Revolve Group (NYSE: RVLV) reported Q1 EPS of $0.06, $0.02 better than the analyst estimate of $0.04. Revenue for the quarter came in at $146.08 million versus the consensus estimate of $140.82 million.

“While the COVID-19 pandemic has created significant headwinds for many companies, including REVOLVE, I am very proud of how the organization has responded,” said co-founder and co-CEO Mike Karanikolas. “Ensuring the health and safety of employees is our top priority. The team has done an outstanding job transitioning to working remotely, where possible, and safeguarding employees where their roles require them to remain on site, all while staying laser focused on maintaining exceptional service for our valued customers.”

“Our competitive position and our recent business results give me continued confidence in our long-term future,” Karanikolas added. “We began the first quarter strong with net sales for January and February combined increasing by more than 20% year-over-year and with our inventory turning approximately 20% faster year-over-year before the COVID-19 impact led to a significant decrease in net sales in the final weeks of March. Importantly, early in the second quarter, our efforts have helped drive improved net sales trends with sequential improvement in the year-over-year net sales declines for each of the past four weeks.”

“I would like to thank our great team for their dedication, agility, hard work and sacrifice demonstrated through this difficult time,” added co-founder and co-CEO Michael Mente. “This is one of the most challenging periods we have experienced in our 17 years of operating the business, yet from challenge comes opportunity. Our brand connection with customers continues to grow stronger and we believe the pandemic will further accelerate the shift to consumer spending online. We are confident in our ability to manage through this environment and thrive over the long term.”

Updated Assumptions for 2020

Due to the unpredictability associated with COVID-19, the Company is not providing net sales or Adjusted EBITDA guidance. However, the Company is providing some updated assumptions for the fiscal year ending December 31, 2020:

• Gross margin for the full year 2020 is now expected to be below the 48.6% gross margin reported for the first quarter of 2020, reflecting a further expected reduction of the net sales mix contribution from REVOLVE’s Owned Brands in 2020, the shift in mix of net sales by product category to “at home” goods like the beauty category that generates a relatively lower gross margin, and an increased promotional environment industrywide (as many retailers are seeking to clear excess inventory). These updated assumptions are a direct outcome of the unprecedented operating environment caused by the COVID-19 pandemic.
• Weighted average diluted shares are expected to be approximately 72 million.
• Capital expenditures are expected to be approximately $2 million.

For earnings history and earnings-related data on Revolve Group (RVLV) click here.