LOS
ANGELES, Feb. 27, 2024 /PRNewswire/ -- Revolve
Group, Inc. (NYSE: RVLV), the next-generation fashion retailer for
Millennial and Generation Z consumers, today announced financial
results for the fourth quarter and full year ended December 31, 2023.
"I'm proud of our team's accomplishments in 2023 that set us up
well for 2024," said co-founder and co-CEO Mike Karanikolas. "Despite the challenging
backdrop for consumer discretionary spending, we closed out the
year with a solid fourth quarter that included improved sales
trends, year-over-year expansion of our gross margin and early
progress on selling and distribution cost efficiencies."
"Our profitable and cash generative business remains a key
competitive advantage that has enabled us to invest in longer-term
growth initiatives throughout the cycle at a time when many
industry peers have no choice but to significantly reduce
investment," said co-founder and co-CEO Michael Mente. "Our focus on maximizing
value creation over the long-term is supported by investments in
our brands, technology and operations as well as delivering value
to stockholders through our $100
million stock repurchase program."
Fourth Quarter 2023 Financial Summary
|
|
Three Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Change
|
|
|
(in thousands,
except percentages)
|
Net sales
|
|
$
|
257,778
|
|
|
$
|
259,153
|
|
|
(1 %)
|
Gross profit
|
|
$
|
134,049
|
|
|
$
|
133,288
|
|
|
1 %
|
Gross margin
|
|
|
52.0
|
%
|
|
|
51.4
|
%
|
|
|
Net income
|
|
$
|
3,494
|
|
|
$
|
7,868
|
|
|
(56 %)
|
Adjusted EBITDA
(non-GAAP financial measure)
|
|
$
|
8,538
|
|
|
$
|
14,137
|
|
|
(40 %)
|
Net cash used in
operating activities
|
|
$
|
(3,876)
|
|
|
$
|
(11,015)
|
|
|
NM
|
Free cash flow
(non-GAAP financial measure)
|
|
$
|
(4,960)
|
|
|
$
|
(12,278)
|
|
|
NM
|
Fourth Quarter 2023 Operational Metrics
|
|
Three Months Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Change
|
|
|
(in thousands,
except average order value and percentages)
|
Active
customers
|
|
|
2,543
|
|
|
|
2,340
|
|
|
9 %
|
Total orders
placed
|
|
|
2,022
|
|
|
|
1,954
|
|
|
3 %
|
Average order
value
|
|
$
|
303
|
|
|
$
|
306
|
|
|
(1 %)
|
|
|
|
|
|
|
|
|
|
|
|
Additional Fourth Quarter 2023 Metrics and Results
Commentary
- Trailing 12-month Active customers increased by 33,000
during the fourth quarter of 2023, growing to 2,543,000 as of
December 31, 2023, an increase of 9%
year-over-year.
- Total net sales were $257.8
million, a decrease of 1% year-over-year, and a sequential
improvement from the 4% decrease year-over-year reported in the
third quarter of 2023.
- Gross profit was $134.0
million, an increase of 1% year-over-year.
- Gross margin was 52.0%, a year-over-year increase of 57
basis points that was driven by margin expansion in the REVOLVE
segment. It was the first year-over-year increase in gross margin
in six quarters.
- Within operating expenses, our variable operating costs
were more efficient than implied by our fourth quarter 2023
outlook, primarily driven by early progress in our efforts to
contain shipping and logistics costs, which was offset by
higher-than-expected general and administrative expenses.
- Net income was $3.5
million, a year-over-year decrease of 56%, primarily due to
growth in operating expenses year-over-year that more than offset
the slight growth in gross profit referenced above.
- Adjusted EBITDA was $8.5
million, a year-over-year decrease of 40%.
- Diluted earnings per share (EPS) was $0.05, a year-over-year decrease of
55%.
Additional Fourth Quarter 2023 Net Sales Commentary
- REVOLVE segment net sales were $220.0 million, a year-over-year increase of
1%.
- FWRD segment net sales were $37.8
million, a year-over-year decrease of 10%.
- Domestic net sales were $213.7
million, a year-over-year decrease of
2%.
- International net sales were $44.1 million, a year-over-year increase of
7%.
Additional trend information regarding Revolve Group's fourth
quarter and full year 2023 financial results and operating metrics
is available in the Q4 and FY 2023 Financial Highlights
presentation available on the company's investor relations website
at https://investors.revolve.com.
Results Since the End of Fourth Quarter 2023
During the first eight weeks of 2024 (January 1, 2024 to February 25, 2024), net sales decreased by a
mid-single digit percentage year-over-year compared to the same
period in 2023.
2024 Business Outlook
Based on information available to us as of February 27, 2024, we are providing the following
guidance for the full year ending December
31, 2024 and the first quarter ending March 31, 2024.
|
FY 2024
Outlook
|
Gross margin
|
52.5% to
53.0%
|
Fulfillment
expenses
|
3.3% to 3.5% of net
sales
|
Selling and
distribution expenses
|
17.8% to 18.0% of net
sales
|
Marketing
expenses
|
16.0% to 16.2% of net
sales
|
General and
administrative expenses
|
$130 million to $133
million
|
Effective tax
rate
|
24% to 26%
|
|
|
|
First Quarter 2024
Outlook
|
Gross margin
|
51.4% to
51.9%
|
Fulfillment
expenses
|
3.5% of net
sales
|
Selling and
distribution expenses
|
18.1% of net
sales
|
Marketing
expenses
|
16.0% of net
sales
|
General and
administrative expenses
|
$33.0
million
|
|
|
Full Year 2023 Financial Summary
|
|
Year Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Change
|
|
|
(in thousands,
except percentages)
|
Net sales
|
|
$
|
1,068,719
|
|
|
$
|
1,101,416
|
|
|
(3 %)
|
Gross profit
|
|
$
|
554,199
|
|
|
$
|
592,323
|
|
|
(6 %)
|
Gross margin
|
|
|
51.9
|
%
|
|
|
53.8
|
%
|
|
|
Net income
|
|
$
|
28,147
|
|
|
$
|
58,697
|
|
|
(52 %)
|
Adjusted EBITDA
(non-GAAP financial measure)
|
|
$
|
43,409
|
|
|
$
|
90,234
|
|
|
(52 %)
|
Net cash provided by
operating activities
|
|
$
|
43,342
|
|
|
$
|
23,436
|
|
|
85 %
|
Free cash flow
(non-GAAP financial measure)
|
|
$
|
39,144
|
|
|
$
|
18,269
|
|
|
114 %
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2023 Operational Metrics
|
|
Year Ended
December 31,
|
|
|
2023
|
|
|
2022
|
|
|
YoY
Change
|
|
|
(in thousands,
except average order value and percentages)
|
Active
customers
|
|
|
2,543
|
|
|
|
2,340
|
|
|
9 %
|
Total orders
placed
|
|
|
8,701
|
|
|
|
8,304
|
|
|
5 %
|
Average order
value
|
|
$
|
297
|
|
|
$
|
304
|
|
|
(2 %)
|
|
|
|
|
|
|
|
|
|
|
|
Additional Full Year 2023 Metrics and Results
Commentary
- Total net sales were $1.1
billion, a year-over-year decrease of 3%.
- Gross profit was $554.2
million, a year-over-year decrease of 6%.
- Gross margin was 51.9%, a year-over-year decrease of 192
basis points that was primarily driven by our results in the first
half of 2023 when our proportion of net sales at full price was
significantly lower compared to the same period in 2022.
Successful rebalancing of our inventory levels during 2023 resulted
in improved year-over-year comparisons for gross margin each
quarter throughout 2023.
- Net income was $28.1
million, a year-over-year decrease of 52%, primarily
reflecting the slight decrease in net sales, reduced gross profit
and an increase in operating expenses year-over-year.
- Adjusted EBITDA was $43.4
million, a year-over-year decrease of 52%.
- Diluted EPS was $0.38, a
year-over-year decrease of 52%.
Additional Full Year 2023 Net Sales Commentary
- REVOLVE segment net sales were $904.5 million, a year-over-year decrease of
2%.
- FWRD segment net sales were $164.2 million, a year-over-year decrease of
9%.
- Domestic net sales were $870.4 million, a year-over-year decrease of
5%.
- International net sales were $198.3 million, a year-over-year increase of
6%.
Cash Flow and Balance Sheet Commentary
- Net cash provided by operating activities was
$43.3 million and free cash
flow was $39.1 million for the
year ended December 31, 2023, an
increase of 85% and 114%, respectively. The increase in both cash
flow measures primarily reflects favorable movements in working
capital, partially offset by lower net
income.
- Stock repurchases were $30.6
million for the year ended December
31, 2023, exclusive of broker fees and excise taxes. The
company repurchased 1,291,635 and 2,198,854 shares of its
Class A common stock during the fourth quarter and full year 2023,
respectively, at an average cost of $13.94 and $13.91
per share, respectively. $69.4
million remained available under the company's $100 million stock repurchase program as of
December 31, 2023
- Balance sheet: Cash and cash equivalents as of
December 31, 2023 grew to
$245.4 million, an increase of
$10.7 million, or 5%, from
$234.7 million as of December 31, 2022. Our balance sheet as of
December 31, 2023 remains debt
free.
- Inventory as of December 31,
2023 was $203.6 million, a
decrease of $11.6 million, or 5%,
from the inventory balance of $215.2
million as of December 31,
2022.
Conference Call Information
Revolve Group management will host a call today at 4:30 pm ET / 1:30 pm
PT to discuss today's results in more detail. To
participate, please dial (888) 330-2454 within the United States or (240) 789-2714 outside
the United States approximately 10
minutes before the scheduled start of the call. The conference ID
for the call is 3102771. The conference call will also be
accessible, live via audio broadcast, on the Investor Relations
section of the Revolve Group website at
http://investors.revolve.com. A replay of the conference call will
be available online at http://investors.revolve.com. In addition,
an audio replay of the call will be available for one week
following the call and can be accessed by dialing 1-800-770-2030
within the United States or
1-647-362-9199 outside the United
States. The replay conference ID is 3102771.
Forward-Looking Statements
This press release contains
''forward-looking statements'' within the meaning of the safe
harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. All statements other than statements of
historical or current fact included in this press release are
forward-looking statements, including but not limited to our
expectations regarding our financial performance for the first
quarter and full year of 2024 and statements regarding
macroeconomic conditions. Forward-looking statements include
statements containing words such as "expect," "anticipate,"
"believe," "project," "will" and similar expressions intended to
identify forward-looking statements. These forward-looking
statements are based on our current expectations. Forward-looking
statements involve risks and uncertainties. Our actual results and
the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
changing economic conditions and their impact on consumer demand
and our business, operating results and financial condition; demand
for our products; supply chain challenges; inflationary pressures;
wars and conflicts in Ukraine/Russia, Israel/Gaza
and the Middle East, other
geopolitical tensions; our fluctuating operating results;
seasonality in our business; our ability to acquire products on
reasonable terms; our e-commerce business model; our ability to
attract customers in a cost effective manner; the strength of our
brand; competition; fraud; system interruptions; our
ability to fulfill orders; the impact of public health crises on
our business, operations and financial results; the effect of
claims, lawsuits, government investigations, other legal or
regulatory proceedings or commercial or contractual disputes; and
other risks and uncertainties included under the caption "Risk
Factors" and elsewhere in our filings with the Securities and
Exchange Commission, or SEC, including, without limitation,
our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2023 and our Annual
Report on Form 10-K for the year ended December 31, 2023, which we expect to file with
the SEC on February 27, 2024. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by
this cautionary statement, and we undertake no obligation to revise
or update any forward-looking statements to reflect events or
circumstances after the date hereof.
Use of Non-GAAP Financial Measures and Other Operating
Metrics
To supplement our condensed consolidated financial
statements, which are prepared and presented in accordance with
Generally Accepted Accounting Principles in the United States of America (GAAP), we
reference in this press release and the accompanying tables the
following non-GAAP financial measures: Adjusted EBITDA and free
cash flow.
The presentation of this non-GAAP financial information is not
intended to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP, and our non-GAAP measures may be different
from non-GAAP measures used by other companies.
We use these non-GAAP financial measures to evaluate our
operating performance, generate future operating plans and make
strategic decisions regarding the allocation of capital. Our
management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance and
liquidity by excluding certain expenses that may not be indicative
of our ongoing core operating performance. We believe that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance and when analyzing
historical performance and liquidity and when planning,
forecasting, and analyzing future periods.
For a reconciliation of these non-GAAP financial measures to
GAAP measures, please see the tables captioned "Reconciliation of
Non-GAAP Financial Measures" included at the end of this
release.
Definitions of our non-GAAP financial measures and other
operating metrics are presented below.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP
financial measure that we calculate as net income before other
(income) expense, net; taxes; and depreciation and amortization;
adjusted to exclude the effects of equity-based compensation
expense and certain non-routine items. Adjusted EBITDA is a key
measure used by management to evaluate our operating performance,
generate future operating plans and make strategic decisions
regarding the allocation of capital. In particular, the exclusion
of certain expenses in calculating Adjusted EBITDA facilitates
operating performance comparisons on a period-to-period basis and,
in the case of exclusion of the impact of equity-based
compensation, excludes an item that we do not consider to be
indicative of our core operating performance.
Free Cash Flow
Free cash flow is a non-GAAP financial
measure that we calculate as net cash provided by operating
activities less cash used in purchases of property and equipment.
We view free cash flow as an important indicator of our liquidity
because it measures the amount of cash we generate. Free cash flow
also reflects changes in working capital.
Active Customers
We define an active customer as a
unique customer account from which a purchase was made across our
platform at least once in the preceding 12-month period. In any
particular period, we determine our number of active customers by
counting the total number of customers who have made at least one
purchase in the preceding 12-month period, measured from the last
date of such period. We view the number of active customers as a
key indicator of our growth, the reach of our sites, the value
proposition and consumer awareness of our brand, the continued use
of our sites by our customers and their desire to purchase our
products.
Total Orders Placed
We define total orders placed as
the total number of orders placed by our customers, prior to
product returns, across our platform in any given period. We
view total orders placed as a key indicator of the velocity of our
business and an indication of the desirability of our products and
sites to our customers. Total orders placed, together with average
order value, is an indicator of the net sales we expect to
recognize in a given period.
Average Order Value
We define average order value as
the sum of the total gross sales from our sites in a given period,
prior to product returns, divided by the total orders placed in
that period. We believe our high average order value demonstrates
the premium nature of our product assortment. Average order value
varies depending on the site through which we sell merchandise, the
mix of product categories sold, the number of units in each order,
the percentage of sales at full price, and for sales at less than
full price, the level of markdowns.
About Revolve Group, Inc.
Revolve Group, Inc. (NYSE:
RVLV) is the next-generation fashion retailer for Millennial and
Generation Z consumers. As a trusted premium lifestyle brand and a
go-to online source for discovery and inspiration, we deliver an
engaging customer experience from a vast yet curated offering of
apparel, footwear, accessories, beauty and home products. Our
dynamic platform connects a deeply engaged community of millions of
consumers, thousands of global fashion influencers and more than
1,000 emerging, established and owned brands.
We were founded in 2003 by our co-CEOs, Michael Mente and Mike
Karanikolas. We sell merchandise through two complementary
segments, REVOLVE and FWRD, that leverage one platform. Through
REVOLVE, we offer an assortment of premium apparel, footwear,
accessories and beauty products from emerging, established and
owned brands. Through FWRD, we offer an assortment of curated and
elevated iconic and emerging luxury brands. For more
information, visit www.revolve.com.
Contacts:
Investors:
Erik Randerson, CFA
562.677.9513
IR@revolve.com
Media:
Jennifer Walker
revolve@walkerdrawas.com
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited)
|
(In thousands, except
per share data)
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net sales
|
|
$
|
257,778
|
|
|
$
|
259,153
|
|
|
$
|
1,068,719
|
|
|
$
|
1,101,416
|
|
Cost of
sales
|
|
|
123,729
|
|
|
|
125,865
|
|
|
|
514,520
|
|
|
|
509,093
|
|
Gross
profit
|
|
|
134,049
|
|
|
|
133,288
|
|
|
|
554,199
|
|
|
|
592,323
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fulfillment
|
|
|
8,997
|
|
|
|
8,532
|
|
|
|
36,654
|
|
|
|
31,804
|
|
Selling and
distribution
|
|
|
45,776
|
|
|
|
45,389
|
|
|
|
197,052
|
|
|
|
190,419
|
|
Marketing
|
|
|
42,353
|
|
|
|
39,893
|
|
|
|
171,774
|
|
|
|
181,648
|
|
General and
administrative
|
|
|
34,724
|
|
|
|
28,815
|
|
|
|
126,585
|
|
|
|
115,312
|
|
Total operating
expenses
|
|
|
131,850
|
|
|
|
122,629
|
|
|
|
532,065
|
|
|
|
519,183
|
|
Income from
operations
|
|
|
2,199
|
|
|
|
10,659
|
|
|
|
22,134
|
|
|
|
73,140
|
|
Other (income) expense,
net
|
|
|
(2,677)
|
|
|
|
293
|
|
|
|
(15,627)
|
|
|
|
(3,476)
|
|
Income before income
taxes
|
|
|
4,876
|
|
|
|
10,366
|
|
|
|
37,761
|
|
|
|
76,616
|
|
Provision for income
taxes
|
|
|
1,382
|
|
|
|
2,498
|
|
|
|
9,614
|
|
|
|
17,919
|
|
Net income
|
|
$
|
3,494
|
|
|
$
|
7,868
|
|
|
$
|
28,147
|
|
|
$
|
58,697
|
|
Earnings per share of
Class A and Class B
common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.05
|
|
|
$
|
0.11
|
|
|
$
|
0.39
|
|
|
$
|
0.80
|
|
Diluted
|
|
$
|
0.05
|
|
|
$
|
0.11
|
|
|
$
|
0.38
|
|
|
$
|
0.79
|
|
Weighted average number
of shares of Class A and Class B common stock
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
71,782
|
|
|
|
73,349
|
|
|
|
72,961
|
|
|
|
73,314
|
|
Diluted
|
|
|
72,171
|
|
|
|
74,286
|
|
|
|
73,583
|
|
|
|
74,520
|
|
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In thousands, except
share and per share data)
|
|
|
|
December
31,
|
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
245,449
|
|
|
$
|
234,724
|
|
Accounts receivable,
net
|
|
|
12,405
|
|
|
|
5,421
|
|
Inventory
|
|
|
203,587
|
|
|
|
215,224
|
|
Income taxes
receivable
|
|
|
1,625
|
|
|
|
2,974
|
|
Prepaid expenses and
other current assets
|
|
|
65,523
|
|
|
|
59,874
|
|
Total current
assets
|
|
|
528,589
|
|
|
|
518,217
|
|
Property and equipment
(net of accumulated depreciation of $17,994 and $13,081
as of December 31, 2023 and December 31, 2022,
respectively)
|
|
|
7,763
|
|
|
|
8,934
|
|
Right-of-use lease
assets
|
|
|
36,440
|
|
|
|
22,964
|
|
Intangible assets,
net
|
|
|
1,875
|
|
|
|
1,600
|
|
Goodwill
|
|
|
2,042
|
|
|
|
2,042
|
|
Other assets
|
|
|
2,172
|
|
|
|
807
|
|
Deferred income taxes,
net
|
|
|
30,005
|
|
|
|
24,754
|
|
Total
assets
|
|
$
|
608,886
|
|
|
$
|
579,318
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
47,821
|
|
|
$
|
50,789
|
|
Income taxes
payable
|
|
|
—
|
|
|
|
229
|
|
Accrued
expenses
|
|
|
40,714
|
|
|
|
38,266
|
|
Returns
reserve
|
|
|
63,780
|
|
|
|
63,381
|
|
Current lease
liabilities
|
|
|
6,863
|
|
|
|
5,844
|
|
Other current
liabilities
|
|
|
30,442
|
|
|
|
22,577
|
|
Total current
liabilities
|
|
|
189,620
|
|
|
|
181,086
|
|
Non-current lease
liabilities
|
|
|
34,126
|
|
|
|
18,659
|
|
Total
liabilities
|
|
|
223,746
|
|
|
|
199,745
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Class A common stock,
$0.001 par value; 1,000,000,000 shares
authorized as of December 31, 2023 and December 31,
2022;
38,693,589 and 40,766,510 shares issued and
outstanding as of December 31, 2023
and December 31, 2022, respectively.
|
|
|
39
|
|
|
|
41
|
|
Class B common stock,
$0.001 par value; 125,000,000 shares authorized
as of December 31, 2023 and December 31, 2022;
32,597,119 and
32,597,119 shares issued and outstanding as of
December 31, 2023 and
December 31, 2022, respectively.
|
|
|
33
|
|
|
|
33
|
|
Additional paid-in
capital
|
|
|
116,713
|
|
|
|
110,338
|
|
Retained
earnings
|
|
|
268,355
|
|
|
|
269,161
|
|
Total stockholders'
equity
|
|
|
385,140
|
|
|
|
379,573
|
|
Total liabilities and
stockholders' equity
|
|
$
|
608,886
|
|
|
$
|
579,318
|
|
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
|
2022
|
|
Operating
activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
28,147
|
|
|
$
|
58,697
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5,094
|
|
|
|
4,791
|
|
Equity-based
compensation
|
|
|
5,839
|
|
|
|
5,862
|
|
Deferred income taxes,
net
|
|
|
(5,251)
|
|
|
|
(5,695)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(6,984)
|
|
|
|
(782)
|
|
Inventories
|
|
|
11,637
|
|
|
|
(43,965)
|
|
Income taxes
receivable
|
|
|
1,349
|
|
|
|
401
|
|
Prepaid expenses and
other current assets
|
|
|
(5,649)
|
|
|
|
(17,760)
|
|
Other
assets
|
|
|
(1,365)
|
|
|
|
1,939
|
|
Accounts
payable
|
|
|
(2,968)
|
|
|
|
(3,556)
|
|
Income taxes
payable
|
|
|
(229)
|
|
|
|
229
|
|
Accrued
expenses
|
|
|
2,448
|
|
|
|
4,367
|
|
Returns
reserve
|
|
|
399
|
|
|
|
14,085
|
|
Right-of-use lease
assets and current and non-current lease liabilities
|
|
|
3,010
|
|
|
|
1,162
|
|
Other current
liabilities
|
|
|
7,865
|
|
|
|
3,661
|
|
Net cash provided by
operating activities
|
|
|
43,342
|
|
|
|
23,436
|
|
Investing
activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(4,198)
|
|
|
|
(5,167)
|
|
Net cash used in
investing activities
|
|
|
(4,198)
|
|
|
|
(5,167)
|
|
Financing
activities:
|
|
|
|
|
|
|
Proceeds from the
exercise of stock options, net
|
|
|
536
|
|
|
|
887
|
|
Repurchases of Class A
common stock
|
|
|
(30,913)
|
|
|
|
—
|
|
Net cash (used in)
provided by financing activities
|
|
|
(30,377)
|
|
|
|
887
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
1,958
|
|
|
|
(2,887)
|
|
Net increase in cash
and cash equivalents
|
|
|
10,725
|
|
|
|
16,269
|
|
Cash and cash
equivalents, beginning of period
|
|
|
234,724
|
|
|
|
218,455
|
|
Cash and cash
equivalents, end of period
|
|
$
|
245,449
|
|
|
$
|
234,724
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
|
|
Income taxes, net of
refund
|
|
$
|
12,995
|
|
|
$
|
23,031
|
|
Operating
leases
|
|
$
|
7,012
|
|
|
$
|
5,858
|
|
Supplemental
disclosure of non-cash activities:
|
|
|
|
|
|
|
Lease assets obtained
in exchange for new operating lease liabilities
|
|
$
|
20,452
|
|
|
$
|
21,938
|
|
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
SEGMENT
INFORMATION
|
(Unaudited)
|
|
The following table
summarizes our net sales and gross profit for each of our
reportable segments (in thousands):
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
Net
sales
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
REVOLVE
|
|
$
|
220,025
|
|
|
$
|
217,138
|
|
|
$
|
904,525
|
|
|
$
|
921,676
|
|
FWRD
|
|
|
37,753
|
|
|
|
42,015
|
|
|
|
164,194
|
|
|
|
179,740
|
|
Total
|
|
$
|
257,778
|
|
|
$
|
259,153
|
|
|
$
|
1,068,719
|
|
|
$
|
1,101,416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
REVOLVE
|
|
$
|
121,343
|
|
|
$
|
116,445
|
|
|
$
|
491,817
|
|
|
$
|
514,585
|
|
FWRD
|
|
|
12,706
|
|
|
|
16,843
|
|
|
|
62,382
|
|
|
|
77,738
|
|
Total
|
|
$
|
134,049
|
|
|
$
|
133,288
|
|
|
$
|
554,199
|
|
|
$
|
592,323
|
|
The following table
lists net sales by geographic area (in thousands):
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
United
States
|
|
$
|
213,658
|
|
|
$
|
217,989
|
|
|
$
|
870,405
|
|
|
$
|
914,364
|
|
Rest of the
world
|
|
|
44,120
|
|
|
|
41,164
|
|
|
|
198,314
|
|
|
|
187,052
|
|
Total
|
|
$
|
257,778
|
|
|
$
|
259,153
|
|
|
$
|
1,068,719
|
|
|
$
|
1,101,416
|
|
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
KEY OPERATING AND
FINANCIAL METRICS
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(in thousands,
except average order value and percentages)
|
|
Gross margin
|
|
|
52.0
|
%
|
|
|
51.4
|
%
|
|
|
51.9
|
%
|
|
|
53.8
|
%
|
Adjusted
EBITDA
|
|
$
|
8,538
|
|
|
$
|
14,137
|
|
|
$
|
43,409
|
|
|
$
|
90,234
|
|
Free cash
flow
|
|
$
|
(4,960)
|
|
|
$
|
(12,278)
|
|
|
$
|
39,144
|
|
|
$
|
18,269
|
|
Active
customers
|
|
|
2,543
|
|
|
|
2,340
|
|
|
|
2,543
|
|
|
|
2,340
|
|
Total orders
placed
|
|
|
2,022
|
|
|
|
1,954
|
|
|
|
8,701
|
|
|
|
8,304
|
|
Average order
value
|
|
$
|
303
|
|
|
$
|
306
|
|
|
$
|
297
|
|
|
$
|
304
|
|
REVOLVE GROUP, INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
A reconciliation of
non-GAAP Adjusted EBITDA to net income for the three months and
year ended December 31, 2023 and 2022 is as follows:
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(in
thousands)
|
|
Net income
|
|
$
|
3,494
|
|
|
$
|
7,868
|
|
|
$
|
28,147
|
|
|
$
|
58,697
|
|
Excluding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense, net
|
|
|
(2,677)
|
|
|
|
293
|
|
|
|
(15,627)
|
|
|
|
(3,476)
|
|
Provision for income
taxes
|
|
|
1,382
|
|
|
|
2,498
|
|
|
|
9,614
|
|
|
|
17,919
|
|
Depreciation and
amortization
|
|
|
1,342
|
|
|
|
1,272
|
|
|
|
5,094
|
|
|
|
4,791
|
|
Equity-based
compensation
|
|
|
1,610
|
|
|
|
1,452
|
|
|
|
5,839
|
|
|
|
5,862
|
|
Non-routine items
(1)
|
|
|
3,387
|
|
|
|
754
|
|
|
|
10,342
|
|
|
|
6,441
|
|
Adjusted
EBITDA
|
|
$
|
8,538
|
|
|
$
|
14,137
|
|
|
$
|
43,409
|
|
|
$
|
90,234
|
|
|
|
(1)
|
Non-routine items in
the three months and year ended December 31, 2023 included $0.6
million and $7.5 million in legal fees and charges for two separate
settled legal matters, respectively and $2.8 million related to
non-routine import and export fees. Non-routine items in the three
months and year ended December 31, 2022 included $0.8 million and
$6.4 million in legal fees and charges for a settled legal matter,
respectively and $0.1 million in other non-routine
items.
|
A reconciliation of
non-GAAP free cash flow to net cash provided by operating
activities for the three months and year ended December 31, 2023
and 2022 is as follows:
|
|
|
|
Three Months Ended
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(in
thousands)
|
|
Net cash (used in)
provided by
operating activities
|
|
$
|
(3,876)
|
|
|
$
|
(11,015)
|
|
|
$
|
43,342
|
|
|
$
|
23,436
|
|
Purchases of property
and equipment
|
|
|
(1,084)
|
|
|
|
(1,263)
|
|
|
|
(4,198)
|
|
|
|
(5,167)
|
|
Free cash
flow
|
|
$
|
(4,960)
|
|
|
$
|
(12,278)
|
|
|
$
|
39,144
|
|
|
$
|
18,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
$
|
(1,084)
|
|
|
$
|
(1,263)
|
|
|
$
|
(4,198)
|
|
|
$
|
(5,167)
|
|
Net cash (used in)
provided by financing activities
|
|
$
|
(18,279)
|
|
|
$
|
391
|
|
|
$
|
(30,377)
|
|
|
$
|
887
|
|
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SOURCE Revolve Group, Inc.