Youth-focused online fashion retailer Revolve Group Inc. reported a 6 percent increase in sales for the first quarter on Wednesday, despite the negative impacts of Covid-19 on global business, the economy, and consumer spending.
For the first quarter ended March 31, 2020, the California-based retailer, which went public in June of last year, announced net sales of approximately $146 million, up from $137.3 million in the same period in the previous year.
The company’s Forward segment saw growth of 47 percent, reporting sales of $21.6 million for the quarter, while the namesake Revolve segment saw its sales increase 1 percent to $124.5 million.
Revolve Group’s quarterly net income totaled $4.2 million, down 16 percent from $4.96 million in the prior-year period.
“While the Covid-19 pandemic has created significant headwinds for many companies, including Revolve, I am very proud of how the organization has responded,” said co-founder and co-CEO, Mike Karanikolas, in a news statement.
“Our competitive position and our recent business results give me continued confidence in our long-term future,” he added.
“We began the first quarter strong with net sales for January and February combined increasing by more than 20 percent year-over-year and with our inventory turning approximately 20 percent faster year-over-year before the Covid-19 impact led to a significant decrease in net sales in the final weeks of March. Importantly, early in the second quarter, our efforts have helped drive improved net sales trends with sequential improvement in the year-over-year net sales declines for each of the past four weeks.”
Looking forward, Covid-19 has continued to have a negative impact on the company’s financial results into its second quarter.
For the full month of April 2020, Revolve saw net sales decrease approximately 40 percent year over year, while April has in recent years has been one of Revolve’s largest net sales months of the year as it capitalized on its “Revolve Festival” event held in the Coachella Valley, which has of course been postponed.
Still, the company said that its “at home” categories such as beauty products and loungewear are selling well, but that these represent a “relatively lower average selling prices than the average Revolve offerings often purchased for special occasions outside the home.”
Due to the unpredictability associated with Covid-19, the company did not provide net sales or Adjusted EBITDA guidance for 2020. However, gross margin for the full year 2020 is expected to be below the 48.6 percent gross margin reported for the first quarter of 2020.