Online styling service Stitch Fix has continued to reduce its losses in a financial year buoyed by growing sales.

Managing $1.34 billion in sales in fiscal 2026, a 6.4 per cent yearly increase, Stitch Fix’s CEO Matt Baer called it a “transformative year”.

“We closed the year as a significantly healthier business, with a strengthened operating foundation, along with a reimagined client experience and more compelling assortment,” Baer added.

“We remain confident in our transformation strategy and ability to advance our efforts to deliver the most personalized and client-centric shopping experience as we navigate a challenging consumer environment.”

The results follow continued year-end losses. Stitch Fix ended fiscal 2025 with a deficit of $28.7 million, down to a $12.6 million loss for the most recent year. In fiscal 2024, the company recorded a loss of $118.9 million.

Stitch Fix ended the year with more than 2.7 million active clients, generating an average revenue of $592 per head, a 7.8 per cent increase year-on-year.

Going forward, Stitch Fix expects a more challenging retail environment in fiscal 2027. It has warned investors that revenue growth is expected to fall by as much as 5.6 per cent in the first quarter compared to the previous year, with full-year revenues set to decline by as much as 2.8 per cent.