Revolve Group, LLC (RVLV) saw its stock price plummet 8.39% in after-hours trading on Tuesday, despite reporting first-quarter earnings that largely beat analysts' expectations. The sharp decline suggests that investors may have been looking for even stronger results or were concerned about specific aspects of the company's performance.
According to the company's first-quarter 2025 financial results, Revolve reported earnings per share (EPS) of $0.16, surpassing the IBES estimate of $0.14. Net income came in at $11.406 million, also beating the expected $10.4 million. The company's adjusted EBITDA of $19.299 million significantly exceeded the IBES estimate of $15.5 million, indicating strong operational efficiency.
However, Revolve's Q1 sales of $296.709 million fell short of the IBES estimate of $298 million, which may have contributed to the negative market reaction. The company reported a gross profit of $154.286 million and a gross margin of 52%, but investors might have been looking for stronger top-line growth. The after-hours sell-off suggests that market participants are reassessing Revolve's growth prospects and valuation in light of these mixed results, despite the company's ability to exceed profitability expectations.
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