What Happened:
Shares of online fashion retailer Revolve Group (NASDAQ: RVLV) fell 6.25% in the after-market session after the company reported first-quarter results that missed analysts' estimates for revenue, operating income, and free cash flow. A minor positive was that active customers grew and exceeded expectations. Management called out an "increasingly challenging macroeconomic environment that led to a deceleration in net sales momentum," which might lower the growth expectations for the coming quarter. This was a weak quarter and the near-term outlook seems shaky. Following the results, Raymond James analyst downgraded the stock's rating from Outperform (Buy) to Market Perform (Hold).
What is the market telling us:
Revolve's shares are very volatile and over the last year have had 50 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Revolve is down 17.4% since the beginning of the year, and at $18.87 per share it is trading 49% below its 52-week high of $37.01 from May 2022. Investors who bought $1,000 worth of Revolve's shares at the IPO in June 2019 would now be looking at an investment worth $546.57.
Is now the time to buy Revolve? Access our full analysis of the earnings results here, it's free.