They’re dressing for nights out on the town again.
Revolve Group, the Los Angeles-based online retail company known for clothing and apparel targeted at younger shoppers, reported a record $22 million in net income in the first quarter of 2021, a roughly 435 percent increase from last year.
In the three months ending on March 31, the company’s net sales were a record $179 million, a 22.5 percent increase from last year, and it registered some $33 million in cash flow, the company said Thursday after the bell. Its shares rose roughly 9 percent in after-market trading to $56.40.
“Our exceptional results for the first quarter reinforce our belief that Revolve is uniquely positioned for the reopening of economies and the post-COVID-19 world as a brand consumers associate with living an active social lifestyle,” the company’s cofounder and co-chief executive officer Mike Karanikolas said in a statement.
“We are excited to reaccelerate our investment in the business to support our next phase of growth,” he said.
The sales growth came from demand for both, beauty, sleep and casual wear apparel as well as going-out clothes, and shoppers more inclined to spend stimulus checks on discretionary purchases, the company said.
“Particularly exciting is that the strong recovery in March came from a return to growth in styles associated with social outings, such as dresses, as well as continued strong growth in at-home related products, including beauty, intimates and activewear that have grown rapidly throughout the pandemic,” Revolve cofounder and co-chief executive officer Michael Mente said in a statement.
“Driven by our powerful brand, our proprietary technology, and our data-driven merchandising, our results demonstrate great progress against our goal of developing a deeper relationship with our customer and capturing a larger share of her wallet over time,” he said.
The company said the results also reflected a surge in demand for apparel and consumer goods in March as vaccines were being distributed around the country, a year since the first round of pandemic-related lockdowns went into effect.
For Revolve, the pandemic and the impact of isolation on its customer base — young Millennial and Gen Z shoppers who sought out its apparel for social outings and travel — meant rethinking what it had to offer shoppers in those demographics during an unusual time.
“When customers shifted away from a travel and going-out lifestyle to a more stay-at-home lifestyle, we had to completely change how we interacted with the customer — from the merchandise that we offer and promote, as well as the way we speak to her, and the concept that we provide to her,” Mente told WWD Thursday evening.
“Coming out of the pandemic, we’ll be a lot more ‘broader lifestyle,’” he added. “When the customer comes to us, she’d always view us for clothes to go out in and travel with, and then now we’ll also make sure that she thinks of us when she’s working out, when she’s buying make-up, and other casual categories that we weren’t as strong in.”
Dealing with the changing demand also meant fine-tuning fulfillment processes so that operations could meet the whiplash in demand, Karanikolas told WWD.
“We entered the period knowing that there was a reasonable chance that we would see a surge in demand,” he said. “We just didn’t know the exact timing or what the levels would look like, but we knew we had to be prepared to be prepared.”