Revolve Group, Inc. — Call Transcript 2026

Raise your hand if you shop at Revolve and raise your hand if you're going to vote for us in Extel. Extel. Thank you, everybody. Hi, everybody. Also, raise your hand if you want free stuff from Revolve. Yeah. Okay, you're going to come to the DJ session this afternoon, the Experiential Expo, 4:45 P.M. today. We'll have a great fair with the best brands, including Revolve, having part of this great event. I'm Oliver Chen, TD Cowen's retail new platforms and luxury analyst. We're delighted to have Jesse Timmermans here. He's the CFO of Revolve. We have a buy rating, a $28 price target on 20x EV to EBITDA. The company has been a leader in customer centricity, fashion, weaving AI tech into operations for a better scalable platform and long-term owners and operators. Jesse, thanks a lot. Yeah, thanks for having us. For those less familiar with the story, can you help us frame how Revolve is differentiated versus peers? We view you as a Gen Z leader. What are your core competencies? We are the fashion destination for the next-generation consumer. For those of you that don't know, we were founded over 20 years ago by Mike and Michael, who are still our co-CEOs and very active in the business still today. I'd say that is differentiator Number 1 is that founder-led owner mindset. They still own 42% of the outstanding shares, very long-term oriented in driving the brand and driving the business. That is definitely a key differentiator. Number 2, when they founded the business, neither Mike nor Michael were fashion guys. Michael was a business analyst. Mike was a hardcore engineer. They relied on data and technology to make all their decisions and built the entire technology infrastructure from the ground up, homegrown, and still leverage that technology today, which serves us very well, especially in this new era of AI innovation, and set up really well to take advantage of that. That's Number 2 is just the technology infrastructure, the vast and really quality data that we have, and just a culture of innovation. Then Number 3 is the powerful brand. Over time, we've invested heavily in the brand, in really building the brand for the long term and really connecting with this next-generation consumer. We have a phenomenal brand marketing team who really knows the customer and knows how to engage with that customer. We just launched Revolve Los Angeles, our first namesake label that feeds into that brand heat. Then Number 4, and maybe I'll keep it at that, is just the consistent growth, and not just growth, but profitable growth. That goes back to the founder-led mindset and always growing profitably. That's led to a very strong balance sheet. We have over $336 million in cash in the bank as of Q1, which allows us to stay on the offense when others are playing defense. That also segues into AI. You've been a pioneer of digital in many ways and rapid A/B testing as well as using algorithms. What are your favorite examples of AI today and what you're doing and how you're using it, both magic and logic? Yeah, absolutely. I think the most visible AI opportunities are where we've leveraged AI is on the site. Developed our own internal search algorithm. That resulted in double-digit conversion rate increase, and then not only that, we're not paying a third party several hundred thousand dollars a year to operate that search algorithm. Visual and virtual try-on on the site, which also increases conversion. Gives her the opportunity to mix and match outfits. Most recently, AI generative Q&A on the site to surface the most relevant Q&A to really educate her better on that first purchase, which helps in conversion, helps in retention, and then also on the return rate, reduces return rate over the long term. It's really throughout the business, and there's a lot of examples that I could go into. All the way from, call it the midstream of the business on marketing and editorial and using AI to improve efficiency and increase output, all the way to the back office in developing our own internal reporting and analysis tool. Using it for invoice processing, translating voice to text on customer service calls so we can better mine that data, and many other examples. I would say the most visible and exciting are on the customer front and really curating that experience for the customer. We offer over 1,000 brands and 100,000 styles on the site at any given point, so that curation and kind of journey for the customer is really important. You mentioned return rates, they've improved. The customer and the general consumer economy has a lot of crosscurrents. What's happening return rates and structural initiatives, as well as what you're seeing perhaps with the health of the consumer? Yeah. Return rate was a big initiative for us last year, and we had a number of initiatives in play to reduce the return rate, and we successfully did that in 2025. Even in Q1, we had a 80 basis point reduction in return rate on top of a 280-basis point reduction last year in Q1. It's largely from our initiatives and really reducing the return rate, but not at the detriment of the customer. From day one, free shipping, free returns, home is a dressing room. That's core to the service proposition. We don't want to make it harder on the customer. It's all about maintaining that customer experience. Then there is some structural shifts as well. One of our growth opportunities is category diversification. Yeah. We've historically been very heavy in dresses. We think there's a massive opportunity out there to capture more share of her wallet and serve other aspects of her life, from active to essentials to beauty and men's. Physical stores also carry a meaningfully lower return rate than that of the online purchases. As we continue to roll out more stores, there will be a structural benefit to return rate. Mm-hmm. On customer health, you previously mentioned April trending at around 14% versus the 16% you had in first quarter. What's happening with consumer sentiment? We see a mixed picture with the consumer fundamentally sound, but sentimentally weak, but they're still spending, of course. May, at some people, have gotten better. Yeah. It is tricky, like you said. Sentiment, University of Michigan sentiment is at an all-time low. We're stuck with sticky inflation, higher fuel prices, and a lot of uncertainty, so there's a lot of challenges. I would say sentiment is pretty low. That said, I think she's proven to be fairly resilient. I think layer our execution on top of that and being able to drive that 16% growth in Q1 despite the macro pressures out there. You do have tougher second half comps on the gross margin side of the model. What are puts and takes we should think about and rank order of opportunities or risks? Yeah. Number 1 opportunity is own brand mix expansion. We are at about 20% in 2025. We see that going meaningfully higher over time. Yeah. We peaked at 36%, just to put some context to it, back in 2019. We think we can be higher than that, again, over time. A couple big drivers recently was the launch of Revolve Los Angeles, our first namesake brand. That was a pretty limited SKU set, but really serves as a halo, allowing us to launch more products at more accessible price points. Yeah Go deeper and really drive volume in the coming years. That's the biggest opportunity on the margin side. I think on the offset, there's just quarter-to-quarter fluctuation on full price markdown mix. We did see a little bit of a tick down on full price mix this past quarter, and expect that to continue for the year, but that's a quarter-to-quarter dynamic. Still very healthy and higher. Yeah than we were at in the pre-COVID era. Over time, we continue to drive that up. You do have a multi-year compare of a high degree of full price selling. That's tougher when you're anniversarying that. What's happening with full price selling? Is that a concern relative to cleanliness of inventory? No. It's still in a very healthy place. Yeah. Even though it did tick down year-over-year, it was higher last year, but we were in a much higher, a different time zone then. Still very healthy and higher than it was back in, again, the pre-COVID era, which was the most normal time period. I think inventory's healthy, growing at about the same pace as sales. Even in the markdown component of our sales, markdown margin has meaningfully improved. That's another example of AI innovation, where we leveraged AI to optimize the markdown algorithm. Yeah which is driving significant margin gains there. To your point, we start to lap in the back half of the year, so the comps get tougher on that side. Thank you for that. Also, thank you for sponsoring the experiential fair. I'll DJ today at 4:45 at the Courtyard, but can we get Cardi B here next time? We'll work on it. Okay. You're already killing my margin with this free product. Webcast it and Cardi B. What is the Cardi B joint venture? Tell us about Grow-Good Beauty Hair Care. Yeah. We're really excited about this. We've got a number of big swing growth initiatives at play. Yeah. Grow-Good is one. I'll get into that. Physical retail is another one. The REVOLVE Los Angeles brand launch that I mentioned. Grow-Good is beauty product, in partnership with Cardi B. It's a joint venture. Very shared economics. She's very engaged. We pre-launched in March, sold out within an hour. We had the official launch in April, sold out in an hour again. We just got into more inventories. That was just limited by our inventory buys. We got into more inventory in May. We'll have a bigger inventory buy this month. A bigger one in August. Incrementally building into the inventory. The Grow-Good brand alone reached 650,000 followers in a matter of weeks, which is phenomenal and outpaces some of the other celebrity beauty brands out there. Compare that to Cardi's 164 million followers, that kind of puts some context around the opportunity that we have with that brand. How did you pick doing this? You are an OG of the influencer community. Why this JV? Why beauty and hair care? Yeah. We saw an opportunity. We'd been working with Cardi for years. She's been a great partner. We both saw the opportunity in beauty, and leveraging her passion for the product, and then also, of course, her brand power. Combine that with Revolve's operational excellence. Yeah All the back office fulfillment and just great customer service that we can offer. It was a great match. I think this sets the stage for either future partnerships or also future own brands within beauty now that we have the playbook. REVOLVE Los Angeles own brand. I'm excited to see that. What are your vision for % of mix or pace of growth and general strategy for halo and later? Yeah. This year is really about that halo effect. Not just the halo for the Revolve label brand, the REVOLVE Los Angeles brand, but it also serves as a great halo for the entire business. Next year, we'll start to get into other more accessible price points, other categories, and those will be the real volume drivers. We see own brand mix increasing meaningfully over the coming years. We don't put a target on it because we want to do what's right for the assortment on the site, and we don't want to over-penetrate in any certain category or even own brands itself. The other opportunity. Yeah In own brands is in physical retail. Own brands perform better in store than they do online, both from a mix perspective and an inventory productivity perspective. We've got a couple real opportunities to drive own brand mix higher over time. On stores, that's a really cool topic. You signed a lease in Miami. Aspen and The Grove are performing well. What's happening with stores? What are you learning here? I've always wanted you to have hundreds of these, but you got to be measured. Yeah. Definitely being measured. We think we're very good at online, but acknowledge we still need to build the muscle for physical retail. That's everything from processes, inventory management, and the team. That's the phase we're in right now is really building that infrastructure. What we've learned, stores are a great source of new customer adds. Even in our home of L.A., we see a halo for the online business, and just anecdotally in talking to customers and kind of overhearing customers talk, it's incredible how many customers don't know Revolve, even, again, in our home turf of L.A. Great new customer acquisition tool. I mentioned own brands. Own brands outpacing in store. Then return rate, back to the return rate, meaningfully lower in store than online. We think it could be half of the business over time. There's still three quarters of the dollars out there in retail are flowing through physical retail stores. It's a largely untapped opportunity for us. We have been fortunate to teach a class with Revolve at Columbia Business School, and part of it is how fast you are A/B testing digitally extremely well and executing that to both cultural relevance and inventory management. What's the hardest part of stores? How do you actually do that physically? It's not exactly possible. Yeah. It is tougher in stores, That's the one thing we're learning. I think both the challenge and the opportunity is how do you fit and what do you fit into a store out of our 100,000 styles that we carry on the site. It is very much a curation. Each store is different. Aspen is much different from the Grove, is going to be different than Miami. We do have a rich set of data both on the merchandise front and on the customer front. We know what they're buying, where they are. We can leverage that to assort the store. Yeah. Even in store, we can quickly A/B test. Back to AI opportunities, we have some really great visualization tools. Yeah where we can see what product is in what area of the store and what's selling and who's selling it. We can, maybe not as quick as online, but really quickly read what's working in store and quickly re-assort. You learn a lot. It's a magic model with having 100,000 styles. What are your view for the SKU count later? You have a lot of liberty to go into multiple categories too, but you're balancing this against simplify to amplify, but the customer loves coming back even when things aren't perfect. Yep. Yeah. There's still opportunity for SKU or style growth. Just for example, that has increased significantly over the past eight years. Yeah I would say. With the goal of increasing the units, but doing so via breadth and not depth, so still buying very shallow and increasing the breadth. Yeah We continue to read and react. That comes back to AI curation and helping her kind of navigate the site and enabling her journey to find the right product across those styles. Yeah. Reinforcement learning could hold the promise. Yeah intersecting that with personalization. Still, you got to be cool and human too. Yeah. Sexy. Yep. Test, read, and react. Actually, that's a mainstay of when I worked with you on the IPO. What about test, read, and react today versus call it five years ago? Yeah. Faster, better. Yeah. Yeah. It incrementally gets better every year. Even before this AI evolution. We continue to get better and better via machine learning, via just having more data points over the course of our journey. Having 2.8 million active customers across 100,000 styles across 20 years gives us a very rich set of data to work with. Yeah. That's quite proprietary, and it all has a lot of veracity to that data. We talked about Coachella, TD Cowen at Coachella. What happens to the person who doesn't go to Coachella later in life but still wants to love Revolve? Yeah. That customer lifetime value. Yep. Definitely an opportunity there. I think she can continue to grow within the Revolve ecosystem and then graduate into FWRD. Yeah which is our luxury segment. Higher price point, slightly different product mix. Great photography there, too. Yeah. Phenomenal. Really proprietary. Yep kind of looks. Yeah. That's a key differentiator. Yeah Some of the other luxury players. It's a real curated, young luxury feel. That comes through on the site, comes through on the merchandise. We just partnered with Rosie Huntington-Whiteley as our fashion director, which has been well-received by both brands and customers alike. It's continuing, again, similar to Revolve, just that constant newness curation, having a vast assortment, but making sure it's very curated. That serves that customer that's growing her wallet, growing her different aesthetic over time. You also have other brands like Helsa too. Yep. Do you think that helps serve long-term value for the older customers as well? Yeah. Cross-listing, more and more cross-listing across both Revolve and FWRD where brands. Yeah can kind of play in both. Oh, interesting. Yeah. Yeah. Well, what's on the roadmap for FWRD? It's been great momentum now, and it's a big luxury opportunity. Yeah. Just continued great merchandise, great editorial, great assortment. We're also focusing on the high-value customer- Yeah really investing there. in gaining that customer. I think that customer is kind of feeling the turmoil in the luxury industry. Yeah There's fewer points of distribution, fewer places to find great product. Again, brands and customers alike are finding FWRD is a really great place to find great product. Then once we have her in, she realizes the great service that we offer that outpaces other competitors. Even going D2C or going directly to the brand itself, we can generally outperform on a service level. That sounds very compelling. On the capital allocation side, Jesse, $336 million of cash, no debt. What are you thinking about capital deployment, investments, minority stakes, M&A? A different part B to this is, this is an investment year to a certain extent. Could you reflect upon that, too? Yeah. Really great place to be in terms of capital allocation. Where we see the greatest ROI is investing back into the business, and this gets to your point B of your question. That's where we see the greatest ROI. We're still only 3% penetrated in our core domestic market. Yeah. Even lower penetration internationally. We have a lot of room to grow. Number 1 is invest back into the business, and this is definitely an investment year, supporting the REVOLVE Los Angeles launch, the Grow-Good launch, physical stores. We have a lot going on. We're really optimistic about the long-term growth opportunities, and if even just one of these hits, it'll be a game changer. That's Number 1, invest back into the business. Number 2 is opportunistic M&A, and that can take the form of partnerships, minority investments, which we've made several of. Most recently in January, made a minority investment into a brand that serves the growth opportunity and category diversification, really excited about that. We continue to look at things. All three of these things at the same time. What's your approach? What are you looking for a partnership or a minority investment? How would you choose the methodology and/or the nature of the targets? It needs to serve one of our growth opportunities. Yeah. Generally, where these fit is in that category of diversification, whether it's men's or active or essentials. There could be opportunity in beauty, although we've chosen to more incubate and build that on our own at this point. Really, it's about serving one of those growth opportunities, and primarily that category diversification. A lot of times it's a brand that we carry on the site, so we have really good intel into how the brand is performing with our customer and in our ecosystem. International is about 20% of sales. I think there's a lot of pent-up demand there, given how much global traffic you have. Plus, you could probably improve service levels. What's happening internationally? Yeah. Really great growth coming out of international. 20% this most recent quarter, and that's on top of great growth last year, so really good long-term growth out of the international business. That said, it's very diversified across regions, so it's very seldom that you'll see every region hitting in the same quarter. This most recent quarter, of course, and into Q2, Middle East is experiencing some pressure, obviously. On the flip side, we have regions like Mexico, which was a phenomenal grower. We increased new customers by 80%. Back to your service point, that was a result of increasing the service levels, offering different, more curated payment types for that customer in Mexico, and then doing some more dedicated marketing. That's the international playbook, is get the service levels right and on par with the U.S. customer. Make sure the assortment is right, of course, and then do more dedicated marketing in those regions. China's been phenomenal for us. Yeah. That's more different, when it comes to marketing and a much different customer. We recently developed an own brand specifically in China for the China customer that was designed, styled, and the fit was specific for that customer. Yeah. Marketed that via livestream, sold out. Wow. Had over 100,000 views on the livestream. More opportunity to do more of that kind of dedicated own brand within China. Yeah. We've seen a lot of missteps in China, actually. How did you do so well there? What has been the learning so far? Yeah. Our head of China spent a lot of time in China, and has a lot of contacts there. We hired, kind of under him, a head of China that came from the livestreaming- Yeah industry. She knows how the customer behaves, how she shops, what she looks for. I think it's people and just making sure we're going at the right pace and addressing the customer's needs. I'll ask one more, then I'll open it up to the audience for questions. Well, there's a lot of great things we talked about from stores to own brands to beauty. How do you prioritize these or what are you thinking about that, I think you do a good job focusing on the core bread and butter, but what are your thoughts on prioritization and not going too crazy? Yeah. I think this goes back to the founder-led culture that we have and having Mike and Michael still in the seat of the CEO and building at the right pace. Growing, being aggressive, but doing so at the right pace, remaining profitable. It is a constant balance of prioritization. We do have a lot going on right now, so I think it's making sure that we are investing while at the same time keeping the house in order and growing that core business. Any questions from the audience, feel free to raise your hand. Go ahead, Linda. Thanks. Good talk. Thank you. Can you speak a little bit to influencer marketing and the use of AI and where you guys come out on using AI content creators, and where is the line, and how do you see that as sort of how your customer feels when you've been experimenting with that? How is that working? Yeah, most of the- I'll repeat the question for the webcast as well. Influencer marketing and AI. Yep. Yeah. To date, all the influencer marketing and the marketing in general has been human. Very authentic and curated, more playbook of the past. Not to say that it won't shift to AI over time. We'll have to see how that plays out. We are very conscious of the customer feedback and how the customer reacts to that. Thus far, it's been at least on the marketing and what you see is human. That said, we're leveraging AI in the back, in the systems and the processes to increase the speed and the efficiency at which we do things, and then more so on the performance marketing side, where we're using that to expand the reach on some of our bigger channels. Yeah, I think you have to be very careful to make sure it's authentic and gauge the customer reaction. We had a question over there as well. Oh, yeah. I'm curious if you could talk a little bit more about international and that margin profile as it compares to more U.S. The question was the international business and how that margin profile compares to the U.S. business. Generally, on a gross margin basis, it's very consistent across domestic, international. It's similar product. There's always differences region by region, and FWRD can skew higher in certain regions than Revolve, so that takes the blended margin down. On the transactional costs, that's where you see some pressure on the international side because it does cost more to ship back and forth internationally. We're continuing to get better and better and more efficient when it comes to that. We can serve 80% of our international customers in two to three business days, which is phenomenal, and that's coming out of the U.S. Service is a key element there. Higher on the transactional costs, offset by a slightly lower return rate. There's some puts and takes, and by the time you get down to contribution margin, it's similar. The international team, the dedicated international team, is very small. We're leveraging the greater Revolve infrastructure to serve that business, so you just get economies of scale as you grow. Any other questions? Jesse, which part of your job keeps you up at night, and which part's the most fun? The least fun and the most fun. Okay. Least fun, investor conferences. Oh, no. Are you kidding me? Just kidding. You come back again and again. No. You're pretty loyal. Yeah. Yeah. Well, you like music. Yeah culture. Yeah, yeah. No. Media have fun. Yeah. No, these are fun. Don't get me wrong. I'm just giving you a hard time. No, I think what keeps me up at night are good things. We have a lot of growth opportunities in play right now. Last year was all about tariffs, and that was a bad keeping me up at night. This year is all about the growth opportunities. We covered them all, but I think in just the prioritization point, that's always important. I think fun, I've got a couple different versions of fun. I think fun is getting out and experiencing the brand, whether that's at REVOLVE Festival or some of the other events that we do. Because a lot of times, I'm just in the back office and just grinding in Excel and doing other things. Yeah, that's fun too, though. It's really good. Yeah. That's the other piece. That's the other fun part is just cranking in Excel and working with the team. Yeah being in the office and engaging there. It is good to get out and really experience the brand and talk to the customer. Now having physical stores, it's great to visit the stores and see how the customer's engaging and see the product in real life. What's been most fun when you do experience the brand? What have been your biggest surprises? Yeah, I think maybe not a surprise, but everybody knows us for the brand and what you see on Instagram. The influencers and the great product and all the sexy. What is surprising to most is when you talk to a customer, the first thing they say is, "The service is phenomenal. I get my product the next day. The returns are so easy. The product is great." That's a surprise to a lot of people; is the customer really values that service component. I guess surprising is how many people still don't know Revolve. Again, back to that 3% penetration. We still have a lot of opportunity out there and a lot of customers to acquire. I think you've been leaders to this embracing your customer and personalization, but what do you think is ahead for service? What are you testing with returns? Anything on the horizon? The Mikes both have intense, innovative minds. Yeah. On a service front, I think we're very good today. It can always get better. I think it's faster shipping. The return process is easy, but that can always be faster. I think on the service side, it comes back to the website and the curation and the personalization, and that continues to evolve, and we can get better and better there. I'd put that in the service component as well. Yeah. Yeah, we do have some initiatives in play for return rate, but again, we want to make that return rate go down in win-win ways and not impact the customer experience. The other thing we talk about at TD Cowen in a book we wrote is what we call the retail nexus. We're thinking about marketplaces and digital advertising. You do have such high frequency and loyalty in your multi-brand. How are you contemplating those aspects of opportunity? Yeah. I think brand is always important. Yeah building the brand for the long term, that goes back to investing in brand marketing consistently over time and just really building that brand. That set us up well to launch REVOLVE Los Angeles and that first namesake brand. I definitely think it's a balance. You have to do both. Could you get alternative revenue streams from digital advertising? I think we could, and we've discussed that. We do have now some pop-ups on the checkout. We're getting some revenue from that, have tried to really want to maintain that experience. just that core Revolve experience on the site and not clutter things too much. Yeah, it's a balance with. Yeah execution and what about the marketplace frontier? Yeah, I think- Don't you like it being capital light, but there's trade-offs. Yeah. There are trade-offs. Fun fact, Mike and Michael. They did massage chairs, right, in the very beginning. Oh, yeah, they did a bunch of stuff. They did. Maybe cellphone covers. I don't know. Yeah. There was a lot of innovation and experimentation. Yeah. They partnered with José at Farfetch. Yeah launched Farfetch North America. Yeah in the early days. Wow. They got direct experience with that marketplace model. What they realized, it's really hard to manage all those different brands going back to the service level. you don't have 100% control over the full purchase cycle. Yeah. Sometimes iconic luxury, as we cover that sector too, like owns from the alligator farms to the customer touch point. Yeah. So- Yeah I get it. Last question, what do you think is less well understood about Revolve? If we only remember a couple of things from this precious time, we had together, what should they be? Yeah. I think less understood or less appreciated is just that founder-led culture and the culture of innovation and technology. It's a phenomenal brand. We have great product, but it's really the culture behind it that's driving that- Led by Mike and Michael. I think to take away from this is the consistent growth, profitability, and the meaningful growth opportunities we have ahead. Okay, great. Well, Jesse, it's been a pleasure. Thank you. Yeah. Thanks, Oliver. Thank you very much. Yeah, good to be here.

Speaker 2: Raise your hand if you shop at Revolve and raise your hand if you're going to vote for us in Extel. Extel. Thank you, everybody. Hi, everybody. Also, raise your hand if you want free stuff from Revolve. Raise your hand if you shop at Revolve and raise your hand if you're going to vote for us in Extel. raise your hand if you shop at revolve and raise your hand if you're going to vote for us in extel Extel. extel Thank you, everybody. thank you everybody Hi, everybody. hi everybody Also, raise your hand if you want free stuff from Revolve. also raise your hand if you want free stuff from revolve

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Okay, you're going to come to the DJ session this afternoon, the Experiential Expo, 4:45 P.M. today. We'll have a great fair with the best brands, including Revolve, having part of this great event. I'm Oliver Chen, TD Cowen's retail new platforms and luxury analyst. We're delighted to have Jesse Timmermans here. He's the CFO of Revolve. We have a buy rating, a $28 price target on 20x EV to EBITDA. The company has been a leader in customer centricity, fashion, weaving AI tech into operations for a better scalable platform and long-term owners and operators. Jesse, thanks a lot. Okay, you're going to come to the DJ session this afternoon, the Experiential Expo, 4:45 P.M. today. okay you're going to come to the dj session this afternoon the experiential expo 4:45 p.m today We'll have a great fair with the best brands, including Revolve, having part of this great event. we'll have a great fair with the best brands including revolve having part of this great event I'm Oliver Chen, TD Cowen's retail new platforms and luxury analyst. i'm oliver chen td cowen's retail new platforms and luxury analyst We're delighted to have Jesse Timmermans here. we're delighted to have jesse timmermans here He's the CFO of Revolve. he's the cfo of revolve We have a buy rating, a $28 price target on 20x EV to EBITDA. we have a buy rating a $28 price target on 20x ev to ebitda The company has been a leader in customer centricity, fashion, weaving AI tech into operations for a better scalable platform and long-term owners and operators. the company has been a leader in customer centricity fashion weaving ai tech into operations for a better scalable platform and long-term owners and operators Jesse, thanks a lot. jesse thanks a lot

Speaker 1: Yeah, thanks for having us. Yeah, thanks for having us. yeah thanks for having us

Speaker 2: For those less familiar with the story, can you help us frame how Revolve is differentiated versus peers? We view you as a Gen Z leader. What are your core competencies? For those less familiar with the story, can you help us frame how Revolve is differentiated versus peers? for those less familiar with the story can you help us frame how revolve is differentiated versus peers We view you as a Gen Z leader. we view you as a gen z leader What are your core competencies? what are your core competencies

Speaker 1: We are the fashion destination for the next-generation consumer. For those of you that don't know, we were founded over 20 years ago by Mike and Michael, who are still our co-CEOs and very active in the business still today. I'd say that is differentiator Number 1 is that founder-led owner mindset. They still own 42% of the outstanding shares, very long-term oriented in driving the brand and driving the business. That is definitely a key differentiator. Number 2, when they founded the business, neither Mike nor Michael were fashion guys. Michael was a business analyst. Mike was a hardcore engineer. We are the fashion destination for the next-generation consumer. we are the fashion destination for the next-generation consumer For those of you that don't know, we were founded over 20 years ago by Mike and Michael, who are still our co-CEOs and very active in the business still today. for those of you that don't know we were founded over 20 years ago by mike and michael who are still our co-ceos and very active in the business still today I'd say that is differentiator Number 1 is that founder-led owner mindset. i'd say that is differentiator number 1 is that founder-led owner mindset They still own 42% of the outstanding shares, very long-term oriented in driving the brand and driving the business. they still own 42% of the outstanding shares very long-term oriented in driving the brand and driving the business That is definitely a key differentiator. that is definitely a key differentiator Number 2, when they founded the business, neither Mike nor Michael were fashion guys. number 2 when they founded the business neither mike nor michael were fashion guys Michael was a business analyst. michael was a business analyst Mike was a hardcore engineer. mike was a hardcore engineer They relied on data and technology to make all their decisions and built the entire technology infrastructure from the ground up, homegrown, and still leverage that technology today, which serves us very well, especially in this new era of AI innovation, and set up really well to take advantage of that. That's Number 2 is just the technology infrastructure, the vast and really quality data that we have, and just a culture of innovation. Then Number 3 is the powerful brand. Over time, we've invested heavily in the brand, in really building the brand for the long term and really connecting with this next-generation consumer. We have a phenomenal brand marketing team who really knows the customer and knows how to engage with that customer. We just launched Revolve Los Angeles, our first namesake label that feeds into that brand heat. They relied on data and technology to make all their decisions and built the entire technology infrastructure from the ground up, homegrown, and still leverage that technology today, which serves us very well, especially in this new era of AI innovation, and set up really well to take advantage of that. they relied on data and technology to make all their decisions and built the entire technology infrastructure from the ground up homegrown and still leverage that technology today which serves us very well especially in this new era of ai innovation and set up really well to take advantage of that That's Number 2 is just the technology infrastructure, the vast and really quality data that we have, and just a culture of innovation. that's number 2 is just the technology infrastructure the vast and really quality data that we have and just a culture of innovation Then Number 3 is the powerful brand. then number 3 is the powerful brand Over time, we've invested heavily in the brand, in really building the brand for the long term and really connecting with this next-generation consumer. over time we've invested heavily in the brand in really building the brand for the long term and really connecting with this next-generation consumer We have a phenomenal brand marketing team who really knows the customer and knows how to engage with that customer. we have a phenomenal brand marketing team who really knows the customer and knows how to engage with that customer We just launched Revolve Los Angeles, our first namesake label that feeds into that brand heat. we just launched revolve los angeles our first namesake label that feeds into that brand heat Then Number 4, and maybe I'll keep it at that, is just the consistent growth, and not just growth, but profitable growth. That goes back to the founder-led mindset and always growing profitably. That's led to a very strong balance sheet. We have over $336 million in cash in the bank as of Q1, which allows us to stay on the offense when others are playing defense. Then Number 4, and maybe I'll keep it at that, is just the consistent growth, and not just growth, but profitable growth. then number 4 and maybe i'll keep it at that is just the consistent growth and not just growth but profitable growth That goes back to the founder-led mindset and always growing profitably. that goes back to the founder-led mindset and always growing profitably That's led to a very strong balance sheet. that's led to a very strong balance sheet We have over $336 million in cash in the bank as of Q1, which allows us to stay on the offense when others are playing defense. we have over $336 million in cash in the bank as of q1 which allows us to stay on the offense when others are playing defense

Speaker 2: That also segues into AI. You've been a pioneer of digital in many ways and rapid A/B testing as well as using algorithms. What are your favorite examples of AI today and what you're doing and how you're using it, both magic and logic? That also segues into AI. that also segues into ai You've been a pioneer of digital in many ways and rapid A/B testing as well as using algorithms. you've been a pioneer of digital in many ways and rapid a/b testing as well as using algorithms What are your favorite examples of AI today and what you're doing and how you're using it, both magic and logic? what are your favorite examples of ai today and what you're doing and how you're using it both magic and logic

Speaker 1: Yeah, absolutely. I think the most visible AI opportunities are where we've leveraged AI is on the site. Yeah, absolutely. yeah absolutely I think the most visible AI opportunities are where we've leveraged AI is on the site. i think the most visible ai opportunities are where we've leveraged ai is on the site Developed our own internal search algorithm. That resulted in double-digit conversion rate increase, and then not only that, we're not paying a third party several hundred thousand dollars a year to operate that search algorithm. Visual and virtual try-on on the site, which also increases conversion. Gives her the opportunity to mix and match outfits. Most recently, AI generative Q&A on the site to surface the most relevant Q&A to really educate her better on that first purchase, which helps in conversion, helps in retention, and then also on the return rate, reduces return rate over the long term. It's really throughout the business, and there's a lot of examples that I could go into. Developed our own internal search algorithm. developed our own internal search algorithm That resulted in double-digit conversion rate increase, and then not only that, we're not paying a third party several hundred thousand dollars a year to operate that search algorithm. that resulted in double-digit conversion rate increase and then not only that we're not paying a third party several hundred thousand dollars a year to operate that search algorithm Visual and virtual try-on on the site, which also increases conversion. visual and virtual try-on on the site which also increases conversion Gives her the opportunity to mix and match outfits. gives her the opportunity to mix and match outfits Most recently, AI generative Q&A on the site to surface the most relevant Q&A to really educate her better on that first purchase, which helps in conversion, helps in retention, and then also on the return rate, reduces return rate over the long term. most recently ai generative q&a on the site to surface the most relevant q&a to really educate her better on that first purchase which helps in conversion helps in retention and then also on the return rate reduces return rate over the long term It's really throughout the business, and there's a lot of examples that I could go into. it's really throughout the business and there's a lot of examples that i could go into All the way from, call it the midstream of the business on marketing and editorial and using AI to improve efficiency and increase output, all the way to the back office in developing our own internal reporting and analysis tool. Using it for invoice processing, translating voice to text on customer service calls so we can better mine that data, and many other examples. I would say the most visible and exciting are on the customer front and really curating that experience for the customer. We offer over 1,000 brands and 100,000 styles on the site at any given point, so that curation and kind of journey for the customer is really important. All the way from, call it the midstream of the business on marketing and editorial and using AI to improve efficiency and increase output, all the way to the back office in developing our own internal reporting and analysis tool. all the way from call it the midstream of the business on marketing and editorial and using ai to improve efficiency and increase output all the way to the back office in developing our own internal reporting and analysis tool Using it for invoice processing, translating voice to text on customer service calls so we can better mine that data, and many other examples. using it for invoice processing translating voice to text on customer service calls so we can better mine that data and many other examples I would say the most visible and exciting are on the customer front and really curating that experience for the customer. i would say the most visible and exciting are on the customer front and really curating that experience for the customer We offer over 1,000 brands and 100,000 styles on the site at any given point, so that curation and kind of journey for the customer is really important. we offer over 1,000 brands and 100,000 styles on the site at any given point so that curation and kind of journey for the customer is really important

Speaker 2: You mentioned return rates, they've improved. The customer and the general consumer economy has a lot of crosscurrents. What's happening return rates and structural initiatives, as well as what you're seeing perhaps with the health of the consumer? You mentioned return rates, they've improved. you mentioned return rates they've improved The customer and the general consumer economy has a lot of crosscurrents. the customer and the general consumer economy has a lot of crosscurrents What's happening return rates and structural initiatives, as well as what you're seeing perhaps with the health of the consumer? what's happening return rates and structural initiatives as well as what you're seeing perhaps with the health of the consumer

Speaker 1: Yeah. Return rate was a big initiative for us last year, and we had a number of initiatives in play to reduce the return rate, and we successfully did that in 2025. Even in Q1, we had a 80 basis point reduction in return rate on top of a 280-basis point reduction last year in Q1. It's largely from our initiatives and really reducing the return rate, but not at the detriment of the customer. Yeah. yeah Return rate was a big initiative for us last year, and we had a number of initiatives in play to reduce the return rate, and we successfully did that in 2025. return rate was a big initiative for us last year and we had a number of initiatives in play to reduce the return rate and we successfully did that in 2025 Even in Q1, we had a 80 basis point reduction in return rate on top of a 280-basis point reduction last year in Q1. even in q1 we had a 80 basis point reduction in return rate on top of a 280-basis point reduction last year in q1 It's largely from our initiatives and really reducing the return rate, but not at the detriment of the customer. it's largely from our initiatives and really reducing the return rate but not at the detriment of the customer From day one, free shipping, free returns, home is a dressing room. That's core to the service proposition. From day one, free shipping, free returns, home is a dressing room. from day one free shipping free returns home is a dressing room That's core to the service proposition. that's core to the service proposition We don't want to make it harder on the customer. We don't want to make it harder on the customer. we don't want to make it harder on the customer It's all about maintaining that customer experience. Then there is some structural shifts as well. One of our growth opportunities is category diversification. It's all about maintaining that customer experience. it's all about maintaining that customer experience Then there is some structural shifts as well. then there is some structural shifts as well One of our growth opportunities is category diversification. one of our growth opportunities is category diversification

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We've historically been very heavy in dresses. We think there's a massive opportunity out there to capture more share of her wallet and serve other aspects of her life, from active to essentials to beauty and men's. Physical stores also carry a meaningfully lower return rate than that of the online purchases. As we continue to roll out more stores, there will be a structural benefit to return rate. We've historically been very heavy in dresses. we've historically been very heavy in dresses We think there's a massive opportunity out there to capture more share of her wallet and serve other aspects of her life, from active to essentials to beauty and men's. we think there's a massive opportunity out there to capture more share of her wallet and serve other aspects of her life from active to essentials to beauty and men's Physical stores also carry a meaningfully lower return rate than that of the online purchases. physical stores also carry a meaningfully lower return rate than that of the online purchases As we continue to roll out more stores, there will be a structural benefit to return rate. as we continue to roll out more stores there will be a structural benefit to return rate

Speaker 2: Mm-hmm. On customer health, you previously mentioned April trending at around 14% versus the 16% you had in first quarter. What's happening with consumer sentiment? We see a mixed picture with the consumer fundamentally sound, but sentimentally weak, but they're still spending, of course. May, at some people, have gotten better. Mm-hmm. mm-hmm On customer health, you previously mentioned April trending at around 14% versus the 16% you had in first quarter. on customer health you previously mentioned april trending at around 14% versus the 16% you had in first quarter What's happening with consumer sentiment? what's happening with consumer sentiment We see a mixed picture with the consumer fundamentally sound, but sentimentally weak, but they're still spending, of course. we see a mixed picture with the consumer fundamentally sound, but sentimentally weak but they're still spending of course May, at some people, have gotten better. may at some people have gotten better

Speaker 1: Yeah. It is tricky, like you said. Sentiment, University of Michigan sentiment is at an all-time low. We're stuck with sticky inflation, higher fuel prices, and a lot of uncertainty, so there's a lot of challenges. I would say sentiment is pretty low. That said, I think she's proven to be fairly resilient. I think layer our execution on top of that and being able to drive that 16% growth in Q1 despite the macro pressures out there. Yeah. yeah It is tricky, like you said. it is tricky like you said Sentiment, University of Michigan sentiment is at an all-time low. sentiment university of michigan sentiment is at an all-time low We're stuck with sticky inflation, higher fuel prices, and a lot of uncertainty, so there's a lot of challenges. we're stuck with sticky inflation higher fuel prices and a lot of uncertainty so there's a lot of challenges I would say sentiment is pretty low. i would say sentiment is pretty low That said, I think she's proven to be fairly resilient. that said i think she's proven to be fairly resilient I think layer our execution on top of that and being able to drive that 16% growth in Q1 despite the macro pressures out there. i think layer our execution on top of that and being able to drive that 16% growth in q1 despite the macro pressures out there

Speaker 2: You do have tougher second half comps on the gross margin side of the model. What are puts and takes we should think about and rank order of opportunities or risks? You do have tougher second half comps on the gross margin side of the model. you do have tougher second half comps on the gross margin side of the model What are puts and takes we should think about and rank order of opportunities or risks? what are puts and takes we should think about and rank order of opportunities or risks

Speaker 1: Yeah. Number 1 opportunity is own brand mix expansion. Yeah. yeah Number 1 opportunity is own brand mix expansion. number 1 opportunity is own brand mix expansion We are at about 20% in 2025. We see that going meaningfully higher over time. We are at about 20% in 2025. we are at about 20% in 2025 We see that going meaningfully higher over time. we see that going meaningfully higher over time

Speaker 2: Yeah. Yeah. yeah

Speaker 1: We peaked at 36%, just to put some context to it, back in 2019. We think we can be higher than that, again, over time. We peaked at 36%, just to put some context to it, back in 2019. we peaked at 36% just to put some context to it back in 2019 We think we can be higher than that, again, over time. we think we can be higher than that again over time A couple big drivers recently was the launch of Revolve Los Angeles, our first namesake brand. That was a pretty limited SKU set, but really serves as a halo, allowing us to launch more products at more accessible price points. A couple big drivers recently was the launch of Revolve Los Angeles, our first namesake brand. a couple big drivers recently was the launch of revolve los angeles our first namesake brand That was a pretty limited SKU set, but really serves as a halo, allowing us to launch more products at more accessible price points. that was a pretty limited sku set but really serves as a halo allowing us to launch more products at more accessible price points

Speaker 2: Yeah Yeah yeah

Speaker 1: Go deeper and really drive volume in the coming years. Go deeper and really drive volume in the coming years. go deeper and really drive volume in the coming years That's the biggest opportunity on the margin side. I think on the offset, there's just quarter-to-quarter fluctuation on full price markdown mix. We did see a little bit of a tick down on full price mix this past quarter, and expect that to continue for the year, but that's a quarter-to-quarter dynamic. Still very healthy and higher. That's the biggest opportunity on the margin side. that's the biggest opportunity on the margin side I think on the offset, there's just quarter-to-quarter fluctuation on full price markdown mix. i think on the offset there's just quarter-to-quarter fluctuation on full price markdown mix We did see a little bit of a tick down on full price mix this past quarter, and expect that to continue for the year, but that's a quarter-to-quarter dynamic. we did see a little bit of a tick down on full price mix this past quarter and expect that to continue for the year but that's a quarter-to-quarter dynamic Still very healthy and higher. still very healthy and higher

Speaker 2: Yeah Yeah yeah

Speaker 1: than we were at in the pre-COVID era. Over time, we continue to drive that up. than we were at in the pre-COVID era. than we were at in the pre-covid era Over time, we continue to drive that up. over time we continue to drive that up

Speaker 2: You do have a multi-year compare of a high degree of full price selling. That's tougher when you're anniversarying that. What's happening with full price selling? Is that a concern relative to cleanliness of inventory? You do have a multi-year compare of a high degree of full price selling. you do have a multi-year compare of a high degree of full price selling That's tougher when you're anniversarying that. that's tougher when you're anniversarying that What's happening with full price selling? what's happening with full price selling Is that a concern relative to cleanliness of inventory? is that a concern relative to cleanliness of inventory

Speaker 1: No. It's still in a very healthy place. No. no It's still in a very healthy place. it's still in a very healthy place

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Even though it did tick down year-over-year, it was higher last year, but we were in a much higher, a different time zone then. Still very healthy and higher than it was back in, again, the pre-COVID era, which was the most normal time period. I think inventory's healthy, growing at about the same pace as sales. Even in the markdown component of our sales, markdown margin has meaningfully improved. That's another example of AI innovation, where we leveraged AI to optimize the markdown algorithm. Even though it did tick down year-over-year, it was higher last year, but we were in a much higher, a different time zone then. even though it did tick down year-over-year it was higher last year but we were in a much higher a different time zone then Still very healthy and higher than it was back in, again, the pre-COVID era, which was the most normal time period. still very healthy and higher than it was back in again the pre-covid era which was the most normal time period I think inventory's healthy, growing at about the same pace as sales. i think inventory's healthy growing at about the same pace as sales Even in the markdown component of our sales, markdown margin has meaningfully improved. even in the markdown component of our sales markdown margin has meaningfully improved That's another example of AI innovation, where we leveraged AI to optimize the markdown algorithm. that's another example of ai innovation where we leveraged ai to optimize the markdown algorithm

Speaker 2: Yeah Yeah yeah

Speaker 1: which is driving significant margin gains there. To your point, we start to lap in the back half of the year, so the comps get tougher on that side. which is driving significant margin gains there. which is driving significant margin gains there To your point, we start to lap in the back half of the year, so the comps get tougher on that side. to your point we start to lap in the back half of the year so the comps get tougher on that side

Speaker 2: Thank you for that. Also, thank you for sponsoring the experiential fair. I'll DJ today at 4:45 at the Courtyard, but can we get Cardi B here next time? Thank you for that. thank you for that Also, thank you for sponsoring the experiential fair. also thank you for sponsoring the experiential fair I'll DJ today at 4:45 at the Courtyard, but can we get Cardi B here next time? i'll dj today at 4:45 at the courtyard but can we get cardi b here next time

Speaker 1: We'll work on it. We'll work on it. we'll work on it

Speaker 2: Okay. Okay. okay

Speaker 1: You're already killing my margin with this free product. You're already killing my margin with this free product. you're already killing my margin with this free product

Speaker 2: Webcast it and Cardi B. What is the Cardi B joint venture? Tell us about Grow-Good Beauty Hair Care. Webcast it and Cardi B. webcast it and cardi b What is the Cardi B joint venture? what is the cardi b joint venture Tell us about Grow-Good Beauty Hair Care. tell us about grow-good beauty hair care

Speaker 1: Yeah. We're really excited about this. We've got a number of big swing growth initiatives at play. Yeah. yeah We're really excited about this. we're really excited about this We've got a number of big swing growth initiatives at play. we've got a number of big swing growth initiatives at play

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Grow-Good is one. I'll get into that. Physical retail is another one. The REVOLVE Los Angeles brand launch that I mentioned. Grow-Good is beauty product, in partnership with Cardi B. It's a joint venture. Very shared economics. She's very engaged. We pre-launched in March, sold out within an hour. We had the official launch in April, sold out in an hour again. We just got into more inventories. That was just limited by our inventory buys. We got into more inventory in May. We'll have a bigger inventory buy this month. A bigger one in August. Incrementally building into the inventory. The Grow-Good brand alone reached 650,000 followers in a matter of weeks, which is phenomenal and outpaces some of the other celebrity beauty brands out there. Grow-Good is one. grow-good is one I'll get into that. i'll get into that Physical retail is another one. physical retail is another one The REVOLVE Los Angeles brand launch that I mentioned. the revolve los angeles brand launch that i mentioned Grow-Good is beauty product, in partnership with Cardi B. grow-good is beauty product in partnership with cardi b It's a joint venture. it's a joint venture Very shared economics. very shared economics She's very engaged. she's very engaged We pre-launched in March, sold out within an hour. we pre-launched in march sold out within an hour We had the official launch in April, sold out in an hour again. we had the official launch in april sold out in an hour again We just got into more inventories. we just got into more inventories That was just limited by our inventory buys. that was just limited by our inventory buys We got into more inventory in May. we got into more inventory in may We'll have a bigger inventory buy this month. we'll have a bigger inventory buy this month A bigger one in August. a bigger one in august Incrementally building into the inventory. incrementally building into the inventory The Grow-Good brand alone reached 650,000 followers in a matter of weeks, which is phenomenal and outpaces some of the other celebrity beauty brands out there. the grow-good brand alone reached 650,000 followers in a matter of weeks which is phenomenal and outpaces some of the other celebrity beauty brands out there Compare that to Cardi's 164 million followers, that kind of puts some context around the opportunity that we have with that brand. Compare that to Cardi's 164 million followers, that kind of puts some context around the opportunity that we have with that brand. compare that to cardi's 164 million followers that kind of puts some context around the opportunity that we have with that brand

Speaker 2: How did you pick doing this? You are an OG of the influencer community. Why this JV? Why beauty and hair care? How did you pick doing this? how did you pick doing this You are an OG of the influencer community. you are an og of the influencer community Why this JV? why this jv Why beauty and hair care? why beauty and hair care

Speaker 1: Yeah. We saw an opportunity. We'd been working with Cardi for years. She's been a great partner. We both saw the opportunity in beauty, and leveraging her passion for the product, and then also, of course, her brand power. Combine that with Revolve's operational excellence. Yeah. yeah We saw an opportunity. we saw an opportunity We'd been working with Cardi for years. we'd been working with cardi for years She's been a great partner. she's been a great partner We both saw the opportunity in beauty, and leveraging her passion for the product, and then also, of course, her brand power. we both saw the opportunity in beauty and leveraging her passion for the product and then also of course her brand power Combine that with Revolve's operational excellence. combine that with revolve's operational excellence

Speaker 2: Yeah Yeah yeah

Speaker 1: All the back office fulfillment and just great customer service that we can offer. It was a great match. I think this sets the stage for either future partnerships or also future own brands within beauty now that we have the playbook. All the back office fulfillment and just great customer service that we can offer. all the back office fulfillment and just great customer service that we can offer It was a great match. it was a great match I think this sets the stage for either future partnerships or also future own brands within beauty now that we have the playbook. i think this sets the stage for either future partnerships or also future own brands within beauty now that we have the playbook

Speaker 2: REVOLVE Los Angeles own brand. I'm excited to see that. What are your vision for % of mix or pace of growth and general strategy for halo and later? REVOLVE Los Angeles own brand. revolve los angeles own brand I'm excited to see that. i'm excited to see that What are your vision for % of mix or pace of growth and general strategy for halo and later? what are your vision for % of mix or pace of growth and general strategy for halo and later

Speaker 1: Yeah. This year is really about that halo effect. Not just the halo for the Revolve label brand, the REVOLVE Los Angeles brand, but it also serves as a great halo for the entire business. Next year, we'll start to get into other more accessible price points, other categories, and those will be the real volume drivers. We see own brand mix increasing meaningfully over the coming years. We don't put a target on it because we want to do what's right for the assortment on the site, and we don't want to over-penetrate in any certain category or even own brands itself. The other opportunity. Yeah. yeah This year is really about that halo effect. this year is really about that halo effect Not just the halo for the Revolve label brand, the REVOLVE Los Angeles brand, but it also serves as a great halo for the entire business. not just the halo for the revolve label brand the revolve los angeles brand but it also serves as a great halo for the entire business Next year, we'll start to get into other more accessible price points, other categories, and those will be the real volume drivers. next year we'll start to get into other more accessible price points other categories and those will be the real volume drivers We see own brand mix increasing meaningfully over the coming years. we see own brand mix increasing meaningfully over the coming years We don't put a target on it because we want to do what's right for the assortment on the site, and we don't want to over-penetrate in any certain category or even own brands itself. we don't put a target on it because we want to do what's right for the assortment on the site and we don't want to over-penetrate in any certain category or even own brands itself The other opportunity. the other opportunity

Speaker 2: Yeah Yeah yeah

Speaker 1: In own brands is in physical retail. Own brands perform better in store than they do online, both from a mix perspective and an inventory productivity perspective. We've got a couple real opportunities to drive own brand mix higher over time. In own brands is in physical retail. in own brands is in physical retail Own brands perform better in store than they do online, both from a mix perspective and an inventory productivity perspective. own brands perform better in store than they do online both from a mix perspective and an inventory productivity perspective We've got a couple real opportunities to drive own brand mix higher over time. we've got a couple real opportunities to drive own brand mix higher over time

Speaker 2: On stores, that's a really cool topic. You signed a lease in Miami. Aspen and The Grove are performing well. What's happening with stores? What are you learning here? I've always wanted you to have hundreds of these, but you got to be measured. On stores, that's a really cool topic. on stores that's a really cool topic You signed a lease in Miami. you signed a lease in miami Aspen and The Grove are performing well. aspen and the grove are performing well What's happening with stores? what's happening with stores What are you learning here? what are you learning here I've always wanted you to have hundreds of these, but you got to be measured. i've always wanted you to have hundreds of these but you got to be measured

Speaker 1: Yeah. Definitely being measured. We think we're very good at online, but acknowledge we still need to build the muscle for physical retail. That's everything from processes, inventory management, and the team. That's the phase we're in right now is really building that infrastructure. What we've learned, stores are a great source of new customer adds. Even in our home of L.A., we see a halo for the online business, and just anecdotally in talking to customers and kind of overhearing customers talk, it's incredible how many customers don't know Revolve, even, again, in our home turf of L.A. Great new customer acquisition tool. I mentioned own brands. Own brands outpacing in store. Then return rate, back to the return rate, meaningfully lower in store than online. We think it could be half of the business over time. Yeah. yeah Definitely being measured. definitely being measured We think we're very good at online, but acknowledge we still need to build the muscle for physical retail. we think we're very good at online but acknowledge we still need to build the muscle for physical retail That's everything from processes, inventory management, and the team. that's everything from processes inventory management and the team That's the phase we're in right now is really building that infrastructure. that's the phase we're in right now is really building that infrastructure What we've learned, stores are a great source of new customer adds. what we've learned stores are a great source of new customer adds Even in our home of L.A., we see a halo for the online business, and just anecdotally in talking to customers and kind of overhearing customers talk, it's incredible how many customers don't know Revolve, even, again, in our home turf of L.A. even in our home of l.a we see a halo for the online business and just anecdotally in talking to customers and kind of overhearing customers talk it's incredible how many customers don't know revolve even again in our home turf of l.a Great new customer acquisition tool. great new customer acquisition tool I mentioned own brands. i mentioned own brands Own brands outpacing in store. own brands outpacing in store Then return rate, back to the return rate, meaningfully lower in store than online. then return rate back to the return rate meaningfully lower in store than online We think it could be half of the business over time. we think it could be half of the business over time There's still three quarters of the dollars out there in retail are flowing through physical retail stores. It's a largely untapped opportunity for us. There's still three quarters of the dollars out there in retail are flowing through physical retail stores. there's still three quarters of the dollars out there in retail are flowing through physical retail stores It's a largely untapped opportunity for us. it's a largely untapped opportunity for us

Speaker 2: We have been fortunate to teach a class with Revolve at Columbia Business School, and part of it is how fast you are A/B testing digitally extremely well and executing that to both cultural relevance and inventory management. What's the hardest part of stores? How do you actually do that physically? It's not exactly possible. We have been fortunate to teach a class with Revolve at Columbia Business School, and part of it is how fast you are A/B testing digitally extremely well and executing that to both cultural relevance and inventory management. we have been fortunate to teach a class with revolve at columbia business school and part of it is how fast you are a/b testing digitally extremely well and executing that to both cultural relevance and inventory management What's the hardest part of stores? what's the hardest part of stores How do you actually do that physically? how do you actually do that physically It's not exactly possible. it's not exactly possible

Speaker 1: Yeah. It is tougher in stores, That's the one thing we're learning. I think both the challenge and the opportunity is how do you fit and what do you fit into a store out of our 100,000 styles that we carry on the site. It is very much a curation. Each store is different. Aspen is much different from the Grove, is going to be different than Miami. We do have a rich set of data both on the merchandise front and on the customer front. We know what they're buying, where they are. We can leverage that to assort the store. Yeah. yeah It is tougher in stores, That's the one thing we're learning. it is tougher in stores that's the one thing we're learning I think both the challenge and the opportunity is how do you fit and what do you fit into a store out of our 100,000 styles that we carry on the site. i think both the challenge and the opportunity is how do you fit and what do you fit into a store out of our 100,000 styles that we carry on the site It is very much a curation. it is very much a curation Each store is different. each store is different Aspen is much different from the Grove, is going to be different than Miami. aspen is much different from the grove is going to be different than miami We do have a rich set of data both on the merchandise front and on the customer front. we do have a rich set of data both on the merchandise front and on the customer front We know what they're buying, where they are. we know what they're buying where they are We can leverage that to assort the store. we can leverage that to assort the store

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Even in store, we can quickly A/B test. Back to AI opportunities, we have some really great visualization tools. Even in store, we can quickly A/B test. even in store we can quickly a/b test Back to AI opportunities, we have some really great visualization tools. back to ai opportunities we have some really great visualization tools

Speaker 2: Yeah Yeah yeah

Speaker 1: where we can see what product is in what area of the store and what's selling and who's selling it. We can, maybe not as quick as online, but really quickly read what's working in store and quickly re-assort. where we can see what product is in what area of the store and what's selling and who's selling it. where we can see what product is in what area of the store and what's selling and who's selling it We can, maybe not as quick as online, but really quickly read what's working in store and quickly re-assort. we can maybe not as quick as online but really quickly read what's working in store and quickly re-assort

Speaker 2: You learn a lot. It's a magic model with having 100,000 styles. What are your view for the SKU count later? You have a lot of liberty to go into multiple categories too, but you're balancing this against simplify to amplify, but the customer loves coming back even when things aren't perfect. You learn a lot. you learn a lot It's a magic model with having 100,000 styles. it's a magic model with having 100,000 styles What are your view for the SKU count later? what are your view for the sku count later You have a lot of liberty to go into multiple categories too, but you're balancing this against simplify to amplify, but the customer loves coming back even when things aren't perfect. you have a lot of liberty to go into multiple categories too but you're balancing this against simplify to amplify but the customer loves coming back even when things aren't perfect

Speaker 1: Yep. Yeah. There's still opportunity for SKU or style growth. Just for example, that has increased significantly over the past eight years. Yep. yep Yeah. yeah There's still opportunity for SKU or style growth. there's still opportunity for sku or style growth Just for example, that has increased significantly over the past eight years. just for example that has increased significantly over the past eight years

Speaker 2: Yeah Yeah yeah

Speaker 1: I would say. With the goal of increasing the units, but doing so via breadth and not depth, so still buying very shallow and increasing the breadth. I would say. i would say With the goal of increasing the units, but doing so via breadth and not depth, so still buying very shallow and increasing the breadth. with the goal of increasing the units but doing so via breadth and not depth so still buying very shallow and increasing the breadth

Speaker 2: Yeah Yeah yeah

Speaker 1: We continue to read and react. That comes back to AI curation and helping her kind of navigate the site and enabling her journey to find the right product across those styles. We continue to read and react. we continue to read and react That comes back to AI curation and helping her kind of navigate the site and enabling her journey to find the right product across those styles. that comes back to ai curation and helping her kind of navigate the site and enabling her journey to find the right product across those styles

Speaker 2: Yeah. Reinforcement learning could hold the promise. Yeah. yeah Reinforcement learning could hold the promise. reinforcement learning could hold the promise

Speaker 1: Yeah Yeah yeah

Speaker 2: intersecting that with personalization. Still, you got to be cool and human too. intersecting that with personalization. intersecting that with personalization Still, you got to be cool and human too. still you got to be cool and human too

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Sexy. Sexy. sexy

Speaker 1: Yep. Yep. yep

Speaker 2: Test, read, and react. Actually, that's a mainstay of when I worked with you on the IPO. What about test, read, and react today versus call it five years ago? Test, read, and react. test read and react Actually, that's a mainstay of when I worked with you on the IPO. actually that's a mainstay of when i worked with you on the ipo What about test, read, and react today versus call it five years ago? what about test read and react today versus call it five years ago

Speaker 1: Yeah. Faster, better. Yeah. yeah Faster, better. faster better

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Yeah. It incrementally gets better every year. Even before this AI evolution. Yeah. yeah It incrementally gets better every year. it incrementally gets better every year Even before this AI evolution. even before this ai evolution We continue to get better and better via machine learning, via just having more data points over the course of our journey. Having 2.8 million active customers across 100,000 styles across 20 years gives us a very rich set of data to work with. We continue to get better and better via machine learning, via just having more data points over the course of our journey. we continue to get better and better via machine learning via just having more data points over the course of our journey Having 2.8 million active customers across 100,000 styles across 20 years gives us a very rich set of data to work with. having 2.8 million active customers across 100,000 styles across 20 years gives us a very rich set of data to work with

Speaker 2: Yeah. That's quite proprietary, and it all has a lot of veracity to that data. We talked about Coachella, TD Cowen at Coachella. What happens to the person who doesn't go to Coachella later in life but still wants to love Revolve? Yeah. yeah That's quite proprietary, and it all has a lot of veracity to that data. that's quite proprietary and it all has a lot of veracity to that data We talked about Coachella, TD Cowen at Coachella. we talked about coachella td cowen at coachella What happens to the person who doesn't go to Coachella later in life but still wants to love Revolve? what happens to the person who doesn't go to coachella later in life but still wants to love revolve

Speaker 1: Yeah. Yeah. yeah

Speaker 2: That customer lifetime value. That customer lifetime value. that customer lifetime value

Speaker 1: Yep. Definitely an opportunity there. I think she can continue to grow within the Revolve ecosystem and then graduate into FWRD. Yep. yep Definitely an opportunity there. definitely an opportunity there I think she can continue to grow within the Revolve ecosystem and then graduate into FWRD. i think she can continue to grow within the revolve ecosystem and then graduate into fwrd

Speaker 2: Yeah Yeah yeah

Speaker 1: which is our luxury segment. Higher price point, slightly different product mix. which is our luxury segment. which is our luxury segment Higher price point, slightly different product mix. higher price point slightly different product mix

Speaker 2: Great photography there, too. Great photography there, too. great photography there too

Speaker 1: Yeah. Phenomenal. Yeah. yeah Phenomenal. phenomenal

Speaker 2: Really proprietary. Really proprietary. really proprietary

Speaker 1: Yep Yep yep

Speaker 2: kind of looks. kind of looks. kind of looks

Speaker 1: Yeah. That's a key differentiator. Yeah. yeah That's a key differentiator. that's a key differentiator

Speaker 2: Yeah Yeah yeah

Speaker 1: Some of the other luxury players. It's a real curated, young luxury feel. That comes through on the site, comes through on the merchandise. We just partnered with Rosie Huntington-Whiteley as our fashion director, which has been well-received by both brands and customers alike. It's continuing, again, similar to Revolve, just that constant newness curation, having a vast assortment, but making sure it's very curated. That serves that customer that's growing her wallet, growing her different aesthetic over time. Some of the other luxury players. some of the other luxury players It's a real curated, young luxury feel. it's a real curated young luxury feel That comes through on the site, comes through on the merchandise. that comes through on the site comes through on the merchandise We just partnered with Rosie Huntington-Whiteley as our fashion director, which has been well-received by both brands and customers alike. we just partnered with rosie huntington-whiteley as our fashion director which has been well-received by both brands and customers alike It's continuing, again, similar to Revolve, just that constant newness curation, having a vast assortment, but making sure it's very curated. it's continuing again similar to revolve just that constant newness curation having a vast assortment but making sure it's very curated That serves that customer that's growing her wallet, growing her different aesthetic over time. that serves that customer that's growing her wallet growing her different aesthetic over time

Speaker 2: You also have other brands like Helsa too. You also have other brands like Helsa too. you also have other brands like helsa too

Speaker 1: Yep. Yep. yep

Speaker 2: Do you think that helps serve long-term value for the older customers as well? Do you think that helps serve long-term value for the older customers as well? do you think that helps serve long-term value for the older customers as well

Speaker 1: Yeah. Cross-listing, more and more cross-listing across both Revolve and FWRD where brands. Yeah. yeah Cross-listing, more and more cross-listing across both Revolve and FWRD where brands. cross-listing more and more cross-listing across both revolve and fwrd where brands

Speaker 2: Yeah Yeah yeah

Speaker 1: can kind of play in both. can kind of play in both. can kind of play in both

Speaker 2: Oh, interesting. Oh, interesting. oh interesting

Speaker 1: Yeah. Yeah. yeah

Speaker 2: Yeah. Well, what's on the roadmap for FWRD? It's been great momentum now, and it's a big luxury opportunity. Yeah. yeah Well, what's on the roadmap for FWRD? well what's on the roadmap for fwrd It's been great momentum now, and it's a big luxury opportunity. it's been great momentum now and it's a big luxury opportunity

Speaker 1: Yeah. Just continued great merchandise, great editorial, great assortment. We're also focusing on the high-value customer- Yeah. yeah Just continued great merchandise, great editorial, great assortment. just continued great merchandise great editorial great assortment We're also focusing on the high-value customer- we're also focusing on the high-value customer-

Speaker 2: Yeah Yeah yeah

Speaker 1: really investing there. really investing there. really investing there in gaining that customer. I think that customer is kind of feeling the turmoil in the luxury industry. in gaining that customer. in gaining that customer I think that customer is kind of feeling the turmoil in the luxury industry. i think that customer is kind of feeling the turmoil in the luxury industry

Speaker 2: Yeah Yeah yeah

Speaker 1: There's fewer points of distribution, fewer places to find great product. Again, brands and customers alike are finding FWRD is a really great place to find great product. Then once we have her in, she realizes the great service that we offer that outpaces other competitors. Even going D2C or going directly to the brand itself, we can generally outperform on a service level. There's fewer points of distribution, fewer places to find great product. there's fewer points of distribution fewer places to find great product Again, brands and customers alike are finding FWRD is a really great place to find great product. again brands and customers alike are finding fwrd is a really great place to find great product Then once we have her in, she realizes the great service that we offer that outpaces other competitors. then once we have her in she realizes the great service that we offer that outpaces other competitors Even going D2C or going directly to the brand itself, we can generally outperform on a service level. even going d2c or going directly to the brand itself we can generally outperform on a service level

Speaker 2: That sounds very compelling. On the capital allocation side, Jesse, $336 million of cash, no debt. What are you thinking about capital deployment, investments, minority stakes, M&A? A different part B to this is, this is an investment year to a certain extent. Could you reflect upon that, too? That sounds very compelling. that sounds very compelling On the capital allocation side, Jesse, $336 million of cash, no debt. on the capital allocation side jesse $336 million of cash no debt What are you thinking about capital deployment, investments, minority stakes, M&A? what are you thinking about capital deployment investments minority stakes m&a A different part B to this is, this is an investment year to a certain extent. a different part b to this is this is an investment year to a certain extent Could you reflect upon that, too? could you reflect upon that too

Speaker 1: Yeah. Really great place to be in terms of capital allocation. Where we see the greatest ROI is investing back into the business, and this gets to your point B of your question. That's where we see the greatest ROI. We're still only 3% penetrated in our core domestic market. Yeah. yeah Really great place to be in terms of capital allocation. really great place to be in terms of capital allocation Where we see the greatest ROI is investing back into the business, and this gets to your point B of your question. where we see the greatest roi is investing back into the business and this gets to your point b of your question That's where we see the greatest ROI. that's where we see the greatest roi We're still only 3% penetrated in our core domestic market. we're still only 3% penetrated in our core domestic market

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Even lower penetration internationally. We have a lot of room to grow. Number 1 is invest back into the business, and this is definitely an investment year, supporting the REVOLVE Los Angeles launch, the Grow-Good launch, physical stores. We have a lot going on. We're really optimistic about the long-term growth opportunities, and if even just one of these hits, it'll be a game changer. That's Number 1, invest back into the business. Number 2 is opportunistic M&A, and that can take the form of partnerships, minority investments, which we've made several of. Most recently in January, made a minority investment into a brand that serves the growth opportunity and category diversification, really excited about that. We continue to look at things. All three of these things at the same time. Even lower penetration internationally. even lower penetration internationally We have a lot of room to grow. we have a lot of room to grow Number 1 is invest back into the business, and this is definitely an investment year, supporting the REVOLVE Los Angeles launch, the Grow-Good launch, physical stores. number 1 is invest back into the business and this is definitely an investment year supporting the revolve los angeles launch the grow-good launch physical stores We have a lot going on. we have a lot going on We're really optimistic about the long-term growth opportunities, and if even just one of these hits, it'll be a game changer. we're really optimistic about the long-term growth opportunities and if even just one of these hits it'll be a game changer That's Number 1, invest back into the business. that's number 1 invest back into the business Number 2 is opportunistic M&A, and that can take the form of partnerships, minority investments, which we've made several of. number 2 is opportunistic m&a and that can take the form of partnerships minority investments which we've made several of Most recently in January, made a minority investment into a brand that serves the growth opportunity and category diversification, really excited about that. most recently in january made a minority investment into a brand that serves the growth opportunity and category diversification really excited about that We continue to look at things. we continue to look at things All three of these things at the same time. all three of these things at the same time

Speaker 2: What's your approach? What are you looking for a partnership or a minority investment? How would you choose the methodology and/or the nature of the targets? What's your approach? what's your approach What are you looking for a partnership or a minority investment? what are you looking for a partnership or a minority investment How would you choose the methodology and/or the nature of the targets? how would you choose the methodology and/or the nature of the targets

Speaker 1: It needs to serve one of our growth opportunities. It needs to serve one of our growth opportunities. it needs to serve one of our growth opportunities

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Generally, where these fit is in that category of diversification, whether it's men's or active or essentials. There could be opportunity in beauty, although we've chosen to more incubate and build that on our own at this point. Really, it's about serving one of those growth opportunities, and primarily that category diversification. A lot of times it's a brand that we carry on the site, so we have really good intel into how the brand is performing with our customer and in our ecosystem. Generally, where these fit is in that category of diversification, whether it's men's or active or essentials. generally where these fit is in that category of diversification whether it's men's or active or essentials There could be opportunity in beauty, although we've chosen to more incubate and build that on our own at this point. there could be opportunity in beauty although we've chosen to more incubate and build that on our own at this point Really, it's about serving one of those growth opportunities, and primarily that category diversification. really it's about serving one of those growth opportunities and primarily that category diversification A lot of times it's a brand that we carry on the site, so we have really good intel into how the brand is performing with our customer and in our ecosystem. a lot of times it's a brand that we carry on the site so we have really good intel into how the brand is performing with our customer and in our ecosystem

Speaker 2: International is about 20% of sales. I think there's a lot of pent-up demand there, given how much global traffic you have. Plus, you could probably improve service levels. What's happening internationally? International is about 20% of sales. international is about 20% of sales I think there's a lot of pent-up demand there, given how much global traffic you have. i think there's a lot of pent-up demand there given how much global traffic you have Plus, you could probably improve service levels. plus you could probably improve service levels What's happening internationally? what's happening internationally

Speaker 1: Yeah. Really great growth coming out of international. 20% this most recent quarter, and that's on top of great growth last year, so really good long-term growth out of the international business. That said, it's very diversified across regions, so it's very seldom that you'll see every region hitting in the same quarter. This most recent quarter, of course, and into Q2, Middle East is experiencing some pressure, obviously. On the flip side, we have regions like Mexico, which was a phenomenal grower. We increased new customers by 80%. Back to your service point, that was a result of increasing the service levels, offering different, more curated payment types for that customer in Mexico, and then doing some more dedicated marketing. That's the international playbook, is get the service levels right and on par with the U.S. customer. Yeah. yeah Really great growth coming out of international. 20% this most recent quarter, and that's on top of great growth last year, so really good long-term growth out of the international business. really great growth coming out of international 20% this most recent quarter and that's on top of great growth last year so really good long-term growth out of the international business That said, it's very diversified across regions, so it's very seldom that you'll see every region hitting in the same quarter. that said it's very diversified across regions so it's very seldom that you'll see every region hitting in the same quarter This most recent quarter, of course, and into Q2, Middle East is experiencing some pressure, obviously. this most recent quarter of course and into q2 middle east is experiencing some pressure obviously On the flip side, we have regions like Mexico, which was a phenomenal grower. on the flip side we have regions like mexico which was a phenomenal grower We increased new customers by 80%. we increased new customers by 80% Back to your service point, that was a result of increasing the service levels, offering different, more curated payment types for that customer in Mexico, and then doing some more dedicated marketing. back to your service point that was a result of increasing the service levels offering different more curated payment types for that customer in mexico and then doing some more dedicated marketing That's the international playbook, is get the service levels right and on par with the U.S. customer. that's the international playbook is get the service levels right and on par with the u.s customer Make sure the assortment is right, of course, and then do more dedicated marketing in those regions. China's been phenomenal for us. Make sure the assortment is right, of course, and then do more dedicated marketing in those regions. make sure the assortment is right of course and then do more dedicated marketing in those regions China's been phenomenal for us. china's been phenomenal for us

Speaker 2: Yeah. Yeah. yeah

Speaker 1: That's more different, when it comes to marketing and a much different customer. We recently developed an own brand specifically in China for the China customer that was designed, styled, and the fit was specific for that customer. That's more different, when it comes to marketing and a much different customer. that's more different when it comes to marketing and a much different customer We recently developed an own brand specifically in China for the China customer that was designed, styled, and the fit was specific for that customer. we recently developed an own brand specifically in china for the china customer that was designed styled and the fit was specific for that customer

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Marketed that via livestream, sold out. Marketed that via livestream, sold out. marketed that via livestream sold out

Speaker 2: Wow. Wow. wow

Speaker 1: Had over 100,000 views on the livestream. More opportunity to do more of that kind of dedicated own brand within China. Had over 100,000 views on the livestream. had over 100,000 views on the livestream More opportunity to do more of that kind of dedicated own brand within China. more opportunity to do more of that kind of dedicated own brand within china

Speaker 2: Yeah. We've seen a lot of missteps in China, actually. How did you do so well there? What has been the learning so far? Yeah. yeah We've seen a lot of missteps in China, actually. we've seen a lot of missteps in china actually How did you do so well there? how did you do so well there What has been the learning so far? what has been the learning so far

Speaker 1: Yeah. Our head of China spent a lot of time in China, and has a lot of contacts there. We hired, kind of under him, a head of China that came from the livestreaming- Yeah. yeah Our head of China spent a lot of time in China, and has a lot of contacts there. our head of china spent a lot of time in china and has a lot of contacts there We hired, kind of under him, a head of China that came from the livestreaming- we hired kind of under him a head of china that came from the livestreaming-

Speaker 2: Yeah Yeah yeah

Speaker 1: industry. She knows how the customer behaves, how she shops, what she looks for. I think it's people and just making sure we're going at the right pace and addressing the customer's needs. industry. industry She knows how the customer behaves, how she shops, what she looks for. she knows how the customer behaves how she shops what she looks for I think it's people and just making sure we're going at the right pace and addressing the customer's needs. i think it's people and just making sure we're going at the right pace and addressing the customer's needs

Speaker 2: I'll ask one more, then I'll open it up to the audience for questions. Well, there's a lot of great things we talked about from stores to own brands to beauty. How do you prioritize these or what are you thinking about that, I think you do a good job focusing on the core bread and butter, but what are your thoughts on prioritization and not going too crazy? I'll ask one more, then I'll open it up to the audience for questions. i'll ask one more then i'll open it up to the audience for questions Well, there's a lot of great things we talked about from stores to own brands to beauty. well there's a lot of great things we talked about from stores to own brands to beauty How do you prioritize these or what are you thinking about that, I think you do a good job focusing on the core bread and butter, but what are your thoughts on prioritization and not going too crazy? how do you prioritize these or what are you thinking about that i think you do a good job focusing on the core bread and butter but what are your thoughts on prioritization and not going too crazy

Speaker 1: Yeah. I think this goes back to the founder-led culture that we have and having Mike and Michael still in the seat of the CEO and building at the right pace. Yeah. yeah I think this goes back to the founder-led culture that we have and having Mike and Michael still in the seat of the CEO and building at the right pace. i think this goes back to the founder-led culture that we have and having mike and michael still in the seat of the ceo and building at the right pace Growing, being aggressive, but doing so at the right pace, remaining profitable. It is a constant balance of prioritization. We do have a lot going on right now, so I think it's making sure that we are investing while at the same time keeping the house in order and growing that core business. Growing, being aggressive, but doing so at the right pace, remaining profitable. growing being aggressive but doing so at the right pace remaining profitable It is a constant balance of prioritization. it is a constant balance of prioritization We do have a lot going on right now, so I think it's making sure that we are investing while at the same time keeping the house in order and growing that core business. we do have a lot going on right now so i think it's making sure that we are investing while at the same time keeping the house in order and growing that core business

Speaker 2: Any questions from the audience, feel free to raise your hand. Go ahead, Linda. Any questions from the audience, feel free to raise your hand. any questions from the audience feel free to raise your hand Go ahead, Linda. go ahead linda

Speaker 3: Thanks. Good talk. Thank you. Can you speak a little bit to influencer marketing and the use of AI and where you guys come out on using AI content creators, and where is the line, and how do you see that as sort of how your customer feels when you've been experimenting with that? How is that working? Thanks. thanks Good talk. good talk Thank you. thank you Can you speak a little bit to influencer marketing and the use of AI and where you guys come out on using AI content creators, and where is the line, and how do you see that as sort of how your customer feels when you've been experimenting with that? can you speak a little bit to influencer marketing and the use of ai and where you guys come out on using ai content creators and where is the line and how do you see that as sort of how your customer feels when you've been experimenting with that How is that working? how is that working

Speaker 1: Yeah, most of the- Yeah, most of the- yeah most of the-

Speaker 2: I'll repeat the question for the webcast as well. Influencer marketing and AI. I'll repeat the question for the webcast as well. i'll repeat the question for the webcast as well Influencer marketing and AI. influencer marketing and ai

Speaker 1: Yep. Yeah. To date, all the influencer marketing and the marketing in general has been human. Very authentic and curated, more playbook of the past. Not to say that it won't shift to AI over time. We'll have to see how that plays out. We are very conscious of the customer feedback and how the customer reacts to that. Thus far, it's been at least on the marketing and what you see is human. That said, we're leveraging AI in the back, in the systems and the processes to increase the speed and the efficiency at which we do things, and then more so on the performance marketing side, where we're using that to expand the reach on some of our bigger channels. Yeah, I think you have to be very careful to make sure it's authentic and gauge the customer reaction. Yep. yep Yeah. yeah To date, all the influencer marketing and the marketing in general has been human. to date all the influencer marketing and the marketing in general has been human Very authentic and curated, more playbook of the past. very authentic and curated more playbook of the past Not to say that it won't shift to AI over time. not to say that it won't shift to ai over time We'll have to see how that plays out. we'll have to see how that plays out We are very conscious of the customer feedback and how the customer reacts to that. we are very conscious of the customer feedback and how the customer reacts to that Thus far, it's been at least on the marketing and what you see is human. thus far it's been at least on the marketing and what you see is human That said, we're leveraging AI in the back, in the systems and the processes to increase the speed and the efficiency at which we do things, and then more so on the performance marketing side, where we're using that to expand the reach on some of our bigger channels. that said we're leveraging ai in the back in the systems and the processes to increase the speed and the efficiency at which we do things and then more so on the performance marketing side where we're using that to expand the reach on some of our bigger channels Yeah, I think you have to be very careful to make sure it's authentic and gauge the customer reaction. yeah i think you have to be very careful to make sure it's authentic and gauge the customer reaction

Speaker 2: We had a question over there as well. We had a question over there as well. we had a question over there as well

Speaker 4: Oh, yeah. I'm curious if you could talk a little bit more about international and that margin profile as it compares to more U.S. Oh, yeah. oh yeah I'm curious if you could talk a little bit more about international and that margin profile as it compares to more U.S. i'm curious if you could talk a little bit more about international and that margin profile as it compares to more u.s

Speaker 1: The question was the international business and how that margin profile compares to the U.S. business. Generally, on a gross margin basis, it's very consistent across domestic, international. It's similar product. There's always differences region by region, and FWRD can skew higher in certain regions than Revolve, so that takes the blended margin down. On the transactional costs, that's where you see some pressure on the international side because it does cost more to ship back and forth internationally. We're continuing to get better and better and more efficient when it comes to that. We can serve 80% of our international customers in two to three business days, which is phenomenal, and that's coming out of the U.S. Service is a key element there. Higher on the transactional costs, offset by a slightly lower return rate. The question was the international business and how that margin profile compares to the U.S. business. the question was the international business and how that margin profile compares to the u.s business Generally, on a gross margin basis, it's very consistent across domestic, international. generally on a gross margin basis it's very consistent across domestic international It's similar product. it's similar product There's always differences region by region, and FWRD can skew higher in certain regions than Revolve, so that takes the blended margin down. there's always differences region by region and fwrd can skew higher in certain regions than revolve so that takes the blended margin down On the transactional costs, that's where you see some pressure on the international side because it does cost more to ship back and forth internationally. on the transactional costs that's where you see some pressure on the international side because it does cost more to ship back and forth internationally We're continuing to get better and better and more efficient when it comes to that. we're continuing to get better and better and more efficient when it comes to that We can serve 80% of our international customers in two to three business days, which is phenomenal, and that's coming out of the U.S. we can serve 80% of our international customers in two to three business days which is phenomenal and that's coming out of the u.s Service is a key element there. service is a key element there Higher on the transactional costs, offset by a slightly lower return rate. higher on the transactional costs offset by a slightly lower return rate There's some puts and takes, and by the time you get down to contribution margin, it's similar. The international team, the dedicated international team, is very small. We're leveraging the greater Revolve infrastructure to serve that business, so you just get economies of scale as you grow. There's some puts and takes, and by the time you get down to contribution margin, it's similar. there's some puts and takes and by the time you get down to contribution margin it's similar The international team, the dedicated international team, is very small. the international team the dedicated international team is very small We're leveraging the greater Revolve infrastructure to serve that business, so you just get economies of scale as you grow. we're leveraging the greater revolve infrastructure to serve that business so you just get economies of scale as you grow

Speaker 2: Any other questions? Jesse, which part of your job keeps you up at night, and which part's the most fun? The least fun and the most fun. Any other questions? any other questions Jesse, which part of your job keeps you up at night, and which part's the most fun? jesse which part of your job keeps you up at night and which part's the most fun The least fun and the most fun. the least fun and the most fun

Speaker 1: Okay. Least fun, investor conferences. Okay. okay Least fun, investor conferences. least fun investor conferences

Speaker 2: Oh, no. Are you kidding me? Oh, no. oh no Are you kidding me? are you kidding me

Speaker 1: Just kidding. Just kidding. just kidding

Speaker 2: You come back again and again. You come back again and again. you come back again and again

Speaker 1: No. No. no

Speaker 2: You're pretty loyal. You're pretty loyal. you're pretty loyal

Speaker 1: Yeah. Yeah. Yeah. yeah Yeah. yeah

Speaker 2: Well, you like music. Well, you like music. well you like music

Speaker 1: Yeah Yeah yeah

Speaker 2: culture. culture. culture

Speaker 1: Yeah, yeah. No. Yeah, yeah. yeah yeah No. no

Speaker 2: Media have fun. Media have fun. media have fun

Speaker 1: Yeah. No, these are fun. Don't get me wrong. I'm just giving you a hard time. No, I think what keeps me up at night are good things. We have a lot of growth opportunities in play right now. Last year was all about tariffs, and that was a bad keeping me up at night. This year is all about the growth opportunities. We covered them all, but I think in just the prioritization point, that's always important. I think fun, I've got a couple different versions of fun. I think fun is getting out and experiencing the brand, whether that's at REVOLVE Festival or some of the other events that we do. Because a lot of times, I'm just in the back office and just grinding in Excel and doing other things. Yeah. yeah No, these are fun. no these are fun Don't get me wrong. don't get me wrong I'm just giving you a hard time. i'm just giving you a hard time No, I think what keeps me up at night are good things. no i think what keeps me up at night are good things We have a lot of growth opportunities in play right now. we have a lot of growth opportunities in play right now Last year was all about tariffs, and that was a bad keeping me up at night. last year was all about tariffs and that was a bad keeping me up at night This year is all about the growth opportunities. this year is all about the growth opportunities We covered them all, but I think in just the prioritization point, that's always important. we covered them all but i think in just the prioritization point that's always important I think fun, I've got a couple different versions of fun. i think fun i've got a couple different versions of fun I think fun is getting out and experiencing the brand, whether that's at REVOLVE Festival or some of the other events that we do. i think fun is getting out and experiencing the brand whether that's at revolve festival or some of the other events that we do Because a lot of times, I'm just in the back office and just grinding in Excel and doing other things. because a lot of times i'm just in the back office and just grinding in excel and doing other things

Speaker 2: Yeah, that's fun too, though. Yeah, that's fun too, though. yeah that's fun too though

Speaker 1: It's really good. Yeah. That's the other piece. That's the other fun part is just cranking in Excel and working with the team. It's really good. it's really good Yeah. yeah That's the other piece. that's the other piece That's the other fun part is just cranking in Excel and working with the team. that's the other fun part is just cranking in excel and working with the team

Speaker 2: Yeah Yeah yeah

Speaker 1: being in the office and engaging there. It is good to get out and really experience the brand and talk to the customer. Now having physical stores, it's great to visit the stores and see how the customer's engaging and see the product in real life. being in the office and engaging there. being in the office and engaging there It is good to get out and really experience the brand and talk to the customer. it is good to get out and really experience the brand and talk to the customer Now having physical stores, it's great to visit the stores and see how the customer's engaging and see the product in real life. now having physical stores it's great to visit the stores and see how the customer's engaging and see the product in real life

Speaker 2: What's been most fun when you do experience the brand? What have been your biggest surprises? What's been most fun when you do experience the brand? what's been most fun when you do experience the brand What have been your biggest surprises? what have been your biggest surprises

Speaker 1: Yeah, I think maybe not a surprise, but everybody knows us for the brand and what you see on Instagram. Yeah, I think maybe not a surprise, but everybody knows us for the brand and what you see on Instagram. yeah i think maybe not a surprise but everybody knows us for the brand and what you see on instagram The influencers and the great product and all the sexy. What is surprising to most is when you talk to a customer, the first thing they say is, "The service is phenomenal. I get my product the next day. The returns are so easy. The product is great." That's a surprise to a lot of people; is the customer really values that service component. I guess surprising is how many people still don't know Revolve. Again, back to that 3% penetration. We still have a lot of opportunity out there and a lot of customers to acquire. The influencers and the great product and all the sexy. the influencers and the great product and all the sexy What is surprising to most is when you talk to a customer, the first thing they say is, "The service is phenomenal. what is surprising to most is when you talk to a customer the first thing they say is "the service is phenomenal I get my product the next day. i get my product the next day The returns are so easy. the returns are so easy The product is great." That's a surprise to a lot of people; is the customer really values that service component. the product is great." that's a surprise to a lot of people is the customer really values that service component I guess surprising is how many people still don't know Revolve. i guess surprising is how many people still don't know revolve Again, back to that 3% penetration. again back to that 3% penetration We still have a lot of opportunity out there and a lot of customers to acquire. we still have a lot of opportunity out there and a lot of customers to acquire

Speaker 2: I think you've been leaders to this embracing your customer and personalization, but what do you think is ahead for service? What are you testing with returns? Anything on the horizon? The Mikes both have intense, innovative minds. I think you've been leaders to this embracing your customer and personalization, but what do you think is ahead for service? i think you've been leaders to this embracing your customer and personalization but what do you think is ahead for service What are you testing with returns? what are you testing with returns Anything on the horizon? anything on the horizon The Mikes both have intense, innovative minds. the mikes both have intense innovative minds

Speaker 1: Yeah. On a service front, I think we're very good today. It can always get better. I think it's faster shipping. The return process is easy, but that can always be faster. I think on the service side, it comes back to the website and the curation and the personalization, and that continues to evolve, and we can get better and better there. I'd put that in the service component as well. Yeah. yeah On a service front, I think we're very good today. on a service front i think we're very good today It can always get better. it can always get better I think it's faster shipping. i think it's faster shipping The return process is easy, but that can always be faster. the return process is easy but that can always be faster I think on the service side, it comes back to the website and the curation and the personalization, and that continues to evolve, and we can get better and better there. i think on the service side it comes back to the website and the curation and the personalization and that continues to evolve and we can get better and better there I'd put that in the service component as well. i'd put that in the service component as well

Speaker 2: Yeah. Yeah. yeah

Speaker 1: Yeah, we do have some initiatives in play for return rate, but again, we want to make that return rate go down in win-win ways and not impact the customer experience. Yeah, we do have some initiatives in play for return rate, but again, we want to make that return rate go down in win-win ways and not impact the customer experience. yeah we do have some initiatives in play for return rate but again we want to make that return rate go down in win-win ways and not impact the customer experience

Speaker 2: The other thing we talk about at TD Cowen in a book we wrote is what we call the retail nexus. We're thinking about marketplaces and digital advertising. You do have such high frequency and loyalty in your multi-brand. How are you contemplating those aspects of opportunity? The other thing we talk about at TD Cowen in a book we wrote is what we call the retail nexus. the other thing we talk about at td cowen in a book we wrote is what we call the retail nexus We're thinking about marketplaces and digital advertising. we're thinking about marketplaces and digital advertising You do have such high frequency and loyalty in your multi-brand. you do have such high frequency and loyalty in your multi-brand How are you contemplating those aspects of opportunity? how are you contemplating those aspects of opportunity

Speaker 1: Yeah. I think brand is always important. Yeah. yeah I think brand is always important. i think brand is always important

Speaker 2: Yeah Yeah yeah

Speaker 1: building the brand for the long term, that goes back to investing in brand marketing consistently over time and just really building that brand. That set us up well to launch REVOLVE Los Angeles and that first namesake brand. I definitely think it's a balance. You have to do both. building the brand for the long term, that goes back to investing in brand marketing consistently over time and just really building that brand. building the brand for the long term that goes back to investing in brand marketing consistently over time and just really building that brand That set us up well to launch REVOLVE Los Angeles and that first namesake brand. that set us up well to launch revolve los angeles and that first namesake brand I definitely think it's a balance. i definitely think it's a balance You have to do both. you have to do both

Speaker 2: Could you get alternative revenue streams from digital advertising? Could you get alternative revenue streams from digital advertising? could you get alternative revenue streams from digital advertising

Speaker 1: I think we could, and we've discussed that. We do have now some pop-ups on the checkout. I think we could, and we've discussed that. i think we could and we've discussed that We do have now some pop-ups on the checkout. we do have now some pop-ups on the checkout We're getting some revenue from that, have tried to really want to maintain that experience. We're getting some revenue from that, have tried to really want to maintain that experience. we're getting some revenue from that have tried to really want to maintain that experience just that core Revolve experience on the site and not clutter things too much. just that core Revolve experience on the site and not clutter things too much. just that core revolve experience on the site and not clutter things too much

Speaker 2: Yeah, it's a balance with. Yeah, it's a balance with. yeah it's a balance with

Speaker 1: Yeah Yeah yeah

Speaker 2: execution and what about the marketplace frontier? execution and what about the marketplace frontier? execution and what about the marketplace frontier

Speaker 1: Yeah, I think- Yeah, I think- yeah i think-

Speaker 2: Don't you like it being capital light, but there's trade-offs. Don't you like it being capital light, but there's trade-offs. don't you like it being capital light but there's trade-offs

Speaker 1: Yeah. There are trade-offs. Fun fact, Mike and Michael. Yeah. yeah There are trade-offs. there are trade-offs Fun fact, Mike and Michael. fun fact mike and michael

Speaker 2: They did massage chairs, right, in the very beginning. They did massage chairs, right, in the very beginning. they did massage chairs right in the very beginning

Speaker 1: Oh, yeah, they did a bunch of stuff. Oh, yeah, they did a bunch of stuff. oh yeah they did a bunch of stuff

Speaker 2: They did. They did. they did

Speaker 1: Maybe cellphone covers. I don't know. Maybe cellphone covers. maybe cellphone covers I don't know. i don't know

Speaker 2: Yeah. There was a lot of innovation and experimentation. Yeah. yeah There was a lot of innovation and experimentation. there was a lot of innovation and experimentation

Speaker 1: Yeah. They partnered with José at Farfetch. Yeah. yeah They partnered with José at Farfetch. they partnered with josé at farfetch

Speaker 2: Yeah Yeah yeah

Speaker 1: launched Farfetch North America. launched Farfetch North America. launched farfetch north america

Speaker 2: Yeah Yeah yeah

Speaker 1: in the early days. in the early days. in the early days

Speaker 2: Wow. Wow. wow

Speaker 1: They got direct experience with that marketplace model. They got direct experience with that marketplace model. they got direct experience with that marketplace model What they realized, it's really hard to manage all those different brands going back to the service level. What they realized, it's really hard to manage all those different brands going back to the service level. what they realized it's really hard to manage all those different brands going back to the service level you don't have 100% control over the full purchase cycle. you don't have 100% control over the full purchase cycle. you don't have 100% control over the full purchase cycle

Speaker 2: Yeah. Sometimes iconic luxury, as we cover that sector too, like owns from the alligator farms to the customer touch point. Yeah. yeah Sometimes iconic luxury, as we cover that sector too, like owns from the alligator farms to the customer touch point. sometimes iconic luxury as we cover that sector too like owns from the alligator farms to the customer touch point

Speaker 1: Yeah. Yeah. yeah

Speaker 2: So- So- so-

Speaker 1: Yeah Yeah yeah

Speaker 2: I get it. Last question, what do you think is less well understood about Revolve? If we only remember a couple of things from this precious time, we had together, what should they be? I get it. i get it Last question, what do you think is less well understood about Revolve? last question what do you think is less well understood about revolve If we only remember a couple of things from this precious time, we had together, what should they be? if we only remember a couple of things from this precious time we had together what should they be

Speaker 1: Yeah. I think less understood or less appreciated is just that founder-led culture and the culture of innovation and technology. It's a phenomenal brand. We have great product, but it's really the culture behind it that's driving that- Yeah. yeah I think less understood or less appreciated is just that founder-led culture and the culture of innovation and technology. i think less understood or less appreciated is just that founder-led culture and the culture of innovation and technology It's a phenomenal brand. it's a phenomenal brand We have great product, but it's really the culture behind it that's driving that- we have great product but it's really the culture behind it that's driving that- Led by Mike and Michael. I think to take away from this is the consistent growth, profitability, and the meaningful growth opportunities we have ahead. Led by Mike and Michael. led by mike and michael I think to take away from this is the consistent growth, profitability, and the meaningful growth opportunities we have ahead. i think to take away from this is the consistent growth profitability and the meaningful growth opportunities we have ahead

Speaker 2: Okay, great. Well, Jesse, it's been a pleasure. Thank you. Okay, great. okay great Well, Jesse, it's been a pleasure. well jesse it's been a pleasure Thank you. thank you

Speaker 1: Yeah. Thanks, Oliver. Yeah. yeah Thanks, Oliver. thanks oliver

Speaker 2: Thank you very much. Thank you very much. thank you very much

Speaker 1: Yeah, good to be here. Yeah, good to be here. yeah good to be here