Stitch Fix, Inc.SFIX

Stitch Fix, Inc. Fair Value Disclosure

10-KFiled Sep 25, 20253 min read
3.FAIR VALUE MEASUREMENTS
Our financial instruments consist of cash, cash equivalents, investments, accounts receivable, accounts payable, and accrued liabilities. At August 2, 2025, and August 3, 2024, the carrying values of cash, accounts receivable, accounts payable, and accrued liabilities approximated fair value due to their short-term nature. We measure our cash equivalents and investments at fair value within Level 1 or Level 2 of the fair value hierarchy because we value these investments using unadjusted, quoted market prices; or alternative pricing sources and models utilizing market observable inputs, respectively.
Further, the Company measures the fair value of certain lease right of use assets and other long-lived assets subject to long-lived asset impairment using Level 3 unobservable inputs. Refer to 2. “Summary of Accounting Policies” for further details on impairment of long-lived assets.
Our cash equivalents and investments, which were accounted for as available-for-sale securities and were measured at fair value on a recurring basis as of August 2, 2025, and August 3, 2024, were as follows:
 August 2, 2025August 3, 2024
(in thousands)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash equivalents:
Money market funds$59,945 $— $— $59,945 $84,594 $— $— $84,594 
Investments:
U.S. Treasury securities16,541 — — 16,541 13,603 — — 13,603 
Corporate bonds (1)
— 105,110 — 105,110 — 67,527 — 67,527 
Asset backed securities— 1,499 — 1,499 — — — — 
Yankee bonds— 5,645 — 5,645 — — — — 
U.S. Agency securities— — — — — 2,976 — 2,976 
Total$76,486 $112,254 $— $188,740 $98,197 $70,503 $— $168,700 
(1) For August 2, 2025, U.S. Treasury securities and corporate bonds includes both short-term investments with remaining maturities of less than one year, and long-term investments with remaining maturities over one year and less than five years.
There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 during fiscal 2025 or fiscal 2024.
The following table sets forth the amortized cost, gross unrealized gains and losses, and fair values of our investments, which are accounted for as available-for-sale securities, as of August 2, 2025, and August 3, 2024:
August 2, 2025August 3, 2024
(in thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueAmortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Investments:
U.S. Treasury securities$16,542 $— $(1)$16,541 $13,588 $16 $(1)$13,603 
Corporate bonds105,115 28 (33)105,110 67,451 88 (12)67,527 
Asset backed securities1,499 — — 1,499 — — — — 
Yankee bonds5,644 1 — 5,645 — — — — 
U.S. Agency securities— — — — 2,973 3 — 2,976 
Total$128,800 $29 $(34)$128,795 $84,012 $107 $(13)$84,106 
No significant available-for-sale securities held as of the periods presented have been in a continuous unrealized loss position for more than 12 months as of August 2, 2025, and August 3, 2024.

Historical Timeline

Fiscal YearFiled
2025Sep 25, 2025Showing above
2024Sep 25, 2024
2018Oct 3, 2018

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

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