Every investor wants a stock that can grow faster than the broad market while at the same time being conservative. A fashion retail disruptor, RVLV curates and sells designer apparel, footwear, and accessories with the help of a proprietary algorithm to manage inventory and tap into fashion trends. But its marketing strategy — which relies on a network of about 4,500 Instagram influencers — is what sets it apart from competitors in the industry.
Unlike the competition, RVLV works almost exclusively through social media networks. Before the pandemic, gross margins were at 51%, while its annual revenue growth was at 24% (2016 to 2019) . These figures are notably higher than its direct competitors (Urban Outfitters and Stitch Fix).
While historically the company depended mostly on travel and tourism, the management pivoted its attention to digital-only programming such as cooking and other stay-at-home routine activities. Recent quarterly net sales are down by a short 2%, which evidences a positive turn-around situation.
Revolve is exercising in an ultra-competitive industry, making it a growth stock with massive potential thanks to its disruptive, social media-driven marketing strategy. The long-term outlook is based on a growth strategy which should be unlocked by the company once the pandemic restrictions are lifted.