US' Revolve Q2 FY25 sales rise 9%, net income dips on one-off charges

The active customers rose 6 per cent to 2.74 million, with total orders placed growing 7 per cent. Despite these operational gains, net income fell 35 per cent to $10 million due to a swing in other income to a $2.9 million expense, higher foreign exchange losses, a $2.4 million non-cash charge from a subsidiary disposal, and an increased effective tax rate of 33.7 per cent.

Adjusted EBITDA improved 12 per cent YoY to $22.9 million, reflecting improved fulfilment and distribution efficiency. Diluted EPS dropped to $0.14 from $0.21 in Q2 FY24, Revolve said in a press release.

The international net sales grew 17 per cent to $67.3 million, outpacing the 7 per cent growth in domestic sales. Cash and cash equivalents stood strong at $310.7 million, up 27 per cent YoY, with the company maintaining a debt-free balance sheet. Free cash flow for the quarter was $9.6 million.

In Q2 FY25, the Revolve segment generated net sales of $268.4 million, marking a 9 per cent YoY increase. The Fwrd segment followed with $40.6 million in net sales, up 10 per cent. Domestically, sales reached $241.6 million, a 7 per cent rise, while international sales surged 17 per cent YoY to $67.3 million.

“This is our highest Adjusted EBITDA margin in three years, and our highest operating cash flow for any second quarter in the past four years,” said Mike Karanikolas co-founder and co-CEO at Revolve. “I am especially proud of the team for delivering the strong second quarter results within such a volatile environment and amidst all the macro uncertainty surrounding tariff policy announcements in early April.”

Looking ahead, Revolve expects gross margin for FY25 between 52.1 to 52.6 per cent—raised from the prior forecast of 50 to 52 per cent—while maintaining guidance for fulfilment, selling, and marketing expenses. The company also noted that July 2025 net sales grew approximately 7 per cent YoY.

Revolve’s Q3 FY25 guidance includes a gross margin between 51.2 and 51.7 per cent and G&A expenses of $38.5 million.

“Our ability to deliver profitable growth and market share gains in the second quarter, while at the same time continuing to invest in exciting long-term growth drivers, is a true reflection of the platform we have built, our operating excellence, and the team's ability to execute,” said Michael Mente, co-founder and co-CEO at Revolve. “Importantly, our healthy cash flow generation gives us the capacity to continue to invest in exciting initiatives such as AI enhancements, developing new owned brands, physical retail exploration, and category expansion that collectively have the potential to accelerate our profitable growth and market share gains for years to come.”

ALCHEMPro News Desk (SG)