Reconciliations to the most directly comparable GAAP financial measures are provided in the press release on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. In the first quarter of fiscal 2024, we began to report our U.K. business as a discontinued operation.

Accordingly, all metrics discussed on today's call represent our continuing operations. Finally, this call in its entirety is being webcast on our investor relations website, and a replay of this call will be available on the website shortly. And now let me turn the call over to our CEO, Matt Baer.

Matt Baer -- Chief Executive Officer

Thanks, Hayden, and good afternoon. As we have said for the past few quarters, we are committed to managing our business with financial discipline to drive profitability in the near term and growth over time. We delivered second quarter results, in line with our outlook on both revenue and adjusted EBITDA. While these fell within our outlook, there is additional work to be done to improve the trajectory of our business.

The original Stitch Fix vision, to create an easier and more enjoyable way for people to shop for clothing and accessories, is as compelling and relevant today as when the company was founded 13 years ago. Our leadership in personalization technology, combined with our passionate and skilled stylists, continues to create an innovative and exciting way to shop. Our transformation efforts are grounded in fully realizing our vision and evolving the Stitch Fix experience. As we stated on last quarter's call, we are focused on three priority areas.

First, we are working to strengthen the foundation of our business across all disciplines. This includes embedding retail best practices across the enterprise and ensuring we have the right organizational structure in place to enable our future success. Second, we are reimagining the client experience in order to attract and retain high lifetime value customers. Third, and simultaneously, we are developing a long-term strategy to build upon these areas and ensure we best serve our clients as their needs evolve in the future.

We believe the execution of these priorities will enable the company to return to sustainable, profitable growth. In the second quarter, we made progress on several initiatives to strengthen the foundation of our business across merchandising and marketing. These actions contributed to our expanding gross margins year over year and will provide the opportunity for us to realize additional efficiencies in our operations. In merchandising, a robust offering of national and private brands is one of the ways we best serve our clients, so we continue to enhance our assortment of both.

Extensive ongoing client feedback enables us to offer private brands that perform better and more profitably than our national brands. And we plan to further strengthen our private brand portfolio by making enhancements to our existing brands and introducing new ones. At the same time, we continue to deepen relationships with the national brands that resonate most with our clients. In marketing, we continue to evolve both program and channel strategies to optimize media mix and efficiency and to strengthen brand affinity.

We know that when we reach clients for whom our offering resonates, they have a higher order value and purchase frequency, as we saw with our newer client cohorts in the second quarter. While we have invested in new upper and mid-funnel tactics that help increase traffic, we continue to have an opportunity to improve our current levels of client conversion, which have not met our expectations. We are focused on improving the performance of our full funnel media. And as we move through the back half of the year, we will adjust our media mix and spend levels in an effort to improve conversion and retention of clients.

Now, let me shift gears to describe how we are reimagining the client experience, which we believe will help us attract and engage the right clients and drive higher lifetime value. We are taking a holistic approach to rethink how our clients engage with Stitch Fix. And going forward, we are prioritizing a reimagination of the client experience to focus on long-term growth. A few initial areas guide our thinking about how to reimagine the client experience.

First, we want to create a more fun and visual experience that better engages clients beginning at their signup and creates ongoing confidence that we will deliver for them on both fit and style. In the coming months, we plan to introduce a new onboarding experience that will be a more dynamic and interactive way for clients to begin their relationship with Stitch Fix. Second, we plan to deepen engagement by developing new ways to inspire and empower clients as they discover their personal style through our service. This includes creating new social connections that help clients visualize their style and give them reasons to return to our platform.

Third, we plan to offer new touch points for clients to interact and develop more personalized connections with stylists. Our stylists play a critical part in our value proposition, and our clients have told us they want to get to know the stylists behind their fixes. By enabling more direct ways to connect with stylists, we believe these relationships will become deeper and more meaningful. While some of these initiatives will begin to roll out in the coming months, it will take time to accomplish our ambitious plans to significantly evolve the Stitch Fix client experience.

I look forward to sharing updates as our work progresses. Finally, we have a powerful value proposition that combines a strong network of stylists, carefully curated merchandise assortment, and advance the data science and technology to create an experience that only Stitch Fix can deliver. We believe that these strategic priorities, tied to strengthening our foundation and reimagining the client experience, will lead to sustainable, profitable growth over time. With that, I'll turn the call over to David to talk about our Q2 financial results and outlook.

David Aufderhaar -- Chief Financial Officer

Thanks, Matt. In Q2, we continued to focus on driving leverage in our P&L while also funding initiatives that position us for long-term growth. The actions we took in Q2, including negotiating cost savings throughout our business, optimizing our carrier mix, implementing efficiency measures, and ensuring we have the right organizational structure in place to enable our future success. Taking a step back, since Q3 of fiscal 2022, we've undertaken detailed reviews of our business and cost structure to identify savings opportunities, and the resulting actions have allowed us to expand gross margins and reduced total annualized SG&A spend by over $370 million.

The work our teams have done to improve gross margin and variable cost leverage continues to produce enviable unit and order economics. And our contribution profit is nearing the high end of its historical 25% to 30% range. And our work here is not done. We believe there are additional opportunities for us to operate more efficiently and drive more leverage in both our fixed and variable cost structures.

Now, let me get into the Q2 results. Q2 net revenue was $330 million, down 18% year over year and down 9% compared to last quarter. Net active clients ended the quarter down 6% compared to last quarter at approximately 2.8 million clients. Revenue per active client ended the quarter at $515, down 3% year over year but up 2% quarter over quarter.

As Matt said, we continue to see strength in our newer client cohorts with both order value and fixed frequency up year over year for those clients. Additionally, our 90-day revenue per active client had its third consecutive quarter of sequential growth. Gross margin for the quarter was 43.4%, down 20 basis points quarter over quarter and up 250 basis points year over year, driven by strong product margins, improvement in inventory health, and transportation leverage. Net inventory decreased 22% quarter over quarter as expected due to the front-loading of our inventory at the beginning of this fiscal year.

We continue to expect inventory balances to these lower levels for the remainder of fiscal 2024 as we align our inventory position with demand, rationalize our assortment, and focus on our successful private brands. Advertising was 7% of revenue in the quarter down 19% quarter over quarter due to our typical lower seasonal spending around the holidays. Q2 adjusted EBITDA came in at $4.4 million and reflected our ongoing cost management discipline. As expected, free cash flow was negative $26.1 million in the quarter due to the timing of receipts related to our inventory purchases in Q1.

We still expect to be free cash flow positive for the full year and ended the quarter with $230 million in cash, cash equivalents, and investments, and no bank debt. Turning to our outlook. We are updating our full fiscal year outlook to reflect the current trends we are seeing in our business. For Q3, we expect total net revenue to be between $300 million and $310 million.

We expect Q3 adjusted EBITDA will be between negative $5 million and breakeven. In the back half of the year, we expect gross margin to increase to between 44% and 45% as a result of the ongoing efforts to drive improvement in our inventory position and efficiencies in our transportation costs. We expect Q3 advertising to be between 8% and 9% of revenue. As we've said in the past, we will continue to be methodical about our approach when we are investing in marketing and may adjust up or down based on the ROI we are seeing.

For the full year, we are lowering our expectations for net revenue to reflect the current trends we are seeing in active clients. We now expect revenue to be between $1.29 billion and $1.32 billion. We expect adjusted EBITDA to be between $10 million and $20 million. For the full fiscal year, we expect gross margin to be approximately 44% and advertising to be approximately 8% of revenue.

Overall, I am confident in our ability to maintain profitability today, and I'm excited about the work we are doing to strengthen the foundation of our business and reimagine the client experience. We will do so by remaining focused on leverage and profitability, along with acquisition and engagement of high lifetime value customers. Now, let me turn the call back to Matt.

Matt Baer -- Chief Executive Officer

Thanks David. As you heard me say earlier, I believe that we have the right strategic priorities in place to generate sustainable, profitable growth over time. We are strengthening the foundation of our business. We are reimagining the client experience to attract and retain high lifetime value customers, and we are developing a long-term strategy to build upon these areas and ensure we best serve our clients as their needs evolve in the future.

While some of these initiatives will begin to come to life later this year, we know it will take time to accomplish our ambitious plans to reimagine the Stitch Fix client experience. I look forward to sharing updates as our work progresses. Thank you all for joining today's call. And now, I'll turn it over to the operator so we can take your questions.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Youssef Squali with Truist Securities. Your line is open.

Youssef Squali -- Truist Securities -- Analyst

Great. Thank you very much. Hi, guys. So, I guess a two-part question.

Active client count was down about 17% year on year. I think that's deterioration from the prior quarter's growth. What's baked into your Q3 and 2024 guide? And can you maybe just flesh out kind of the key initiatives that you have line of sight into that should help reverse or at least stabilize client count in the near to medium term? Thank you.

Matt Baer -- Chief Executive Officer

Hey, Youssef, it's Matt. Appreciate the question. I'll let David answer first in terms of what's baked into the guide, any additional color that he wants to share in terms of the initiatives. And then, I'll add additional color to round out on those initiatives that we're focused on.

David Aufderhaar -- Chief Financial Officer

Yeah. Youssef, I think you asked a couple of questions around active client count. First, Q2 specifically, I think you called out and just a couple of call outs there. First, Q2 is typically our softest quarter for active clients.

And second, as Matt mentioned in the earlier comments, client conversion was below our expectation, and we continue to have an opportunity there. And both of those factors are really what's at play there. And we had gross adds and reactivations that were down quarter over quarter. And so, that's Q2 specifically.

In the back half of the year, you know, we don't specifically guide to active clients, but we do expect the sequential decline in active clients to continue in the back half of the year. And, you know, that said, returning to healthy client growth continues to be a priority focus for the company. You know, we're still very encouraged by the results we're seeing in the new clients we're acquiring that have higher order value and higher frequency. And I think we mentioned in our remarks earlier that, you know, 90-day RPAC is, you know, up again for the third quarter in a row.

And so, as Matt said earlier, we're really focused on improving the performance of our full funnel media, while also leaning into prioritizing the reimagining of our client experience. And we're really excited about that work and believe that it will attract and retain more of those high-value clients. And that's why we continue to have really a methodical approach around this. We're taking the time needed to make sure we focus on returning to healthy, sustainable long-term active client growth.

Matt?

Matt Baer -- Chief Executive Officer

Yeah. Maybe just a quick build on that. You know, it's absolutely right that in terms of optimization within our media spend and our media mix, in order to make sure that we're acquiring the right clients that, as I've noted in previous calls, that our focus is just a really judicious spend of our marketing dollars to make sure that the clients that we're targeting are ones that demonstrate all of the strong likelihood and characteristics of being high LTV clients for us. And over time, we'll continue to be methodical around an expansion of those client segments that we're targeting.

I feel really confident in terms of the work that our marketing team is doing there. They're really focused on making sure we've got the right message in front of the right perspective clients at the right time. We're testing into new mediums as well and increasing spend there so that we can continue to test and learn. We're doing a good job within video right now in terms of storytelling that calls out the unique differentiators of our business model and the manners in which we can uniquely serve clients relative to other retail options that might be at their disposal.

So, that gives me a lot of confidence. The other piece that's just really important is what David noted in terms of the reimagination of our experience. We have just a really, really phenomenal asset where, on day zero, we know more about our client than many retailers could aspire to know about their clients over the entire course of their relationship with them. We know their style preferences, we know their value orientation, and we can nail their fit as early as their very first transaction.

And that's an extremely powerful differentiator and asset that we have. And as we reimagine the experience, we're going to make sure to embed that within everything that we do. As I noted in the prepared remarks, one of the first areas of focus for us is on that onboarding experience. We have an opportunity to make that more fun, more dynamic, and, at the end of the day, inspire more confidence in prospective clients so that they convert with us at much higher levels.

As we increase that conversion through the funnel, we'll be able to optimize our media dollars even more and be able to -- and hopefully then be able to increase the number of new clients that come through the funnel. That optimized or reimagined experience is also one that helps us deepen the relationship with our existing clients as well so that we can better understand how their style preferences, value orientation, and fit changes over time so that we can continue to keep our active and loyal clients for a longer tenure and generate even greater revenue from them. I'm already encouraged by the increase in revenue per active client that we've seen of recent. And now, our opportunity remains to continue to improve our conversion metrics.

And as we reimagine our experience and optimize our media investment, I'm confident that we'll be able to do that over the long term.

Youssef Squali -- Truist Securities -- Analyst

Great. All right. Thank you both.

Operator

Thank you. Please standby for our next question. Our next question comes from the line of Simeon Siegel with BMO Capital Markets. Your line is open.

Simeon Siegel -- BMO Capital Markets -- Analyst

Thanks. Hey, everyone. Good afternoon. Did you say whether there's an ideal percentage of total sales that you'd like to take through private brands and maybe what's the ASP and margin differential for private versus national? And then, I just wanted to confirm something.

I think -- so, at this point, 90-day RPAC, I think you said has now been up for three straight quarters. The trailing 12 months is still down. So, I -- it's just safe to say that that should give you some strong confidence the next quarter's trailing 12 months should be up, right? So, just any color around that and order of magnitude, if possible? Thank you.

Matt Baer -- Chief Executive Officer

Hey, Simeon, it's Matt. I'll speak to the questions around private brand. I'll let David speak to the questions about RPAC and any additional color that he'd like to share in terms of our private brand portfolio. In terms of the penetration between private brands and national brands have a strong perspective on that we're going to lead with a very client-focused approach.

And by putting our clients first, that gives us the opportunity, over the longer term, to allow that mix to organically shake out based on what's in the greatest interest of our clients. And they're effectively voting with both their dollars and all of the other ways that we've built into our experiences that we have an ability to interact with them. Now, it's true that our private brand assortment does contribute a higher margin for us and currently demonstrate higher keep rates. As I spoke to in previous calls, though, we continue to do a rationalization around our national brand matrix, which is helping us continue to deepen our relationship with the national brands that resonate best with our clients.

So, I feel confident that the performance of our national brands will similarly improve over time. The amount of data that we have from our clients, both through the onboarding experience, as well as through our continued relationships with them, not only helps us develop some of the best private brand product on the market, but it's also information that we're able to work back with our national brands to continue to perform -- to continue to improve the performance of the buys that make with them. So, overall, I think it's about finding the balance, but letting the client effectively help us get there.

David Aufderhaar -- Chief Financial Officer

And then, Simeon, on the RPAC side, you know, I think you called out, we definitely are encouraged by the strength we're seeing in the 90-day RPAC. But also from an overall RPAC standpoint, yes, year over year, it's still done slightly. But quarter over quarter, it's up 2%. And a big part of that is what we're seeing in AOV.

I think we called this out last quarter as well. But we're seeing continued strength in overall fixed AOV, which hit a multiyear high for the second quarter in a row. And so, definitely something that's an encouraging sign.

Simeon Siegel -- BMO Capital Markets -- Analyst

And would you expect that to continue? Like should we be looking at this sequentially than year over year?

Matt Baer -- Chief Executive Officer

From an AOV perspective?

Simeon Siegel -- BMO Capital Markets -- Analyst

Sure.

Matt Baer -- Chief Executive Officer

Yeah. I think AOV, you know, there is seasonality to that. But, you know, certainly, the upside that we're seeing is encouraging, and we're going to continue to focus on progressing there.

Simeon Siegel -- BMO Capital Markets -- Analyst

Great. Perfect. Thanks a lot guys. Best of luck for the rest of the year.

Matt Baer -- Chief Executive Officer

Thanks, Simeon.

David Aufderhaar -- Chief Financial Officer

Thank you.

Operator

Please standby for our next question. Our next question comes from the line of Tom Nikic with Wedbush. Your line is open.

Tom Nikic -- Wedbush Securities -- Analyst

Hey, guys. Thanks for taking my question. I wanted to ask about marketing. You know, I think you said second half will be 8% to 9% of sales.

It's higher than what we've seen recently and higher year over year. You also made a comment that, you know, depending on the ROI that you're getting, you know, you can flex up or down. The fact that, you know, I guess, you're planning to, you know, spend a little more as a percent of sales on the marketing side in the second half, is that because you feel like you're starting to see better returns on your marketing spend? You've sort of -- I know that there was a plan to kind of pivot to higher efficiency channels and marketing. Are you starting to see that pay off, And because of that, you know, you want to step on the gas pedal a little bit to try to reinvigorate the top line? Or is there just the something else going on?

Matt Baer -- Chief Executive Officer

Hey, Tom, I'll answer your question. And, David, if you want to add any additional color, feel free to jump in. In terms of where we've seen our marketing, you know, we guided to the year in terms of our marketing spend as a percentage of sales, and, you know, we're still tracking toward that for the totality of the fiscal year. There's also some seasonality built in, in terms of the amount of marketing spend that we have as a percentage of sales quarter to quarter.

That helps us lean into, you know, both where we're strongest and also where we have the strongest ROI then based on that marketing investment. So, we haven't deviated much from what we anticipated coming into the fiscal year. In terms of where we would continue to increase our spend, we look at that, you know, on a daily, weekly basis. And it's not just the totality of the spend, but it's also where we're spending it, and which client segments that we're targeting within each channel.

The marketing team is pretty dialed in at the moment in order to make sure that we're quite judicious in terms of where we're making those investments and the return that we're getting from them. We also anticipate that, over a longer period of time, as the reimagined experience comes to life, we'll start to see higher conversion through the funnel, which would then help us, without even increasing that marketing spend, get a greater return for it. But we'll continue to balance. And as we continue to see higher, you know, RPAC, it's another signal that would give us confidence in a future state in which we might increase marketing as a percentage of sales in order to drive the top line.

Tom Nikic -- Wedbush Securities -- Analyst

All right. Understood. And if I could ask a follow-up on gross margin. So, again, it sounds like gross margin for the second half of the fiscal year.

I think you said it should be better than the first half of the fiscal year. Can you just kind of help us understand what's driving the improvement in gross margin that you're seeing? And I guess how much more runway is there to take gross margins higher?

David Aufderhaar -- Chief Financial Officer

Yeah. Tom, thanks for the question. On the gross margin side, you know, we are definitely really happy with the progress we've made. If you think about where we were in last quarter, you know, gross margins were -- was up 140 basis points year over year.

This quarter, gross margins are up 250 basis points year over year. And I think we've called out for the last couple of quarters. There's a couple of things there. What Matt was talking about this quarter and last quarter about sort of strengthening our foundation and establishing retail best practices, you know, that's really around inventory buying and planning and really seeing the benefits there from a merchandising cost standpoint.

We've also highlighted, transportation has been a big part of our focus. We've adjusted our carrier mix. We've negotiated some of our national carriers, and we continue to use local carriers as well. And so, just a lot of focus around that, both inbound shipments and outbound shipments.

And that's why we're comfortable with talking about sort of a back half guide of 44% to 45%. I think we've also called out, historically, that there's nothing structurally different about our business that says that we can't get back to the high end of that range of 45%. And so, this continues to be a big focus of ours and making sure that we are driving gross margin leverage and contribution leverage as we go forward.

Tom Nikic -- Wedbush Securities -- Analyst

Very helpful. Thank you very much, and best of luck for the rest of the year.

David Aufderhaar -- Chief Financial Officer

Thank you.

Matt Baer -- Chief Executive Officer

Thanks, Tom.

Operator

Our next question comes from the line of Aneesha Sherman with Bernstein. Your line is open.

Aneesha Sherman -- AllianceBernstein -- Analyst

Hi, thank you. So, Matt, if I just look at the business kind of top-line growth over the last two quarters and the next two, where you've guided, kind of -- it feels like no matter how -- which way you look at it, right, to your stack versus 2020 versus 2019, really, what we're seeing is a continued deceleration of the top line, which seems like pretty much at odds with what you're saying about structurally improving the quality of the business, the client metrics you're seeing, and, you know, heavier investment into marketing because you're seeing that working. Can you square that for us a little bit? Like what do you see as the lag time here? Like are we talking about kind of a year lag or a couple of quarters, and when that will actually start materializing in the top line and accelerating again?

Matt Baer -- Chief Executive Officer

Hey, Aneesha. I appreciate the question. Let me first state just, unequivocally, I'm confident in the future success of Stitch Fix. As I continue to immerse myself further in the business, my confidence in our future success, it continues to grow.

And this is rooted in several things, many of which I've discussed previously. The first, as I surveyed the overall retail landscape for apparel and accessories, it's clear the customer is just not satisfied with the current optionality that they have for their shopping. As is topical now, the physical retail experience, it remains extremely cumbersome. Online shopping remains extremely overwhelming.

The service that we offer at Stitch Fix, it solves many of those frustrations for the customer. And as I just noted previously, at Stitch Fix on day zero, we know our clients better than many retailers can aspire to know their customers over the course of their relationship. And it's with that information that we're able to know your style preference, serve your value orientation, and nail your fit as early as that very first transaction. And also critical is that, you know, for us at Stitch Fix, personalization algorithms, artificial intelligence, machine learning, and data science, those are fundamental elements of our model.

They've been part of our DNA since our inception. It's something that we're going to continue to build upon going forward. Many of our tool systems experiences, they're all informed by that. And we're going to continue to invest in that further as we go forward and as we've demonstrated that over the course of our 13-year history.

Now, you know, as you noted, we're also in the midst of a transformation, and transformations take time. And we must continue to develop a stronger foundation for our business, one that's rooted in best-in-class operations built for scale, one that allows us to operate more efficiently, one that unlocks cost reductions from our operations while also improving the client experience. And we're strengthening that foundation and embedding these retail best practices throughout the organization. As we've already discussed on this call, too, as part of strengthening that foundation, we're maniacally focused on a healthier client franchise.

We need to make sure that we're extremely judicious with that marketing spend, methodical in terms of the client segments that we're targeting so that we bring -- so that we bring a client into the experience or demonstrating all the characteristics of high lifetime value, one that will have an enduring relationship with us over a long time. And finally and critically, as we continue to reimagine the client experience and continue our proven history as a disruptive retailer, the core value proposition of just knowing your clients' style preference, value orientation, and fit on day zero is critical. It's a competitive strength and advantage for us. And how that manifests through the experience, well, that needs to evolve.

And as I mentioned in the prepared remarks, we're currently reimagining the onboarding experience so that we can continue to engage with both our perspective and our current clients to make it fun and easy so that they remain extremely confident in the service that we provide. As we continue to improve these experiences, we'll improve conversion through the funnel, better serve new clients, better serve current clients, and we'll continue to reimagine this end-to-end experience over time, including how clients and stylists interact with each other. It's a work in progress. And as it continues, I'll be excited to share more with you.

Aneesha Sherman -- AllianceBernstein -- Analyst

Thank you. That's super helpful. Can I ask a quick follow-up? Do you expect to go back to your usual seasonal cadence of having a slightly heavier weighted second half, which is kind of where you were pre-COVID where second half was contributing a little bit more than half of annual sales?

David Aufderhaar -- Chief Financial Officer

I mean it's a good question, Aneesha. I think, as we go forward, I think some of those trends could return to the business. But I think to Matt's point, like I think we're focused right now on sort of some of those near-term actions that we're doing because we know that will drive us toward active client growth and sustainable revenue growth.

Aneesha Sherman -- AllianceBernstein -- Analyst

Got it. Thank you.

Operator

Thank you. Please standby for our next question. Our next question comes from the line of Maria Ripps from Canaccord. Your line is open.

Maria Ripps -- Canaccord Genuity -- Analyst

Great. Thank you for taking my questions. First, can you maybe just talk about whether you're seeing any impact from the lower course competitors that are growing aggressively in the U.S., whether from the revenue standpoint or intensifying competition in advertising spend? And then, secondly, can you maybe just give us a little bit more color around the launch of new client onboarding experience. What are some of the new features that you have in mind that maybe you can talk about and how will it be different from the current process?

David Aufderhaar -- Chief Financial Officer

Hey, Maria. Yeah, happy to answer both of those questions. First, the question around newer lower-cost entrants into the market, you know, I think one of the things that really encourages me about the Stitch Fix business model is in terms of the client that, you know, we're serving and one in which our service resonates so well with. We don't feel like that's taking away for business.

We understand some of our natural competitors are having to deal with this on a considered basis. But from our perspective, the clients that are coming to Stitch Fix, the ones that are looking for help with personal styling, the ones that are looking for help in terms of completing their closet and completing their wardrobe, the ones that are starting a new job and looking to understand how to build out their assortment so that they have a full collection of workwear or someone that's, you know, struggling with finding apparel that fits them perfectly, all of the need states that we meet, that we're able to satisfy so much better than many other retailers, we feel like those are competitive differentiators for us that offer us a tremendous amount of protection from the retailers that you might have in mind, you know, that are, in many ways, disrupting others in the market today. In terms of additional color on the new onboarding experience, you know, at this point, what I'll share is that, you know, our goal through this process is to make sure that the experience achieves a few different objectives. The first of which is that we're able to acquire all the information that we need from prospective clients in order to serve them as well as possible from the very first interaction that we have with them.

We also need to make sure that we're delivering confidence to them through that experience that we'll be able to meet those needs, that we'll be able to understand their style preference, their value orientation. We need them to have tremendous confidence that we'll be able to understand and nail their fit. And then, the third piece, which is really important and something that, you know, will manifest is it has to be fun. It has to be engaging.

It has to be dynamic. And because we're in the early stages of it, you know, I'll share more as we get closer, but those are the tenants that -- and the principles that are underlying the development of this new product.

Maria Ripps -- Canaccord Genuity -- Analyst

Got it. Thank you so much for the color.

David Aufderhaar -- Chief Financial Officer

Thanks, Maria.

Operator

Thank you. Please standby for our next question. Our next question comes from the line of Ed Yruma with PSC. Your line is open.

Ed Yruma -- Piper Sandler -- Analyst

Hey, guys. Thanks very much for taking the question. Two for me, I guess first, there's obviously a large customer base that is, you know, kind of lapsed or that's fallen out. I know, at the time of the IPO, there was a thought process around a 24- to 36-month kind of reactivation period as people's size or preferences change.

Is any of that still holding? And kind of what efforts are you making against the lapsed customers? And then, as a follow-up, I know one area of refinement has been around the close-up policy, you know, on clearing excess inventory. I guess, kind of where are you with that? And kind of how are you disposing of some of this excess inventory? Thanks.

Matt Baer -- Chief Executive Officer

Hey, Ed, I appreciate the question. As I understood the first part, it's about how we continue to drive engagement with our current clients, and it's something that we talked about in prior calls. You know, as we're continuing to improve and focus on our ability to acquire new clients judiciously, we're similarly working to ensure that we're doing a better job engaging our current clients in order to fend off dormancy proactively. And we're very mindful in terms of the retention and reactivation campaigns.

I do feel that the team is extremely well dialed in and has the right amount of focus on this. We continue to have pockets of success or continue to have success around that reengagement. And we're going to continue to also invest within our CRM capabilities so that we can better understand who our clients are, the right message is to deliver them, what the right time is to deliver that right message. And we feel like through these investments, we'll continue to keep that engagement open.

And over a longer period of time, you know, this speaks to the second part of the reimagination of the experience that's really important, is we're going to start to really focus on what are those experiences that can deepen engagement with our current clients, and how can we make sure that we're giving them a reason to come back and visit us on a more frequent basis. And as we do that, we feel confident that we'll continue to be a part of their shopping journey. We'll continue to take a greater wallet share over time. And that's why that's such an important part of the investment in terms of the reengagement of the experience there.

In terms of the second part of the question on clearance, I'll answer it and allow David to jump in with a little bit of additional color there, one of the things that's really important is that we continue to invest in our pricing science there. We want to make sure that we're getting smarter about our pricing intelligence. That will help ensure that we've got the right markdown cadence so that we can drive the right sell-through, so that we can ensure that we have the right keep rates. And as inventory ages, then, we'll be able to make sure that we have less and less as a percentage of our total retail that needs to go to clearance.

I feel good about our level of investment there. I feel good about some of the initial results that we've seen from this increased focus in pricing science. And it's also just a phenomenal of our continued focus on retail best practices and the outsized impact that it can have on our overall business performance. And I think, finally, our ability to do that speaks a lot to what David was talking about, too, in terms of getting leverage out of the business so that we can further invest in growth initiatives over time.

David Aufderhaar -- Chief Financial Officer

And, Ed, just to add on that, on the clearance side, you know, one of the other aspects that certainly has been a benefit for us is Freestyle, you know, where we can use Freestyle in a lot of the ways that Matt was just describing around, you know, targeted promotions and sales and using that as an avenue from a clearance perspective. And so, that has certainly helped us from an inventory health standpoint.

Ed Yruma -- Piper Sandler -- Analyst

Thanks so much.

Matt Baer -- Chief Executive Officer

Thanks, Ed.

Operator

Please standby for our next question. Our next question comes from the line of Kunal Madhukar from UBS. Your line is open.

Kunal Madhukar -- UBS -- Analyst

Hi. Thank you for taking my questions. I guess a lot of the questions are coming in because -- especially about growth coming in because there seems to be some dichotomy between, you know, what you profess and the numbers that we see. So, if the user experience is so much better than what their current experience is with other retailers, why is it that the active client base is, you know, back to the January 2018 kind of levels? And then, you know, thinking about wallet share, what percentage of wallet share do you currently have from the existing clients? And a follow-up would be you talked about having a more personalized experience with like the stylists.

So, what does that mean in terms of stylist headcount and the amount of time that the stylist will spend with individual clients? And then, you know, the follow-up to that would be what would be the cost of having a more personalized experience? Thank you.

Matt Baer -- Chief Executive Officer

All right. Thank you, Kunal. I heard three questions. I'll do my best to take them in order.

The first is in terms of why I continue to have such confidence in the future success of Stitch Fix versus what the numbers that you're looking at are demonstrating. And I think, you know, based on what I've continued to say is our core differentiator and our core capability is how well we know our clients and how well we know clients from that very first interaction. Our opportunity going forward is how we further capitalize on that information and how we continue to build and reimagine the experience around that. So, that confidence, you know, is speaking to that future growth opportunity.

And as I noted earlier, we're in the midst of a transformation, and those transformations do take time. On the second question, you know, in terms of wallet share, we're very methodical in terms of the different client segments that we're targeting. And within those client segments, we're also filling very different needs for each of those clients. And as a result, we have a very different wallet share with each of those different client bases.

And the teams are very focused on making sure that we continue to develop, build and message to those clients in those different segments to meet those needs and gain as much wallet share as possible. On the third question, in terms of the future of the client-stylist relationship and how we want to build out a more personalized experience and what that means for the cost basis on stylists, I think what's really important there is that we're driving more meaningful interactions between clients and stylists, ones that continue to add value and ones that create experiences that are differentiated and personalized for each client. While some clients may rely on our service to continue to keep their wardrobe replenished and refreshed over time and require minimal interaction with stylist, you might actually see less interaction with stylists. Other clients have been very vocal and have heard in many of the client focus groups that I've attended that they want to have a deeper and more meaningful interaction with their stylists and then to be looking for help, you know, getting dressed or finishing out their closet in a much more dynamic and engaged way.

So, in terms of what it means from an expense basis, I think, you know, it would be one where we're not anticipating any increase on that because we're going to be able to tailor that experience to the individual where some clients are going to want a deeper or more constant engagement with stylists. And others are going to be utilizing the power of our data science and our technology in order to keep their wardrobe refresh, keep them on style and on trend potentially with less experience. So, net-net, I think it will balance over time.

Operator

Thank you. With that, I see no further questions in the queue. Thank you for participating in today's conference. That does conclude the program.

[Operator signoff]

Duration: 0 minutes

Call participants:

Hayden Blair -- Senior Director, Investor Relations and Treasury

Matt Baer -- Chief Executive Officer

David Aufderhaar -- Chief Financial Officer

Youssef Squali -- Truist Securities -- Analyst

Simeon Siegel -- BMO Capital Markets -- Analyst

Tom Nikic -- Wedbush Securities -- Analyst

Aneesha Sherman -- AllianceBernstein -- Analyst

Maria Ripps -- Canaccord Genuity -- Analyst

Ed Yruma -- Piper Sandler -- Analyst

Kunal Madhukar -- UBS -- Analyst

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Stitch Fix (SFIX) Q2 2024 Earnings Call Transcript was originally published by The Motley Fool