American firm Revolve Group's net sales at $1.1 bn in FY23

28 Feb '24

3 min read

Pic: Revolve

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Revolve Group reported a 3 per cent decline in FY23 net sales to $1.1 billion, with gross profit down 6 per cent to $554.2 million.
Net income and adjusted EBITDA fell 52 per cent to $28.1 million and $43.4 million, respectively.
Q4 saw a 9 per cent rise in active customers, despite a 1 per cent sales dip and net income dropping 56 per cent to $3.5 million.

US-based firm Revolve Group, a next-generation fashion retailer for Millennial and Generation Z consumers, has reported total net sales of $1.1 billion in fiscal 2023 (FY23), marking a 3 per cent decline compared to the previous year. This decrease in sales was mirrored across various segments of the business, with the company facing a 6 per cent drop in gross profit to $554.2 million and a gross margin reduction of 192 basis points to 51.9 per cent.

Net income and adjusted EBITDA both saw significant declines, each dropping by 52 per cent to $28.1 million and $43.4 million, respectively. Diluted earnings per share (EPS) also fell by 52 per cent to $0.38, reflecting the combined impact of reduced net sales, lower gross profit, and increased operating expenses.

Breaking down the results further, the Revolve segment experienced a modest 2 per cent decrease in net sales to $904.5 million, while the FWRD segment saw a more pronounced decline of 9 per cent to $164.2 million. On the geographical front, domestic net sales decreased by 5 per cent to $870.4 million, but international net sales bucked the trend with a 6 per cent increase to $198.3 million.

For the fourth quarter of fiscal 2023 (Q4 FY23), Revolve Group added 33,000 active customers, a 9 per cent year-over-year (YoY) increase, bringing the total to 2,543,000. Despite a slight 1 per cent decrease in total net sales to $257.8 million, the quarter saw a sequential improvement from the third quarter's 4 per cent YoY decrease. Gross profit for the quarter inched up by 1 per cent to $134 million, and gross margin increased by 57 basis points to 52 per cent.

However, net income for the quarter fell by 56 per cent to $3.5 million, primarily due to rising operating expenses. Adjusted EBITDA and diluted EPS also saw decreases of 40 per cent and 55 per cent, respectively.

Segment-wise, the Revolve segment posted a 1 per cent increase in net sales to $220.0 million, while the FWRD segment's net sales dropped by 10 per cent to $37.8 million. Domestic sales decreased by 2 per cent to $213.7 million, but international sales grew by 7 per cent to $44.1 million.

"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. "Despite the challenging backdrop for consumer discretionary spending, we closed out the year with a solid fourth quarter that included improved sales trends, year-over-year expansion of our gross margin and early progress on selling and distribution cost efficiencies."

Fibre2Fashion News Desk (DP)

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