Stitch Fix, Inc.

My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Stitch Fix first quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw a question, again, press the star one. I would now like to turn the conference over to Cheryl Valenzuela, Head of Investor Relations. You may begin.

Good afternoon, and thank you for joining us today for the Stitch Fix first quarter fiscal 2026 earnings call. With me on the call are Matt Baer, Chief Executive Officer, and David Osterhar, Chief Financial Officer. We have posted complete first quarter 2026 financial results in a press release on the quarterly results section of our website investors.stitchfix.com. We would like to remind everyone that we will be making forward-looking statements on this call, which involves risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reporting 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 the results to differ. In particular, our press release issued and filed today, as well as our annual report on Form 10-K for fiscal 2025 and subsequent periodic reports filed with the SEC. Also note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. Please note, The fiscal 2024 was a 53-week year due to an extra week in the fourth quarter. As such, references to our year-over-year revenue growth rates and consecutive quarters of revenue growth in our women's and men's businesses on this call are based on an adjusted 52-week basis, removing the impact of the extra week to provide a comparison that we believe more accurately reflects our performance. During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the press release on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being webcast on our Investor Relations website, and a replay of this call will be available on the website shortly. And now, let me turn the call over to Matt.

Thank you, Cheryl, and good afternoon, everyone. Q1 was a strong start to the year. Revenue exceeded our outlook and accelerated 7.3% year over year to $342.1 million. Adjusted EBITDA also exceeded our outlook and was nearly 4% of revenue at $13.4 million. We are increasingly becoming the retailer of choice for more of our clients' apparel and accessories needs. We are doing this by leveraging the latest in generative AI technology, the expertise of our human stylists, and our assortment of leading brands in service of our aim to deliver the most client-centric and personalized shopping experience. Given our Q1 performance, combined with the robust demand we've seen so far this quarter, we are guiding to a third quarter of accelerating growth in Q2 and raising our full-year guidance. The outperformance is the direct result of the compounding benefits we're seeing from the disciplined execution of our transformation strategy. We've strengthened the foundation of our business by embedding retail best practices and building significantly more leverage into our operating model. We have fundamentally reimagined our client experience. We zeroed in on four areas to deliver a more modern and dynamic Stitch Fix. First, delivering enhanced client engagement features. Second, cultivating deeper client-stylist relationships. Third, offering a best-in-class assortment. And fourth, increasing the flexibility of our business model. For example, our increased flexibility now includes dynamic, larger fixes, the ability to turn a freestyle shopping journey into a styled fix, curated theme fixes for specific occasions and use cases, and family accounts, which unlock the Stitch Fix experience for the extended family. This comprehensive and customer-driven approach is clearly resonating with clients. Our fixed AOV was up nearly 10% in Q1. The ninth consecutive quarter, AOV has increased year over year, as our larger fixed offerings in our improved assortment continue to resonate with our clients and better meet their outfitting needs. We are strengthening our competitive position and gaining market share in our core apparel business. Our strategic expansion into non-apparel categories is further accelerating this growth. By helping clients complete their outfits and dress them from head to toe, we are capturing a greater share of their wallet from other retailers. Our 7.3% year-over-year revenue growth in Q1 meaningfully outpaced Sarkana's estimated 1% growth for the broader U.S. apparel, accessories, and footwear market. Our growth is broad-based, with both our women's and men's businesses continuing to accelerate. In women's, we saw a strong start to fall sales across key seasonal categories, such as sweaters, coats, jackets, and vests, which combined, grew 19% year-over-year. Sneakers, which were up 63% year-over-year, driven by New Balance, Gola, and Adidas, and wide-leg denim was up 217% driven by outsized performance in Days Denim, Pistola, and Madewell. We've also seen great client responses to new brands, especially within activewear and footwear, such as Varley, Birkenstock, and Roan. and we're excited to continue to add new brands to our assortment in the coming months. Our men's business delivered a second consecutive quarter of double-digit revenue growth by leaning more into the elevated everyday and athleisure styles our clients are looking for. Seasonal categories such as fleece, sweaters, and outerwear grew 57% combined. while denim grew 30% and sneakers grew 24% year-over-year. Brands like Travis Matthew and Viore delivered outsized growth and remained trusted client favorites for style, versatility, and quality, while new brands such as Katin, Industry, and NN07 have introduced more style and trend into our assortment. We believe that our expanded relevance in activewear and athleisure Footwear and accessories in particular could unlock a significant wallet share opportunity and that our fair share with our existing client base in these categories is approximately $1 billion of incremental revenue. We are confident in our ability to capture increased market share in the future. Just as importantly, we're focused on achieving profitable active client growth We ended the quarter with 2.3 million active clients at the high end of our expectations. Q1 marked the sixth consecutive quarter of improvement in active client year-over-year growth rates and a return to sequential active client growth in our men's business. We continue to expect a sequential increase in net ads in Q3 of our current fiscal year. Our methodical approach to rebuilding our client base around long-term fit with our service and higher lifetime value paired with a continuously improving client experience is working. With respect to new clients, three-month LTVs have grown year over year for nine consecutive quarters and remain at three-year highs. We also have had more new clients on recurring fixed shipments at the end of Q1 than in any of the prior six quarters. Q1 also benefited from higher re-engagements with a significantly higher percentage of re-engaged clients enrolling in recurring shipments compared to last year. We believe these positive trends confirm the improved quality of our new and returning client cohorts and will lead to greater client retention, higher revenue predictability, and improved profitability over the long term To build on this momentum and ensure we sustain this improved client quality, we are also focused on delivering growth by leveraging our competitive differentiation in data science and AI. AI is not new to Stitch Fix. When we launched nearly 15 years ago, we disrupted retail with a proprietary, data-driven approach. Over time, we've amassed billions of insights on our clients' fit style, and budget preferences that, combined with the human judgment of our stylists, enable us to uniquely deliver ultra-personalization at scale. We're capitalizing on this competitive advantage through a suite of AI-powered innovations that aim to drive greater client engagement and retention. For example, Vision, our generative AI-powered style visualization experience, provides our clients with an entirely new and inspiring approach to style discovery, offering personalized, shoppable images of each client based on the unique style profile and the latest trends. Another great example is our AI Style Assistant, which leverages GenAI to engage in a dialogue with clients and is helping our clients better articulate their individual requests to their stylists. The style assistant draws on each client's style file and the extensive data we already know about them. And the more it's used, the smarter it gets, helping ensure each fix delivers on the client's individual needs. The scope of our GenAI strategy goes beyond client-facing features. We are taking an enterprise-wide approach, incorporating these capabilities across every area of the business to drive further efficiencies and deepen our competitive advantage as a leading innovator in retail. For example, our merchandising team is using GenAI to fundamentally transform private brand product development and inventory management. Our GenAI assisted design process leverages our proprietary data to develop complete fashion lines, which will enable us to respond to trends more quickly and bring products to market faster. Beyond design, AI provides predictive intelligence for trend forecasting, optimizing inventory, and setting intelligent pricing, ensuring every piece of merchandise we sell is calibrated for both profitability and client satisfaction. The innovations we've introduced across our business will enable us to better serve clients this holiday season. We entered this critical period with our most seasonally relevant assortment and competitive pricing and promotions enhanced by new and inspiring shopping experiences, including vision, theme fixes, and fixes built around a freestyle item. We also launched Stylus Connect, a platform for near real-time client stylus collaboration and introduced family accounts to better support gifting during the season. holiday performance has been strong with record freestyle sales for the Black Friday to Cyber Monday period. In closing, we have strong momentum in our business, remain focused on exceeding our clients' expectations, and will continue to play offense in order to deliver increased market share gains. Now, I'll turn the call over to David to share more details of our financial results and future outlook.