US' Revolve Group's Q3 2024 net sales rise 10% YoY to $283.1 mn

The company's net income was $10.8 million, an increase from $3.2 million in Q3 2023. Basic earnings per share (EPS) in Q3 2024 stood at $0.16 (up from $0.04 in Q3 2023), and diluted EPS was $0.15, an increase from $0.04 in Q3 2023, Revolve said in its financial release.

Cost of sales in this quarter was $138.3 million (up from $124.4 million in Q3 2023). Adjusted EBITDA was $17.5 million, an increase of 85 per cent YoY. The fulfilment costs were $9.3 million, or 3.3 per cent of net sales, compared to $9.2 million, or 3.6 per (in Q3 2023). The selling and distribution costs were $47.9 million, or 16.9 per cent of net sales, compared to $48.9 million, or 19.0 per cent (in Q3 2023).

Marketing costs were $39.5 million, or 14.0 per cent of net sales, compared to $39.6 million, or 15.4 per cent, in the third quarter of 2023. The total operating expenses in Q3 2024 were $130.6 million (down from $132.9 million in Q3 2023) and income from operations were $14.3 million (up from $0.3 million in Q3 2023).

The Revolve segment of the Group reported net sales of $243.4 million, a YoY increase of 12 per cent, while the Fwrd segment net sales remained flat at $39.7 million. Domestic net sales were $222.7 million, a YoY increase of 7 per cent. International net sales were $60.5 million, a year-over-year increase of 20 per cent, driven by growth in all major regions, stated the press release.

"We delivered exceptional results in the third quarter, highlighted by double-digit top-line growth, significant expansion of net income, and 85 per cent growth in Adjusted EBITDA year-over-year," said co-founder and co-CEO Mike Karanikolas. "Key contributors to our increased profitability were meaningfully improved efficiency in our logistics costs, continued improvement in our return rate, and increased marketing efficiency year-over-year."

Nine months (9M) 2024 financials

Net sales of the company in the first nine months of 2024 were $836.2 million (up from $810.9 million in 2023), and cost of sales was $397.2 million (up from $390.8 million in 2023). Gross profit in this period amounted to $439.0 million (up from $420.2 million in 2023). Fulfilment cost for the 9M 2024 period was recorded at $27.9 million (up from $27.7 million in 2023) and the selling and distribution cost at$146.8 million (down from $151.3 million in 2023).

Marketing cost for 9M 2024 was $123.9 million (down from $129.4 million in 2023). Total operating expenses were $399.0 million (down from $400.2 million in 2023), while income from operations was $40.0 million (up from $19.9 million in 2023). The basic EPS in 9M 2024 stood at $0.53 (up from $0.34 in 2023), and diluted EPS at $0.52 (up from $0.33 in 2023).

2024 outlook

Revolve expects gross margin to be 52.2 per cent (previously: 52.5-53.0 per cent) for full year 2024, and fulfilment expenses at 3.3 per cent of net sales (unchanged from previous range of 3.3-3.5 per cent). It also expects selling and distribution expenses to be 17.5 per cent of net sales (previously: 17.8-18.0 per cent), and marketing expenses to be 15.1 per cent of net sales (previously: 15.3-15.5 per cent). General and administrative expenses are expected to be $136.0 million (previously: $135 million-$138 million), said the release.

Fourth quarter (Q4) 2024 outlook

The company is expecting gross margin for Q4 to be 51.2-51.5 per cent, fulfilment expenses at 3.4 per cent of net sales, and selling and distribution expenses to be 17.3 per cent of net sales. Marketing expenses are expected to be 15.9 per cent of net sales, and general and administrative expenses $35.6 million.

"Our strong quarter is a result of our execution on key growth and efficiency initiatives, which have helped us continue our net sales momentum into the first month of the fourth quarter of 2024," said co-founder and co-CEO Michael Mente. "We achieved these strong financial results while continuing to invest in initiatives that we believe set us up well for market share gains over the long-term, including international expansion, leveraging AI technology for merchandising and marketing enhancements, expansion into physical retail, and broadening our owned brand capabilities.”

Fibre2Fashion News Desk (SG)