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Revolve’s Sales, Costs Rose in Q2

Rapper Saweetie standing in front of Revolve backdrop during Coachella in 2019.
Rapper Saweetie at Revolve Festival during Coachella in 2019. (Getty)

The Los Angeles-based e-commerce fashion retailer posted a 27 percent year-over-year increase in net sales — $290 million — in the three months ending on June 30, it reported Wednesday.

However, its net income, a measure of profitability, dropped significantly in the quarter, from $35.5 million last year to $16.3 million, due to rising costs of shipping and a much higher rate of returns.

Fuel surcharges in particular contributed to the margin hit, according to co-founder and co-chief executive Mike Karanikolas. The surcharges were quadruple that of the same period in 2021, though Karanikolas said he anticipates these costs to drop.

The company’s shares fell 14 percent.

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”We delivered these results despite macroeconomic conditions that became more challenging as the quarter progressed, creating cost pressures that impacted profitability, and also contributed to a moderating year-over-year growth trend in net sales in June that has continued into the third quarter,” Karanikolas said in a statement.

Revolve expects the coming months to be challenging in terms of macroeconomic conditions, with its fourth quarter likely to be the most difficult, CFO Jesse Timmermans said on a call with analysts.

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