Evercore ISI Maintains Hold Rating on Revolve Group with $19 Target

Revolve Group (RVLV) received a Hold rating and $19.00 price target from Evercore ISI's Michael Binetti. The company reported Q2 revenue of $308.97 million and a net profit of $10.16 million, compared to $282.46 million revenue and $15.38 million net profit last year. Binetti has a 4-star analyst rating with a 6.6% average return and 55.14% success rate.

Revolve Group (RVLV), the fashion retailer, reported its second-quarter (Q2) 2025 earnings, showcasing robust revenue growth despite ongoing tariff pressures. The company reported Q2 revenue of $308.97 million, a 9.4% year-over-year increase, and net profit of $10.16 million, compared to $282.46 million in revenue and $15.38 million in net profit during the same period last year [1].

Key highlights from the earnings report include:

- Revenue Growth: Revenue of $308.97 million, up 9.4% year-over-year, exceeded analyst expectations of $297.91 million [2].
- Net Profit: Net profit of $10.16 million, a significant improvement over last year's $15.38 million.
- Gross Margin: Gross margin of 54.1%, up from 50.0% last year, reflecting improved inventory dynamics and tariff mitigation efforts [2].
- Free Cash Flow: Free cash flow of $52.4 million, a 424% increase year-over-year, indicating strong cash flow generation [2].

Revolve Group's expansion into new product categories, such as shorts and jewelry, and its continued investment in AI and technology innovations contributed to its strong performance. The company also reported a notable 17% growth in international sales, with the Chinese market more than doubling over the past two years [2].

Market Reaction and Outlook

Following the earnings release, Revolve's stock experienced a 1.22% increase in regular trading and a further 2.5% rise in after-hours trading, reaching $20.92 [2]. The stock remains below its 52-week high of $39.58 but shows a positive trend compared to its 52-week low of $16.80.

Revolve Group provided guidance for the full-year gross margin, expecting it to be between 52.1% and 52.6%. The company plans to continue its investment in owned brands and physical retail, with a new store opening in Los Angeles in Q4 2025. Ongoing investments in AI and technology to enhance customer experience and operational efficiency are also expected [2].

Risks and Challenges

Supply chain disruptions, increasing competition in the fashion retail market, economic uncertainties, potential tariff changes, currency fluctuations, and shifts in consumer behavior could pose risks to Revolve Group's future growth [2].

Conclusion

Revolve Group's Q2 2025 earnings demonstrate strong revenue growth and improved profitability despite tariff pressures. The company's strategic initiatives and investments in new product categories and technology are driving its performance. However, investors should remain vigilant to potential risks and challenges that could impact the company's future growth.

References

[1] Revolve Group press release. (2025). Retrieved from https://seekingalpha.com/news/4479082-revolve-group-gaap-eps-of-0_14-beats-by-0_01-revenue-of-308_97m-beats-by-11_34m

[2] Revolve Group Q2 2025 earnings call transcript. (2025). Retrieved from https://www.investing.com/news/transcripts/earnings-call-transcript-revolve-q2-2025-sees-revenue-beat-stock-rises-93CH-4171628