Revolve's (NYSE:RVLV) Q4: Beats On Revenue

Max Juang /
2024/02/27 4:42 pm EST

Online fashion retailer Revolve Group (NASDAQ: RVLV) reported results ahead of analysts' expectations in Q4 FY2023, with revenue flat year on year at $257.8 million. It made a GAAP profit of $0.05 per share, down from its profit of $0.11 per share in the same quarter last year.

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Revolve (RVLV) Q4 FY2023 Highlights:

  • Revenue: $257.8 million vs analyst estimates of $246 million (4.8% beat)
  • EPS: $0.05 vs analyst estimates of $0.02 ($0.03 beat)
  • Free Cash Flow was -$4.96 million, down from $11.49 million in the previous quarter
  • Gross Margin (GAAP): 52%, up from 51.4% in the same quarter last year
  • Trailing 12 months Active Customers : 2.54 million, up 203,000 year on year
  • Market Capitalization: $1.22 billion

"I'm proud of our team's accomplishments in 2023 that set us up well for 2024," said co-founder and co-CEO Mike Karanikolas.

Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve Group (NASDAQ: RVLV) is a next generation fashion retailer that leverages social media and a community of fashion influencers to drive its merchandising strategy.

Online Retail

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Sales Growth

Revolve's revenue growth over the last three years has been strong, averaging 25.5% annually. This quarter, Revolve beat analysts' estimates but reported a year on year revenue decline of 0.5%.

Revolve Total Revenue

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Usage Growth

As an online retailer, Revolve generates revenue growth by expanding its number of buyers and the average order size in dollars.

Over the last two years, Revolve's active buyers, a key performance metric for the company, grew 23.9% annually to 2.54 million. This is strong growth for a consumer internet company.

Revolve Trailing 12 months Active Customers

In Q4, Revolve added 203,000 active buyers, translating into 8.7% year-on-year growth.

Revenue Per Buyer

Average revenue per buyer (ARPB) is a critical metric to track for consumer internet businesses like Revolve because it measures how much customers spend per order.Revolve ARPB

Revolve's ARPB has declined over the last two years, averaging 10.4%. Although it's unfortunate to see the company lose its pricing power, it was still able to achieve strong buyer growth. This quarter, ARPB declined 8.5% year on year to $101.37 per buyer.

Key Takeaways from Revolve's Q4 Results

It was great to see Revolve beat analysts' revenue expectations this quarter. We were also glad it expanded its user base. On the other hand, its revenue growth regrettably slowed. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track. The stock is up 3% after reporting and currently trades at $17.99 per share.

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