Stitch Fix, Inc. (NASDAQ:SFIX) stock was trading higher but has since reversed and started to trade lower after the company reported better-than-expected third-quarter earnings on Tuesday, after the market closed.

What To Know: The company reported a loss of six cents per share, beating the consensus estimate of an 11 cent loss. In addition, Stitch Fix reported sales of $325.02 million, beating the consensus estimate of $314.44 million.

The company reported 2.35 million active clients, down 10.6% year-over-year, with net revenue per active client rising 3.2% to $542.

It ended the quarter with $242.1 million in cash, cash equivalents and investments.

“Stitch Fix delivered strong third quarter results, marked by our overall return to year-over-year revenue growth,” said Matt Baer, CEO, Stitch Fix.

“Our performance, which exceeded expectations, is the direct result of the strength of the Stitch Fix value proposition and the team’s disciplined execution of our strategy. Now in the growth phase of our transformation, we are focused on cementing our role as the retailer of choice for apparel and accessories by consistently delivering the most client-centric and personalized shopping experience.”

Outlook: The company sees fourth-quarter sales from $298 million to $303 million, versus the consensus estimate of $288.57 million.

Stitch Fix now expects fiscal-year sales from $1.25 billion to $1.26 billion, versus the consensus estimate of $1.23 billion. The company previously expected sales form $1.23 billion to $1.24 billion.

Following the earnings report, Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating on Stitch Fix and maintained a $6 price target.

SFIX Price Action: Stitch Fix closed Wednesday 10.54% lower at $4.29, according to data from Benzinga Pro.

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Image: This illustration was generated using artificial intelligence via Midjourney.