Can Stitch Fix Keep RPAC Growth Going Into Fiscal 2026?

Stitch Fix, Inc. SFIX reported a strong start to fiscal 2026, with rising Revenue per Active Client (RPAC) marking the seventh consecutive quarter of sustained growth. RPAC reached $559, representing a 5.3% year-over-year increase in the fiscal first quarter. Average Order Value (AOV), which rose nearly 10% this quarter, marked the ninth consecutive period of year-over-year growth. Management attributes this steady rise to a reimagined client experience that emphasizes larger fix offerings and a higher quality brand assortment.The improvement in RPAC reflects clients spending more per active client, supporting Stitch Fix’s ability to capture a greater share of wallet from its existing client base. Management also highlighted efforts to expand relevance in categories like activewear, athleisure, footwear, and accessories, which are helping drive higher-value interactions and improved engagement. Alongside this, management noted improving new-client quality, with three-month lifetime values rising year over year for nine consecutive quarters.Stitch Fix closed the fiscal first quarter with 2.3 million active clients, reaching the high end of expectations. Management reiterated that it is taking a disciplined, methodical approach to rebuilding the active client base.The key question is whether RPAC can keep climbing. Management explicitly noted that double-digit AOV growth in the second half of fiscal 2025 will create more difficult comparisons ahead. At the same time, the company expects inflation and weakening consumer confidence to remain factors that could influence discretionary spending behavior. Even so, management believes ongoing product innovation and personalization initiatives are designed to drive stronger engagement and retention over time.SFIX Faces Competition From Designer Brands & GAPDesigner Brands, Inc. DBI in the third quarter of fiscal 2025, posted a 3.2% decline in net sales and a 2.4% decline in total comparable sales. However, profitability improved year over year, as Designer Brands’ gross profit increased to $339.6 million from $333.8 million last year. Gross margin rose to 45.1% from 43.0% in the prior year.GAP, Inc. GAP in the third quarter of fiscal 2025 posted net sales of $3.9 billion, an increase of 3% year over year, supported by solid comparable sales growth of 5%. However, GAP’s profitability faced pressure as gross margin declined 30 basis points to 42.4% versus last year. Merchandise margin contracted 70 basis points year over year, reflecting headwinds that included an estimated net tariff impact of approximately 190 basis points.The Zacks Rundown for SFIXStitch Fix’s shares have gained 28.3% in the past six months compared with the industry’s rise of 12%. SFIX presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchFrom a valuation standpoint, SFIX trades at a forward price-to-sales ratio of 0.5, lower than the industry’s average of 1.98.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for SFIX’s current year and next year earnings estimates indicates year-over-year growth of 9.1% and 56.7%, respectively.Image Source: Zacks Investment ResearchZacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Gap, Inc. (GAP): Free Stock Analysis Report Stitch Fix, Inc. (SFIX): Free Stock Analysis Report Designer Brands Inc. (DBI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks