Revolve Group (NYSE: RVLV) reported Q4 EPS of $0.26, $0.15 better than the analyst estimate of $0.11. Revenue for the quarter came in at $140.75 million versus the consensus estimate of $135.28 million.

Q4 2020 Highlights

• Total net sales were $140.8 million, a year-over-year (YoY) decrease of 5%.
• Gross margin was 56.0%, a YoY increase of 305 basis points and the highest-ever gross margin reported for a fourth quarter. Gross margin benefitted from improved inventory dynamics that contributed to a YoY increase in the percentage of net sales at full-price and a YoY decrease in the depth of markdowns, partially offset by a lower contribution from Owned Brands that is consistent with the outlook shared on recent investor conference calls.
• Net income was $19.0 million, a YoY increase of 126%.
• Adjusted EBITDA was $18.7 million, a YoY increase of 37%.
• Diluted earnings per share (EPS) was $0.26, a YoY increase of 117%.
• Net income and EPS for the fourth quarter of 2020 benefitted from a lower effective tax rate of (19.1%) that resulted in a tax benefit, primarily due to excess tax benefits realized as a result of the exercise of non-qualified stock options during the fourth quarter of 2020. This compares to an effective tax rate of 18.9% in the prior-year period.

“Our highly profitable fourth quarter capped a year of record net income and cash flow generation achieved despite the challenging COVID-19 backdrop,” said co-founder and co-CEO Michael Mente. “Our 2020 results are a true testament to our team’s agility, highlighted by $57 million in net income and $74 million in operating cash flow, representing year-over-year increases of approximately 60 percent on both measures.”

“We believe REVOLVE is well positioned to benefit from the reopening of economies, which will enable our customer to finally enjoy the active social lifestyle she loves and has come to associate with REVOLVE,” said co-founder and co-CEO Mike Karanikolas. “With our cash position more than doubling during 2020 and a clean inventory position as we enter 2021, we are focused on capitalizing on the exciting opportunities ahead.”

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