Revolve Group is proving there might be a few winners amid the ongoing pandemic.
The fashion e-tailer posted quarterly results Wednesday after the bell, beating top-line expectations and improving on bottom-line profits year-over-year. Shares of Revolve surged more than 23 percent during after-hours trading as a result.
The company credited the recent success to a combination of better-than-expected revenues, along with a number of cost-saving measures, such as slashing executive compensations, furloughing associates and reducing inventory buys at the beginning of the pandemic.
“Our team has done a phenomenal job remaining extremely nimble throughout this highly uncertain and fluid environment, finding innovative ways to deliver operating efficiencies throughout the business and rapidly adjusting our marketing and merchandising strategies to stay connected with our customer,” Revolve cofounder and co-ceo Michael Mente, said in his prepared remarks.
Cofounder and co-ceo Mike Karanikolas added that Revolve’s “segment inventory turned approximately 30 percent faster year-over-year, serving as a key driver of our strong cash flow.
“We are confident that our agile team, flexible business model and strong balance sheet position us well to navigate through what continues to be an uncertain environment,” Karanikolas continued. “We believe these competitive advantages, coupled with our strong brand, differentiated technology and deep customer connection, position us to thrive over the long term.”
For the three-month period ending June 30, the company’s total revenues were $142 million, down from nearly $162 million last year. But profits rose to $14.2 million, up from $12.7 million a year ago.
The company is not providing forward-looking guidance, but said net sales in June increased year-over-year for the first time since the pandemic began. International sales also increased, up 3 percent year-over-year, with the strongest gains in western Europe. Top-performing categories were beauty, accessories, loungewear and intimates, while dresses — Revolve’s biggest category — were down year-over-year. Even so, the e-commerce site ended the quarter with $53 million in free cash flow, compared with $2 million the same time last year.
“We are keeping our customers very happy,” Mente said on Wednesday afternoon’s conference call with analysts. “Despite everything going on in the world around us, we’re continuing to drive brand loyalty.”
The Los Angeles-based company, which was founded in 2003, went public in June 2019. The platform is a favorite among Millennial and Gen Z shoppers and is known for its festival attire, Instagram-friendly backdrops and use of influencers.
Shares of Revolve, which closed up 4.56 percent to $19.50 Wednesday, are down approximately 24 percent year-over-year.