TCF POST Report
Revolve Group, Inc. delivered strong financial performance in the second quarter of 2026, demonstrating continued resilience and commercial momentum. The company recorded its third consecutive quarter of double-digit year-over-year net sales growth, with total net sales reaching $347.4 million, an 11% increase from $309.0 million in Q2 2025.
- Net Sales: $347.4 million (+11% YoY)
- Net Income: $18.6 million (+86% YoY)
- Adjusted EBITDA: $26.8 million (+17% YoY)
- Gross Margin: 56.6% (+254 basis points YoY)
Net income surged 86% year over year to $18.6 million, compared with $10.0 million in Q2 2025, while diluted earnings per share (EPS) also climbed 86% to $0.26.
Analysts note that these bottom-line results were significantly strengthened by a favorable $5.9 million pre-tax tariff refund under the International Emergency Economic Powers Act (IEEPA). The refund contributed $4.4 million after tax, equivalent to $0.06 per diluted share. Excluding these one-time tariff-related gains, Revolve’s core operating profitability remained exceptionally strong, supported by disciplined cost management and robust cash flow generation that exceeded 70% of Adjusted EBITDA during the first half of 2026.
Fashion Innovations
Revolve’s portfolio of owned and partner brands continued to strengthen consumer engagement through strategic product innovation and high-profile collaborations.
The rapid expansion of the newly launched REVOLVE Los Angeles label has quickly established it as a key pillar of the company’s proprietary brand strategy.
Within the luxury business, the FWRD segment recorded quarterly sales of $44.9 million, representing 11% year-over-year growth.
The company also continued expanding its product portfolio through high-impact celebrity collaborations, most notably its ongoing partnership with global music icon Cardi B for the Grow-Good beauty line.
These exclusive launches continued to drive consumer demand. Total orders increased 11% year over year to 2.7 million, while active customers rose to 3.04 million, marking the company’s strongest year-over-year active customer growth rate in nearly three years.
Sourcing, Tariffs & Supply Chain Dynamics
Sourcing strategies and evolving trade regulations remained key considerations for Revolve as it navigated an increasingly complex global supply chain.
Tariff Refunds
The receipt of IEEPA tariff refunds contributed $5.9 million to pre-tax earnings. The refunds reduced the cost of sales by $5.6 million and lifted the gross margin by 162 basis points during the quarter.
Gross Margin Expansion
Excluding the impact of tariff refunds, Revolve’s underlying gross margin expanded 92 basis points year over year to 54.1%, reflecting a favorable product mix, disciplined pricing, and well-controlled markdown activity.
Inventory
Total inventory stood at $276 million at the end of Q2 2026, representing a 25% year-over-year increase against a distorted prior-year comparison.
On a two-year stacked basis, however, net sales growth exceeded inventory growth by approximately five percentage points, underscoring efficient inventory management and healthy inventory turnover.
Marketing & Customer Acquisition
Revolve continued investing aggressively—but strategically—in customer acquisition and long-term brand building.
Marketing expenditure increased to 16.5% of net sales during Q2 2026, up from 15.2% in Q2 2025, representing an increase of 130 basis points.
These investments continued to generate measurable returns. Active customer numbers expanded across both domestic and international markets, while the average order value (AOV) remained resilient at a premium $299.
Global Footprint & International Expansion
The United States remained Revolve’s largest market, generating $269.1 million, or 77% of total Q2 2026 net sales.
International operations continued to gain momentum, with revenue increasing to $78.4 million, representing 23% of total sales. This sustained growth underscores the company’s expanding global customer base and the effectiveness of its international e-commerce strategy.
Balance Sheet Strength & Shareholder Capital Return
Revolve ended the second quarter with a robust balance sheet, holding $312 million in cash and cash equivalents and carrying no debt.
Both operating cash flow and free cash flow remained strong, with first-half 2026 free cash flow reaching $34.0 million.
Reflecting confidence in its long-term cash generation capability, the company continued returning capital to shareholders by repurchasing 497,675 Class A common shares during Q2 2026 at an average price of $19.98 per share. The repurchase retired more than 1% of the company’s outstanding Class A common stock in a single quarter.
With $45.7 million remaining under its authorized share repurchase program, Revolve remains well positioned to balance continued investment in organic growth with disciplined shareholder returns as it enters the second half of 2026.