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Revolve stock plunges after reporting loss in first earnings since IPO

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Revolve stock plunges after reporting loss in first earnings since IPO

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Executives of Revolve celebrate their IPO at the NYSE June 7, 2019.

Source: NYSE

Shares of online retailing platform Revolve fell more than 15% Friday after the company reported a surprising loss, despite topping revenue expectations.

It was the company’s first earnings announcement since it became public in June.

Revolve reported a second-quarter net loss of $28.1 million, or 57 cents a share, compared to a net income of $10.5 million, or 15 cents a share, last year. Analysts surveyed by Refinitiv had expected Revolve to earn 19 cents a share.

Revenue rose to $161.9 million, up 22% from $131.8 million in the year-ago period, which beat analyst expectations of $159.9 million.

The company reported the number of active customers grew to 1.36 million, up 36% from last year. In a note, Jeffries analyst Randal Konik said the growth showed “strong brand momentum and healthy fundamentals.” Customers also placed 1.29 million orders with the company, a year-over-year increase of 31%.

However, Konik said the average value of a customer’s order fell 2% to $275 due to the mix of products sold.

“As RVLV continues to expand its active customer base, grow internationally, add new influencers to its network, and introduce new product categories, we see ample opportunity to expand its [total addressable market],” he said. “We believe there is also a significant opportunity to increase share within its U.S. core demographic, given REVOLVE’s low penetration of less than 3%.”

Shares of the company are up 72% since its trading debut, valuing the company at around $2.1 billion.

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