The Los Angeles-based e-commerce fashion retailer posted a 27 percent year-over-year increase in net sales — $290 million — in the three months ending on June 30, it reported Wednesday.
However, its net income, a measure of profitability, dropped significantly in the quarter, from $35.5 million last year to $16.3 million, due to rising costs of shipping and a much higher rate of returns.
Fuel surcharges in particular contributed to the margin hit, according to co-founder and co-chief executive Mike Karanikolas. The surcharges were quadruple that of the same period in 2021, though Karanikolas said he anticipates these costs to drop.
The company’s shares fell 14 percent.
”We delivered these results despite macroeconomic conditions that became more challenging as the quarter progressed, creating cost pressures that impacted profitability, and also contributed to a moderating year-over-year growth trend in net sales in June that has continued into the third quarter,” Karanikolas said in a statement.
Revolve expects the coming months to be challenging in terms of macroeconomic conditions, with its fourth quarter likely to be the most difficult, CFO Jesse Timmermans said on a call with analysts.
Learn more:
At Revolve’s First Store, Anyone Can Be an Influencer
The fashion giant, known for its influencer trips and events, is opening a social club in LA that will be open to the general public.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Fashion News Click Here
