Revolve at TD Cowen: Data-Driven Strategy Amid Market Volatility

On Wednesday, 04 June 2025, Revolve Group LLC (NYSE:RVLV) took center stage at the TD Cowen 9th Annual Future of the Consumer conference. The company highlighted its strategic approach to navigating a volatile consumer environment, with a focus on leveraging data and technology. Despite challenges, Revolve remains optimistic about growth opportunities, particularly through AI implementation and international expansion.

Key Takeaways

• Revolve reported 14% growth in Q4 2024, driven by successful category diversification.
• The company’s AI initiatives have led to significant revenue increases and operational efficiencies.
• Consumer sentiment is rated a 6 out of 10, reflecting market uncertainty.
• Revolve maintains a strong cash position with over $300 million, allowing for continued investment.
• International markets present substantial growth potential, being four times the size of the US market.

Financial Results

• Revolve achieved 14% growth in Q4 2024, underscoring its adaptability in a challenging market.
• The company reduced its Q1 return rate by nearly three percentage points year-over-year.
• Initial full-year guidance is set between 50% to 52%, accounting for potential tariff impacts.
• With a "fortress balance sheet," Revolve holds over $300 million in cash, providing a cushion for strategic investments.

Operational Updates

• Tariffs: 16% of inventory is sourced from China, with ongoing efforts to mitigate tariff impacts.
• Category Diversification: Dresses grew 4-5% in Q1, while fashion apparel saw a 14% increase. The beauty segment has quadrupled over five years, now comprising 4-5% of the business.
• Physical Retail: The Aspen store, a year old, shows strong performance, and a new store is set to open at The Grove in LA this fall.
• AI Implementation: Revolve’s internal search algorithm, developed by its data science team, outperformed third-party technology, generating a seven-digit revenue lift.

Future Outlook

• International Expansion: Revolve is focusing on enhancing the customer experience internationally, with all-inclusive pricing and fast shipping.
• Forward (Luxury): Investment continues in the Forward business, capitalizing on industry disruptions.
• Physical Retail Strategy: Revolve adopts a cautious yet optimistic approach to expanding its physical retail footprint, driven by data insights.
• Product Mix: The company aims to attract customers across various categories, including activewear, outerwear, and essentials.

Q&A Highlights

• Consumer Sentiment: Jesse rates consumer health at 6 out of 10, citing volatility and macroeconomic influences.
• Tariffs: Revolve actively monitors tariff impacts, employing strategies like negotiations and inventory management to mitigate effects.
• AI Strategy: AI is integral to Revolve’s operations, enhancing search optimization, reducing return rates, and managing inventory.
• Promotions: Revolve’s promotion strategy is data-driven, focusing on algorithmic markdowns based on inventory and demand.

For a deeper dive into Revolve’s strategic insights and market positioning, refer to the full transcript below.

Full transcript - TD Cowen 9th Annual Future of the Consumer:

Oliver Chen, Analyst, TD Cowen: Sunglasses.

About you, Alex? Okay. Yeah. I like Lovers and Friends and girlfriend. Yep.

Girlfriend’s really good too.

Jesse, Unidentified, Revolve: I like the margins though.

Oliver Chen, Analyst, TD Cowen: The margins, that’s a good topic. So, hi everybody, thanks for joining today. I’m Oliver Chen, TD Cowen’s retail, new platforms and luxury analyst. I’ve known Jesse since the IPO of Revolve, we’ve had the joy of working together for many years. At TD Cowen, we rate Revolve by $21 price target.

Company has been a leader in customer centricity, as you know, I love fashion and this company has been at the forefront of really balancing magic and logic and weaving AI a decade ago into operations. We also appreciate your vote in the II poll, so if you can vote, please do, it really helps us do what we do here at TD Cowen. Jesse, thanks a lot.

Jesse, Unidentified, Revolve: Yeah, thanks for having

Oliver Chen, Analyst, TD Cowen: me. So, for those a little less familiar, although this room is very familiar, how is Revolve different versus peers? What are your core competencies?

Jesse, Unidentified, Revolve: Yeah. No, thanks Oliver and it’s great to be here and thanks for all of your great content on Revolve and even outside of Revolve, it’s super helpful in the industry. Maybe if I step back, Revolve was founded over twenty years ago by Mike and Michael, are still our co CEOs today. They were not fashion guys back when they founded the business, so they relied on data to make their decisions, to drive the merchandise buying, really build the whole internal structure, ERP, operating systems, marketing, everything. So from day one, it’s been data driven and technology focused and I think that’s one big differentiator and it’s really played to our advantage in this most recent era of AI, which is a huge benefit and something we’re leveraging that I’m sure we’ll get into.

So that’s one. I think merchandise is also a key differentiator. I think being broad yet curated is really important. It’s not the stale department store of the past but it has that broad assortment. It also has the curation and you know, kinda specialness of a boutique but is able to serve customers around the world and and really provide these great emerging brands to that customer.

So merchandise is really important. Then that feeds into marketing and really having a voice and really speaking to this next generation consumer and being focused on this next generation consumer is also important. The purchasing power is moving to this next generation. I say she a lot because that’s still the majority of our customer. We do have a great men’s business that’s still in development but you know, I’ll say she for now.

She’s looking for newness, she’s looking for authenticity and that’s something we provide her. And then I think just from a financial perspective, growing consistently and growing profitably has been a key differentiator. That’s led to a really, you know, fortress balance sheet of over $300,000,000 in cash, which is especially important in times like this where we can continue to invest and grow through cycles.

Oliver Chen, Analyst, TD Cowen: Jesse, what are you seeing with the consumer today? During first quarter, average average order values declined slightly. What are you seeing lately in terms of the the health of the consumer? There’s a fair bit of volatility month to month.

Jesse, Unidentified, Revolve: Yeah, yeah, definitely volatility and it’s really hard to pinpoint how the consumer is feeling. I think it’s really confusing out there, there’s a lot of volatility, a lot of uncertainty and we saw that coming out of q four, we closed 2024 really strong with 14% growth in q four. Then January softened with LA wildfires during which time we paused social social media and the conversation was really focused around the wildfires and in reverence to the victims of those fires. So we saw a soft January. Then February and March picked back up closer to our q four levels, so we were feeling really good about things.

Then April started to soften again, we saw the decrease in AOV’s a little bit in q one and then that continued into April. April also slowed to the mid single digit, know, right around Liberation Day and again, all the uncertainty in the macro and the headlines that were happening there. Then in the back week or two of April, it started to pick up again and that continued into May. So, you know, I think again, the theme is it’s very uncertain, very volatile out there but everything we can control is going really well. I think, you know, managing through the cycle and getting back to some kind of normal will come out stronger.

Oliver Chen, Analyst, TD Cowen: Yeah. What what drives, feels like different things every time a little bit, but what do you monitor in terms of driving volatility?

Jesse, Unidentified, Revolve: Yeah, I think, you know, for us, it’s really been around the the sentiment out there and that’s really driven by the headlines and you see those when there’s an abrupt change like we had on Liberation Day or back in, you know, kind of the mini banking crisis we had with the collapse of Silicon Valley Bank. There’s an abrupt change, she starts to pull back, she’s uncertain

Oliver Chen, Analyst, TD Cowen: Yeah.

Jesse, Unidentified, Revolve: And then it comes back a little bit.

Oliver Chen, Analyst, TD Cowen: Where are you now with return rates? Because return rates also interplay with sentiment.

Jesse, Unidentified, Revolve: Yeah. Yeah. We That’s Maybe that’s one difference is we did not see different from times past when you have those abrupt changes where you see return rate Yeah. Tick up. We didn’t see that this time.

Yeah. And I think that’s partly due to our effort on reducing return rates and we made a lot of great progress on reducing return rates. Yeah. Saw almost a three point reduction year on year in q one. Mhmm.

Yeah, I think, you know, we have to see how this plays out but, know, again, the balance sheet, we think we can continue to manage through it.

Oliver Chen, Analyst, TD Cowen: You have a really loyal and large active customer base, what what is, who is your customer? She’s pretty wide ranging, but what’s the household income profile like?

Jesse, Unidentified, Revolve: Yeah, yeah, it is wide ranging and again, I’ll say she because that’s majority of our customer today but it’s that 20 to 40 year old customer really seeking emerging fashion, really wants to look great. Historically, she’s come to us for the occasion. Yeah. We’re making an effort to really increase our share of her wallet and get her to come to us for everything in her life from beauty to basics to essentials to active to outerwear. You know, I think when I say 20 to 40, it does it does go outside of that range, we’re really tapping into that younger customer and getting her early in the funnel.

Beauty is a great product for customer acquisition, especially at that younger age and that lower price point. And then on the high end of that age range, being able to graduate her from Revolve up into Ford in those higher price point handbags, shoes. Household income is higher than the national average but not significantly higher and I think that’s a surprise to many out there. She does dedicate more share of her wallet to fashion. She’s you know, going out and wants to look great and stay on trend.

Oliver Chen, Analyst, TD Cowen: You also gave a really nice update in early one hour, this is changing every hour but on tariffs, 16% of inventory from China. Walk us through your your guidance calculations and and how you’re feeling now with this dynamic situation.

Jesse, Unidentified, Revolve: Yeah, back to the theme of uncertain Yeah. Still very uncertain out and maybe to rewind, at the time we gave guidance, that was at the point where China was at a 45%, everybody else was at 10%. Our guidance range for the full year was 50 to 52%. At the low end of the range, that assumed that elevated tariffs were in place, the one forty five and the 10, and our best estimation of our mitigation efforts, which you know, we think we can make great progress on. Then at the high end of the range, and this wasn’t any one scenario, there were literally dozens of scenarios that went into this range, but at the higher high end of the range, that assumed tariffs were reduced to some level and or mitigation played out greater than that low end of the range.

So it could be a combination of those and again, it was a dozen scenarios, it was China at 30, China at 50, China at one forty five, China at 10, everybody else, you know, so it’s, there’s a lot of different moving pieces there, but I think given that China’s now at 30 at least for now, but we do have Europe coming to 50 here in a few weeks, so I think given where we’re at now, it gives us a little more confidence in the range, but doesn’t significantly change our mitigation tactics and how we’re how we’re operating.

Oliver Chen, Analyst, TD Cowen: Well, does does it change in light of the 30 and trying to acquire as much inventory as humanly possible within this window of time?

Jesse, Unidentified, Revolve: Yeah, 30 is still high. Yeah. So, I think it’s still kind of managing as we were at one forty five, it just is I guess easier negotiations at 30 than it was at one forty five? Yeah. Now, if it goes down like it, you know, for a period of twenty four, thirty six hours last week where it went down to zero, that’s at the point when we will, you know, really try to ramp and get inventory in as quickly as possible.

Oliver Chen, Analyst, TD Cowen: Okay. And what about elasticity in terms of as you approach pricing? How are you thinking about that? There’s many approaches, usually people are trying to manage within a category. Of course, you’re being surgical and behavioral economics can play a role too.

Jesse, Unidentified, Revolve: Yeah. Yeah, definitely being surgical on this and it depends on the brand, the price point and the product. Mhmm. And we carry third party brands, so they’re trying to maintain price price equivalency across the board and manage their MSRP’s. You know, what we’ve found on own brands is there’s pockets where we can increase price with zero impact to demand just based on the quality relative to other products.

That’s not across the board and again, this gets back to the surgical nature of those price increases.

Oliver Chen, Analyst, TD Cowen: Okay. And Jesse, what about promotions and merchandise margins relative to how you’re planning inventory relative to sales?

Jesse, Unidentified, Revolve: Yep, yep. Promotions, we are not True promotions, we’re not leaning into and we don’t typically react with promotions to any cycle or competitive dynamic, we do our own thing. Now, the markdown front, that’s largely algorithm driven and that will depend on inventory levels and demand and there’s some human oversight there. We did see some shift from full price to markdown in q one and that continued into April but, know, I think it’s just business as usual on that front and continue to manage to maximize margin dollars.

Oliver Chen, Analyst, TD Cowen: Will you see higher markdowns than last year for the balance of the year?

Jesse, Unidentified, Revolve: You know, I think q one and q two have the tougher comps. We had really high full price You’re anniversary Full price mix year, so we’re anniversarying that, then it starts to lighten up in the back half of the year. But Okay. You know, I think outside of the year over year comps, the full price mix is better today than it was pre COVID. So I think it speaks to just continued improvement in merchandising Mhmm.

That broad yet shallow initial buy and then reordering into the stuff that works.

Oliver Chen, Analyst, TD Cowen: You’re ahead of the curve with fashion product execution, what’s happening now with dresses relative to wardrobing and and what she cares about most?

Jesse, Unidentified, Revolve: Yeah, yeah, dress is still an important piece of the business she still comes to us for that occasion. She needs to be able to buy multiple dresses, try them on, return them if they don’t fit. So that’s still important to the business. That said, dresses grew four or 5% in q one, fashion apparel grew 14%. So I think it speaks to the category diversification and she’s coming to us now more and more for other products outside of dresses which is really exciting for us.

Oliver Chen, Analyst, TD Cowen: Yes, lifestyle building. Yep.

Jesse, Unidentified, Revolve: Outerwear was really great in q four and into q one and I think the Aspen store helps with that and really gets exposure to those products, gets those products in front of her.

Oliver Chen, Analyst, TD Cowen: What should we understand longer term for a product mix? You have a great beauty assortment too. Yeah. Great accessory assortment, great handbag assortment.

Jesse, Unidentified, Revolve: Yeah, great. Yeah, we are we are really excited about category diversification. Mhmm. I think if you use beauty as a case study, that’s quadrupled over the last five years. Some really great brand additions to the roster.

Mhmm. Still a lot of work to do on presenting that product, merchandising the product and marketing that product. But still at four or 5% of the business and we think based on relative comps, whether you pick a department store, another multi brand retailer, that can be double digit percentage percentage of the business. Yeah. And then if you think about men’s, men’s is sub three percent of the business, sub 4% of the business, that theoretically can be half of the business.

Half of the purchases out there for a male come from a female, we have a very engaged and active female audience, so a lot of opportunity there. And then probably most exciting is just again, within that core demographic, getting her to come to us for everything, for active, outerwear, essentials, basics. We launched our foundation shop in January, so that’s kind of the more foundational everyday items and that’s been had great feedback from brands and customers, we continue to test into that. So, I

Oliver Chen, Analyst, TD Cowen: think over time Interesting. Yeah, timelessness. What should we understand about the margin mix? Certainly, owned brands are higher but between say beauty versus dress versus fashion.

Jesse, Unidentified, Revolve: Yeah, yeah, those do carry lower initial product margins than a dress does.

Oliver Chen, Analyst, TD Cowen: Yeah.

Jesse, Unidentified, Revolve: But when you work down to contribution margin, it starts to wash out where fashion apparel has a lower return rate than dresses and then beauty for example, significantly lower at a low single digit return rate versus the dresses that are higher than our overall return rate. So, I think, know, managing to that contribution margin and bottom line profitability.

Oliver Chen, Analyst, TD Cowen: Is comparable across those. Yeah. Yeah. Owned brands are better contribution margins.

Jesse, Unidentified, Revolve: Yep. Yep. Yeah. And then and then I think if you look at the customer LTV Yeah. Having those other product categories gives her more opportunity on order frequency over time.

Oliver Chen, Analyst, TD Cowen: Yeah. Coming back. And it has multiplicative positive Yeah. Effects on lifestyle. I’m I’m a big guy, know, physical plus digital.

What’s happening now, I think you can have a lot of stores but you’ve been very disciplined.

Jesse, Unidentified, Revolve: Yes. Yeah, I think that’s the key and I think going back to the long term mindset of Mike and Michael still owning just less than half of the company, we are always trying things, always testing, but also being very disciplined in listening to the data. So this being no different, we have Aspen, which is about a year old and then we’ll open The Grove in LA later this year in the fall. So we really wanna get these two stores right, read the data, make sure they’re operating to our high level of standards before we start rolling out a bigger strategy on physical, but that doesn’t take away our optimism on physical. We think it’s a massive opportunity, know, still 2 thirds of the dollars out there going through a physical door.

Yeah. We think we have a great brand and the scale and this is a great time for us to leverage that brand into stores and make them make them an experience. I think, know, different from again, the typical stale department store, these will be experiences for the customer.

Oliver Chen, Analyst, TD Cowen: What have you learned so far from Aspen by the way?

Jesse, Unidentified, Revolve: Yeah, what what got us excited about physical and and Aspen was one, new customers. We saw new customers over index in the store and even in LA, which is our hometown at The Grove when we had this holiday pop up, we saw new customers over index which was surprising and then anecdotally, we had one of our team members following a couple of girls that were like, looked like core Revolve girls walking up an Or riding up an escalator and saw a Revolve ad and the girls were talking like, what’s Revolve? Have you heard of Revolve? That sounds familiar. And the other girl said, I think it’s a fashion company.

So just to have that anecdotal

Oliver Chen, Analyst, TD Cowen: Awareness build, yeah.

Jesse, Unidentified, Revolve: Yeah, gave us, you know, kinda made us acknowledge what a great opportunity we have out there, even in our own backyard. So new customers, we also saw a halo effect even in LA, it was small, but there still was a halo effect even from a temporary pop up, so that gave us greater confidence in the physical opportunity. Own brands outperformed in store relative to online and then also, own brand sales outperformed the inventory levels, so really great sell through on the own brands, which back to the margin potential on owned brands gave us a lot of excitement. And then again, back to the experience, we had a lot of activations within the stores. Aspen, we had a New Year’s Eve activation and the videos posted from that activation averaged 400,000 views each which were far higher than other activations we’ve had.

Oliver Chen, Analyst, TD Cowen: So, need an activation here next year. Yep, we’re working on it, we’re working on it. So, alright, that’s really exciting. I do know you do a great job managing, how many SKUs do you have around?

Jesse, Unidentified, Revolve: So, we’ll have around a hundred thousand on the site at any point over a thousand Very,

Oliver Chen, Analyst, TD Cowen: very, there’s a lot available. How did you decide what should go in stores?

Jesse, Unidentified, Revolve: Yeah, right now that is primarily driven by our our merchandising team and optimizing the store assortment for what we think is happening in that market. I think longer term, back to the data driven merchandising, there’s opportunities to leverage AI in our data to figure out you know, what what to optimally source in the stores. You know, Aspen’s going to be different than The Grove, The Grove’s gonna be different than the next store so And to your point, the challenge and the opportunity is getting a hundred thousand styles into a store and which of those hundred thousand go in the store. But again, challenge and opportunity. I think the other, the great thing about the store is it’s revolving forward under one roof, so a lot of cross sell opportunity and then you’ve got anywhere from a $20 tube of lipstick to a $60,000 handbag under one roof, so it’s a great kind of customer draw both on the high and the low end and then Yeah.

Can walk out with something.

Oliver Chen, Analyst, TD Cowen: I’m a I’ve loved watching Ford continue to innovate, that’s about 15% of the mix, it’s your luxury division. You’ve had two quarters of revenue growth and margin expansion and what’s happening with this business now in terms of, you know, parts of the aspirational consumer there and it’s been a volatile market for luxury as well.

Jesse, Unidentified, Revolve: Yeah, yeah, we are, I’ll say we’re excited about a lot of things, we’re excited about this as well. Yeah. A lot of challenge out there in luxury but we see it as an opportunity. Again, back balance sheet, the long term focus of Mike and Michael. We are continuing to invest in the business, while others are pulling back.

If you look at Match’s going completely away, Hudson Bay going away, Saxon Neiman having their challenges, Farfetch being acquired by Kupang. So there’s just a lot of disruption out there Mhmm. Which has enabled us to acquire some great talent. So we’ve added some great talent to the forward business recently. Also, adding brands to the roster, some brands that we’ve been after for quite a while, being able to add those and then getting also better allocations from existing brands to the forward assortment.

So, and and I think, you know, leveraging AI and everything Revolve is good at into that forward business has been super beneficial. A lot of cross sell opportunity and engaging that 2,600,000 active customers on the Revolve or on the forward platform, it’s still sub 5% overlap. So, using the loyalty program and the websites, you know, to kind of complement each other.

Oliver Chen, Analyst, TD Cowen: Great. International also, there’s a lot of demand here, it’s 20% of your sales, it was 16 prior. I’m sure you can offer more service internationally, what’s what’s stopping you, what are what are your thoughts for global expansion?

Jesse, Unidentified, Revolve: Yeah, yeah, a lot of opportunity there as well. International market is four times the size of The US market, lower penetration for us in those international markets. Every market is different, but I think the theme is the same. First, get the customer experience right and get it to the level of our domestic customers. So that’s all inclusive pricing, fast and free shipping.

We can reach 80% of our international customers in two to three business days, which is really compelling for that customer. The next step, once we get all of that service right, is really marketing and merchandising specific to that customer in those markets. Really exciting, most recently is the Revolve business in China. Historically, China’s been more of a forward business and more of a brand name business. We’re seeing really great growth coming out of China on the Revolve platform.

Thanks in part, in large part due to a team we put in place there that’s really starting to work with the local marketing channels and marketing in a way that really connects with that consumer. So on Red, Douyuan, Tmall and then having the right merchandise on the right marketing channel to really drive sales there. So that’s kind of the next step in this evolution of international is really the merchandising and marketing to get that customer engagement.

Oliver Chen, Analyst, TD Cowen: What percentage of total China could be massive for you. Yeah. What’s stopping you from doing this more quickly?

Jesse, Unidentified, Revolve: Yeah, I think we wanna do it at the right pace. You know, there’s a number of regions that are performing well, so it’s just resource allocation and making sure, again, we do it at the right pace and do it at the right time, we don’t wanna market ahead of the assortment, we don’t wanna assort ahead of the customer experience, so it’s just a lot of blocking and tackling but very very optimistic over the long term.

Oliver Chen, Analyst, TD Cowen: Okay. I’ve always been excited on AI, I teach a class in AI at Columbia Business School. What are some of the key pillars of how you’re using this? You’re using it in a few different ways, would love you to speak to that.

Jesse, Unidentified, Revolve: Yeah, no, we are we are very excited about AI as well and I think what goes under appreciated, undervalued Yeah. Is the data driven, the technology culture Mhmm. That we have. Yeah. Well, Mike Mike is the man.

Yeah, yeah, he’s a hardcore hardcore engineer. So I think just having that culture of embracing data and technology that we’ve had for twenty years, now gives us the ability to really move fast on AI and it’s not just a buzzword, these are, know, it’s real for us. And we think it can touch all aspects of the business. If we start maybe with a more kind of fun, front facing, customer facing AI initiatives, one great example is developing our own internal search algorithm on the site. Historically, was provided by a third party that’s arguably the best in search in the world.

Our data science team was able to develop our own that outperformed that third party technology leading to what we estimate seven digit revenue lift from that. Wow. Also saving hundreds of thousands of dollars because we’re not paying the third party for that search functionality and we own the algorithm and the technology so we can continue to iterate and make it better and better. We are also using AI to reduce the return rate. So a lot of return rate initiatives leveraging AI.

We’re using it to expand our reach in digital performance marketing. So that’s been a great efficiency driver on the digital performance marketing side. On the site, a lot of customization, personalization, product assortment on the site, leveraging that and creating good edits on the site which leverages into email and then email’s been performing very well over the last couple quarters. A lot on kind of size, fit, experience, so using video on the site, using the AI within the reviews to better sort and filter reviews and bubble up the best reviews and allow the customer to sort on those reviews and a number of other things that I’m forgetting on the site specifically. And then in the back office and kind of operations, leveraging AI to intelligently route customer service inquiries to the best equipped agent.

Also, translating voice calls from customers into text, then we can better data mine all of the all of the customer inquiries and better serve the customer and and modify our processes and respond to customers better on an already best in class customer service, customer satisfaction score. On the inventory side, intelligently placing inventory around the world in our different distribution centers based on algorithms determining how probable is that item to sell within a region. For example, if we ship something to a customer in The UK or Europe, she returns it, how likely is that product to resell? If it’s likely that it’s gonna resell in UK or Europe, keep it there, don’t ship it across the Atlantic again all the way back here just to ship it to another customer. So a lot of efficiency gains there.

And then starting to use it kind of in the back office accounting, AP processing and and most of this stuff, we’re leveraging third parties to some extent, but a lot is internally developed. We have a really great data science and business intelligence team Sounds

Oliver Chen, Analyst, TD Cowen: like you can open a consulting firm too.

Jesse, Unidentified, Revolve: I think that, yeah. B to b. Yeah.

Oliver Chen, Analyst, TD Cowen: What about AI creatively? Because you’ve spoken to that too.

Jesse, Unidentified, Revolve: Yeah. Yeah. Starting to leverage that creatively on the site and editorial. Yeah, continued kind of, we have a team of two or three that specifically works on creative and editorial for product images.

Oliver Chen, Analyst, TD Cowen: Well, as we link AI to our models, how do you think it will, what impact might it play on revenues and margins or the bigger drivers, you have so many.

Jesse, Unidentified, Revolve: Yeah. I think revenue and contribution margin, probably the first two and the biggest and I think, you know, AI driving better conversion on the site, so we’re paying for less traffic or you know, less traffic converts to more revenue. Mhmm. And then, you know, I think it gets down to the just, you know, blocking and tackling and leveraging it in the back office and that leads to efficiencies over time. But the most ones we’re most excited about is that kind of customer facing Yeah.

Development.

Oliver Chen, Analyst, TD Cowen: For sure. What is the toughest part of your job?

Jesse, Unidentified, Revolve: Oh, you know, think, well, today it’s probably tariffs, but but again, we see this cycle as an opportunity, we’ll get through it, great team really engaged on managing through that. So that’s pretty tough right now. I think, you know, maybe back to your point on what’s holding us up on international, why don’t we move faster? I think it’s resource allocation, optimizing the people and the resources to the right opportunity because there is a lot of opportunities out there so prioritization is is really important. Yeah.

Oliver Chen, Analyst, TD Cowen: Well, you have a loyal customer, like, eventually she doesn’t go to music festivals every year, so when you have brands like Helsa, what are you thinking about as your customers get a little bit older?

Jesse, Unidentified, Revolve: Yeah, yeah, I think Ford is a great opportunity for that older customer and even, you know, I think maybe she doesn’t go to Coachella, she’ll go to Stagecoach the following weekend with that older crowd. So I think there’s still opportunities out there for that older customer to really engage with the brand and you know, I think, this is my opinion, but I think 50 is the new 30 Yeah, for sure. And customers are, you know, I think people are kind of younger by nature, which we see as an opportunity as well.

Oliver Chen, Analyst, TD Cowen: Okay, we we are asking all c suite this, how would you rate the health of the customer Jesse on a scale of one to 10?

Jesse, Unidentified, Revolve: Oh, I’m guessing I can’t say five and cheat. I’ll say six. A six. Okay. Yeah and I think, you know, just a lot of confusion out there and kind of what’s going on and with the uncertainty, I think she’s trying to figure out, you know, kinda how she feels.

Oliver Chen, Analyst, TD Cowen: Yeah, for sure. And then if you had to bet on one consumer behavior shift that will define the next five years, what would, what have you spotted?

Jesse, Unidentified, Revolve: Consumer behavior shift, I think, you know, I think post COVID we did see people wanting physical interaction connection, connection, know, and that could mean going into stores and experiencing brands more and I think that’s one element that led us down this testing of physical retail. I think, know, that connection with brands is gonna be really important and something we’ve done well over time and I think puts us in pole position to capitalize on that going forward. Yeah, you’ve been able to perpetuate relevance over many years, you know, what’s your secret to success to staying cool and relevant? Yeah, I think it comes down to people and data. You know, reading the data, the data will tell us where to go but it also includes people and having a team that’s engaged and passionate about fashion and is out there in the market and living the brand is really important so they can bring that back to the Whether it’s the branding, the brand marketing, the merchandising, it’s really important to have a group of, you know, young passionate people.

Oliver Chen, Analyst, TD Cowen: TikTokification of retail, big theme for us and me. What’s happening with social platforms next and some volatility in TikTok as well.

Jesse, Unidentified, Revolve: Yeah, yeah, yeah, it’ll be interesting. I think, you know, moving to video which is a little bit aged at this point, but there continues to be more engagement on video, whether that’s on Instagram, TikTok or YouTube has been great for us recently in that longer format video, really engaging for the customer and especially on things like beauty where you can have, you know, a longer form video around, you know, a beauty application. You know, what what’s next, we’ll see, we’ll follow where the customer goes, you know, we followed the customer from when it was the early days of blogs into early days of Facebook, into Instagram, into TikTok, so we’ll continue to adapt.

Oliver Chen, Analyst, TD Cowen: Well, Jesse, it’s been a pleasure to see this journey and also, Revolve’s been at the forefront of magic and logic, relevance and technology and also the best experiential events in the industry and quality, great fashion. Thank you. Yeah. Thank you, Thank you.

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