Revolve achieves 10 percent net sales increase in Q4, driven by segment and market expansion

The US-based fashion retailer Revolve Group reported an outstanding finish to fiscal year 2025, marked by a 10 percent year-over-year increase in fourth-quarter net sales to 324.4 million dollars. This performance was characterized by double-digit growth across both the Revolve and FWRD segments, as well as domestic and international markets.

Net income for the quarter surged 58 percent to 18.6 million dollars, while adjusted EBITDA rose 44 percent to 26.3 million dollars. Co-founder and co-CEO Mike Karanikolas attributed these results to powerful brand momentum and data-driven operational execution, particularly in the face of ongoing macroeconomic pressures.

Segment and geographical performance highlights

The group saw broad-based strength as it exited the year, with several key metrics reaching multi-year highs. The trailing 12-month active customer base grew by 94,000 in the fourth quarter, the highest quarterly increase in more than three years, reaching a total of 2,841,000. Revolve segment net sales rose 10 percent year-over-year to 276.6 million dollars, while FWRD segment luxury net sales increased 14 percent to 47.8 million dollars, driven by record new customer acquisition and a personal shopping program that grew 100 percent in 2025.

International net sales grew 13 percent to 64.2 million dollars. China and the Middle East were highlighted as significant growth drivers, with mainland China growing at nearly twice the overall international rate.

Beauty sales surged 43 percent year-over-year. While this category carries lower order values, management noted it serves as a powerful entry point for new customers who eventually migrate to higher-ticket apparel.

AI innovation and operational efficiency

Revolve continues to leverage its technology DNA to drive financial gains through artificial intelligence (AI). Karanikolas reported that AI-driven personalization and search algorithm enhancements generated millions of dollars in annualized revenue gains during 2025. The company is currently testing a generative AI feature on the Revolve site to surface contextually relevant product information, which serves as a foundational step toward launching agentic AI conversational chat in the future.

A key strategic priority for 2026 is the expansion of Revolve’s physical footprint. Following the opening of a permanent store at The Grove in Los Angeles, management noted an enthusiastic response and a meaningful uptick in interest from tier 1 landlords in other attractive locations. Furthermore, owned brand penetration reached 20 percent of Revolve segment net sales for the full year 2025. Because these exclusive brands generate significantly higher gross margins than third-party labels, the company plans to introduce new "impactful" owned brand chapters in the coming quarters to further drive profitability.

Financial health and 2026 outlook

Revolve entered 2026 with a "bulletproof" balance sheet, ending the year with 303 million dollars in cash and equivalents and zero debt. Net sales for the first seven weeks of 2026 increased approximately 16 percent year-over-year.

For the full year 2026, the company expects a gross margin between 53.7 percent and 54.2 percent. While management anticipates increased brand marketing investments to support new initiatives, they remain confident that their strong financial position will allow them to capture market share from struggling competitors in the luxury and premium fashion space.