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Stitch Fix data highlights challenges faced by up-and-coming e-commerce disruptors

1 month ago by Jon Marino in Earnings, Retail

Stitch Fix ($NASDAQ:SFIX) shares are up nearly 40% this year, but the shopping app is expected to rack up more losses - and that's coming at a time when investors are beginning to shun money-losing digital disruptors. Analysts tracked by Zacks Investment Research are expecting EPS -$0.06 when Stitch Fix announces earnings Monday, December 9.

The good news is, that Stitch Fix is continuing to draw engagement to its app, which our first chart tracks. Our Apple ($NASDAQ:AAPL) Store Ratings Count continues to grow (our multi-colored chart tracks separate versions of the app) and reflects continuing growth in ratings, which is a positive sign for the San Francisco-based startup. Seeing ratings rise roughly 50% in the space of a year is good news - but Stitch Fix data in other areas may leave investors scratching their heads. 

For one, Facebook ($NASDAQ:FB) Talking About Count is continuing to slide, down to just 1/20th as many mentions as Stitch Fix commanded on its best day in 2017. The brand's social engagement is hovering around a recent low - which is bad holiday shopping mojo, especially when compared to other companies that have been able to drum up some major hype this holiday shopping season.

Looking at our last chart, there's an understandable concern that after years of positive growth, job postings peaked - and that's a poor sign for forward-looking growth. In 2017, job postings rose 11.6%; in 2018, they went up another 51%. But they peaked around the beginning of 2019, and job postings have declined about 19% since. 

Taken together, it's not clear that Stitch Fix is disrupting digital marketplaces, so much as it is becoming increasingly apparent that more web retailers are beginning to face the same competition challenges from fellow startups, the way big retailers have. But if Stitch Fix can power itself to an earnings beat thanks to its rising rating count, it will be a sign of solid engagement at the company. 

About the Data: 

Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

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Jon Marino

Jon Marino is Thinknum's finance editor, covering the impacts of alternative data on public companies and investors. Prior to joining Thinknum, Jon worked in the ...

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