Why Revolve Group Stock Was Tumbling Today
Shares of Revolve Group (NYSE: RVLV) were falling today after the online apparel seller posted disappointing results in its fourth-quarter earnings report. Sales came in below expectations, and the company offered weak guidance for 2020, sending shares down 16.7% as of 2:23 p.m. EST Wednesday.
Revolve, which calls itself a next-generation retailer targeting millennials and Gen-Zers, said sales rose 16% to $147.6 million, which missed estimates at $152 million. Active customers increased 27% to 1.49 million, but orders placed rose only 14% to 1.09 million. The company slowed down its ordering in the quarter to work through its existing inventory, which led to increased markdowns. Consequently, gross margin fell from 54.1% to 52.9%, and operating income declined slightly. With the help of a lower tax rate, however, earnings per share rose from $0.11 to $0.12, beating estimates by a penny.
Members of the Revolve staff. Image source: Revolve Group.
Source Fool.com
