Stitch Fix on Tuesday reported a narrower-than-expected loss for its fiscal first quarter and beat analysts’ sales expectations, thanks to adding more users of its Freestyle direct-buy service.

However, the online styling and shopping service has cut its revenue outlook for fiscal year. It stated that the company faces continuing supply chain pressures and was in transition as new customers are added.

In a telephone interview, Elizabeth Spaulding, CEO of Fix said that “we’re currently in the big learning phase” and was referring to onboarding new clients for the Freestyle or Fix experiences. There’s also a wider supply chain background. …We wanted to ensure that we are being conservative enough for the coming year.

This is what Stitch Fix’s performance in the three months ended October 30th compared with analysts expectations, as based upon survey data from Refinitiv.

• The loss per share is 2 cents, as opposed to the expected loss of 14cents
• Revenue: $581 million vs. $571 million expected

Stitch Fix posted a net loss in the amount of $1.83million, which is 2 cents per share. This compares to net income of $9.54million, or 9 Cents per share, one year ago. This was more than analysts expected for a per-share loss of 14c.

The sales increased 19% from $490million a year prior to reach $581 million. It beat all expectations of $571 millions.

Stitch Fix stated that active clients rose 11% from last year to 4.18million. StreetAccount estimates that the number of active clients was slightly lower than what analysts had predicted at 4.23 millions. According to StreetAccount, active clients can be defined as those who purchased a Fix subscription in the previous 52 weeks.

According to the company, net revenue per active customer rose by 12 percent to record $524. Spaulding explained that this growth was due to increased clothing purchases by customers, as well as their subscriptions. In the fourth quarter, Freestyle was made available to all customers. Before that time, the service was only available to Stitch Fix subscribers.

“It is still in its early stages. Spaulding explained that while we are still in the early stages of opening this new customer experience, it is a significant step forward. Spaulding stated, “This is opening up the ecosystem… it will definitely be a multi-quarter transformation. However, we are deeply committed to the building phase.

Stitch Fix anticipates that it will see revenues between $505 million to $520 million for the fiscal second quarter. Analysts expected sales of $585 million.

It now expects that revenue will grow at a single-digit rate for the fiscal year. This is down from its previous outlook of 15% growth. Analysts were expecting sales to rise by 15% year-over-year.

Stitch Fix stock has fallen 57% in the last year. Stitch Fix has a market capitalization of $2.7 million.

Stitch Fix has the complete earnings press release. here.

This is a developing story. Keep checking back for more updates.