Stitch Fix personalization investments show signs of paying off
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Stitch Fix executives credited its client experience improvements, particularly deeper customer-stylist relationships and improved flexibility, for improved financial results on a Q3 2025 earnings call Tuesday.
The company increased the maximum number of items per order from five to eight last year, which is directly contributing to 10% year-over-year average order value growth, according to CEO Matt Baer.
Stitch Fix is rolling out a feature that will let customers start a curated order based on apparel they discover through the Freestyle service, according to Baer. Freestyle suggests items based on a customer's preferences, and the new option would let customers have their stylists design a complete order around a chosen piece.
The CX improvements Stitch Fix began implementing in August are paying off, but the company still has work ahead.
Net revenue rose 0.7% year over year to $325 million in the third quarter of 2025, marking the company's return to year-over-year revenue growth, according to a company earnings report. This marks the first year-over-year growth in 12 quarters.
Third quarter 2025 marked the second straight quarter of year-over-year new customer growth, according to Baer. However, while the quarter saw the lowest quarter of sequential active client declines in three years, active clients fell 10.6% year over year to less than 2.4 million.
Stitch Fix's improvements to personalization and discovery are designed to help the company stand out from other clothing retailers as the company continues to pursue a return to customer growth.
'As we move from the build phase into the growth phase of our transformation, we're focused on cementing ourselves as the retailer of choice for apparel and accessories by delivering the most client-centric and personalized shopping experience,' Baer said.
Stitch Fix's value proposition, driven by convenience and personalization, is expected to resonate with shoppers even in the face of economic uncertainty, according to Baer.
'Clients come to Stitch Fix for the personalized styling, the convenience, the discovery of the items that they love, and it inherently offers additional value and protects our business from any pure price comparison shopping,' Baer said.
Stylists in particular will play an important role, according to Baer. The 'strong and enduring relationships' between stylists and customers helps Stitch Fix tailor each client's experience and adjust to their budgets as needed.
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