Revolve Shares Fall 12% After Sales Rise but Income Falls

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By Stephen Nakrosis

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Shares of fashion retailer Revolve Group Inc. fell on Thursday, a day after the company reported higher sales but lower income for the second quarter.

At 11:27 am ET, the company’s shares were trading 14% lower at $26.60 each. Volume at the time was just under 3 million shares. The stock’s 65-day average volume is some 1.6 million shares.

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After the bell on Wednesday, Revolve reported second-quarter earnings per share of 22 cents on sales of $290.1 ​​million. In the year-ago period, the company reported EPS of 42 cents on sales of $228.6 million.

“We delivered strong results in the second quarter, highlighted by record net sales that increased 27% year-over-year,” said Mike Karanikolas, the company’s co-founder and co-chief executive.

The results came despite macroeconomic conditions that grew 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,” he said.

Revolve experienced a higher return rate during the quarter compared with a year earlier. “Selling and distribution costs also reflect significantly increased fuel surcharges on customer shipments due to higher fuel prices,” it said.

“General and administrative costs also deleveraged year-over-year due entirely to a $5 million accrual in connection with a pending legal matter,” Revolve said.

Several analysts on Thursday cut their price target on Revolve’s stock. Wedbush slashed its target to $23 a share from $59 and Morgan Stanley lowered its target to $28 a share from $51, according to Benzinga.

Write to Stephen Nakrosis at [email protected]

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Credit: www.marketwatch.com /

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