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Snap beats expectations but stock falls on light Q1 forecast

Snap’s stock fell in after-hours trading on Thursday after the company reported its fourth-quarter earnings despite beating Wall Street’s expectations.

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Evan Spiegel, CEO of SNAP Inc.

Stephen Desaulniers | CNBC

Snap’s stock fell as much as 10% in after-hours trading on Thursday after the company reported its fourth-quarter earnings despite beating Wall Street’s expectations on earnings, revenue and user growth. But the company provided a first-quarter adjusted EBITDA forecast that was much lower than analysts’ consensus expectations.

Here’s what they reported:

  • Adjusted earnings per share: 9 cents vs. 7 cents per share forecast by Refinitiv
  • Revenue: $911 million vs. $857.4 million forecast by Refinitiv
  • Global daily active users (DAUs): 265 million vs. 257.79 million per FactSet
  • Average revenue per user (ARPU): $3.44 vs. $3.34 forecast by FactSet

Snap guided that it would lose between $50 million and $70 million on an adjusted EBITDA basis in Q1, well shy of analysts’ consensus expectations of an adjusted EBITDA profit of $19.3 million, according to Refinitiv.

The company’s net loss fell to $113 million, down more than 53% from a $241 million net loss last year.

Snap reported 265 million daily active users, up more than 6% from the 249 million the company reported in October. That figure is up nearly 22% compared to the 218 million daily users the company reported a year prior.

Snap expects year-over-year revenue growth of 56% to 60% for the first quarter, Snap Chief Financial Officer Derek Andersen said in prepared remarks. The company also expects to reach approximately 275 million DAUs in the first quarter, Andersen said.

The company’s performance in the first quarter, however, could be impacted by two key factors. First, Andersen highlighted that Snap experienced two weeks of interruption to advertising demand as brand advertisers paused campaigns in the period following the Jan. 6 insurrection at the U.S. Capitol.

“Thus we started the quarter slower than we would have otherwise expected,” Andersen said in his prepared remarks.

Additionally, Andersen warned that Apple’s privacy changes in iOS 14, which are expected to take effect late in the first quarter, “present another risk of interruption to demand.” Those changes could impact social media companies’ ability to target ads to users.

“It is not clear yet what the longer term impact of those changes may be for the topline momentum of our business, and this may not be clear until several months or more after the changes are implemented,” Andersen said in his prepared remarks.

Snap Chief Business Officer Jeremi Gorman said on the earnings call that although Apple’s looming privacy changes could disrupt the company’s advertising business, the decision to protect user privacy is in line with Snap’s business.

“The reality is we admire Apple, and we believe that they are trying to do the right thing for their customers,” Gorman said on a call with analysts.

Gorman added that Snap has been working with Apple in preparation for the changes, it has been educating its advertisers and it is making long-term investments to use more first-party data for advertising. Additionally, the company plans to provide advertisers with more opportunities to provide their products and services to Snap users directly through Snapchat.

“Overall, we feel really well prepared for these changes, but changes to this ecosystem are usually disruptive and the outcome is uncertain,” Gorman said.

Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 pm EST.

Source: https://www.cnbc.com/2021/02/04/snap-snap-earnings-q4-2020.html

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Source: https://www.cnbc.com/earnings/

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Stitch Fix shares surge as online styling service reports surprise profit

Stitch Fix shares jumped after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

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The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares jumped 14% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the Covid pandemic.

Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 19 cents vs. a loss of 13 cents expected
  • Revenue: $571.2 million vs. $548 million expected

Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.

Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.

Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever. Customers have been purchasing more items to keep at home, Stitch Fix said, as they have more brands and price points to choose from.

Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

The company also said it had its lowest ever churn rate at the end of the period, meaning its customers are sticking around.

Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.

CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead. The company’s next initiative will be to market and raise broader awareness around the offering, she said. Stitch Fix is preparing to roll out a national advertising campaign on the debut.

Early indications are that “Freestyle” is meaningfully accretive to the company’s revenue per active client metric, Spaulding told analysts on a conference call.

“Clients have agency, flexibility and choice while also experiencing a highly personalized shopping experience,” Spaulding said.

For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.

For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.

While the entire retail industry is working through supply chain complications, Stitch Fix said it is seeing a small impact, but nothing that will hurt the business in the fall and winter months. The company said it is less reliant on Vietnam, where manufacturing has largely come to a standstill due to ongoing pandemic lockdowns in the region.

As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.

Find the full press release from Stitch Fix here.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Source: https://www.cnbc.com/2021/09/21/stitch-fix-sfix-q4-2021-earnings.html

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© 2021 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

Market Data Terms of Use and Disclaimers

Data also provided by Reuters

Source: https://www.cnbc.com/earnings/

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