Revolve Group Q2 Earnings Call Highlights

Key Points

• Revolve reported strong Q2 growth: Net sales rose 12% year over year to $347 million, while active customers surpassed 3 million and orders increased 11%. July sales accelerated approximately 18%, supporting management’s expectation for full-year double-digit revenue growth.
• Profitability benefited from tariff refunds and operational improvements: Gross margin expanded to 56.6%, including a roughly 160-basis-point benefit from approximately $8 million in IEEPA tariff refunds. Adjusted EBITDA rose to $27 million, although increased marketing and other investments are expected to reduce the full-year adjusted EBITDA margin by about two percentage points.
• The company is investing in future growth: Initiatives include the REVOLVE Los Angeles owned brand, a third physical store, the fast-selling Grow-Good beauty venture with Cardi B, and AI-powered shopping and analytics tools. International sales grew 16%, led by strength in Mexico and a rebound in the Middle East.

Revolve Group NYSE: RVLV reported second-quarter 2026 net sales of $347 million, up 12% from a year earlier, as growth accelerated across its REVOLVE and FWRD segments, domestic and international markets, and customer base. Management said July sales rose approximately 18% year over year, reinforcing its expectation for double-digit revenue growth for the full year.

Co-founder and Co-CEO Mike Karanikolas said the company recorded its strongest quarterly new-customer acquisition performance in four years. Trailing 12-month active customers rose 11% year over year, increasing by 115,000 during the quarter and surpassing 3 million for the first time. Total orders increased 11% to 2.7 million, while average order value was $299, compared with $300 a year earlier.

“We had a very solid quarter, highlighted by strong and profitable growth across segments and geographies,” Karanikolas said. He attributed the momentum to investments in brand building, technology and artificial intelligence, site experience, and category expansion.

Sales Growth Across Segments and Markets

REVOLVE segment sales rose 13% year over year in the second quarter, while FWRD sales increased 11%. Domestic revenue advanced 11%, and international sales climbed 16%. International markets represented nearly 23% of total net sales, the company’s highest reported mix.

Karanikolas said Mexico again posted particularly strong growth, while the Middle East rebounded to double-digit growth after a weak start to the quarter. Management said it capitalized on demand in the region while some competitors reduced activity.

Fashion apparel outpaced overall sales growth, led by wardrobe-essential categories including tops, pants, outerwear, intimates, shorts and jeans. Beauty and men’s products also grew faster than the overall business on a combined basis, according to management.

During the question-and-answer session, Karanikolas said July’s sales acceleration reflected internal execution rather than a broad consumer trend. He cited heavier marketing investments during the second quarter and said the company was seeing broad-based strength across revenue, customer acquisition, segments and geographies.

Profitability, Tariff Refunds and Investment Spending

Second-quarter gross margin was 56.6%, up from 54.1% a year earlier. The result included an approximately 160-basis-point benefit from refunds of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. Excluding the refunds, gross margin increased roughly 90 basis points, which management said was driven primarily by AI- and data-based recalibration of markdown algorithms.

The company received and recognized most of approximately $8 million in filed IEEPA tariff refund claims during the quarter. Net income was $19 million, or $0.26 per diluted share, including a $0.06-per-share benefit from the refunds. Adjusted EBITDA rose to $27 million from $23 million a year earlier, including a $5.6 million benefit from tariff refunds.

Chief Financial Officer Jesse Timmermans said the company continued to invest heavily in longer-term growth initiatives, particularly its REVOLVE namesake label, physical retail expansion and joint venture with Cardi B. Those initiatives are expected to reduce full-year adjusted EBITDA margin by about two percentage points, with roughly 150 basis points related to marketing and 50 basis points to general and administrative spending.

Marketing expense reached 16.5% of sales in the quarter, up 130 basis points year over year. Selling and distribution costs rose to 17.9% of sales, pressured by higher customer-shipment costs and fuel surcharges in international markets. The company also cited elevated logistics costs tied to geopolitical conditions.

For the third quarter, Revolve expects gross margin of 53.5% to 54%, fulfillment costs of approximately 3.4% of sales, selling and distribution costs of approximately 17.5% of sales, marketing investment of about 15% of sales, and G&A expense of approximately $43.5 million. It maintained its full-year gross-margin outlook of 53.5% to 54% and raised its full-year marketing outlook to 15.8% to 16% of sales. Full-year G&A is expected to be $170 million to $172 million.

Owned Brands, Luxury and Retail Expansion

Co-founder and Co-CEO Michael Mente said owned-brand penetration within the REVOLVE segment increased year over year for a sixth consecutive quarter. The company introduced the second collection for its REVOLVE Los Angeles namesake label in late June, and Mente said early sell-through was stronger than that of the first assortment.

The initial REVOLVE Los Angeles collections emphasize higher-priced statement pieces designed to establish a premium positioning, Mente said. The company plans over time to extend REVOLVE-branded products into more categories and price points, with the goal of building more meaningful sales volume beginning in 2027 and beyond.

FWRD’s 11% sales growth was aided by a rebound in handbags, including pre-owned luxury handbags sold through FWRD Renew. Mente also highlighted FWRD’s Summer Club capsule, which featured exclusive products from brands including Missoni, The Attico, Cult Gaia and SAME. Net sales from the capsule increased nearly 50% year over year, he said. FWRD also recently added Christian Louboutin’s women’s and men’s collections.

In physical retail, Revolve expects to open its third store in the fourth quarter at Aventura Mall in Greater Miami. Management described South Florida as a major existing customer market and said the location will support events, activations and greater penetration of owned brands. The company is taking a measured approach to store expansion while building retail systems, technology and operating processes, Mente said.

Cardi B Venture and AI Initiatives

Revolve’s Grow-Good beauty brand, developed through its joint venture with Cardi B, sold through its first three product drops within hours, with certain products selling out in minutes, according to management. The company plans a larger inventory restock beginning this fall.

Mente said Grow-Good had reached 670,000 Instagram followers, while several hundred thousand consumers had requested back-in-stock notifications. Products carry an average 4.9 out of 5 customer-review score, and nearly one-third of orders in early July came from repeat customers. Management said Grow-Good’s gross margin is directionally similar to the company’s owned-brand assortment and that its customers have little overlap with REVOLVE and FWRD shoppers.

Karanikolas also outlined AI investments, including planned testing of an on-site image-search capability that will allow shoppers to upload a photo and locate exact or similar items in the company’s assortment. Internally, the company has developed AI tools that allow employees to query its data warehouse in plain language and analyze retail-store video feeds to track traffic, conversion and other store metrics.

Revolve ended the quarter with $312 million in cash and cash equivalents and no debt. Inventory was $276 million, up 25% year over year, though Timmermans said the comparison was affected by tariff-related receipt delays in the prior-year quarter. The company repurchased nearly 500,000 Class A shares at an average price of $19.98, using about $10 million and reducing Class A shares outstanding by more than 1%.

About Revolve Group (NYSE:RVLV)

Revolve Group, Inc operates as a leading online fashion retailer primarily serving millennial and Gen Z consumers through its flagship e-commerce platform. The company offers a curated assortment of apparel, accessories and beauty products from more than 500 established and emerging brands, alongside private label labels covering contemporary and premium segments. With a focus on trend-driven merchandise and seamless user experience, the website features shoppable editorial content and digital styling advice aimed at strengthening customer engagement and brand loyalty.

Founded in 2003 and headquartered in Cerritos, California, Revolve has expanded its footprint beyond North America by launching localized sites and logistics centers in Europe and the Middle East.

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