I don't have a view on $SFIX's coming quarterly results but I've been thinking more about dynamics that may, over time, help drive improved financial results for the company
The apparel recommendation feed for direct buy seems perfectly suited for sponsored listings at one point. This kind of optimization may be a ways off for Stitch but promoted brands/pieces would flow very naturally from the current version of the feed
There's no reason to believe that Stitch couldn't make a nice margin from brands seeking promotion on its platform
Stitch's private label products have the opportunity to dramatically improve over time. Consider how much better the 2nd, 3rd, 4th & 5th generation of private label products might be
Lower prices and better products = increased consumer satisfaction. Higher PL penetration over time = higher margins
As Stitch's scale increases, it should be able to risk less of its own balance sheet when selling units. Like QVC/HSN, it may not need to buy all that it sells which will lower capital intensity and increase returns on capital
Generally speaking, traditional apparel channels are in a state of disarray and when the US emerges from virus life, malls/stores may not be positioned to effectively handle increased demand for new apparel
Given its business model, Stitch will likely be better positioned to handle any surges in consumer demand versus store based retailers
Stitch has been volatile around earnings releases & I do not profess to know or care about a single quarter's results. There are no guarantees of success but Stitch has a lot of the pieces in place that may allow it to flourish over time & meaningfully improve its fin'l metrics
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