Revolve Group (NYSE:RVLV) Announces Quarterly Earnings Results, Misses Estimates By $0.02 EPS

Key Points

• Revolve Group reported EPS of $0.20, missing analyst estimates by $0.02, while quarterly revenue of $355.96 million topped the $345.49 million consensus.
• Sales rose 20% year over year to about $356 million, with active customers up 18% and growth across REVOLVE, FWRD, and domestic and international markets.
• Profitability faced pressure: gross margin fell 75 basis points to 53.9% and adjusted EBITDA declined 7% to $23.5 million, amid higher marketing and overhead spending and increased freight costs.

Revolve Group (NYSE:RVLV - Get Free Report) posted its quarterly earnings data on Tuesday. The company reported $0.20 EPS for the quarter, missing analysts' consensus estimates of $0.22 by ($0.02), Zacks reports. Revolve Group had a return on equity of 13.38% and a net margin of 5.54%. The business had revenue of $355.96 million during the quarter, compared to the consensus estimate of $345.49 million.

Here are the key takeaways from Revolve Group's conference call:

• Strong top-line momentum: Third-quarter net sales rose 20% year over year to $356 million, with REVOLVE and FWRD, domestic and international markets all growing at least 20%. Active customers increased 18%, supported by record new-customer acquisition and stronger engagement from existing customers.
• Improving operating fundamentals: The return rate declined by more than two percentage points year over year, aided by category diversification and targeted initiatives. International sales grew 22% for the 15th consecutive quarter of outperformance versus the U.S., while mobile-app customers continued to show higher engagement and value.
• Profitability remains pressured during the investment year: Gross margin fell 75 basis points to 53.9%, and adjusted EBITDA declined 7% to $23.5 million as the company increased marketing and G&A spending. Higher fuel surcharges, freight costs and lower average order value are expected to weigh on fourth-quarter margins, with full-year selling and distribution expense guidance raised to 17.5% of sales.
• Growth initiatives are gaining traction: The Aventura store opened ahead of schedule and under budget, omnichannel customers spend nearly three times as much as single-channel customers, and the Cardi B-backed Grow-Good business is scaling profitably. Management also highlighted significant brand-building opportunities through REVOLVE Los Angeles, the Donatella Versace joint venture and AI-enabled shopping and store tools.
• Management expects margin recovery in 2027: Executives believe marketing and G&A investments made in 2026 can be leveraged as the company returns toward historical spending levels. They reiterated a long-term goal of double-digit EBITDA margins, supported by increasing owned-brand penetration, physical retail expansion and operating leverage.

Revolve Group Stock Performance

Revolve Group stock traded down $0.27 during trading hours on Tuesday, reaching $21.73. 1,441,735 shares of the company's stock traded hands, compared to its average volume of 986,961. Revolve Group has a fifty-two week low of $17.35 and a fifty-two week high of $31.68. The firm has a market capitalization of $1.54 billion, a price-to-earnings ratio of 21.52, a PEG ratio of 2.84 and a beta of 1.70. The firm's 50 day moving average is $21.73 and its 200-day moving average is $23.34.

Wall Street Analyst Weigh In

A number of equities analysts recently issued reports on the stock. Piper Sandler boosted their target price on shares of Revolve Group from $27.00 to $30.00 and gave the stock an "overweight" rating in a research report on Wednesday, August 5th. UBS Group lowered their price target on Revolve Group from $29.00 to $27.00 and set a "neutral" rating on the stock in a research note on Tuesday, October 27th. Wall Street Zen lowered Revolve Group from a "buy" rating to a "hold" rating in a research note on Saturday, July 25th. BTIG Research restated a "buy" rating and set a $35.00 price target on shares of Revolve Group in a research note on Wednesday, October 28th. Finally, Roth Capital reaffirmed a "buy" rating and issued a $37.00 target price on shares of Revolve Group in a report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $29.69.

About Revolve Group

Revolve Group, Inc operates a digital commerce platform focused on fashion and lifestyle products. Through its REVOLVE and FWRD platforms, the company offers women's and men's apparel, footwear, accessories, beauty products and other lifestyle merchandise from established and emerging brands. Its portfolio also includes proprietary and exclusive brands, including superdown and Song of Style.

The company primarily reaches customers through its e-commerce websites and mobile experiences, supported by influencer marketing, social media, content creation and data-driven merchandising.

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