--- title: "Revolve Group Signals Strong Growth in Earnings Call" type: "News" locale: "en" url: "https://longbridge.com/en/news/295725094.md" description: "Revolve Group reported Q2 2026 net sales of $347 million, up 12% year-over-year, marking its third consecutive quarter of double-digit growth. Net income reached $19 million with diluted EPS of $0.26. The company highlighted expanding margins, an 11% increase in active customers surpassing 3 million, and international sales hitting a record mix of nearly 23%. Despite higher marketing and logistics costs pressuring near-term margins, management emphasized strong underlying profitability, AI-driven efficiency gains, and strategic investments supporting long-term growth." datetime: "2026-08-13T00:30:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295725094.md) - [en](https://longbridge.com/en/news/295725094.md) - [zh-HK](https://longbridge.com/zh-HK/news/295725094.md) generator: "portal-rs" --- # Revolve Group Signals Strong Growth in Earnings Call Revolve Group ((RVLV)) has held its Q2 earnings call. Read on for the main highlights of the call. ### Claim 55% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks Revolve Group’s latest earnings call struck an upbeat tone, with management emphasizing strong top-line growth, expanding margins excluding one-offs, and accelerating customer metrics. Executives acknowledged near-term pressure from heavier marketing, logistics costs, and higher inventory, but framed these as deliberate investments supporting a widening competitive moat and long-term earnings power. ## Net Sales Growth — Third Straight Double-Digit Quarter Revolve delivered consolidated Q2 2026 net sales of $347 million, up 12% year over year and marking a third consecutive quarter of double-digit growth. The core REVOLVE segment grew 13% while FWRD luxury advanced 11%, with total orders rising 11% to 2.7 million, underscoring broad-based demand across the platform. ## Profitability and Margin Quality Improve Net income reached $19 million and diluted EPS came in at $0.26, including a $0.06 boost from tariff refunds under IEEPA. Adjusted EBITDA climbed to $27 million from $23 million a year ago, a roughly 17% increase, aided by a $5.6 million refund but still pointing to healthier underlying profitability despite heavier spending. ## Active Customer Base Accelerates Revolve’s trailing 12‑month active customers grew 11% year over year, surpassing the 3 million mark, signaling renewed engagement momentum. The company added about 115,000 active customers in the quarter, its biggest quarterly gain in four years, suggesting marketing and merchandising strategies are landing well with shoppers. ## International Markets Hit New Mix High International net sales jumped 16% year over year, outpacing domestic growth and pushing overseas revenue to nearly 23% of total net sales, the highest mix in company history. The Middle East and Mexico were singled out for standout performance, highlighting growing global brand resonance and a widening geographic earnings base. ## Gross Margin Gains Powered by AI Reported consolidated gross margin was 56.6%, helped by roughly 160 basis points of tariff refund benefit, but the core story was still positive. Excluding refunds, gross margin expanded about 90 basis points versus last year, driven by AI and data‑driven markdown algorithms that are sharpening pricing decisions and limiting unnecessary discounting. ## Owned Brands and FWRD Luxury Outperform Owned brands on the REVOLVE platform increased their penetration for the sixth straight quarter, supporting margin and differentiation. FWRD sales grew 11%, roughly four times estimated luxury market growth, with handbags rebounding, the FWRD Summer Club capsule gaining nearly 50% in sales, and the second REVOLVE Los Angeles drop showing stronger sell‑through than the first. ## Grow‑Good JV with Cardi B Shows Explosive Start The Grow‑Good beauty joint venture, fronted by Cardi B, saw repeated sell‑outs and quickly amassed about 670,000 Instagram followers, signaling strong viral traction. Early indicators include an average product review of 4.9 out of 5, repeat purchase rates around 33% in early July, and sub‑$20 price points that are attracting largely incremental, younger customers. ## Tech, AI and Physical Retail Build Long-Term Moat Management highlighted AI deployments improving markdowns, search relevance, and internal analytics, including plain‑English data queries and image search tests, as efficiency and conversion drivers. Revolve is also pushing into brick‑and‑mortar, preparing its third physical store at Aventura Mall for a Q4 opening, while returning about $10 million via buybacks and maintaining $312 million in cash with no debt. ## Higher Marketing and G&A Weigh on Margins Marketing spend rose to 16.5% of net sales, up 130 basis points year over year and above prior guidance, as management leaned into growth and brand building that it estimates will trim about two points from 2026 EBITDA margin. General and administrative expenses climbed 13% to $43.4 million, with full‑year G&A now guided to $170 million to $172 million as Revolve builds capabilities for scale. ## Logistics and Distribution Costs Under Pressure Selling and distribution costs increased to 17.9% of net sales, up 47 basis points year over year, reflecting higher shipping expenses for international customers. Management cited variable fuel charges, surcharges, and broader logistics cost inflation as headwinds, but sees these as manageable relative to the growth opportunity and is working on efficiency offsets. ## Cash Flow and Working Capital Temporarily Soft Q2 saw net cash used in operating activities of $8 million and free cash flow of negative $11 million, a reversal driven primarily by unfavorable working capital timing. Even so, year‑to‑date operating cash flow stood at $41 million and free cash flow at $34 million, suggesting underlying cash generation remains healthy once inventory and timing effects normalize. ## Inventory Elevated but Two-Year Trends Healthier Inventory ended the quarter at $276 million, up 25% year over year and higher than management’s preferred level in the near term. Executives argued the comparison is distorted by tariff‑related receipt delays last year and noted that on a two‑year stacked basis, net sales have outpaced inventory growth by roughly five percentage points, indicating no structural overhang yet. ## Near-Term Margin Reliance on Tariffs For Q3, Revolve expects gross margin of 53.5% to 54.0%, implying an 88 basis‑point decline at the midpoint versus last year’s tough comparison. Some current margin performance reflects tariff refunds under IEEPA, and excluding these benefits margins would be lower, with about $1.4 million of potential refunds still not baked into reported numbers or guidance. ## Input Costs and Tariff Policy Create Overhang Management is bracing for gradually higher input costs from petroleum‑based synthetic fabrics, mills, factories, and transportation, all of which are embedded in the outlook. New Section 301 tariffs averaging about 12.5% are already factored into guidance, but future phases remain uncertain and could add further margin pressure if enacted. ## Guidance Highlights Strong Q3 Momentum and Investment Looking ahead, Revolve guided Q3 gross margin to 53.5%–54.0% and reiterated full‑year gross margin of 53.5%–54.0%, implying modest expansion at the midpoint despite cost headwinds. Management expects Q3 fulfillment costs of roughly 3.4% of sales, selling and distribution around 17.5%, marketing at about 15% in Q3 and above 16% in Q4, G&A of about $43.5 million in Q3 and $170–$172 million for the year, and an effective tax rate of 24%–26%, with July net sales already accelerating to about 18% growth. Revolve’s earnings call painted a picture of a growth company leaning into its strengths while absorbing near-term cost and cash flow volatility. For investors, the key takeaway is a business driving double-digit sales and customer gains, expanding underlying margins via AI and owned brands, and betting aggressively on marketing, international expansion, and new concepts like Grow‑Good to sustain that momentum. ### Related Stocks - [RVLV.US](https://longbridge.com/en/quote/RVLV.US.md) ## Related News & Research - [Revolve Group Recently Became Aware Of Unauthorized Access To Certain Of Its Systems](https://longbridge.com/en/news/303740161.md) - [Revolve Group Says Cyber Intrusion May Expose Customer Payment Card Data](https://longbridge.com/en/news/303724515.md) - [Top Wall Street analysts are bullish on these 3 stocks for the long haul](https://longbridge.com/en/news/303858219.md) - [Nextpower Inc (NXT) Gets a Buy from Wells Fargo](https://longbridge.com/en/news/303840692.md) - [MGO One Seven LLC Buys 7,052 Shares of Taiwan Semiconductor Manufacturing Company Ltd. $TSM](https://longbridge.com/en/news/303855308.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**