Q3 Rundown: Revolve (NYSE:RVLV) Vs Other Online Retail Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how online retail stocks fared in Q3, starting with Revolve (NYSE:RVLV).
Consumers ever rising demand for convenience, selection, and speed are secular engines underpinning ecommerce adoption. For years prior to Covid, ecommerce penetration as a percentage of overall retail would grow 1-2% annually, but in 2020 adoption accelerated by 5%, reaching 25%, as increased emphasis on convenience drove consumers to structurally buy more online. The surge in buying caused many online retailers to rapidly grow their logistics infrastructures, preparing them for further growth in the years ahead as consumer shopping habits continue to shift online.
The 6 online retail stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 5.2% on average since the latest earnings results.
Revolve (NYSE:RVLV)
Launched in 2003 by software engineers Michael Mente and Mike Karanikolas, Revolve (NASDAQ:RVLV) is a fashion retailer leveraging social media and a community of fashion influencers to drive its merchandising strategy.
Revolve reported revenues of $283.1 million, up 9.9% year on year. This print exceeded analysts’ expectations by 4.4%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ number of active customers estimates.
"We delivered exceptional results in the third quarter, highlighted by double-digit top-line growth, significant expansion of net income, and 85% growth in Adjusted EBITDA year-over-year," said co-founder and co-CEO Mike Karanikolas.
Revolve Total Revenue
Interestingly, the stock is up 17.2% since reporting and currently trades at $30.51.
Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Carvana reported revenues of $3.66 billion, up 31.8% year on year, outperforming analysts’ expectations by 5.3%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
Carvana Total Revenue
Carvana delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4% since reporting. It currently trades at $199.12.
Founded in 2002 by Niraj Shah, Wayfair (NYSE:W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Wayfair reported revenues of $2.88 billion, down 2% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ number of active customers estimates and a decline in its buyers.
Wayfair delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 21.7 million active buyers, down 2.7% year on year. Interestingly, the stock is up 8% since the results and currently trades at $46.24.
Founded by Ryan Cohen, who later became known for his involvement in GameStop, Chewy (NYSE:CHWY) is an online retailer specializing in pet food, supplies, and healthcare services.
Chewy reported revenues of $2.88 billion, up 4.8% year on year. This number beat analysts’ expectations by 0.7%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The stock is up 5.7% since reporting and currently trades at $35.49.
Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE:CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".
Coupang reported revenues of $7.87 billion, up 27.2% year on year. This result topped analysts’ expectations by 1.4%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The company reported 22.5 million active buyers, up 11.4% year on year. The stock is down 15.2% since reporting and currently trades at $22.80.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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