4.2%. That is how much Stitch Fix’s diluted share count increased in the twelve months ended August 1, even as the company narrowed its operating loss from $38.9 million to $21.7 million.
The surface read is straightforward: revenue grew 6.4% to $1.3 billion, and the net loss shrank to $12.6 million from $28.7 million. Stitch Fix is getting closer to break-even. The less tidy detail is that cash fell from $114.0 million to $95.3 million, while gross margin slipped from 44.4% to 43.7%.
The SG&A ratio fell while gross margin slipped, rather than Stitch Fix keeping more of each sale. Stitch Fix said SG&A fell to 45.3% of revenue from 47.5%, helped by lower compensation and benefits expense.
"SG&A as a percentage of revenue decreased to 45.3% for fiscal 2026, compared to 47.5% for the prior year, primarily driven by lower compensation and benefits expense as a percentage of revenue."
Stitch Fix, 2026 10-K, September 24, 2026
The SG&A ratio fell by 2.2 percentage points as the operating margin improved to negative 1.6%. It is a measurable operating gain, but it also leaves a specific question: how much of the progress comes from a business that is improving, and how much comes from a smaller cost base?
The merchandise side supplied the complication. Stitch Fix said customers generated more revenue per active client, with higher average order values tied to more items kept per Fix and higher average unit prices. But the company also said the cost of goods sold rose and expects it to keep rising.
"Despite these price increases, our cost of goods sold increased in fiscal 2026 and we expect will continue to rise, primarily due to higher transportation cost from rising oil prices and continued merchandise assortment investments."
Stitch Fix, 2026 10-K, September 24, 2026
That leaves Stitch Fix with better client economics on one side and a narrower merchandise margin on the other. Gross profit still rose to $588.5 million, but it grew more slowly than revenue.
Cash adds another layer. Capital spending increased 18% to $19.2 million, inventory rose 3.7% to $122.7 million, and the company used $42.3 million in financing activities, including $26.4 million of stock repurchases and $17.6 million for tax withholdings tied to share awards. The cash balance moved lower alongside those changes even as the reported loss improved.
The longer record supplies useful scale. Revenue reached $2.1 billion in fiscal 2021 and stood at $1.3 billion in fiscal 2025, so the latest growth sits well below the earlier peak. At the latest close, Stitch Fix had a $363.2 million market capitalization and traded at 0.2 times enterprise value to sales. Those figures describe a company valued at 0.2 times enterprise value to sales, while its operating margin remained negative despite the lower SG&A ratio.
The unresolved point is whether higher revenue per client can keep offsetting rising fulfillment and assortment costs without another round of SG&A reduction. Stitch Fix’s next report has not answered that question yet: can revenue keep growing while gross margin and cash stop giving ground?
Source: Stitch Fix fiscal 2026 Form 10-K, filed September 24, 2026.