[music] A little over a month ago, we got a really impressive quarter from a firm holdings. The buy now pay later powerhouse. This guy's posted a 12-cent earnings beat off an 11centent basis with much higher than expected revenue.The stock shot up more than 11% the next day, reaching a high of $79 and change a couple days later. Since then though, a firm has gradually drifted lower because of concerns about the state of the consumer to the point where it's now back to $65 and change. trading like that great ...

Summary of Revolve's Q3 Earnings Call Company Overview - **Company**: Revolve - **Industry**: Digital Fashion Retail - **Founded**: 2003 - **Segments**: Revolve and Forward - **Recent Developments**: Expansion into physical retail with pop-up stores in Aspen and a new store opening at The Grove in Los Angeles [1][4][5] Key Financial Highlights - **Q3 Performance**: Achieved strong margins and solid profitability despite tariff headwinds - **Margin Growth**: Approximately 300 basis points year-over-year margin increase, marking one of the highest margin quarters ever [4][5] - **Drivers of Success**: - Effective tariff mitigation strategies - Improvements in merchandise assortment algorithms, leading to reduced markdowns [5][6] - Healthier inventory position compared to the previous year [7] Revenue Trends - **Q4 Outlook**: Early indicators show re-acceleration in revenue growth, with mid-single-digit growth observed in October [8][9] - **Strategic Decisions**: Reduced investment in certain promotions to enhance margins, resulting in double-digit gross profit gains in Q3 [9][10] - **Consumer Behavior**: Consumers are holding up well, with rational promotions during the holiday season [11][12] AI and Technology Investments - **AI Utilization**: Significant improvements in search algorithms and marketing reach through AI, leading to double-digit gains in revenue [15][17] - **Future Developments**: Continued investment in AI for design iteration, invoice processing, and customer engagement technologies [18][19][20] Competitive Landscape - **Forward Platform**: Gaining market share despite industry challenges, with a focus on sustainable business practices and avoiding excessive discounting [28][30] - **Market Positioning**: Positioned well for long-term success due to a focus on margins and brand partnerships [30][31] Omnichannel Strategy - **Physical Store Expansion**: Plans to open flagship stores, leveraging online brand strength to capture offline market share [33][34] - **Customer Acquisition**: New physical stores are attracting new customers, enhancing online engagement [35] Marketing Strategy - **Innovative Marketing**: Continued evolution of marketing strategies, including successful events like Revolve Festival and partnerships with brands like the Lakers [36][40] - **Social Media Growth**: Significant growth in marketing efficiency through platforms like TikTok and YouTube [43][44] International Growth - **Market Expansion**: International sales account for about 20% of the business, with significant growth in China (50% year-over-year in Q3) [45][46] - **Live Streaming Success**: Successful marketing efforts in China, including live streaming, which has potential for scalability [46] Inventory and Product Mix - **Healthy Inventory Levels**: Strong inventory management, with a focus on balancing third-party and own brand products [48][49] - **Category Expansion**: Growth in newer categories like beauty and men's fashion, with plans for continued investment [51][52] Pricing Strategy - **Average Order Value (AOV)**: Increased AOV driven by higher full-price realization and some price increases due to tariffs [54][55] - **Tariff Mitigation**: Effective strategies in place to manage tariff impacts while maintaining competitive pricing [56][57] Future Priorities for 2026 - **Key Focus Areas**: - Expansion of physical stores - Continued innovation in marketing and own brand partnerships - Ongoing investments in technology and AI to drive operational efficiencies [59][60][61]

Financial Data and Key Metrics Changes - The company has a strong balance sheet with over $300 million in cash and no debt, allowing for investment during challenging times [4] - Gross margin for the year is guided at approximately 53.5%, with a clear path to reach 55% through optimization and own brand mix [50][68] - The company reported a 350 basis point increase in gross margin and an 11% increase in gross profit dollars in Q3 [47] Business Line Data and Key Metrics Changes - The Forward segment, which targets higher-end consumers, has shown positive growth and improving margins, indicating market share gains [6][7] - Own brands accounted for about 18% of the Revolve segment in 2024, with plans to increase this mix while maintaining quality [31] Market Data and Key Metrics Changes - Revolve's sales in mainland China doubled over the last few years, with a 50% year-over-year increase in the latest quarter [36][38] - The company is seeing a stronger performance in the higher-income consumer segment, while the lower-income segment is experiencing softness [8][9] Company Strategy and Development Direction - The company is focused on leveraging AI for growth and efficiency, including customer-facing initiatives and back-office optimizations [11][15] - Physical retail expansion is being approached cautiously, with a disciplined rollout strategy based on data from existing stores [26][27] - The company is investing in a preferred customer program to enhance service for high-income consumers [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the consumer, particularly among younger demographics [8] - The company is confident in its ability to navigate pricing pressures without significant customer resistance [40][41] - Future growth is expected to come from a combination of gross margin improvements and operational efficiencies [67][70] Other Important Information - The company is exploring opportunistic M&A to fill product gaps and accelerate category expansion [73] - A buyback plan is in place, allowing for capital allocation flexibility alongside organic growth investments [73] Q&A Session Summary Question: How is the company leveraging AI for growth? - The company has developed its own internal search algorithm that outperforms third-party solutions, driving significant conversion gains [11][15] Question: What is the strategy for physical retail expansion? - The company is taking a disciplined approach, testing performance in existing stores before scaling further [26][27] Question: How is the company managing pricing and customer resistance? - The company has not seen significant resistance to price increases and aims to maintain competitive pricing for own brands [40][41] Question: What are the expectations for gross margin progression? - The company aims to bridge to a 55% gross margin through optimization and an increased mix of own brands [50][68] Question: What is the outlook for return rates? - Return rates have increased slightly due to markdown strategies, but the company expects long-term improvements as product diversification continues [56][57]

Financial Data and Key Metrics Changes - The company reported a gross margin of approximately 53.5% for the year, with expectations to reach 55% in the future due to healthy inventory and optimization strategies [50][67] - Gross profit dollars increased by 11% year-over-year, reflecting a 350 basis point improvement in gross margin [47] Business Line Data and Key Metrics Changes - The Forward segment, which focuses on higher-end products, has shown positive growth and improving margins, indicating market share gains [6][7] - Own brands accounted for about 18% of the Revolve segment in 2024, with plans to increase this mix, which previously peaked at 36% in 2019 [32][34] Market Data and Key Metrics Changes - Revolve's business in mainland China doubled over the past few years, with a 50% year-over-year increase in the latest quarter [37][39] - The company is seeing a stronger performance in the higher-income consumer segment, while the lower-income segment has shown some softness [10][11] Company Strategy and Development Direction - The company is focusing on physical retail expansion, having opened stores in Aspen and planning to open another in The Grove, LA, to enhance brand presence and customer experience [26][27] - Investments in AI and technology are being leveraged to improve customer experience and operational efficiencies across various business functions [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of the consumer, particularly among higher-income demographics, despite broader economic challenges [10][11] - The company aims to maintain a disciplined approach to physical retail expansion, ensuring that new stores are strategically evaluated based on performance data [28][29] Other Important Information - The company has a strong balance sheet with over $300 million in cash and no debt, allowing for continued investment in growth initiatives [73] - The marketing strategy has shifted towards more efficient spending, with successful events like the Revolve Festival driving higher engagement without increased budgets [62] Q&A Session Summary Question: How is the company adapting to the challenges in the luxury market? - Management noted that they are gaining market share in the luxury segment while others struggle, attributing success to product quality and customer service [6][7] Question: What is the strategy for physical retail expansion? - The company plans to open stores gradually, focusing on data-driven decisions to assess performance before further rollouts [26][28] Question: How is the company leveraging AI? - AI is being used to enhance customer experience through personalized shopping tools and to optimize inventory management and logistics [13][19]

Question-and-Answer SessionSo before we begin, a few quick housekeeping items. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. And with that, let's kick it off. I want to start a little bit higher level. For those in the audience who may be newer to the Revolve story, can you provide some background on Revolve's business model, the strate ...

Revolve Group (NYSE: RVLV) 2025 Conference Summary Company Overview - **Company**: Revolve Group - **Business Model**: Founder-led and data-driven fashion retailer targeting next-generation consumers with a focus on social media platforms like Instagram and TikTok [7][8] Key Points Business Strategy and Differentiation - **Founder Ownership**: Co-founders Mike and Michael own approximately 44% of the business, fostering a long-term growth mindset [7] - **Data-Driven Approach**: The company utilizes data for inventory management, marketing, and overall decision-making, which has been integral since inception [8] - **Consistent Growth**: Revolve has demonstrated profitable growth over the past 20 years, positioning itself as a leader in the fashion e-commerce space [8] Consumer Landscape - **Consumer Resilience**: Despite economic challenges, consumer spending remains resilient, particularly among higher-income brackets [10] - **Q4 Performance**: October sales showed mid-single-digit growth, translating to a 16%-18% increase over two years, indicating a recovery towards double-digit growth [12] Revenue and Growth Strategies - **Revenue Deceleration**: Q3 saw a 4% year-over-year growth, attributed to tough comparisons and strategic promotional cuts that improved gross margins by 350 basis points [13][14] - **Future Growth Initiatives**: New brand launches, including Sofia Richie Grainge and Halo, are expected to drive revenue growth in 2026 [15] Owned Brands Performance - **Increase in Owned Brand Revenue**: Owned brands accounted for 18% of revenue in 2024, up from 36% in 2019, with expectations for continued growth [18] - **International Launches**: Successful exclusive owned brand launches in Mainland China, with net sales growth exceeding 50% year-on-year [21] AI and Technology Integration - **AI Utilization**: Revolve is leveraging AI for personalized customer experiences, inventory management, and operational efficiencies [24][26] - **Agentic Commerce**: The company is exploring agentic AI features, with a significant increase in AI referrals to the site [30] Physical Retail Expansion - **Physical Store Strategy**: Revolve is expanding into physical retail, with successful performance metrics from its Aspen store and plans for a new location at The Grove in LA [34][36] - **Market Testing**: The company is gathering data from its physical locations to inform future expansion strategies [36] Financial Performance and Projections - **EBITDA Margin Goals**: Targeting a return to double-digit EBITDA margins, with a goal of reaching 55% gross margin through owned brand expansion and tariff mitigation strategies [38][39] - **Marketing Efficiency**: The marketing strategy is evolving, with a focus on digital performance and brand marketing, aiming for increased efficiency and effectiveness [49][50] Tariff Impact and Pricing Strategy - **Tariff Mitigation**: The company has successfully mitigated most of the tariff impacts, with price increases in the mid-single digits expected to continue into 2026 [47][54] - **Demand Elasticity**: So far, price increases have not significantly affected demand, indicating a unique product offering that maintains customer interest [55] Investor Insights - **Underappreciated Aspects**: The founder-led nature of the business and its data-driven culture are key differentiators that may not be fully recognized by investors [63] Conclusion Revolve Group is strategically positioned for growth through its unique business model, data-driven approach, and expansion into both owned brands and physical retail. The company is navigating current economic challenges while maintaining a focus on profitability and customer engagement.

Core Insights - Revolve Renewable Power Corp. reported its financial results for Q1 FY2026, which ended on September 30, 2025 [1] Financial Performance - The company is a North American owner, operator, and developer of renewable energy projects [1] - Detailed financial statements and management discussions are available on the company's website and SEDAR+ [1]

Core Viewpoint - Revolve Group (RVLV) shows a significantly improving earnings outlook, making it a solid choice for investors as analysts continue to raise their earnings estimates for the company [1][2] Earnings Estimate Revisions - The upward trend in earnings estimate revisions reflects growing optimism among analysts regarding Revolve Group's earnings prospects, which is expected to positively impact its stock price [2] - The Zacks Rank system indicates a strong correlation between earnings estimate revisions and near-term stock price movements [2] - The current-quarter earnings estimate is $0.16 per share, representing a -5.9% change from the previous year, but the Zacks Consensus Estimate has increased by 45.46% over the last 30 days with no negative revisions [6] - For the full year, the earnings estimate is projected at $0.73 per share, a +5.8% change from the prior year, with a 32.76% increase in the consensus estimate over the same timeframe [7][8] Zacks Rank and Performance - Revolve Group has achieved a Zacks Rank 2 (Buy) due to favorable estimate revisions, which is a reliable indicator for investors [9] - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [9] Stock Performance - The stock has gained 6.8% over the past four weeks, driven by solid estimate revisions, indicating strong earnings growth prospects [10]

Core Viewpoint - Revolve Renewable Power Corp. successfully closed a brokered private placement, raising gross proceeds of $3,039,973 through the issuance of 15,999,857 units at a price of $0.19 per unit, which includes common shares and warrants [1][2][3] Financing Details - The offering was conducted on a "best efforts" basis by Beacon Securities Limited, with a cash commission of 7.0% of gross proceeds and compensation options equal to 7.0% of units sold [4] - The net proceeds will be utilized for advancing late-stage projects and for working capital [3] Insider Participation - Certain insiders participated in the offering, which is classified as a "related party transaction" under Multilateral Instrument 61-101, with exemptions from formal valuation and minority shareholder approval requirements due to the transaction's value being less than 25% of the company's market capitalization [5] Ownership Changes - Director Roger Norwich acquired 100,000 units, reducing his ownership to approximately 8.78% on a non-diluted basis [6][7] - Director Joseph O'Farrell acquired 263,157 units, reducing his ownership to approximately 9.77% on a non-diluted basis [8] Company Overview - Revolve was established in 2012 to meet the growing demand for renewable energy, focusing on utility-scale wind, solar, hydro, and battery storage projects across North America [10] - The company has developed and sold over 1,550 MW of projects and is targeting 5,000 MW of utility-scale projects under development [11]

E.L.F. Beauty Analysis - E.L.F. is increasing product costs by approximately $1 [2] - Core E.L.F. brand growth is moderating to around 2-5% in the second half, previously around 20% [3] - Retailers are destocking and facing tough comparisons, impacting E.L.F.'s core brand growth [5] - Consumption trends in the market are attractive, around 7-10% [5] Tapestry (Coach & Kate Spade) Analysis - Coach is experiencing strong growth, up 21%, driven by capturing Generation Z customers and offering good value [7] - Coach bags are priced around $300-$500, offering value compared to luxury brands like Louis Vuitton and Cartier ($2,000-$3,000+) [8] - Kate Spade is still a work in progress [8] - High expectations were set for Tapestry coming into the quarter [9] Consumer & Retail Trends - Higher-income spenders are increasingly important to companies [11] - Retailers with a middle-income positioning, like department stores, face a tougher environment [12] - The US consumer has been resilient with low unemployment [13] - Consumers are prioritizing value and low price points [13] Canada Goose Analysis - Direct-to-consumer comps are up 10% [15] - Marketing expenses were higher than Wall Street expected, impacting EBIT [15]