're better at targeting high quality clients, I think there is more of an opportunity to bring more people in the Style Pass and we have a really good understanding what client type will work really well with Style Pass.
So again, and you can assume that we'll be disciplined about it and roll it out to the people that make some more sense for and excited about the metrics that we've seen for other clients who are using Style Pass.

嗨,希思,这是迈克。 我认为我们将继续对Style Pass采取非常严谨的方法,我们对这种能力感到兴奋,我们已经用了一年时间。 我们对续约率也非常兴奋。 正如您可以想象的那样,当我们表明我们更擅长瞄准高质量的客户时,我认为更多的机会可以让更多的人加入Style Pass,我们非常了解哪种客户类型能够很好地与 风格通行证。

再说一遍,你可以假设我们会对它进行纪律处分,并将其推广给那些对我们在使用Style Pass的其他客户看到的指标更有意义和兴奋的人。


Great. Thank you both.

非常好。 谢谢你们俩。

Paul Yee

Thank you.



We'll hear now from Ralph Schackart with William Blair.

我们现在会听到Ralph Schackart和威廉布莱尔的消息。

Ralph Schackart

Hi can you hear me?


Paul Yee



Ralph Schackart

Sorry, operator jumped in there. Just in terms of Men's Exclusive Brands, you disclosed it's more than a third today. Curious, where do you think this metric can trend longer term, and structurally do you think Exclusive Brands are better fit for Men's or is there also a broader opportunity for Women's as well? Thank you.

对不起,操作员跳进去了。 就男士独家品牌而言,您今天披露的超过三分之一。 好奇,您认为这个指标在哪里可以长期发展,从结构上看,您认为独家品牌更适合男性,还是女性也有更广泛的机会? 谢谢。


Yes, that's a great question, Ralph. I think it should go higher, we're very confident in our ability to do it. Again, the reason we use Exclusive Brands is to fill in where we see gaps, I think structurally in the Men's business, we saw more gaps on our price point in style kind of perspective than we see in Women's, but we have a healthy Exclusive Brand business in Women's.
And as we continue to get really good at developing Exclusive Brands, I think you'll see us continue to invest both in Men's, Women's and certainly in Kids as well. So there is no ceiling I think to kind of what the number is, I don't know, I wouldn't want to speculate on a specific number, but it's an important part of our strategic platform on all three businesses and also in the U.K.

是的,这是一个很好的问题,拉尔夫。 我认为应该更高,我们对自己的能力非常有信心。 再一次,我们使用独家品牌的原因是为了填补我们看到差距的地方,我认为在男士业务的结构上,我们看到的价格点在我们的价格点上比我们在女士们看到的更多,但我们有一个健康的独家 女装品牌业务。

随着我们继续擅长开发独家品牌,我认为你会看到我们继续投资男士,女士和儿童。 所以没有天花板,我认为这个数字是什么,我不知道,我不想推测一个特定的数字,但它是我们所有三个业务的战略平台的重要组成部分,也是联合王国


And from KeyBanc Capital Markets, we'll move to Edward Yruma.

从KeyBanc Capital Markets,我们将转向Edward Yruma。

Edward Yruma

Thanks for taking my questions. I guess first on the kids business, how would you compare the growth trajectory versus maybe how men's had ramped. Are you seeing any important takeaways? And then second, you guys have a pretty good story to tell on inventory markdowns. Is that a function of the algorithmic buying? And kind of how much more room do you have to kind of keep driving markdowns lower? Thank you.

谢谢你回答我的问题。 我首先想到的是孩子们的生意,你如何比较男性的成长轨迹与男性的成长轨迹。 你看到任何重要的外卖吗? 然后第二,你们有一个非常好的故事来讲述库存减价。 这是算法购买的功能吗? 还有什么样的空间让你继续降低降价? 谢谢。


Yes. I'll take the Kid's one and - this is Mike, and then Paul will take the second question. So from a product acceptance and our ability to do exclusive brands with this business, we're seeing very similar kind of trends that we've seen in Men's. The Kid's clients and their parents love the - kind of love the service, love the personalization and really love the product.
Obviously, the total addressable market dynamics are different and there's potential differences in average order value just because the average unit retail prices of the product is different. And we're very sensitive to that and - but feel really confident in our ability to have this grow into a very profitable an important strategic planning for the business.

是。 我会选择孩子的一个 - 这是迈克,然后保罗将接受第二个问题。 因此,从产品接受度和我们在这个行业中做独家品牌的能力来看,我们看到的非常类似于Men's的趋势。 孩子的客户和他们的父母都喜欢这种服务,热爱个性化,热爱产品。

显然,总的可寻址市场动态是不同的,平均订单价值的潜在差异仅仅是因为产品的平均单位零售价格不同。 而且我们对此非常敏感 - 但我们非常有信心将其发展为一项非常有利可图的业务重要战略规划。

Paul Yee

Hi, Ed, this is Paul. In response to your question around sort of the - I think you're referring to clearance as opposed to markdowns. But we are still, I would say, in the early stages of our abilities to buy the right product, distribute it to the right clients and therefore reduce clearance over time.
And I think we're really proud of our results in Q3. We drove 150 basis point expansion in gross margins year-over-year. And that's the function of, not only lower shrink year-over-year, but also lower clearance activity and that's a function again of our strength in inventory management.
So as we look forward, I would say we are still investing in algorithmic capabilities to better align our inventory to our clients I would say in the buying and planning side using the rich data we have on our clients to inform our assortments, our mix of buy that's certainly an opportunity.
And just overall inventory management in getting products to the right client through styling in algorithms, I would say, are still areas where we continue to invest in and see opportunities in the future. So, I think I can tell we're really proud of our Q3 results and that's a function of the capabilities we've been building to date.

嗨,埃德,这是保罗。回答你的问题 - 我认为你指的是通关而不是降价。但是,我会说,在我们购买正确产品的能力的早期阶段,我们仍然可以将其分发给正确的客户,从而减少清关。




Edward Yruma

Thanks so much.


Paul Yee

Thanks, Ed.



We'll hear next from Eric Johnson with Piper Jaffray.

接下来我们将听听Eric Johnson与Piper Jaffray的谈话。

Eric Johnson

Hi guys, thanks for taking the question. First, just curious if your guidance contemplates any impact from tariffs for this year? And then, as we look out further, if lift 4 [ph] goes into effect, any thoughts on how you guys would mitigate them? And then do you have any data showing anything specific on your customer price sensitivity as it relates to being able to pass through any extra cost you might have?

嗨,大家好,谢谢你提出这个问题。 首先,只是好奇你的指导是否考虑了今年关税的影响? 然后,当我们进一步观察时,如果电梯4 [ph]生效,那么你们对如何缓解它们的想法? 然后,您是否有任何数据显示您的客户价格敏感度的具体内容,因为它与您可能承担的任何额外费用有关?

Paul Yee

Hi, Eric, this is Paul. Thanks for your question. I think the first thing to note on tariffs is all of the tariffs enacted to date have had a very minimal impact to our business. So in essence our guidance does reflect any impact of tariffs in place today. And that being said, as you are aware, we are monitoring the situation very carefully where there is the potential for the remaining imports from China to be subject to tariffs. And like a lot of other apparel retailers we do source product from China. And should that situation arise we have three levers in our toolkit to manage that impact.
First and foremost, we have a very strong set of relationships with our brand partners and so we're already starting our conversations to contemplate that situation, and ultimately how do we read our costs throughout our supply chain to mitigate any costs that come our way. Second, with our Exclusive Brands what we do on the supply chain, we're already in the process of diversifying our country of origin and migrating some production from China to other countries.
And then finally, you alluded to this, one advantage that we have is, we do have a really rich data set of understanding our clients and their behaviors and response to any kind of changes. And so should we have to surgically pass on costs, we do have I think a good capability to do so. So there are a lot of unknowns that as you can imagine that we're very much monitoring and managing scenarios and we'll obviously give more updates as the news transpires.




Eric Johnson

Great. Thank you.

非常好。 谢谢。

Paul Yee

Thank you.



From Suntrust we'll move to Youssef Squali.

从Suntrust我们将转移到Youssef Squali。

Youssef Squali

Thanks a lot. Thank you so much. I have a couple of questions. First would you, Paul. It looks like your guidance, if I look at it at the midpoint, it seems the continuation of - or an acceleration - further acceleration of revenue per active customer per month. But it also seems, I think an acceleration the active clients growth when in the last nine months, it's actually being decelerating from something like 22% to 17%. First, is that a fair assumption?
And second, what is behind that expected deceleration is that mostly U.K., or I'm sorry, is that U.K. or is that mostly from the core business in the U.S.? And then the other question is just around the Style Pass. Thank you for the 70% renewal rate info. I was wondering maybe you can comment on the percentage of clients which today have Style Pass and the type of growth you're seeing in that metric? Thank you.

非常感谢。 非常感谢。 我有一些问题。 首先,保罗。 它看起来像你的指导,如果我在中点看它,似乎是每个活跃客户每月收入的延续 - 或加速 - 进一步加速。 但看起来,我认为在过去九个月中,活跃的客户增长加速,实际上正在从22%减少到17%。 首先,这是一个公平的假设吗?

第二,预期减速的背后原因是英国,或者对不起,是英国还是主要来自美国的核心业务? 然后另一个问题就在Style Pass附近。 感谢您提供70%的续订率信息。 我想知道您是否可以评论今天有Style Pass的客户百分比以及您在该指标中看到的增长类型? 谢谢。

Paul Yee

Hi, Youssef, this is Paul. Thanks for your questions. As I shared with the guidance for Q4, I would say we continue to see benefit in growth from both levers which is client count growth and revenue per client. I would say the raise in our guidance for that quarter is driven by the continued momentum in our revenue per client growth. So we've grown four consecutive quarters and we see that momentum continuing. And as for active client count, we grew that 17% in Q3 and we see consistent growth as we look forward to Q4. So again, we see benefits from both.
In terms of the drivers of that revenue per active client drivers - the drivers of that growth, similar to my comments to Heath, it's a whole host of initiatives we have to find the right client and serve them well through better understanding them and through inventory management. So that momentum frankly, continues.
Specific to your question in the U.K. and its impact in client count, we just launched a month ago. And certainly we're very much in the early stages and with both the U.K. and frankly, the kids business, we're still in the very early stages of learning from those businesses and really seeing the impact on the Men's Pass [ph] two and a half years into our business. So overall, we are really pleased and you're seeing that raise for Q4.
To your question on Style Pass, I would say a minority of our clients currently today benefit from Style Pass and it's very purposeful and we want to make sure that the offering we provide them, not only makes sense for them, but also makes sense for our business and we're constantly evaluating opportunities to bring more people onto the platform, but right now we're really pleased with the results obviously and we'll continue to monitor opportunities to bring more people into the Style Pass family.


就每个活跃客户驱动程序的收入驱动因素而言 - 这一增长的驱动因素,与我对Heath的评论类似,我们必须找到合适的客户并通过更好地了解客户并通过库存来为他们提供良好的服务。管理。坦率地说,这种势头继续下去。


关于Style Pass的问题,我想说今天我们的一小部分客户都会受益于Style Pass而且非常有目的,我们希望确保我们提供的产品不仅对他们有意义,而且也有意义。我们的业务和我们不断评估将更多人带入平台的机会,但是现在我们对结果非常满意,我们将继续监控将更多人带入Style Pass家族的机会。

Youssef Squali



Paul Yee

Thanks Youssef.



We'll hear next from Ike Boruchow with Wells Fargo.

我们接下来会听到Ike Boruchow和Wells Fargo的消息。

Ike Boruchow

Hi, good afternoon, everyone. Congrats, good quarter. I don't know if this question is for Katrina or Mike, but I want to ask you more about competition. So I know that within the subscription market you guys are by far and away the largest player. But how do you guys think about the rental market? There was obviously a large private player in that space. There's been some specialty retailers who have announced launches into that space. I'm just curious how you think about that competitively. And is that something that Stitch Fix would ever consider adding on to the subscription box service? Thanks.

嗨,大家下午好。 恭喜,好季度。 我不知道这个问题是针对卡特里娜还是麦克,但我想问你更多关于比赛的问题。 所以我知道在订阅市场中,你们是最大的玩家。 但是你们如何看待租赁市场? 那个空间里显然有一个大型的私人球员。 已经有一些专业零售商宣布进入该领域。 我只是好奇你对竞争力的看法。 这是Stitch Fix会考虑添加到订阅盒服务的东西吗? 谢谢。


Yes. Thanks for the question, Ike. I mean, we really think of ourselves as focused on personalization and there's really very few other players that are as focused on personalization as we are. That is the core of what we're focused on and the apparel market it's really, really large and we're not seeing any head-to-head competition I would say.
Your question about rental, it's interesting and yes, we're definitely looking at that market and it could be a future opportunity for us. I would say that right now, it - we don't see it as big of an opportunity as the opportunities we have within our core business, so we definitely will continue to monitor that.

是。 谢谢你的提问,艾克。 我的意思是,我们真的认为自己专注于个性化,而且很少有其他人像我们一样专注于个性化。 这是我们关注的核心和服装市场的真正,非常大,我们也没有看到任何正面竞争。

关于租赁的问题,这很有意思,是的,我们肯定会关注那个市场,这对我们来说可能是一个未来的机会。 我现在就说,它 - 我们认为它不像我们在核心业务中拥有的机会那么大,所以我们肯定会继续监控这一点。

Ike Boruchow




And from Wolfe Research, we'll go to Adrienne Yih.

从Wolfe Research,我们将去Adrienne Yih。

Adrienne Yih

Good afternoon. Let me add my congratulations. Nice quarter. Katrina, two questions for you. It sounds like the positive fix - the positive first fix is coming from the back of data analytics. And I'm just wondering, how the evolution of the data analytics versus the personal style is evolving?
Secondarily, what specifically can you tell us about what makes a good positive first fix? Is it something they say in their profile, or is it more general kind of psychographic? And then for Paul, just to piggyback off the tariff question, can you give us a general estimate of what you think the indirect sourcing from China is? Thank you very much.

下午好。 让我再加上祝贺。 不错的季度。 卡特里娜,给你两个问题。 这听起来像是积极的解决方案 - 积极的第一个修复来自数据分析的背后。 我只是想知道,数据分析与个人风格的演变是如何演变的?

其次,具体来说你能告诉我们什么是积极的第一次解决方案? 这是他们在自己的个人资料中所说的话,还是更为一般的心理学? 然后对于保罗来说,只是为了背负关税问题,你能否给我们一般估计你认为来自中国的间接采购是什么? 非常感谢你。


Thanks for your questions, Adrienne. Firstly just on first fix and your - I guess the two sub questions, one is what makes a positive first fix experience, and that's actually we have a definition around that and that's a fix in which you bought at least one item is a fix where you are excited. We ask an exclusive question, are you excited to get your next fix? And that actually - that signals positive intent, it signals the commitment to our potential retention and so those are metrics that we use to define that.
And in terms of what's driving it, yes, it is data analytics that is helping us to better identify clients, but it's really everything that we do. And we think about - two quarters ago, we shared that we had our highest keep rates in the business. The higher keep rates obviously contribute to more successful first fixes and people being happy with the experience, as we improve the merchandise, as we're able to bring in more products that people are excited about that's going to improve that experience.
And so, I don't think we can share, we don't give all the credit to data, but I think it's really just broadly all of the things that we're working on in the business that improves that experience and contributes to that, to the momentum we see there.

感谢您的提问,Adrienne。首先只是在第一次修复和你的 - 我猜两个子问题,一个是积极的第一次修复体验,实际上我们有一个定义围绕这个,这是一个修复,你买了至少一个项目是一个修复,其中你很兴奋我们提出一个独家问题,您是否很高兴能够获得下一个解决方案?实际上 - 这表明了积极的意图,它标志着我们对潜在保留的承诺,因此这些是我们用来定义它的指标。

就驱动它的方式而言,是的,数据分析正在帮助我们更好地识别客户,但它确实是我们所做的一切。我们想到 - 两个季度前,我们分享了我们在业务中保持最高的保留率。较高的保留率显然有助于更成功的首次修复和人们对体验感到满意,因为我们改进了商品,因为我们能够引入更多人们对能够改善体验的产品。


Adrienne Yih



Paul Yee

Hi, Adrienne. This is Paul. To your question around sort of our China's - product sourced from China. So we're obviously in close contact with our brand partners and we do source a healthy portion of our product from China through our vendors and then also directly through our exclusive brand lines and given that outlook we're - as I noted earlier, really focused on ways should the situation arise to mitigate the impact. And that's what we're closely monitoring as we speak, and again more to come as news progresses.

嗨,阿德里安娜。 这是保罗。 关于我们中国的一些产品 - 来自中国的产品。 因此,我们显然与我们的品牌合作伙伴保持密切联系,我们通过我们的供应商从中国采购我们产品的健康部分,然后直接通过我们的独家品牌系列,并且鉴于前景我们 - 正如我之前提到的,真的 重点关注应采取哪些措施来减轻影响。 这就是我们在发言时密切关注的内容,以及随着新闻的进展而来的更多内容。

Adrienne Yih

Great. Thank you very much.

非常好。 非常感谢你。


Our next question will come from Janet Kloppenburg with JJK Research.

我们的下一个问题将来自Janet Kloppenburg和JJK Research。


Good evening everyone. Congrats on a really super quarter. I had a couple of questions around the Exclusive Brand development. Are you internally developing that? Do you have a design or merchandising team that is growing within the organization or is this done through some of your vendor partners? And just if there's any relative inventory risk there higher versus what it might be with some of your partners? And if the exclusive brand - I think I'm correct that it's devoted to Men's right now, will it move into Women's and other categories as well?
Secondly, I was wondering, Katrina, if you could talk a little bit about, this is kind of specific, but in the traditional retail world, seasonal inventory hit a real rough patch in the April quarter because it was so damn cold, and there was a shift and lots of different things that happened. But I was just wondering if you have a special sauce that allows you to mitigate those kinds of risks in terms of seasonality and weather trends?
And I also just wanted to ask, given this performance which may be tied in some way to the increased advertising spend, how we should think about your marketing budget going forward? And if you may devote more of your spend to marketing, given the success you've seen? Thank you.

各位晚上好。恭喜真正的超级季度。关于独家品牌发展,我有几个问题。你在内部开发吗?您是否有一个在组织内部成长的设计或销售团队,或者是通过您的某些供应商合作伙伴完成的?而且,如果存在任何相对库存风险,那么与您的某些合作伙伴相比可能存在更高的风险?如果这个独家品牌 - 我认为我现在专注于男士是正确的,它会进入女性和其他类别吗?




So, hi Janet, this is Mike. I'll take the first question and then pass it on to others for questions two and three. So we do both, your question about to do some of the design work with vendor partners and/or internal, we have internal people depending on the client that are working on some of the designs.
But we also - we have so much data what works and what doesn't work and a very strong kind of product team and tech team that helps us develop product. But we lean on and ask our vendor partners to help us think through it too. And a lot of it is new training for them because they get way more data from us than they will get from any another partner, which actually allows us develop really great product.
And that's why you are seeing our success in Exclusive Brands. And like I said earlier on the call, it's a huge strategic pillar for us, and it's represented in all parts of our business. It is actually in Women's too, but we just highlighted the Men's Exclusive Brand development on this call.


但我们也 - 我们拥有大量有用的数据和无效的数据,以及帮助我​​们开发产品的强大的产品团队和技术团队。但我们依靠并要求我们的供应商合作伙伴帮助我们思考它。而且很多都是针对他们的新培训,因为他们从我们这里得到的数据比从任何其他合作伙伴获得的更多,这实际上可以让我们开发出非常好的产品。






Janet, just on your question on seasonality, I think this is one of the many dimensions that we're able to personalize across. And so when our stylists are choosing items for our clients, they're actually able to see the weather in that geography, so that we're really always sending seasonally relevant, climate-relevant products to our client. And I think the other place that we have advantage is, because we turn our inventory, because we have the great relations - because we turn our inventory over six times a year and because we have these great relationships with our vendors, we're able to react more in season than I think many other retailers can.
And so, we're able to see weekly selling and understand not just what is selling, but understand the why behind that, that allows us to be able to react really quickly whether it's something that has to do with weather or something that has to do with trend. And I think that's a big advantage of our model where we are turning the inventory quickly and are able to be a little more reactive.

珍妮特,就你的季节性问题而言,我认为这是我们能够个性化的众多方面之一。因此,当我们的造型师为我们的客户选择商品时,他们实际上能够看到该地理区域的天气,因此我们总是向客户发送与季节相关的气候相关产品。而且我认为我们拥有优势的另一个地方是,因为我们有库存,因为我们有很好的关系 - 因为我们每年将库存调整六次以上,因为我们与供应商建立了良好的关系,我们能够季节反应比我想其他许多零售商都要多。





Paul Yee

Hi, Janet, this is Paul. In regards your question around marketing, we still see opportunities to build investments in marketing. As you can tell, we just launched our first innerwear brand campaign in Q3. And I would say even in the life of Stitch Fix, this is a new capability for us that we're building, and starting to infuse data science in that function to better target and frankly reengage our client base.
So as you think about our longer margins of 11% to 13%, that reflects our marketing spend of 9% to 11% as a percent of revenue. So I would say we're still in the lower end of that range of marketing and it's a reflection of the opportunities we do see to drive positive ROI through our marketing investment. So I think we're definitely looking forward to quarters ahead, taking our learnings and reinvesting in capabilities to drive more of what client loves.

嗨,珍妮特,这是保罗。 关于营销方面的问题,我们仍然看到了在营销方面进行投资的机会。 正如您所知,我们刚刚在第三季度推出了我们的第一个内衣品牌活动。 而且我会说,即使在Stitch Fix的生活中,这对我们来说也是一种新的能力,我们正在构建,并开始在该功能中注入数据科学,以更好地瞄准并坦率地重新接触我们的客户群。

因此,当您考虑我们11%至13%的较长利润率时,这反映出我们的营销支出占收入的百分比为9%至11%。 所以我会说我们仍处于营销范围的低端,这反映了我们通过营销投资推动积极投资回报率的机会。 所以我认为我们肯定期待未来的季度,我们的学习和再投资能力,以推动客户喜欢的更多。


Great. Thanks so much.

非常好。 非常感谢。


And at this time, I'd like to turn things back to Katrina for closing remarks.



Great. Thank you very much everybody for joining us. And we look forward to seeing you on the road in upcoming conferences.

非常好。 非常感谢大家加入我们。 我们期待在即将举行的会议上与您见面。


And that will conclude today's conference. Again, thank you all for joining us.

这将结束今天的会议。 再次感谢大家加入我们。


  • Stitch Fix Inc. 电话会议
  • Stitch Fix Inc. 财务报告


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