Stitch Fix (SFIX) Surges 9.17% on Revised Guidance, AI-Driven Turnaround Boosts EBITDA Outlook

Stitch Fix Inc. shares surged 9.1684% in pre-market trading on Dec. 8, 2025, driven by optimism over revised financial guidance and operational improvements. The stock’s sharp rise followed updated Q2 revenue forecasts of $335M–$340M, exceeding prior estimates of $311.9M, alongside adjusted EBITDA guidance of $10M–$13M, signaling improving profitability. These figures reflect a strategic shift toward AI-driven personalization and enhanced client retention, which helped offset a modest decline in active clients while maintaining a robust customer base.

Q1 earnings highlighted a 7.3% year-over-year revenue increase to $342.1M, surpassing market expectations despite a narrow net loss. The company also projected free cash flow positivity for FY26, bolstered by cost management and inventory optimization. Analysts noted the gross margin of 44.4% as a key strength, though negative EBIT and profit margins (-3.1% and -2.27%, respectively) underscore ongoing challenges in scaling profitability. The stock’s technical momentum, marked by a weekly climb from $4.29 to $5.11, reinforced investor confidence in its turnaround strategy.

Market sentiment remains cautiously optimistic, with Q2 and FY26 guidance positioning Stitch Fix to outperform peers in the Consumer Discretionary sector. Strategic investments in AI and stylist expertise have stabilized client growth, while revised forecasts suggest resilience amid broader retail sector volatility. Traders are monitoring key resistance levels, with a break above $5.50 potentially unlocking further upside as the company navigates its transformation phase.