Revolve Group, Inc.

Second-quarter net sales were $347 million, up 12% year over year. REVOLVE net sales increased 13% and FWRD net sales increased 11%; domestic net sales rose 11% and international net sales rose 16%. Gross margin was 56.6%, versus 54.1% a year ago, including an approximately 160 basis point benefit from IEEPA tariff refunds; excluding those refunds, gross margin improved about 90 basis points year over year. Net income was $19 million and diluted EPS was $0.26, including a $0.06 benefit from tariff refunds, versus diluted EPS of $0.14 in Q2 2025. Adjusted EBITDA was $27 million, up from $23 million a year ago, including a $5.6 million benefit from tariff refunds. For the balance of 2026, management expects Q3 gross margin of 53.5% to 54.0% and full-year gross margin of 53.5% to 54.0%. They expect Q3 fulfillment costs of about 3.4% of sales, Q3 selling and distribution costs of about 17.5%, Q3 marketing of about 15%, Q4 marketing north of 16%, full-year marketing of 15.8% to 16.0%, Q3 G&A of about $43.5 million, full-year G&A of $170 million to $172 million, and a full-year tax rate of around 24% to 26%.

Mike Karanikolas framed the quarter as strong and profitable across segments and geographies, emphasizing market share gains, record new-customer acquisition, and a lower return rate. He said July trends were encouraging and tied the acceleration more to company execution and marketing investments than to a broader consumer improvement. He also highlighted REVOLVE Los Angeles, physical retail, Grow-Good Beauty, and AI as foundational initiatives that could broaden the business over time.

Jesse Timmermans focused on the margin and expense build, noting that gross margin was lifted by tariff refunds but also improved about 90 basis points excluding them, while marketing and G&A were both above plan because of strategic investments. He said full-year 2026 guidance still reflects higher input costs, a slightly lower full-price mix, and the impact of new initiatives, while also calling out that the company still has $1.4 million of potential tariff refund claims outstanding. On cash flow, he said operating cash flow was negative $8 million and free cash flow was negative $11 million in Q2, but year to date the company generated $41 million of operating cash flow and $34 million of free cash flow, with $312 million in cash and no debt. He also said the company repurchased nearly 500,000 Class A shares at an average price of $19.98, retiring more than 1% of the Class A stock.

Analysts focused on the 18% July sales acceleration, asking whether it reflected a stronger consumer or company-specific execution, and management pointed mostly to marketing investments, broader momentum across segments and geographies, and category diversification. Several questions centered on Grow-Good Beauty, where management said growth is currently constrained by inventory and that more stock should arrive this fall, with more detail expected later this year as the business becomes more material. Analysts also pressed on return rates, higher G&A, markdowns, and the gross margin outlook; management said return-rate improvements came from category mix and ongoing initiatives, G&A is elevated because of growth investments, and gross margin guidance already incorporates lower full-price mix, input-cost pressure, and tariff assumptions.