Dive Brief:

• Stitch Fix’s customer experience improvements contributed to its better-than-expected financial results, executives said on a Q2 2025 earnings call Tuesday.
• Stylists are central to Stitch Fix’s personalized experience. The company launched stylist profiles in the second quarter of 2025 so customers can better get to know their stylists. The investments in stylist-customer relationships are paying off, with the highest rate of clients requesting the same stylists for their next fix in nearly five years, CEO Matt Baer said. 
• The style service also enhanced its algorithms to deliver better recommendations to stylists, who choose the apparel and accessories for each individual client. Meanwhile, the company leveraged its AI merchandising tool to analyze client transactions and feedback data to predict demand and improve inventory management.

Dive Insight:

Stitch Fix is still shedding clients, but sees its efforts to enhance the customer experience as the key to returning to revenue growth by the end of fiscal 2026. 

“We attribute our progress to a number of improvements we've made to reimagine our client experience,” Baer said. “These include increasing newer, more on-trend styles in our assortment, expanding fixed flexibility, and strengthening client-stylist relationships.”

Stitch Fix was able to slow the loss of customers in the second quarter, reporting a 2.6% drop quarter over quarter compared to a 15.5% drop year over year, according to the company earnings report. Net revenue decreased 5.5% year over year.

“Clients new to Stitch Fix increased year over year, and importantly, Q2 marked our smallest sequential decline in active client count in three years,” Baer said.

There are signs the company is moving in the right direction. In the second quarter, fixed average order value increased 9% year over year, driven by strong keep rates and increased number of items per order, Baer said.

In the first quarter, the styling service expanded the number of items customers can order at once from five to eight, allowing customers to explore more styles. The results surpassed Stitch Fix’s initial expectations and boosted average order values.

“We believe that offering this increased level of flexibility helps our clients navigate seasonal transitions, outfitting solutions and changes in their Fit profile,” Baer said. “And that this change will become an important driver of long-term engagement.”

The company plans further investments in Freestyle, its personalized direct e-commerce platform that customers can use in between stylist-prepared orders, which returned to year-over-year growth in the second quarter. 

Baer sees the Freestyle business as complementary to the fixed experience. 

“It helps us capture greater wallet share for our clients,” he said. “Any time they have an apparel and accessories need, Stitch Fix will be the retailer of choice for them. So as it helps us increase our wallet share with each individual client, it will also help us expand our penetration of the total addressable market.”