Piper Sandler analysts cite ‘foundational issues’ for Stitch Fix

The Yahoo Finance Live team discusses the latest outlook from analysts on Stitch Fix.

Video transcript

[AUDIO LOGO]

SEANA SMITH: Let's kick it off with Stitch Fix. A day after the retailer reported a 20% drop in revenue, Piper Sandler saying that the weakness points to, quote, foundational issues within the business and also saying that we could continue to see near-term pressure. Two big challenges facing Stitch Fix, a limited total addressable market-- this is from Piper Sandler-- and also mixed success with its freestyle business. If you're not familiar, that's a personalized shopping experience that they do offer based on their fit and their size.

Stitch Fix reported a wider-than-expected loss and also announced another executive shakeup here in their most recent earnings report. Dan Jedda is stepping down from his role as CFO at the end of the month, about two months after Elizabeth Spaulding, the former CEO, left her position. Founder Katrina Lake is currently serving as the interim chief executive.

This is a company that has been up against a pretty tough couple of quarters. They have been cutting costs now for quite some time. Just announced their second round of layoffs. From this latest earnings report, doesn't look like they've been able to turn around their business just yet.

- No, there's a lot certainly to be settled out there with Stitch Fix. And, honestly, the move from Stitch Fix to Roku is an interesting one too, because you talk about another company that sort of shot up during the pandemic. Roku at a little bit of a different stage than Stitch Fix, but still a growth-stage company that there will be a lot of work to do there as well.