Revolve Group Q2 Earnings Call Highlights

Revolve reported strong Q2 growth: Net sales rose 12% year over year to $347 million, while active customers surpassed 3 million and orders increased 11%. July sales accelerated approximately 18%, supporting management’s expectation for full-year double-digit revenue growth. Profitability benefited from tariff refunds and operational improvements: Gross margin expanded to 56.6%, including a roughly 160-basis-point benefit from approximately $8 million in IEEPA tariff refunds. Adjusted EBITDA rose to $27 million, although increased marketing and other investments are expected to reduce the full-year adjusted EBITDA margin by about two percentage points. The company is investing in future growth: Initiatives include the REVOLVE Los Angeles owned brand, a third physical store, the fast-selling Grow-Good beauty venture with Cardi B, and AI-powered shopping and analytics tools. International sales grew 16%, led by strength in Mexico and a rebound in the Middle East. Revolve Group NYSE: RVLV reported second-quarter 2026 net sales of $347 million, up 12% from a year earlier, as growth accelerated across its REVOLVE and FWRD segments, domestic and international markets, and customer base. Management said July sales rose approximately 18% year over year, reinforcing its expectation for double-digit revenue growth for the full year. Co-founder and Co-CEO Mike Karanikolas said the company recorded its strongest quarterly new-customer acquisition performance in four years. Trailing 12-month active customers rose 11% year over year, increasing by 115,000 during the quarter and surpassing 3 million for the first time. Total orders increased 11% to 2.7 million, while average order value was $299, compared with $300 a year earlier. Are These 3 Clothing Retailers All Dressed Up And Ready To Rally? “We had a very solid quarter, highlighted by strong and profitable growth across segments and geographies,” Karanikolas said. He attributed the momentum to investments in brand building, technology and artificial intelligence, site experience, and category expansion. Sales Growth Across Segments and Markets REVOLVE segment sales rose 13% year over year in the second quarter, while FWRD sales increased 11%. Domestic revenue advanced 11%, and international sales climbed 16%. International markets represented nearly 23% of total net sales, the company’s highest reported mix. Karanikolas said Mexico again posted particularly strong growth, while the Middle East rebounded to double-digit growth after a weak start to the quarter. Management said it capitalized on demand in the region while some competitors reduced activity. Fashion apparel outpaced overall sales growth, led by wardrobe-essential categories including tops, pants, outerwear, intimates, shorts and jeans. Beauty and men’s products also grew faster than the overall business on a combined basis, according to management. During the question-and-answer session, Karanikolas said July’s sales acceleration reflected internal execution rather than a broad consumer trend. He cited heavier marketing investments during the second quarter and said the company was seeing broad-based strength across revenue, customer acquisition, segments and geographies. Profitability, Tariff Refunds and Investment Spending Second-quarter gross margin was 56.6%, up from 54.1% a year earlier. The result included an approximately 160-basis-point benefit from refunds of tariffs imposed under the International Emergency Economic Powers Act, or IEEPA. Excluding the refunds, gross margin increased roughly 90 basis points, which management said was driven primarily by AI-...