Revolve sales boosted by Forward business
Youth-focused online fashion retailer Revolve Group, Inc. reported a 16% increase in sales in the fourth quarter on Tuesday, as the company's high-end Forward business came into its own, posting particularly strong growth.
For the fourth quarter ended December 31, 2019, the California-based retailer, which went public in June of last year, announced net sales of $147.6 million, up from $127.7 million in the same period in the previous year.
The company’s Forward segment saw growth of 33%, reporting sales of $22.3 million for the quarter, while the namesake Revolve segment saw its sales increase 13% to $125.2 million.
Although the Revolve Group’s overall sales performance in the fourth quarter was solid, it’s worth noting that it represents a deceleration compared to the growth of 22.8% and 22.5% seen by the company in Q2 and Q3, respectively – a slowdown reflected in the fact that the company’s total fourth-quarter revenues came in under analysts’ expectations of $152.2 million.
Revolve Group’s quarterly net income totaled $8.4 million, an increase of 9% from $7.7 million in the prior-year period.
The company’s full-year 2019 sales came to $601.0 million, rising 21% from the previous year’s $498.7 million. $527.3 million of this total was contributed by the Revolve segment, where sales increased 22% year-over-year, with Forward accounting for the remaining $73.7 million, a figure representing a 13% increase from the segment’s revenues in the previous year.
Revolve Group’s annual net income for fiscal 2019 also posted a rise of 16% compared to 2018, increasing from $30.6 million to $35.7 million.
“We are proud to extend our long track record of achieving top-line growth and profitability, delivering net sales growth of over 20%, continued growth in profitability and exceptional cash flow in 2019,” commented Revolve co-founder and co-CEO Michael Mente in a release.
Looking to the future, Revolve Group expects to report net sales in the range of $679 million to $703 million in fiscal 2020, representing growth of between 13% and 17%. The company’s adjusted EBITDA is expected to be in the range of $56 million to $61 million.
The retailer’s outlook for net sales takes into account an estimated 1 to 3 point negative impact related to the ongoing coronavirus outbreak in China. Revolve expects to be affected by supply constraints related to both its own brand and, to a lesser extent, third-party labels, as well as reduced consumer demand in China.
Co-founder and co-CEO Mike Karanikolas, however, is optimistic about the company’s prospects moving forward.
“We are excited about our 2020 initiatives to continue building on the recent momentum in the Forward segment and International markets, while further investing in the core Revolve segment, including enhancing the owned brands platform and continuing to innovate in marketing, technology and customer experience,” he explained.
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