Revolve Group reported Q3 2025 revenue of $295.6 million, a 4 % year‑over‑year increase that fell short of the consensus estimate of roughly $298 million. The modest top‑line growth reflects ongoing macro uncertainty and competitive pressure, but the company still managed a solid rise in sales across its core segments.
Adjusted earnings per share reached $0.24, a surprise of $0.12–$0.16 per share—or 200 % above the consensus range of $0.08 to $0.12. The earnings beat was driven by a sharp expansion in gross margin, tighter cost control, and a higher mix of full‑price sales, especially from the company’s owned brands.
Gross margin climbed to 54.6 %, up 347 basis points from the same period last year. The lift was largely attributable to shallower markdowns, a stronger full‑price mix, and increased contribution from higher‑margin owned labels, underscoring the effectiveness of Revolve’s data‑driven merchandising strategy.
Segment performance showed the REVOLVE unit generating $254.6 million in net sales, up 5 % YoY, while the FWRD unit delivered $41.0 million, up 3 % YoY. Both segments contributed to the overall margin expansion, with the REVOLVE segment benefiting most from the higher‑margin mix.
Management raised its full‑year 2025 gross‑margin guidance to approximately 53.5 % and projected Q4 gross margins of 53.1 % to 53.6 %. The upward revision signals confidence that margin expansion will continue, even as revenue growth moderates. The company also reiterated its focus on international expansion, physical retail initiatives, and technology investments.
Mike Karanikolas, Co‑Founder and Co‑CEO, highlighted the company’s “exceptional gross‑margin performance” and noted that the 350‑basis‑point year‑over‑year increase validates the competitive advantage of its data‑driven merchandising. Michael Mente, Co‑Founder and Co‑CEO, emphasized the firm’s resilience amid macro uncertainty, citing strong cash flow and a solid balance sheet that enable continued investment in long‑term growth initiatives.
Investors reacted cautiously, focusing on the revenue miss despite the strong earnings beat. The market’s muted response reflects concerns about the company’s ability to accelerate sales growth in a challenging economic environment, even as profitability metrics improved.
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