Revolve Group Inc. gained more ground in the third quarter, combining data-savvy with an influencer-heavy marketing approach that’s proven to be catnip for Millennials.
Net income rose 33.9 percent to $9.6 million, from $7.1 million, as earnings per diluted share of 13 cents came in 2 cents ahead of the 11 cents analysts projected.
Sales for the three months ended Sept. 30 increased 22.5 percent to $154.2 million, above the $152.8 million Wall Street anticipated.
The e-commerce company logged a 33.1 percent rise in the number of active customers, to 1.4 million, and a 25.7 percent rise in the number of orders placed, to 1.2 million. The average order value, however, slipped 1.8 percent to $275.
Michael Mente and Mike Karanikolas founded Revolve in 2003 and took the company public this summer as co-chief executive officers with big growth plans in mind. While the Millennial-friendly Revolve sits at the center of the the firm’s strategies, it also has the Gen Z-focused Superdown with sharper pricing and the luxury-centric Forward by Elyse Walker.
Revolve is an anomaly in fashion in that has driven dramatic growth by relying heavily on data and algorithms when deciding on what styles to carry and looking to influencers to power its marketing approach.
But it’s an approach that’s worked well enough to power steady movement at its businesses.
On a conference call with analysts, Mente noted that Superdown expands the company’s addressable market and sets up consumers to become Revolve customers as they grow.
“We have experienced a strong uptick in traffic, engagement and conversion” on Superdown, which now has 140,000 Instagram followers, Mente said.
At the other end of the spectrum with Forward, he said the company “couldn’t be happier with the progress.”
Forward launched Balenciaga in September, Gucci in October and also partnered with Givenchy to launch a handbag on the site during the quarter.
Now, Revolve is getting into the business of making luxury goods, launching its first Forward-owned brand at an event next week, which will feature evening gowns going for roughly $900.
And Karanikolas said Revolve this week launched a new program that sends customers an extra size to try on at home for no cost, noting that customers who order more than one size are more likely to stick with the site.