What Happened?
Shares of online fashion retailer Revolve (NASDAQ: RVLV) jumped 7.7% in the morning session after the company reported strong fourth-quarter earnings and revenue that surpassed analyst expectations.
Revolve posted quarterly earnings of $0.26 per share, beating estimates of $0.16. The fashion retailer's net sales reached $324 million, marking a 10% increase from the same period in the previous year. This revenue growth was driven by a 10% rise in the REVOLVE segment and a 14% increase in the FWRD segment. Profitability also showed significant improvement, with net income jumping 58% year-over-year to $19 million. The better-than-expected results across the board appeared to fuel investor confidence in the company's performance.
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What Is The Market Telling Us
Revolve’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 17% on the news that the company posted third-quarter financial results that significantly beat profit expectations, driven by stronger margins. While revenue grew 4.4% year-over-year to $295.6 million, it narrowly missed Wall Street's estimates. However, investors focused on the bottom line, where earnings per share (EPS) of $0.29 more than doubled the consensus estimate of $0.12. The outperformance was fueled by a significant improvement in gross margin, which expanded by 3.5 percentage points to 54.6%. Additionally, the company's adjusted EBITDA of $25.35 million surpassed expectations by over 77%. Overall, the market cheered the impressive profitability, overlooking the slight revenue miss.
Revolve is down 10.4% since the beginning of the year, and at $26.50 per share, it is trading 15.8% below its 52-week high of $31.45 from December 2025. Investors who bought $1,000 worth of Revolve’s shares 5 years ago would now be looking at an investment worth $574.73.
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