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Stitch Fix Inc. is reducing about 15% of salaried positions as part of a plan to return to profitability.
Shares of the online personalized style services company fell 16% after hours.
The Stitch Fix logo on a smartphone set in Hastings-on-Hudson, New York. (Photographer: Tiffany Hagler-Geard / Bloomberg via Getty Images / Getty Images)
Revenue for the quarter ended April fell 8% year-over-year.
The company forecast net income of $ 485 million to $ 495 million for the fourth quarter, compared to estimates of $ 495.1 million, according to Refinitiv data.
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The layoffs account for almost 4% of the company’s total workforce, or about 330 jobs in total.
Most of the jobs are in business leadership and non-tech style roles, according to CEO Elizabeth Spaulding.
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“[The decision] it was something we had to do to position ourselves for profitable growth … There will be difficult choices along the way, and this is one of them, “Spaulding wrote in a message to Stitch Fix employees.
Ticker Security Last Change Change% SFIX STITCH FIX INC. 7.78 -0.91 -10.47%
Job cuts and other changes are expected to save $ 40 million to $ 60 million in costs in fiscal year 2023. The company will also incur charges of $ 15 million to $ 20 million in the fourth quarter.
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The company lost $ 78 million in its third fiscal quarter. On a per share basis, the San Francisco-based company said it had a loss of 72 cents, which was greater than the expected loss of 57 cents per share.
Reuters contributed to this report.