US’ Revolve Group, a next-generation fashion retailer for Millennial and Generation Z consumers, has reported a slight dip in net sales in the first quarter of fiscal 2024 (Q1 FY24), recording $270.6 million, a 3 per cent decrease compared to the previous year. The company cited an increase in full-price sales that was unfortunately overshadowed by reduced markdown sales.

Despite the drop in overall sales, Revolve saw its active customer base grow by 5 per cent over the past twelve months, reaching 2.551 million as of March 31, 2024. The company's gross profit saw a modest increase of 2 per cent, amounting to $141.5 million. The gross margin significantly improved by 250 basis points to 52.3 per cent.

However, net income fell sharply by 23 per cent to $10.9 million, which included a $2.8 million insurance recovery ($2.1 million, net of taxes), the company said in a press release.

Adjusted EBITDA also saw a decline, down 12 per cent year-over-year (YoY) to $13.3 million, further reflecting the financial strains from escalated operating costs. Inventory levels were up, with a 6 per cent increase to $201.8 million from the previous year.

By segment, the Revolve segment experienced a slight decrease in net sales by 1 per cent to $229.6 million. More significantly, the FWRD segment saw a 15 per cent decline in net sales, totalling $41.0 million. Both domestic and international sales decreased by 3 per cent, recording $219.1 million and $51.5 million, respectively.

"We delivered significant expansion of our gross margin and year-over-year efficiency in our variable logistics costs in the first quarter of FY24, which contributed to strong profitability and cash flow generation that further strengthened our balance sheet," said co-founder and co-CEO Mike Karanikolas. "I am also encouraged that we returned to positive growth in net sales year-over-year during the final month of our first quarter of FY24 as well as during the first month of our second quarter of FY24."

Fibre2Fashion News Desk (DP)

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