It has been about a month since the last earnings report for Revolve Group (RVLV Quick QuoteRVLV - Free Report) . Shares have lost about 6% 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 latest earnings report in order to get a better handle on the important catalysts.

Revolve Q1 Earnings Beat Estimate, Active Customers Grew 8% Y/Y

Revolve delivered a strong first quarter of 2026, with earnings of 20 cents per share rising 25% year over year. The result 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 average order value of $298, up 1%.

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. 

Geographically, U.S. net sales climbed 15% to $274 million. International net sales grew 20% to $68.9 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 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 segment gross margin slipped about 15 basis points to 54.4%. In contrast, FWRD segment gross profit surged 36% to $21.1 million, while segment 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, adjusted EBITDA margin declined 40 basis points year over year to 6.1% in the quarter under review.

RVLV Raises Marketing While Holding Distribution Rate

RVLV increased marketing spend to support major initiatives during the first quarter. Marketing expense rose to $54.2 million, or 15.8% of net sales, compared with $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 expense was $57.7 million, or 16.8% of net sales, matching the year-ago rate. Management pointed to a lower return rate year over year 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 expense improved to 12.3% of net sales from 12.8% as scale efficiencies offset higher investment.

RVLV Converts Profits Into Cash and Liquidity

RVLV continued to generate meaningful cash flow in the quarter. Net cash provided by operating activities was $49.4 million and 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 it remained debt free. Inventory ended the quarter at $245.1 million, down 3% from year-end 2025 and up 15% year over year, which management said was broadly consistent with the pace of net sales growth.

RVLV 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 has updated its expectations across several financial metrics. Gross margin is now projected to be in the range of 53.5% to 54%, compared to the prior outlook of 53.7% to 54.2%. Fulfillment expenses are expected to remain consistent at 3.2% to 3.4% of net sales, while selling and distribution expenses are also unchanged at 17.1% to 17.3% of net sales. Marketing expenses are projected to stay within the range of 15.3% to 15.8% of net sales.

General and administrative expenses have been revised upward and are now expected to fall between $164 million and $168 million, compared to the previous estimate of $161 million to $164 million. 

For the second quarter of 2026, the company expects gross margin to be 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 approximately $43 million.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -8.18% due to these changes.

VGM Scores

At this time, Revolve Group has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

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

Performance of an Industry Player

Revolve Group is part of the Zacks Textile - Apparel industry. Over the past month, Crocs (CROX Quick QuoteCROX - Free Report) , a stock from the same industry, has gained 12%. The company reported its results for the quarter ended March 2026 more than a month ago.

Crocs reported revenues of $921.46 million in the last reported quarter, representing a year-over-year change of -1.7%. EPS of $2.99 for the same period compares with $3.00 a year ago.

Crocs is expected to post earnings of $4.30 per share for the current quarter, representing a year-over-year change of +1.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Crocs. Also, the stock has a VGM Score of B.