A month has gone by since the last earnings report for Revolve Group (RVLV Quick QuoteRVLV - Free Report) . Shares have lost about 6.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Revolve Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Key Highlights

• Revenue: $324.4 million in Q4 FY25, up 10% year over year from $293.7 million and the Zacks Consensus Estimate of $305 million.
• EPS: 26 cents, up 53% year over year from 17 cents and the Zacks Consensus Estimate of 16 cents.
• Gross margin: 53.3%, up 78 basis points year over year from 52.5%. 
• Adjusted EBITDA: $26.3 million, up 44% year over year; Adjusted EBITDA margin of 8.1% (+188 bps YoY).
• Segment revenue: REVOLVE $276.6 million (+10% YoY); FWRD $47.8 million (+14% YoY).
• Geography: U.S. $260.1 million (+10% YoY); International $64.2 million (+13% YoY).

Revenue Drivers

Top-line growth accelerated to 10% year over year, a 6-point improvement from the third quarter. Management pointed to stronger trends across both segments and geographies despite the toughest comparisons of the year, with the 2-year stacked growth rate improving to 26% in the final quarter from 15% in the third quarter. 

Beauty sales grew 43% year over year, and men’s also posted double-digit growth. Active customers on a trailing-12-month basis reached 2.841 million, up 6% year over year, helping broaden the demand base.

Segment & Geographic Performance

REVOLVE, the core segment, delivered 10% year-over-year growth to $276.6 million, supported by stronger demand trends and higher order volume. FWRD, the luxury segment, rose 14% to $47.8 million, with management saying the business is benefiting from disruption among weaker luxury competitors. FWRD gross profit dollars increased 33%, and management described the segment’s margin profile as healthy. By region, the U.S. grew 10% to $260.1 million and International rose 13% to $64.2 million, while management continued to highlight China as an attractive longer-term expansion market.

Margins & Operating Efficiency

Gross margin expanded 78 basis points year over year to 53.3%. Management cited data-driven improvements to the markdown algorithm and a higher mix of owned brands, while also noting tariff and mix pressures in parts of the business. Expense discipline was also evident: marketing investment declined 74 basis points as a percentage of sales. Selling & distribution was modestly higher as a percentage of sales, largely due to lower AOV, while fulfillment was roughly flat year over year. Net income increased 58% year over year, and Adjusted EBITDA rose 44%, with margin reaching 8.1%.

Balance Sheet, Cash Flow & Capital

Liquidity remained solid. Cash and cash equivalents, including restricted cash, totaled $303.2 million at Dec. 31, 2025, and the balance sheet remained debt-free. Inventory entering 2026 was described as healthy and in line with growth, including at FWRD, while the Hong Kong fulfillment hub was said to be improving service levels and lowering logistics costs for China-related flows. In the quarter, operating cash flow was an outflow of $10.2 million and free cash flow was an outflow of $12.9 million, reflecting the company’s seasonally weakest cash-flow quarter. For fiscal 2025, operating cash flow was $59.4 million and free cash flow was $46.2 million. The company had $55.6 million remaining under its $100 million repurchase authorization at year-end 2025.

Management Commentary & Near-Term Outlook

Management reported a strong start to the first quarter of fiscal 2026, with net sales up approximately 16% year over year through the first seven weeks, while noting that prior-year comparisons become tougher through the rest of the quarter because January 2025 was unusually soft. 

First-quarter guidance calls for gross margin of 52.8% to 53.3%, with fulfillment at roughly 3.2% of sales, selling & distribution at roughly 17.1%, marketing at roughly 15.7%, and G&A at approximately $40.5 million.

For fiscal 2026, RVLV guided gross margin in the band of 53.7% to 54.2%, marketing to 15.3% to 15.8% of sales, and G&A to $161 million to $164 million. Management also pointed to a path toward consistently high-single-digit adjusted EBITDA margin over time, with owned brands and G&A leverage cited as the main drivers, while tariffs remain an important variable. Owned brand penetration is expected to build through 2026, and physical retail and international expansion remain longer-term growth levers.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Revolve Group has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Revolve Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.