Stitch Fix shares fell after the company cut guidance for this year

stitch repair Shares tumbled in extended trading Tuesday after the online design service projected a weak outlook for its fiscal third quarter and lowered its full-year outlook, as it struggles to grow its subscriber base.

In its most recent quarter, the company said it faced challenges in absorbing new customers and converting customers. Stitch Fix reported a loss per share in line with analyst estimates, and revenue slightly above expectations, for the three months ended Jan. 29.

Looking ahead, however, Stitch Fix is ​​more cautious about future growth. CEO Elizabeth Spaulding said the company’s number of active clients isn’t where it’d like it to be.

Here’s how the retailer fared in the fiscal second quarter compared to what Wall Street had been expecting, based on a survey of analysts by Refinitiv:

• share loss: 28 cents vs. 28 cents expected
• Revenues: $516.7 million vs. $514.8 million forecast

In the third quarter, Stitch Fix expects net revenue to be between $485 million and $500 million, which is a 5% to 7% decrease from the prior year. Analysts were looking at sales of $560.5 million.

For the fiscal year ending July 30, Stitch Fix sees revenue flat to slightly lower year-over-year, assuming the number of active customers is constant through the end of the 12-month period. Analysts expected revenue to rise 8.1% for the year.

The company said it is actively evaluating its marketing spend to better manage in-flight and conversion improvements. As a result, it said it has withdrawn its previously provided forecast for full-year adjusted earnings before interest, taxes and amortization.

Find the full press release from Stitch Fix here.

This story is developing. . Please check back for updates