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Jun 30, 2020
Revolve Q2 2020 Earnings Report
Revolve Group announced financial results, achieving record EPS and operating cash flow, and improved inventory turns.
Key Takeaways
Revolve Group reported a decrease in net sales by 12% year-over-year, but achieved record EPS of $0.20 and record operating cash flow of $54 million. The company's REVOLVE segment inventory turned approximately 30% faster year-over-year, contributing to strong cash flow. Despite the decline in net sales, net income and Adjusted EBITDA increased year-over-year due to effective cost controls and operating efficiencies.
Record EPS of $0.20 was achieved during the quarter.
Record operating cash flow of $54 million was generated.
REVOLVE segment inventory turned approximately 30% faster year-over-year.
Net sales comparisons improved each month throughout the second quarter, with June 2020 increasing YoY.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Since the end of Q2 2020, COVID-19 has continued to have a negative impact on REVOLVE’s operations and financial results. During the approximately 6 weeks since the end of the second quarter on June 30, 2020 (July 1, 2020 through August 10, 2020), net sales growth remained positive and has increased by a low single-digit percentage year-over-year during the period.
Positive Outlook
- Net sales growth remained positive.
- Net sales have increased by a low single-digit percentage year-over-year.
- Net sales in the beauty category increased more than 100% for the fourth consecutive month.
- Sales of other “at home” categories also increased significantly year-over-year.
- Newly sourced and expanded relationships with third-party vendors and owned brand suppliers.
Challenges Ahead
- COVID-19 has continued to have a negative impact on REVOLVE’s operations and financial results
- Majority of REVOLVE employees continue to work from their homes
- All in-person brand marketing events remain on hold for the foreseeable future
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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