Stitch Fix, Inc. EBITDA dropped on 177% while Revenue increased on 8.5%
09/22/2020 • About Stitch Fix, Inc. (
$SFIX) • By InTwits
Stitch Fix, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Stitch Fix, Inc. is a fast growth stock: FY2020 revenue growth was 8.5%, 5 year revenue CAGR was 37.9% at FY2020 ROIC -10.7%
- EBITDA Margin is quite volatile: -1.7% in FY2020, 2.4% in FY2019, 4.4% in FY2018, 4.0% in FY2017, 9.3% in FY2016
- Stitch Fix, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 5.8%
- CAPEX is quite volatile: $30m in FY2020, $31m in FY2019, $17m in FY2018, $17m in FY2017, $15m in FY2016
- The company has unprofitable business model: ROIC is -10.7%
- It operates with high leverage: Net Debt/EBITDA is 6.8x while industry average is 52.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Stitch Fix, Inc.'s Revenue increased on 8.5%. Revenue growth showed slowdown in FY20Q4 - it was 2.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.57 pp from 16.0% to 16.6% in FY2020. EBITDA Margin declined at -2.4 pp per annum in FY2016-FY2020.
Gross Margin decreased slightly on 0.51 pp from 44.6% to 44.1% in FY2020. SG&A as a % of Revenue increased on 4.0 pp from 43.1% to 47.1% in FY2020. SG&A as a % of Revenue grew at 2.5 pp per annum in the last 5 years.
Net Income margin decreased on 6.3 pp from 2.3% to -3.9% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Stitch Fix, Inc. had CAPEX/Revenue of 1.8%. Stitch Fix, Inc. showed almost no change in CAPEX/Revenue from FY2017 to FY2020. It's average level of CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at negative ROIC (-10.7%) and ROE (-16.8%). ROIC dropped on 17.4 pp from 6.6% to -10.7% in FY2020. ROE dropped on 27.2 pp from 10.4% to -16.8% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.8x and Debt / EBITDA is . Net Debt / EBITDA surged on 4.5x from -4.5x to in FY2020. Debt jumped while cash dropped on 16.1%.
Stitch Fix, Inc. has no short term refinancing risk: cash is higher than short term debt (589.5%).
Financial and operational results
FY ended 08/01/2020
Stitch Fix, Inc. ($SFIX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 730 | 977 | 1,227 | 1,578 | 1,712 | 8.5% |
| Gross Profit | 323 | 434 | 536 | 703 | 754 | 7.3% |
| SG&A | 259 | 403 | 493 | 680 | 806 | 18.6% |
| EBITDA | 68 | 39 | 54 | 38 | -29 | -176.8% |
| Net Income | 33 | -1 | 45 | 37 | -67 | -282.0% |
Balance Sheet
|
|---|
| Cash | 91 | 111 | 298 | 171 | 143 | -16.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | 24 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 140 | |
Cash flow
|
|---|
| Capex | 15 | 17 | 17 | 31 | 30 | -2.0% |
Ratios
|
|---|
| Revenue growth | 113.0% | 33.8% | 25.5% | 28.6% | 8.5% | |
| EBITDA growth | | -42.0% | 36.3% | -29.4% | -176.8% | |
|
|---|
| Gross Margin | 44.3% | 44.5% | 43.7% | 44.6% | 44.1% | -0.5% |
| EBITDA Margin | 9.3% | 4.0% | 4.4% | 2.4% | -1.7% | -4.1% |
| SG&A, % of revenue | 35.5% | 41.2% | 40.2% | 43.1% | 47.1% | 4.0% |
| Net Income Margin | 4.5% | -0.1% | 3.7% | 2.3% | -3.9% | -6.3% |
| CAPEX, % of revenue | 2.1% | 1.8% | 1.4% | 2.0% | 1.8% | -0.2% |
|
|---|
| ROIC | | 32.2% | 20.5% | 6.6% | -10.7% | -17.4% |
| ROE | | -1.1% | 23.8% | 10.4% | -16.8% | -27.2% |
| Net Debt/EBITDA | -1.3x | -2.8x | -5.6x | -4.5x | |
Stitch Fix, Inc. ($SFIX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 445 | 452 | 372 | 443 | | 21.5% | 22.0% | -9.1% | 2.6% |
| EBITDA | 12 | 21 | -33 | -8 | | -17.2% | 12.2% | - | -234.3% |
| Net Income | -0 | 11 | -34 | -44 | | -101.7% | -4.6% | -581.0% | -719.4% |
Balance Sheet
|
|---|
| Cash | 152 | 166 | 97 | 143 | | -12.4% | -0.9% | -32.7% | -16.1% |
| Short Term Debt | 23 | 23 | 23 | 24 | | - | - | - | - |
| Long Term Debt | 132 | 126 | 143 | 140 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 45.3% | 44.8% | 40.8% | 44.9% | | 0.2% | 0.7% | -4.3% | 0.9% |
| EBITDA Margin | 2.6% | 4.6% | -8.9% | -1.8% | | -1.2% | -0.4% | -8.7% | -3.1% |
| Net Income Margin | -0.0% | 2.5% | -9.1% | -10.0% | | -3.0% | -0.7% | -10.8% | -11.7% |
Peers in Internet & Direct Marketing Retail
Below we provide Stitch Fix, Inc. benchmarking against other companies in Internet & Direct Marketing Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farfetch Limited ($FTCH) | - | 59.4% | 56.1% | 69.5% | 63.9% |
| Cango Inc. ($CANG) | - | 142.3% | 3.7% | 31.9% | 42.5% |
| Amazon.com, Inc. ($AMZN) | - | 30.8% | 30.9% | 20.5% | 37.6% |
| Booking Holdings Inc. ($BKNG) | - | 18.0% | 14.6% | 3.7% | -54.9% |
| |
|---|
| Median (4 companies) | - | 45.1% | 22.7% | 26.2% | 40.1% |
|---|
| Stitch Fix, Inc. ($SFIX) | - | 33.8% | 25.5% | 28.6% | 8.5% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cango Inc. ($CANG) | 60.8% | 63.3% | 60.2% | 62.6% | 46.5% |
| Farfetch Limited ($FTCH) | 48.3% | 53.1% | 49.5% | 45.0% | 46.1% |
| Amazon.com, Inc. ($AMZN) | 35.1% | 37.1% | 40.2% | 41.0% | 39.6% |
| |
|---|
| Median (3 companies) | 54.6% | 58.2% | 49.5% | 45.0% | 46.1% |
|---|
| Stitch Fix, Inc. ($SFIX) | 44.3% | 44.5% | 43.7% | 44.6% | 44.1% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Amazon.com, Inc. ($AMZN) | 9.0% | 8.8% | 11.9% | 14.3% | 13.8% |
| Booking Holdings Inc. ($BKNG) | 29.9% | 38.6% | 39.7% | 39.8% | 0.3% |
| Farfetch Limited ($FTCH) | -33.8% | -21.6% | -24.9% | -26.9% | -24.1% |
| |
|---|
| Median (3 companies) | 19.5% | 23.7% | 11.9% | 18.7% | 0.3% |
|---|
| Stitch Fix, Inc. ($SFIX) | 9.3% | 4.0% | 4.4% | 2.4% | -1.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Amazon.com, Inc. ($AMZN) | 5.7% | 6.7% | 5.8% | 6.0% | 10.4% |
| Booking Holdings Inc. ($BKNG) | 2.0% | 2.3% | 3.0% | 2.4% | 4.2% |
| Farfetch Limited ($FTCH) | 2.5% | 3.3% | 3.5% | 3.9% | 1.6% |
| |
|---|
| Median (3 companies) | 2.3% | 2.8% | 3.5% | 3.4% | 4.2% |
|---|
| Stitch Fix, Inc. ($SFIX) | 2.1% | 1.8% | 1.4% | 2.0% | 1.8% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Amazon.com, Inc. ($AMZN) | 11.9% | 7.3% | 14.9% | 13.0% | 14.1% |
| Cango Inc. ($CANG) | - | 48.3% | 6.6% | 4.3% | 3.3% |
| Booking Holdings Inc. ($BKNG) | 17.3% | 23.2% | 27.3% | 32.0% | -3.7% |
| Farfetch Limited ($FTCH) | - | -35.3% | -22.7% | -27.7% | -124.7% |
| |
|---|
| Median (4 companies) | 14.6% | 15.3% | 10.8% | 8.7% | -0.2% |
|---|
| Stitch Fix, Inc. ($SFIX) | - | 32.2% | 20.5% | 6.6% | -10.7% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cango Inc. ($CANG) | 0.8x | -1.3x | - | 1.8x | - |
| Amazon.com, Inc. ($AMZN) | 0.1x | 1.5x | 0.6x | 1.0x | 1.1x |
| Booking Holdings Inc. ($BKNG) | 1.6x | 1.4x | 1.0x | 0.5x | 104.1x |
| |
|---|
| Median (3 companies) | 0.8x | 1.4x | 0.8x | 1.0x | 52.6x |
|---|
| Stitch Fix, Inc. ($SFIX) | -1.3x | -2.8x | -5.6x | -4.5x | - |
