Revolve Group, Inc. (RVLV Quick QuoteRVLV - Free Report) delivered a strong first quarter of 2026, with earnings of 20 cents per share rising 25% year over year. The results beat the Zacks Consensus Estimate of 18 cents by 11.1%, while net sales increased 16% to $342.9 million and topped the consensus mark of $329 million by 4.3%.

Demand indicators improved as trailing 12-month active customers grew 8% year over year to 2.926 million, supported by 12% growth in total orders to 2.581 million and an average order value of $298, up 1%.

RVLV Shows Broad-Based Growth Across Segments

Revolve’s segment results underscored the balance of the quarter’s top-line performance. Net sales in the REVOLVE segment rose 15% year over year to $293.2 million, while FWRD net sales increased 17% to $49.6 million, which management characterized as the strongest growth rates since 2022. The Zacks Consensus Estimate of the REVOLVE and FWRD segment’s net sales were pegged at $283.5 million and $47.4 million, respectively, in the first quarter.

Geographically, U.S. net sales climbed 15% year over year to $274 million, which beat the consensus estimate of $264.8 million. International net sales grew 20% to $68.9 million and surpassed the consensus estimate of $67.5 million. Management said the breadth of growth across major regions was notable even with the Middle East pressure late in the quarter.

Revolve Expands Gross Margin as FWRD Improves Mix

RVLV posted gross profit of $180.6 million, up 17% year over year, as the gross margin expanded 68 basis points to 52.7%. Segment profitability showed a clear divergence that helped explain the consolidated margin lift. REVOLVE segment gross profit rose 14.9% year over year to $159.5 million, but the segmental gross margin slipped about 15 basis points to 54.4%.

In contrast, the FWRD segment’s gross profit jumped 36% year over year to $21.1 million, while the segment’s gross margin expanded about 585 basis points to 42.5%, which management cited as a key driver behind the overall margin improvement.

Income from operations was $15.7 million, implying a 4.6% operating margin for the quarter versus 5% a year ago, as the company scaled brand-building initiatives and continued to fund platform enhancements.

Adjusted EBITDA rose 9% year over year to $21.1 million. We note that the adjusted EBITDA margin declined 40 basis points year over year to 6.1% in the quarter under review.

RVLV Raises Marketing Spend While Holding Distribution Rate

Revolve increased marketing spend to support major initiatives during the first quarter. Marketing expenses rose to $54.2 million, or 15.8% of net sales, from $42.4 million, or 14.3%, in the year-ago quarter. The company said the increase largely reflected incremental brand marketing investments tied to growth initiatives, including the launch of its first-ever namesake label, REVOLVE Los Angeles.

Selling and distribution expenses were $57.7 million, or 16.8% of net sales, matching the year-ago rate. Management pointed to a lower year-over-year return rate as a benefit, partially offset by higher shipping costs. Fulfillment costs were $10.8 million, or 3.1% of net sales, improving slightly from 3.2% a year ago, while general and administrative expenses improved to 12.3% of net sales from 12.8% as scale efficiencies offset higher investment.

Revolve Converts Profits Into Cash & Liquidity

RVLV continued to generate meaningful cash flow in the quarter. Net cash provided by operating activities was $49.4 million and the free cash flow was $44.9 million, increasing 9% and 5% year over year, respectively.

The balance sheet remained a key advantage. Cash and cash equivalents were $335.8 million at March 31, 2026, and the company reported that it remained debt-free. Inventory ended the quarter at $245.1 million, down 3% from the end of 2025 and up 15% year over year, which management said was broadly consistent with the pace of net sales growth.

RVLV Details Growth Initiatives

Revolve highlighted several initiatives it believes can compound over time. The company introduced REVOLVE Los Angeles as its first namesake label and cited early progress in elevating brand awareness through expanded marketing channels. It also launched Grow-Good Beauty hair care products in partnership with Cardi B, which sold out quickly and surpassed 640,000 Instagram followers soon after launch.

Management also emphasized momentum in international and technology priorities. The company described a resurgence in Mexico following upgraded service levels and a refreshed marketing playbook, with new customers in Mexico increasing more than 80% year over year in the first quarter. Revolve also discussed progress in AI, including a recently launched internally developed generative AI product Q&A feature on the REVOLVE mobile channel for dresses, with plans to broaden testing.

Revolve Updates 2026 Outlook

The company’s 2026 business outlook reflects a cautious but steady stance, shaped by ongoing macroeconomic uncertainty. Management makes it clear that factors such as geopolitical tensions, tariffs, inflation, supply-chain instability and currency fluctuations are all being actively considered, especially because they can directly affect consumer spending and operating costs.

For 2026, the company updated its expectations across several financial metrics. The gross margin is projected to be 53.7-54.2% compared with the prior mentioned 53.5-54%. Fulfillment expenses are expected to be consistent at 3.2-3.4% of net sales, while selling and distribution expenses are unchanged at 17.1-17.3% of net sales. Marketing expenses are projected to be 15.3-15.8% of net sales.

General and administrative expenses have been revised downward and are expected to fall $161-$164 million compared with the previously stated $164-$168 million. 

For the second quarter of 2026, the company expects the gross margin between 54.1% and 54.6%. Fulfillment expenses are projected at 3.2% of net sales, while selling and distribution expenses are expected to be 17.5% of net sales. Marketing expenses are estimated at 15.7% of net sales, and general and administrative expenses are projected to be $43 million.

RVLV Stock Past 3-Month Performance

Image Source: Zacks Investment Research

Shares of this Zacks Rank #3 (Hold) company have lost 13.3% in the past three months compared with the industry’s decline of 11.9%.

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