Personal styling service Stickfix saw its stock value drop by 14 percent in after-hours trading when it reported $44.5 million in Q4 losses.
The company’s quarterly revenue increased by 11 percent reaching $443.3 million, up from $432.1 million a year ago. The increase in revenue came with a 9 percent growth rate in its subscriber base, which now constitutes 3.5 million active subscribers.
The decline in sales was primarily a result of supply chain issues that the brand faced at the peak of the coronavirus pandemic, which resulted in backlogged orders. The company’s founder and CEO Katrina Lake had expected the sales to rebound by the fourth quarter as its warehouses reopened, but that has not exactly helped its case.
With consumers continuing to hunker down at home, the company has seen growth in demand for casual and comfortable clothing. Within that category, the demand has been exceptionally high for women’s plus-size clothing and activewear, which was the leading category driving sales growth, CNBC reported.
Despite the declining sales, the company still sees a silver lining in the fact that consumers will retain at least some of their shopping habits as the country emerges out of the pandemic.
In June this year, the company reportedly laid off 1,400 stylists and has so far redacted its workforce by 18 percent. That being said, the company plans to hire 2,000 stylists in cities such as Dallas and Minneapolis, where the cost of living is not high.
The company currently maintains a market cap of $3.2 billion.