Preparing for “the worst” helped Revolve Group Inc. surpass analyst expectations and deliver record earnings per share for its second quarter that ended June 30.

The Cerritos-based ecommerce retailer reported $14.2 million in net income, a 12% increase from the year-ago period, on $142.8 million in revenue.


The company attributed the jump in earnings to its team’s ability to reshuffle its “entire approach to brand marketing and merchandising” during shelter-in-place mandates that “put an abrupt pause on the special social occasions that often serve as a catalyst for customers to buy from Revolve.”


Co-Chief Executive Michael Karanikolas told analysts during an earnings call that the changes included reducing “personnel costs, primarily through furloughs and reductions in salary, wages and hours, as well as layoffs.”


Karanikolas added that Revolve also adjusted “inventory buys for a scenario that assumed no sales recovery in the remainder of 2020, (which) combined with the better-than-expected net sales led, to a 37% decrease in our inventory balance year over year in the second quarter.”


Revolve, which has a market value of about $1.4 billion, also reduced its marketing spend.

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