Stitch Fix shares tumbled 17% in extended trading Tuesday after the online shopping and styling company cut its revenue outlook, citing supply chain issues and the need to still educate consumers on its Freestyle option.

The number of active customers using its services fell short of expectations, hinting at slowing demand.

While Stitch Fix reported a narrower-than-expected loss in its fiscal first quarter as sales topped analysts’ estimates, it wasn’t enough to please investors who were expecting Freestyle, a direct-buy option, to offer a bigger boost.

“We’re in this big learning phase of onboarding new clients to the Freestyle and the Fix experience,” said CEO Elizabeth Spaulding in a phone interview. “And there’s this broader supply chain backdrop. … We wanted to make sure we were being appropriately conservative for the year.”

Here’s how Stitch Fix did in the three-month period ended Oct. 30 compared with what analysts were anticipating, based on survey data compiled by Refinitiv:

• Loss per share: 2 cents vs. a loss of 14 cents expected
• Revenue: $581 million vs. $571 million expected

Stitch Fix reported a net loss of $1.83 million, or 2 cents per share, compared with net income of $9.54 million, or 9 cents per share, a year earlier. That was ahead of analysts’ estimates for a per share loss of 14 cents.

Sales grew 19% to $581 million from $490 million a year earlier. That beat expectations for $571 million.

Stitch Fix said active clients grew 11% to 4.18 million from a year ago. However, that was less than the 4.23 million active clients analysts projected, according to StreetAccount. The company defines active clients as people who either ordered a Fix subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

Net revenue per active client rose 12% to a record $524, the company said. Spaulding attributed the growth to more customers buying extra items of clothing, in addition to their subscriptions. The company completed the roll out of Freestyle to the public in the fourth quarter. Prior to that, only Stitch Fix subscribers could use the service.

“It’s early days. … We are just opening up that new customer experience, but we’re in the game,” Spaulding said. “This is now opening up the ecosystem … and it will absolutely be a multiquarter transformation. But we’re deeply committed to that building phase.”

For its fiscal second quarter, Stitch Fix sees sales ranging between $505 million and $520 million. Analysts had been looking for $585 million in sales.

For the fiscal year, it now anticipates revenue growing at a high-single-digit rate, down from its prior outlook of 15% or more growth. Analysts had been looking for sales to be up 15.7% year over year.

Stitch Fix shares have tumbled roughly 57% year to date. The company has a market cap of $2.7 billion.

Find the full earnings press release from Stitch Fix here.

This story is developing. Please check back for updates.