Stitch Fix shares tumbled as much as 43% Monday after the personal styling service reported quarterly sales that missed analysts’ estimates and issued a disappointing outlook for the current quarter and full year.

In a separate letter to shareholders, Stitch Fix said it now expects net revenue in fiscal 2020 to range between $1.81 billion and $1.84 billion. Analysts had been calling for $1.92 billion, according to Refinitiv data.

It said it has witnessed “heightened promotional activity across retail.” And so Stitch Fix’s current customers are spending less per order, on average, resulting in lower order values than the company had projected.

Its shares were last down about 37% in after-hours trading on the news. Amid a broader market selloff, Stitch Fix shares closed Monday down more than 6%. The stock is down more than 18% over the past 12 months. The company has a market cap of about $2.2 billion.

Here’s how the company did during the second quarter of fiscal 2020 compared with what analysts were expecting, based on Refinitiv data:

• Earnings per share: 11 cents vs. 6 cents expected
• Revenue: $451.8 million vs. $452.5 million expected

Net income during the quarter ended Feb. 1 fell to $11.4 million, or 11 cents per share, from $12 million, or 12 cents a share, a year ago. Analysts had been calling for earnings of 6 cents a share, according to Refinitiv data.

Net revenue increased to $451.8 million from $370.3 million a year ago. That missed expectations for $452.5 million.

The clothing service reported active clients of 3.5 million, up 17% year over year, and slightly better than what analysts were anticipating.

The company said that because of a promotional environment in the U.S., it will focus on growing its assortment of lower-priced items “to serve a broader universe of clients.” It said this decision is what is hurting its outlook. It attributed some of the heightened promotions of late to a shortened 2019 holiday season, with more companies using steep discounts to move merchandise off shelves.

For the current and fiscal third quarter, Stitch Fix is calling for net revenue to range between $465 million and $475 million, or growth of between 14% and 16% year over year. Analysts had been calling for $506.2 million, or growth of nearly 24%.

The company, meantime, called the new global coronavirus outbreak a “fluid” situation that it is monitoring. It said it has not seen a material impact on its business to date. But it said it is “reasonable to expect … some impact.”

It also said costs to advertise on “some key digital channels” have escalated.

“We’re working on both product innovation as well as experimenting into new and emerging channels to offset this, but we are applying more conservatism in the way we are thinking about our marketing spend in the second half of the year,” the company explained in its letter to shareholders.

Stitch Fix said it anticipates “modestly” lessening its marketing spending through the rest of fiscal 2020.

“As we continue to evolve our personalization capabilities, we’re confident in our ability to capture additional market share,” CEO Katrina Lake said.

The company hopes that a new direct buy feature that it launched last year will also help ease pressure on margins. This allows customers to browse and buy individual items, outside of receiving a set “fix” in a box. The company has said these are incremental sales and are not cannibalizing its existing business.

Read the full earnings press release here.