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Stitch Fix has filed for an IPO, and the numbers look good

Stitch Fix has filed for an IPO, and the numbers look good
From TechCrunch - October 19, 2017

Stitch Fix has filed to go public, finally revealing the financial guts of the startup which will be a test of modern e-commerce businesses that are looking to hit the marketand the numbers look pretty great!

Lets start off really quick with profits: aside from the last two quarters, Stitch Fix posted a six-quarter streak ofpositive net income. We talk a lot about companies that are planning to go public that show pretty consistent (or even increasing) losses, but Stitch Fix looks like a company that has actually managed to build a healthy business. The company finally lost money in the last two quarters, but even then, its losses decreased quarter-over-quarterwith the company only losing around $4.5 million in the second quarter this year.

Lets get to the chart!

(A quick note on the above: Stitch Fix considered its fiscal 2017 year beginning in July of 2016, while the above chart is labeled based on dates, with Q2 2017 meaning the quarter ended Julythis year.)

So, as we can see, profits! Stitch Fix is a modern spin on e-commerce where the company gathers your interests and information about your personal style, and then delivers a bunch of options to your door. You can pick the articles you want to buy, and the ones you want to return, and in theory, its a product that helps take away some of the anxiety around choices when it comes to online shopping. Instead of clicking around on Amazon, Stitch Fix tries to understand what you like and stick a bunch of options in front of you, as well as make it really easy to buy.

TechCrunch reported in July that the company had filed confidentially to go public. Stitch Fix is part of a wave of try-before-you-buy startups like Le Tote, MM.LaFleur, as well as others. So, naturally, its an area thats going to be competitivethe most obvious one being Amazon. The company is experimenting with its recent launch of Prime Wardrobe, and the company is well known for bulldozing into segments where it sees an opportunity. Stitch Fix, as we can see, exposed a business that has a run rate of nearly $1 billion counting the year between July 30, 2016, and July 30, 2017.

Founded out of CEO Katrina Lakes apartment in Massachusetts in 2011, Stitch Fixs financials clearly expose a massive business that continues to scale methodically while keeping its burn under control. The last financing round in 2014 valued the company at $309.31 million, according to data from PitchBook, and it was widely pegged to be a big consumer IPO this year.

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