Raphael Stevens

Stitch Fix offered a weak outlook for its fiscal third quarter and slashed its forecast for the full year.
In its latest quarter, the company said it experienced challenges with onboarding new customers and converting clients.
Stitch Fix reported a per-share loss in line with analysts’ estimates and revenue slightly above expectations for the three-month period ended Jan. 29.

The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.
Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares tumbled in extended trading Tuesday after the online styling service offered a weak outlook for its fiscal third quarter and slashed its forecast for the full year, as it struggles to grow its subscriber base.
In its latest quarter, the company said it experienced challenges with onboarding new customers and converting clients. Stitch Fix reported a per-share loss in line with analysts’ estimates and revenue slightly above expectations for the three-month period ended Jan. 29.

Looking ahead, however, Stitch Fix is being much more cautious about its prospects for future growth. Chief Executive Elizabeth Spaulding said the company’s active client count is not where she wants it to be. That’s despite a recently introduced option for shoppers to buy single items from its website, without a subscription, which is known as Freestyle.
Stitch Fix shares shed more than 17% in extended trading, having already tumbled 41% this year as of Tuesday’s market close.
Here’s how the retailer did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Loss per share: 28 cents vs. 28 cents expected
Revenue: $516.7 million vs. $514.8 million expected

Stitch Fix reported a net loss of $30.9 million, or 28 cents per share, compared with a loss of $21 million, or 20 cents a share, a year earlier. That was exactly in line with analysts’ estimates for the quarter.
Revenue grew to $516.7 million from $504.1 million a year earlier, beating estimates of $514.8 million.

The company counted active clients of a little more than 4 million, an increase of 4% from the year-ago period. Revenue per client came in $549 during the period.
Stitch Fix defines an active client as a customer who either checked out a curated style box called a Fix or ordered an item using the retailer’s direct-buy option in the preceding 52 weeks, measured on the last day of that period.
For its third quarter, Stitch Fix expects net revenue to be between $485 million and $500 million, which would represent a decline of 10% to 7% from the prior year. Analysts had been looking for sales of $560.5 million.
For its fiscal year, which ends July 30, Stitch Fix sees revenue flat to slightly down year over year, assuming that the number of active clients is flat through the end of the 12-month period. Analysts had expected revenue to be up 8.1% for the year.
The company said it is actively evaluating its marketing spend to better manage improvements to onboarding and conversion. As a result, it said it has withdrawn a previously provided outlook for full-year adjusted earnings before interest, taxes and amortization.

Freestyle doubts and friction

During an earnings conference call, Spaulding, the CEO, explained that the retailer inadvertently created friction during the Freestyle rollout. Moving forward, it is making changes to make the browsing and checkout process easier for users, she said.
Despite the bumpy start, Spaulding also said the company is still pleased with its decision to invest in adding a direct-buy option, which makes Stitch Fix a more holistic platform for customers looking for new clothes.
“We are confident in our long-term strategy, and we’re seeing clear signals that we are taking the right steps for the future of the business,” she told analysts.
To be sure, in recent months analysts have raised plenty of questions regarding the company’s Freestyle push. It makes Stitch Fix a much closer competitor with department store chains and apparel brands, of which there are dozens and dozens.
Stitch Fix’s business is also run entirely online, which means the company doesn’t have a way to connect with consumers in a physical way. That was seen as a bright spot during the thick of the Covid pandemic, as spending shifted online, but now Stitch Fix is facing heightened transportation expenses and also must deal with mailed returns of unwanted items.
Find the full press release from Stitch Fix here.

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Aaron Rodgers is coming back to the Green Bay Packers, after all.
Rodgers tweeted Tuesday he would return to the team, but threw cold water on a report that said he agreed to a deal that would make him the highest-paid player in NFL history.
There were signs of trouble between Rodgers and the Packers in the 2021 offseason, when the quarterback hinted at tension with the front office.

Quarterback Aaron Rodgers #12 of the Green Bay Packers walks off the field during the second half of the NFL game at State Farm Stadium on October 28, 2021 in Glendale, Arizona.
Christian Petersen | Getty Images

Aaron Rodgers is coming back to Green Bay, after all.
The superstar quarterback said in a tweet Tuesday afternoon that he would return to the team, following reports that he had signed a new contract that would make him the highest-paid player in National Football League history.

“Hey everyone, just wanted to clear some things up; YES I will be playing with the @packers next year,” Rodgers tweeted. “However, reports about me signing a contract are inaccurate, as are the supposed terms of the contract I ‘signed’. I’m very excited to be back.”
NFL Network reporter Ian Rapoport, citing sources, had reported Tuesday morning that Rodgers had agreed to a four-year, $200 million deal with the Packers that would give him $153 million in guaranteed money.
Rodgers, 38, has played in the league since 2005. He has been a starter since 2008, after fellow Packers legend Brett Favre left the franchise.
But there were signs of trouble between Rodgers and the Packers in the 2021 offseason, when the quarterback hinted at tension with the front office, including team general manager Brian Gutekunst. It followed the Packers using their 2020 first-round draft pick on quarterback Jordan Love.
In December, though, Rodgers said his relationship with the front office had improved and praised the Packers for addressing his concerns. “That’s meaningful to me,” he said. “I’ve enjoyed being a part of the conversations that directly affect my job.”

Rodgers is coming off a turbulent 2021 off the field, but still won his fourth Associated Press NFL Most Valuable Player award. That fueled media speculation that the Packers were negotiating a deal to make Rodgers one of the top-paid quarterbacks. 
In addition, the Packers needed to address Rodgers’ contract to obtain cap flexibility. NFL teams have until March 16 to comply with the $208.2 million cap limit for the 2022 season. Entering the month, the Packers’ exceeded the cap by roughly $26 million, according to Over the Cap, a site that tracks NFL salaries.
Since the 2020 season, Kansas City Chiefs quarterback Patrick Mahomes has held NFL’s highest-paid player crown. He signed a 10-year, $450 million deal in 2020.
Buffalo Bills quarterback Josh Allen is second. He signed a six-year, $258 million deal in August, and that deal’s average annual value is  $43 million per season. Dallas Cowboys quarterback Dak Prescott ranks third at $40 million. Houston Texans quarterback Deshaun Watson ($39 million) and Seattle Seahawks quarterback Russell Wilson ($35 million) round out the top five paid players.
On Tuesday, ESPN and other outlets reported that Wilson was dealt to the Denver Broncos in a blockbuster deal.
Rodgers’ AAV, based on the agreement he signed in 2018, is roughly $33.5 million. That’s tied with Detroit Lions quarterback Jared Goff for the sixth-highest deal in the NFL. 
Last season, he led the Packers to an NFL-best 13-4 record, and he threw for 4,115 yards, 37 touchdowns and only four interceptions. Yet the team lost in the divisional playoff round to the San Francisco 49ers.
Rodgers came under heavy criticism in November when it became public that he’s not vaccinated after he told reporters in August he was “immunized.” Rodgers also broke the NFL’s Covid rules after attending a Halloween party without a mask, and then he tested positive for Covid.
Rodgers lost his sponsorship deal with Prevea Health, a Wisconsin health care company. He missed one game in Week 8 against the Chiefs, and NFL fined him $14,650 for attending the party while unvaccinated. The league also fined the Packers $300,000.

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McDonald’s will temporarily close 850 locations in Russia, nearly two weeks after Russian forces invaded Ukraine.
The fast-food giant had taken heat for staying silent on the war.
McDonald’s has long played a symbolic role in Russia, opening its first Moscow location months before the Soviet Union collapsed.

McDonald’s, citing “the needless human suffering unfolding in Ukraine,” announced Tuesday it will temporarily close 850 locations in Russia. The decision came nearly two weeks after Russian forces invaded its ex-Soviet neighbor.
CEO Chris Kempczinski wrote in a letter to franchisees and employees that the chain will pause all operations in Russia. However, it will continue to pay its 62,000 Russian employees, and its Ronald McDonald House Charities will continue to operate.

Later Tuesday PepsiCo, Starbucks and Coco-Cola announced similar step-backs from the country.
In recent days, McDonald’s has drawn criticism for staying silent on the war, given its relatively large Russian footprint. McDonald’s restaurants in Russia and Ukraine account for 2% of its systemwide sales, roughly 9% of its revenue and 3% of its operating income.
McDonald’s has long played a symbolic role in Russia as well. The chain opened its first location in the Soviet Union 32 years ago in Moscow, months before the state collapsed.
“In the thirty-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate,” Kempczinski wrote in his letter. “At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
About 84% of McDonald’s Russian locations are owned by the company, while the rest are operated by franchisees. Owning more of its restaurants generates greater revenue for the company, but opens it up to greater risk in times of turmoil or economic downturn.

Kempczinski said it is impossible to predict when McDonald’s would be able to open its Russian restaurants. The company is experiencing supply chain disruptions and other operational challenges.
He also said McDonald’s is paying full salaries for Ukrainian employees and has donated $5 million to its employee assistance fund. The company is monitoring the humanitarian situation as well.
McDonald’s announcement comes after Yum Brands said it would suspend restaurant development and investment in Russia. The KFC owner has more than 1,000 restaurants in Russia that account for roughly 2% of its systemwide sales.
Starbucks hasn’t yet paused any of its Russian operations, where all of its cafes are run by franchisees. The coffee chain has about 130 locations across Ukraine and Russia. However, CEO Kevin Johnson condemned the Russian attack on Ukraine and vowed to donate royalties from its Russian business to humanitarian causes in Ukraine.

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Starbucks is suspending all business activity in Russia, and its licensee will temporarily shutter locations there.
The coffee chain has about 130 outlets in Russia and Ukraine, according to Bank of America Securities.
The announcement comes after restaurant giant McDonald’s said earlier on Tuesday that it would temporarily close its restaurants in the country.

A woman drinks coffee in a Starbucks in a mall in Khimki outside Moscow.
Alexander Natruskin | Russia

Starbucks has much smaller exposure to the Russian and Ukrainian markets. The company has about 130 outlets in Russia and Ukraine, according to Bank of America Securities. They are all licensed locations, so the Seattle-based company itself doesn’t operate them. Cowen analyst Andrew Charles estimated that they account for less than 1% of Starbucks’ global revenue.
CEO Kevin Johnson wrote in a letter on Tuesday afternoon that the company would provide support to its nearly 2,000 employees who live in Russia. The pause on business activity includes shipping Starbucks products and its licensee will temporarily shutter the stores.
In a separate letter released Friday, Johnson condemned the attacks on Ukraine and vowed to donate royalties from its Russian business to humanitarian causes in the besieged nation.
“We condemn the unprovoked, unjust and horrific attacks on Ukraine by Russia, and our hearts go out to all those affected,” Johnson wrote in that letter.

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The company’s first-ever running shoe for women, called Blissfeel, will be available to purchase starting March 22 in select markets.
The launch marks Lululemon’s official foray into the sneaker category and could prove to be another important lever of growth for the athletic clothing retailer as it seeks to catch its larger competitors.
Lululemon said it will debut two types of women’s cross-training sneakers this summer, priced at $138 and $148.

Lululemon CEO Calvin McDonald said that launching into shoes was the next natural step for the leggings maker.
Source: Lululemon

Lululemon is venturing into footwear, marking a new product category for the maker of leggings and sports bras and deepening its rivalry with giants like Nike and Adidas.
The company’s first-ever running shoe for women, called Blissfeel, will be available to purchase starting March 22 in select markets across North America, Mainland China and the United Kingdom. The running shoes will retail for $148.

The launch marks Lululemon’s official foray into the sneaker category, having only previously sold a small collection of shoes from Athletic Propulsion Labs. The footwear business, for women and men, could prove to be another important lever of growth for the athletic clothing retailer as it seeks to catch its larger competitors.

Source: Lululemon

Sneaker sales have boomed during the pandemic as more consumers pick up running or opt for more comfortable shoes while working from home. It’s an incredibly heated category with competitors ranging from giants like Nike and On Running to more niche brands like Allbirds, which also makes a running shoe.
Lululemon said it’s aiming to launch a men’s footwear collection next year, at which point it will expand its selection for women with special-edition shoes and seasonal sneakers.
In the meantime, Lululemon said it will debut two types of women’s cross-training sneakers this summer, priced at $138 and $148, followed by a slide-on shoe meant for post-workout wear, at $58, and another training sneaker with a more supportive midsole, at $128.

Lululemon will begin this year by launching a running shoe and other options for women, followed by a men’s footwear collection in 2023.
Source: Lululemon

The launches check off a long-awaited goal for Lululemon and Chief Executive Calvin McDonald.

Back in 2019, before the coronavirus pandemic, McDonald said the company saw a whitespace in the shoe market. He hinted that at some point Lululemon would begin selling its own footwear, building on the success it had with APL.
McDonald said in a statement Tuesday that branching into the footwear market was the next natural step for the company.

Source: Lululemon

“It represents an exciting moment for our brand,” he said. “We are entering the footwear category the same way we built our apparel business — with products designed to solve unmet needs, made for women first.”
Athletic footwear sales in the United States grew 17% for men and 24% for women in 2021 compared with 2020 levels, according to data from market research firm NPD Group.
The top sneaker brands for women, notably, are Nike, Skechers, Adidas, Brooks and New Balance, according to NPD sports analyst Matt Powell. Powell said he anticipates sales of both women’s and men’s sports footwear will grow a low-single-digit percentage this year, coming off of last year’s gains, with the first half of 2022 facing bigger challenges for the industry than the latter half.

Source: Lululemon

Early last year, another round of stimulus checks from the government propelled consumer spending, Powell said. And many shoppers opted for a new pair of shoes.
Lululemon’s sales for the 12 months ended Jan. 31, 2021 grew to $4.4 billion from $3.98 billion a year earlier. Its stock is down more than 20% year to date.
Nike, for comparison, raked in $44.5 billion in sales in its fiscal year ended May 31, up 19% from prior-year levels. Adidas has yet to report its results for 2021. Its revenue for the 12 months ended Dec. 31, 2020, amounted to 19.8 billion euros, or about $21.6 billion.

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Advice and the Advisor

If you’re considering a Roth conversion, you’ll need to plan for the upfront tax bite, financial experts say.
Boosting your adjusted gross income can hurt eligibility for other write-offs or trigger higher future Medicare premiums.
However, you can reduce levies through timing and other yearly tax planning strategies.

Getty Images

If you’re considering a Roth conversion, your timing and yearly planning can significantly reduce the tax bite, financial experts say. 
The popular retirement savings strategy allows higher earners to skirt the income limits for Roth individual retirement account contributions. While the maneuver may kickstart tax-free growth, you’ll owe levies on pretax deposits.

And boosting your adjusted gross income may have other consequences, according to certified financial planner Ashton Lawrence at Goldfinch Wealth Management in Greenville, South Carolina.

More from Advice and the Advisor:

For example, you may lose eligibility for certain write-offs, such as the child tax credit or student loan interest deduction. And retirees may unknowingly trigger higher Medicare premiums, he said.
Medicare Part B and Part D calculate monthly premiums with your modified adjusted gross income from two years prior, which means your 2022 income can cause higher costs in 2024.
“That’s a big one that slides under the radar,” Lawrence said.
However, there may be opportunities to help offset the upfront taxes and avoid some of these issues.

The silver lining of market volatility is the ability to pay less tax on Roth conversions.

Sean Michael Pearson
associate vice president at Ameriprise Financial Services

“Think of a Roth conversion as a juicy steak that you can cook how you want,” said Bart Brewer, a CFP and instructor with Ken Zahn Inc. based in Santa Monica, California. “There are lots of planning opportunities here if you do your homework.”

Stock market volatility

One opportunity may be timing a Roth conversion with a stock market downturn, like the latest declines triggered by the Russia-Ukraine conflict.
“The silver lining of market volatility is the ability to pay less tax on Roth conversions,” said Sean Michael Pearson, a CFP and associate vice president at Ameriprise Financial Services in Conshohocken, Pennsylvania. 

For example, if you have $10,000 in a pretax IRA and there’s a 10% market drop, you’ll convert $9,000 instead of $10,000, saving $220 in federal taxes if you’re in the 22% marginal tax bracket, he said.

Reduce adjusted gross income

If you’re planning a Roth conversion, you may consider reducing adjusted gross income by contributing more to your pretax 401(k) plan, Lawrence suggested.
You may also leverage so-called tax-loss harvesting, offsetting profits with losses, in a taxable account. If losses exceed gains, you can use up to $3,000 of capital losses per year to reduce regular income.
And if you’re considering a sizable charitable gift, you may try to send it the same year as the conversion, Brewer said, such as transfers to a donor-advised fund. 

“This strategy is golden if you are charitably inclined and can itemize,” he added.
Roth conversions may make sense in lower-earning years, such as when retirees who haven’t started taking Social Security payments. “In broad terms, that’s most likely going to be the sweet spot,” Lawrence said. More

Nkeki Obi-Melekwe performs during the first birthday gala performance of “Tina: The Tina Turner Musical” in London in 2019.
David M. Benett | Getty Images Entertainment | Getty Images

Nkeki Obi-Melekwe is soaring high as the star of Broadway’s “Tina: The Tina Turner Musical.”
Yet when Covid-19 pandemic shut down Broadway in March 2020, she was suddenly one of millions of unemployed workers. At the time, she was an alternate for the role of Tina Turner.

Obi-Melekwe left New York City and spent time with her family in North Carolina.
“For me, as an artist, telling stories and speaking to an audience through performance is such a large part of who I am that for a long time, I felt like a part of myself just wasn’t intact,” she said.
Fortunately for her, though, the 25-year-old knew that the show would come back to Broadway.
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“I knew that when we returned, her story of resilience would be needed more than ever,” she said. “Tina is ‘the queen of the comeback’ and now, coming out of the pandemic, I think we’re all working on our own personal comebacks, whatever that may be.”

Obi-Melekwe’s comeback happened in the summer of 2021 when Broadway reopened, and last November, she took over the starring role in her show.
And now that she’s back in the spotlight, she’s using her voice to help lift up women so that they, too, can achieve their goals.
“It’s important for all of us to … support each other during this time,” said Obi-Melekwe, who will be performing in Girls With Impact’s International Women’s Day Benefit Concert on Tuesday. The proceeds will enable the nonprofit to train under-resourced young women in its business and leadership academy.
Obi-Melekwe’s involvement with the entrepreneurship program comes as the group has widened its focus to include young adults up to age 24. Prior to the pandemic, the program helped girls in grades 7 through 12.

Nkeki Obi-Melekwe performs onstage at the Glamour Celebrates 2021 Women of the Year Awards on Nov. 8, 2021 in New York.
Dimitrios Kambouris | Getty Images Entertainment | Getty Images

Young adults in Girls With Impact’s mini-MBA program learn hard skills like technology and finance and soft skills such as leadership, collaboration, agility and public speaking. They are then paired with a mentor for coaching.
“[Mentors] will help guide that individual to land in a pathway, to land in college, to land in their first job or to land in their own business,” said Jennifer Openshaw, the group’s founder and CEO.
To be sure, women were disproportionately affected by the pandemic. Whether they were laid off or had to leave to care for children home from school, many struggled to make ends meet. In February 2022, nearly two years into the pandemic, more than 1 million fewer women were in the labor force than in February 2020, according to the National Women’s Law Center.
In response, advocates have called for policymakers and employers to focus on paid sick leave, paid sick days, support for pregnant workers and making child care more available and affordable.
In Girls with Impact’s report focusing on the recovery of women in Connecticut, local government and business leaders advocated for responses such as structured training programs, re-skilling and more access to capital for women business owners.
“People need different pathways,” Openshaw said. “It’s not a one-size-fits-all.”

Obi-Melekwe understands the importance of support and mentorship at every age. She said she was frustrated with trying to fit in after moving to the Bronx in New York City from Charlotte, N.C., with her family when she was 9 years old.
“It wasn’t until a teacher in middle school inspired me to pursue performing that I realized the power of my own performance ability and my own voice,” said Obi-Melekwe.
That power landed her the role of Tina Turner in the London production of the show just three months after she graduated from the University of Michigan in 2018. She came to Broadway as the alternate in 2019.
During Broadway’s long shutdown, Obi-Melekwe began pursuing voiceover work and has since become the voice of carmaker Audi. She also took up pottery as part of a necessary reset.
“I was able to spend time with my folks, spend time in the sunshine, and have space and nature, all things I’d taken for granted until I realized how much I needed these things and how much they helped me cope and make my life feel full when so much else remained uncertain,” Obi-Melekwe said.
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