Shares of Stitch Fix Inc. (NASDAQ: SFIX) jumped 5.01% in after-hours trading on Tuesday following the release of the company's third-quarter fiscal 2025 financial results, which exceeded analyst expectations and included an upward revision to full-year guidance.

The online personal styling service reported a narrower-than-expected loss of $0.06 per share for the quarter ended April 30, beating the analyst consensus estimate of a $0.11 loss. Revenue for the quarter came in at $325 million, surpassing the Street's forecast of $314.4 million and marking a slight increase of 0.7% year-over-year. The company's adjusted EBITDA of $11 million also outperformed expectations of $9.03 million.

Stitch Fix's strong performance was attributed to the effectiveness of its value proposition and strategic execution. CEO Matt Baer stated, "Stitch Fix delivered strong third quarter results, marked by our overall return to year-over-year revenue growth." The company reported 2.35 million active clients, slightly above analyst expectations, despite a 10.6% decrease year-over-year. However, net revenue per active client increased by 3.2% compared to the same period last year, reaching $542.

In light of the better-than-expected results, Stitch Fix raised its fiscal 2025 revenue guidance to a range of $1.25 billion to $1.26 billion, up from the previous forecast of $1.23 billion to $1.24 billion. For the fourth quarter, the company projects revenue between $298 million and $303 million, also ahead of analyst estimates. Additionally, Stitch Fix anticipates being free cash flow positive for the full fiscal year, a positive sign for investors concerned about the company's financial health.

The market's enthusiastic response to Stitch Fix's results and outlook suggests renewed confidence in the company's ability to navigate challenges in the e-commerce and personalized styling space. As the company continues to focus on its core U.S. market following the closure of its UK operations, investors will be watching closely to see if Stitch Fix can maintain this momentum and deliver on its upgraded financial projections.