Revolve Group Inc. is finding Wall Street can be a tough crowd to satisfy.
The Los Angeles-based e-commerce site reported its fourth-quarter earnings aftermarket Tuesday, highlighting nearly $601 million in sales for 2019, a 21 percent increase from its nearly $499 million haul the previous year. Its net income also rose 16 percent to roughly $36 million for the year.
The numbers were buoyed by its strong showing in the fourth quarter, when the company drew in more active customers, and who also spent a little more. The company reeled in some 1.5 million active customers in the quarter, a 27 percent increase from in the previous year, and the average order value rose 3 percent to $282.
This did little to impress shareholders as the stock plummeted more than 20 percent after market to $15 a share, just slightly above its 52-week low of $14.35 and well off its high of $48.36. The company warned that sales would be negatively affected as the coronavirus epidemic weighed on supply.
In the three months ended Dec. 31, the company brought in net sales of nearly $148 million, a 16 percent increase from the same time period the previous year. Its net income for the fourth quarter was $8.4 million, a 9 percent increase from 2018, and its adjusted earnings before interest, taxes, depreciation and amortization was $13.7 million, a 15 percent increase from last year.
The company’s goals for the year include building on its cultural marketing initiatives like its appearance last month on the ABC reality show “The Bachelor” in an episode that drew more than 5 million viewers, as well as ongoing investments in its owned brands and technology, its bread and butter, company executives said in a call with analysts Tuesday.
“We remain committed to technology…we’re testing new initiatives,” co-chief executive officer Mike Karanikolas said on the call, referring to one of its ongoing efforts to develop mobile web engagement.
The company also said it closed the year with no debt, and with cash and cash equivalents of $65.4 million, a 28 percent increase from September.
But it does expect the ongoing coronavirus outbreak to affect operations in the first, and, potentially, the second quarters of 2020. The company projected a “one- to three-point negative impact” to its net sales for the 2020 fiscal year because of supply-side constraints to its owned brands, as well as third-party brands that obtain products from China. Shipments from China have been delayed by a few weeks, amid delays with factory reopenings after the Lunar New Year, which has typically seen Chinese employees back at by around Feb. 10. “The situation remains fluid and uncertain,” the company said.
Revolve was founded in 2003 by Karanikolas and co-ceo Michael Mente, and debuted on Wall Street last summer when it opened trading with an $18 IPO share price, which nearly doubled to $34 the first day.