Please ensure Javascript is enabled for purposes of website accessibility

Why Revolve Group Stock Soared on Friday

By Evan Niu, CFA - May 7, 2021 at 12:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online fashion retailer reported strong first-quarter earnings.

What happened

Shares of Revolve Group (RVLV -2.06%) soared on Friday, up by 14% at 11:30 a.m. EST, after the company reported first-quarter earnings. The results handily beat expectations, and Revolve expressed optimism about economic recovery.

So what

Revenue in the first quarter increased 22% to $178.9 million, topping the consensus estimate of $156.3 million. That resulted in net income of $22 million, or $0.30 per share. Wall Street analysts were looking for just $0.12 per share in profit. The online fashion retailer said active customers were 1.48 million, orders placed were 1.3 million, and the average order value was $256.

Green stock chart going up

Image source: Getty Images.

"Our exceptional results for the first quarter reinforce our belief that REVOLVE is uniquely positioned for the reopening of economies and the post-COVID world as a brand consumers associate with living an active social lifestyle," co-CEO Mike Karanikolas said in a statement. "We are excited to reaccelerate our investment in the business to support our next phase of growth."

Now what

The COVID-19 pandemic continues to affect results, but Revolve sees light at the end of the tunnel. After the quarter closed on March 31, net sales in April continued to gain momentum and "meaningfully" outpaced the first quarter's overall growth rate of 22%, the company said. The company pointed to ongoing progress in vaccine distribution and other signs that the economy in the U.S. is recovering. Revolve has resumed in-person marketing events with safety protocols in place.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Revolve Group Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Revolve Group, Inc. Stock Quote
Revolve Group, Inc.
RVLV
$28.49 (-2.06%) $0.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
390%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.