US retailer Revolve Group posts gross profit of $147.7 mn in Q2 FY23

Gross margin was 54 per cent, a YoY decrease of 198 basis points. This primarily reflected a lower mix of net sales at full price in Q2 FY23, compared to the same quarter the previous year, the company said in a press release.

Revolve Group's net income was $7.3 million, a steep decrease of 55 per cent YoY. The company attributed this drop primarily to the decline in net sales, a reduction in gross profit YoY, and continued pressure on certain operating expenses. Furthermore, Adjusted EBITDA was $10.4 million, a YoY decrease of 61 per cent. The diluted earnings per share (EPS) also decreased by 55 per cent to $0.10.

The retailer reported that the number of trailing 12-month active customers increased by 34,000 during Q2 FY23. This represents a growth of 14 per cent YoY, resulting in a total of 2,458,000 active customers as of June 30, 2023.

Looking at the company's two business segments, the Revolve segment net sales were $235.1 million, a decrease of 4 per cent YoY. Meanwhile, the FWRD segment net sales were lower at $38.6 million, marking a YoY decrease of 15 per cent.

Domestic net sales decreased by 7 per cent to $222.9 million, while international net sales saw a YoY increase of 4 per cent to reach $50.9 million, the release added.

Inventory as of June 30, 2023, stood at $205.3 million, down 2 per cent, or $3.2 million, from $208.5 million as of June 30, 2022.

"Aspirational consumer discretionary spending remains challenging, particularly on goods in the US for our younger customer demographic, which is evident in our second quarter financial results," said co-founder and co-CEO Mike Karanikolas. "Regardless of macroeconomic challenges, we remain on offense and our team continues to deliver great progress on several important growth and efficiency initiatives that we believe will further strengthen our foundation for market share gains and profitable growth over the long term."

ALCHEMPro News Desk (DP)