Revolve's Sales Growth Accelerates as Profit Reverses

The Tip Desk · November 4, 2026 · 4 min read

Third-quarter net sales rose 20% to $356.0 million, the fastest year-over-year pace of the year, while net income fell 27% to $15.5 million.

Revolve Group (RVLV), the next-generation fashion retailer for Millennial and Generation Z consumers, reported net sales of $356.0 million for the three months ended September 30, 2026, up 20% from a year earlier, accelerating from 12% growth in the second quarter and 16% in the first.

The company said the top-line gain was fueled by a 19% increase in total orders placed and a reduced product return rate, partially offset by a lower average order value primarily attributable to initial sales of Grow-Good beauty products at much lower price points. Trailing 12-month active customers reached 3,243,000, up 18% year-over-year, which the company called its highest year-over-year growth rate in three and a half years and its fourth consecutive quarter of growth acceleration. Total orders placed were 2,745,000. Average order value was $292.

Growth was broad. REVOLVE segment net sales were $306.8 million, up 20%. FWRD net sales were $49.2 million, also up 20%. Domestic net sales were $277.4 million, up 20%. International net sales were $78.6 million, up 22%.

Profitability moved the other way. Gross profit was $191.8 million, up 19%. Gross margin was 53.9%, down 75 basis points year-over-year, reversing a 254-basis-point year-over-year expansion in the second quarter. The company said the year-ago third-quarter comparison included 347 basis points of expansion.

Net income was $15.5 million, down 27% from $21.2 million a year earlier, after 86% growth in the second quarter. Diluted earnings were $0.20 a share, compared with $0.29 a year earlier. The company said the prior-year quarter was positively impacted by a $4.5 million insurance recovery, approximately $3.4 million net of taxes, or about $0.05 a share. Other income, net was $2.0 million, compared with $7.3 million a year earlier. Adjusted EBITDA was $23.5 million, down 7%.

Marketing costs were $50.8 million, or 14.3% of net sales, versus 13.7% of sales a year earlier. The company said the increase primarily reflected performance and brand marketing to support growth initiatives, including REVOLVE Los Angeles. Selling and distribution costs were $63.5 million, or 17.8% of net sales, which the company attributed primarily to higher shipping rates, partially offset by a lower return rate. Fulfillment costs were $12.2 million, or 3.4% of net sales. General and administrative costs were $46.2 million, or 13.0% of net sales.

Cash generation reversed. Net cash used in operating activities was $24.3 million, after $8.2 million used in the second quarter and $49.4 million provided in the first. Free cash flow was $27.0 million used. The company said the reduced operating cash flow year-over-year primarily reflected unfavorable changes in working capital. Inventory was $293.3 million as of September 30, 2026, up 23% from $238.8 million a year earlier. Cash and cash equivalents were $284.6 million, down 10% from $315.4 million a year earlier. The company said the balance sheet remained debt free.

Net sales in October 2026 increased by a mid-teen percentage year-over-year. The company said November and December comparisons are much more difficult than October’s, citing mid-single-digit growth in October 2025 and 10% year-over-year net sales growth for the fourth quarter of 2025.

For the fourth quarter of 2026, Revolve Group guided gross margin of 52.3% to 52.8%, fulfillment expenses of 3.3% of net sales, selling and distribution of 17.6% of net sales, marketing of 16.9% of net sales, and general and administrative expenses of $46.1 million. The company raised its full-year 2026 gross-margin outlook to 53.9% to 54.0% from 53.5% to 54.0%, said the outlook does not assume any additional IEEPA tariff refunds, and lifted full-year selling and distribution to 17.5% of net sales and general and administrative expenses to $178.0 million.