After-Hours News: Stitch Fix Soars and ADT Falls

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Personalized-apparel service Stitch Fix (NASDAQ: SFIX) and security company ADT (NYSE: ADT) are making headlines in after-hours trading on Monday, with both companies' stocks making big moves.

  1. Stitch Fix impressed investors with strong quarterly results and upbeat guidance.
  2. ADT posted solid revenue growth but disappointed when it came to adjusted earnings per share.

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Here's a closer look at each of these stories.

Stitch Fix

Shares of personalized online apparel business Stitch Fix soared after the market closed on Monday. The jump followed the company's second-quarter update, which featured better-than-expected fiscal second-quarter financial results and client growth.

The company reported revenue of $370.3 million, up 25% year over year. That was higher than analysts' consensus forecast for revenue of $365.9 million.

Net income for the quarter was $12 million, translating to earnings per share of $0.12. That's significantly higher than net income and earnings per share of $3.6 million and $0.02 in the year-ago quarter, respectively. On average, analysts were expecting earnings per share of $0.05 in the company's second quarter of fiscal 2019.

Stitch Fix also said it now has 3 million clients, up 18% year over year.

Impressively, the company stuck with its plan to spend less on advertising as a percentage of revenue during the quarter and was still able to drive client acquisition across its digital channels.

Making the quarterly update even more impressive, Stitch Fix provided strong guidance for both its fiscal third quarter and its full year of fiscal 2019. Management said it expects fiscal third-quarter revenue to rise 22% to 26% year over year and full-year revenue to increase 25% to 27% over fiscal 2018.

Stitch Fix stock was up 24.1% in after-hours trading as of 7:20 p.m. EDT.

ADT

Residential and home security company ADT saw its shares fall sharply on Monday after the market closed. The stock's decline came as ADT reported disappointing fourth-quarter results.

ADT reported fourth-quarter revenue of $1.19 billion, up 7% year over year. The security company's non-GAAP loss per share was $0.04, up from a non-GAAP loss per share of $0.06 in the year-ago quarter. While revenue was higher than analysts' consensus forecast for $1.16 billion, ADT's non-GAAP loss per share was significantly worse than analysts' average expectation for a non-GAAP profit per share of $0.12.

ADT CEO Jim DeVries was optimistic about the company's results and its continued momentum, noting that the quarter was "strong" and better than management's financial outlook for the period.

"We continue to demonstrate improvement across key operating metrics and strengthened our leadership in leading-edge home automation through the launch of ADT Command and Control," DeVries continued.

Shares were down 11.2% in after-hours trading as of 7:20 p.m. EDT.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Stitch Fix. The Motley Fool has a disclosure policy.