A better quiz leads to more sales for personalized subscription box retailer Stitch Fix. Plus, Costco e-commerce sales are up 26.2% for the quarter and American Eagle generates $271.0 million online this quarter.

Customers are keeping more products Stitch Fix Inc. ships to them, and there are more customers shopping with the e-retailer than ever before, the clothing retailer announced in an earnings call for its first fiscal quarter of 2019.

Sales at the online-only styling service—which sends customers a curated box of clothes based on previous shopping habits and customers only keep what they like—are up 23.9% to $366.2 million for the quarter ending Oct. 27, compared with $295.6 million during the same period last year. Stitch Fix is No. 59 in the Internet Retailer 2018 Top 500.

The driving forces in increasing revenue have been more customer reviews in its Style Shuffle quiz and automated fulfillment, said chief operating officer Mike Smith on an earnings call transcribed by Seeking Alpha. The retailer’s size and relationships with vendors are also shortening lead times on new trends, so the time between when Stitch Fix identifies a trend and when those trending products make it into a box is shorter, meaning it can keep up with the fast-paced world of fashion.

“As a result of our efforts in Q1 ’19, the number of items our women’s clients purchased per [box] reached its highest level on record,” Smith said, but didn’t provide an exact figure.

“Revenue per client grew 2% year over year, despite the dilutive impact of our newer categories,” said chief financial officer Paul Yee. “Our men’s clients, for example, spend approximately 80% of what our women’s clients spend.” Customer count increased 22% during the quarter to 2.9 million users.


Profit margins rose to 45.1%, up from 43.7% last year, reflecting a decrease in inventory held by Stitch Fix, fewer items sold on clearance and new automation in fulfillment centers.

“We implemented an automated outbound fix conveyor and labeling system in our Phoenix fulfillment center, which is reducing per [box] labor costs and improving shipping accuracy,” Smith said. “We plan to begin rolling out this system to our other fulfillment centers in the second half of fiscal ’19 and anticipate additional investments in automation and cost savings as we move forward.”

In other e-commerce earnings news:

  • Warehouse retailer Costco Wholesale Corp. (No. 12) announced a 26.2% increase in e-commerce sales for the first quarter ending Nov. 25, but didn’t break out exact figures. A redesign of the pages for home categories helped drive more sales of furniture and housewares, according to chief financial officer Richard Galanti. However, shipping larger items has had an impact on profit. “We’re making sure things get there on time even if it cost us a little more,” Galanti said on an earnings call transcribed by Seeking Alpha.
  • Online sales at American Eagle (No. 64) now represent 27% of total revenue, which would be about $271.0 million for the third quarter ending Nov. 3.