Revolve Group's Q4 sales drop

Fashion retailer Revolve Group reported a net sales decrease of 1 percent to 257.8 million dollars for the fourth quarter, a sequential improvement from the 4 percent reported in the third quarter of 2023.

During the first eight weeks of 2024, the company’s net sales decreased by a mid-single digit percentage compared to the same period in 2023.

Commenting on the trading update, the company’s co-founder and co-CEO Mike Karanikolas said: "Despite the challenging backdrop for consumer discretionary spending, we closed out the year with a solid fourth quarter that included improved sales trends, year-over-year expansion of our gross margin and early progress on selling and distribution cost efficiencies."

Highlights of Revolve Group’s Q4 results

The company said in a release that active customers increased by 33,000 during the fourth quarter, growing to 2,543,000 as of December 31, 2023, an increase of 9 percent year-over-year.

Gross profit was 134 million dollars, an increase of 1 percent, and gross margin was 52 percent, an increase of 57 basis points.

Net income of 3.5 million dollars, decreased 56 percent, adjusted EBITDA of 8.5 million dollars, decreased 40 percent and diluted earnings per share of 5 cents, decreased 55 percent.

The company’s Revolve segment net sales of 220 million dollars, increased 1 percent, while FWRD segment net sales were 37.8 million dollars, a decrease of 10 percent.

Domestic net sales were 213.7 million dollars, down 2 percent and international net sales were 44.1 million dollars, an increase of 7 percent.

"Our profitable and cash generative business remains a key competitive advantage that has enabled us to invest in longer-term growth initiatives throughout the cycle at a time when many industry peers have no choice but to significantly reduce investment," added the company’s co-founder and co-CEO Michael Mente.

For the full year, the company added, gross margin is expected to be in the range of 52.5 percent to 53 percent and first quarter gross margin to be in the range of 51.4 percent to 51.9 percent.