US’ Revolve Group, a next-generation fashion retailer for Millennial and Generation Z consumers, has reported a notable 12 per cent year-over-year (YoY) increase in active customers, reaching 2.51 million in the third quarter for fiscal 2023 (Q3 FY23). However, the company saw net sales dip by 4 per cent to $257.6 million.

The decrease in sales was accompanied by a 6 per cent fall in gross profit to $133.2 million. This was partly due to a lower percentage of full-price sales and a reduced proportion of owned brand sales within the Revolve segment. The company's gross margin also suffered, contracting by 127 basis points to 51.7 per cent, the Revolve Group said in its Q3 FY23 results.

Net income starkly declined by 73 per cent YoY, settling at $3.2 million. Adjusted EBITDA followed suit, plummeting by 46 per cent to $9.5 million. This downward trend extended to diluted earnings per share (EPS), which dropped by a significant 75 per cent to $0.04.

In a more detailed financial breakdown, the Revolve segment's net sales saw a 2 per cent decrease, ending at $217.7 million. The FWRD segment fared worse, with net sales falling by 14 per cent to $39.9 million. The company's domestic sales were not spared, experiencing a 5 per cent decline to $207.2 million. International sales showed a slight resilience, with a marginal decrease of 1 per cent to $50.4 million.

Revolve Group reported a 5 per cent decrease in inventories to $202.9 million compared to $213.3 million from the same period last year.

"We achieved a key 2023 objective of rebalancing our inventory as the spread between our YoY inventory and sales trends was favourable in the third quarter for the first time in more than two years," said co-founder and co-CEO Mike Karanikolas. "This important accomplishment contributed to our strong and increased cash flows YoY, even in an environment where spending on discretionary products by our consumer demographic continues to be pressured."

Fibre2Fashion News Desk (DP)

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