Revolve(US:RVLV)2024-08-06 20:30Financial Performance - Gross margin for 2024 is projected at 54.0%, compared to 53.2% in 2023 and 51.9% in 2022[79] - Adjusted EBITDA for the three months ended June 30, 2024, is $20,474 thousand, up from $10,377 thousand in the same period of 2023[83] - Net income for the three months ended June 30, 2024, was $15,377 thousand, compared to $7,303 thousand in the same period of 2023[83] - Net sales for the three months ended June 30, 2024, increased by $8.7 million, or 3.2%, to $282.5 million compared to $273.7 million in the same period in 2023[118] - Net sales for the six months ended June 30, 2024, were $553.0 million, a slight decrease of $301,000 (0.1%) compared to $553.3 million in the same period in 2023, attributed to a 1.1% decrease in orders shipped[125] Customer Metrics - Active customers increased to 2,577 in 2024, compared to 2,458 in 2023[79] - Active customers increased during the period ended June 30, 2024, compared to the same period in 2023, driven by enhanced engagement and customer acquisition efforts[89] - Total orders placed reached 2,271 in the three months ended June 30, 2024, slightly up from 2,268 in the same period of 2023[79] - Total orders placed were flat in the three months ended June 30, 2024, compared to the same period in 2023, but decreased slightly in the six months ended June 30, 2024, primarily due to reduced promotional activity[91] Sales Segments - The REVOLVE segment generated $245.5 million in net sales for the three months ended June 30, 2024, a 4.4% increase from $235.1 million in the same period in 2023[101] - The FWRD segment generated $36.9 million in net sales for the three months ended June 30, 2024, a decrease of 4.3% from $38.6 million in the same period in 2023[102] - Net sales in the REVOLVE segment increased by 1.8% to $475.1 million for the six months ended June 30, 2024, while net sales in the FWRD segment decreased by 10.0% to $77.9 million[126] Expenses - Cost of sales for the three months ended June 30, 2024, was $129.9 million, representing 46.0% of net sales, unchanged from the same period in 2023[119] - Fulfillment expenses decreased by $129, or 1.4%, to $9.3 million for the three months ended June 30, 2024, representing 3.3% of net sales[120] - Selling and distribution expenses decreased by $451, or 0.9%, to $50.4 million for the three months ended June 30, 2024, accounting for 17.9% of net sales[121] - Marketing expenses decreased by $8.5 million, or 16.6%, to $43.0 million for the three months ended June 30, 2024, representing 15.2% of net sales[122] - General and administrative expenses increased by $4.9 million, or 17.2%, to $33.5 million for the three months ended June 30, 2024, accounting for 11.9% of net sales[116] Cash Flow and Investments - Free cash flow for the six months ended June 30, 2024, was $(26,653) thousand, compared to $(15,069) thousand in the same period of 2023[79] - For the six months ended June 30, 2024, the company generated $13.7 million in operating cash flow, a decrease of 60.5% compared to $34.7 million for the same period in 2023[140] - Net cash used in investing activities was $4.1 million for the six months ended June 30, 2024, compared to $2.1 million for the same period in 2023, indicating a 95.2% increase[141] - Net cash used in financing activities was $10.0 million for the six months ended June 30, 2024, primarily due to share repurchases, compared to a net cash provided of $0.4 million in the same period of 2023[142] Market and Economic Conditions - The overall economic environment, including inflation and employment rates, significantly impacts customer spending and, consequently, the company's financial performance[94] - The company has been impacted by high levels of inflation, which has affected supply chain costs, shipping, and labor, necessitating monitoring and potential pricing strategies[144] International Expansion - The company has successfully expanded internationally with limited investment, offering express shipping and hassle-free returns for international orders over $100[77] - The company plans to continue investing in international markets while maintaining focus on the core U.S. market[77] Accounting and Financial Policies - The company continues to evaluate its critical accounting policies and estimates, with no material changes reported since the last annual report[145] - The company has not engaged in foreign currency hedging transactions, and foreign currency transaction gains and losses have not been material to its consolidated financial statements[149] - The company’s cash and cash equivalents are primarily held in money market funds and cash deposits, with no significant impact expected from interest rate changes[148]