The stock of Revolve Group, the online fashion retailer of the United States, is hard to hide after the peak of $45.
Editor’s note: This article is from WeChat public account “IPO knows early” (ID: Ipozaozhidao), by Uncle C.
According to the IPO, the US fashion online retailer Revolve Group was listed on June 7 this year. After the stock price crossed the peak of $45, it was difficult to hide. The first half of the financial report showed that the company’s growth began to slow down, but the average market target price is still $41. There are many Wall Street investors who look at the prospects of multiple companies.
Revolve’s net loss in the second quarter was $28.075 million, which turned from profit to loss, and net profit for the same period last year was $10.467 million. Excluding the one-time expenses of repurchasing B-shares of $41 million before the listing, the company’s adjusted earnings per share rose to $0.18 from $0.15 in the same period last year, less than market expectations of $0.19.
Revolve is comprised of Volvo, a popular apparel shopping platform, and Forward, a high-end shopping platform. In 2019, it developed a relatively young and relatively low-end Superdown, but it was still small. The platform has more than 500 brands, including 21 own brands. Net sales growth last year and the first two quarters of this year remained at around 20%. This year, the Revolve platform contributed more and more to sales (83%), and the growth rate was significantly higher than Forward. In the first half of this year, Forward’s net sales growth rate was 2%.
New business indicators synergistic expansion trend
Revolve’s net sales in the second quarter increased 22.8% year-on-year to US$161.9 million, slightly exceeding market expectations of US$159.9 million. The number of active users increased from 998,000 in the same period last year to 1.359 million, an increase of 36.2%, and the total number of orders increased by 30.8% to 1.294 million.
Revolve is the main marketing method for KOL, which is to rely on the fashion bloggers of social platforms to convert purchases. Revolve’s official account and FORWARD have more than 7 million fans on mainstream social media such as Instagram. However, 75% of marketing expenses are used for performance marketing. Once Revolve is successfully drained by KOL, they need to be converted into active users through search advertising and mobile push. Revolve’s second quarter report shows that marketing costs increased by 17.7% year-on-year, but accounted for the proportion of net sales.