Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 06, 2020 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | RVLV | |
Entity Registrant Name | REVOLVE GROUP, INC. | |
Entity Central Index Key | 0001746618 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-38927 | |
Entity Tax Identification Number | 46-1640160 | |
Entity Address, Address Line One | 12889 Moore Street | |
Entity Address, City or Town | Cerritos | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90703 | |
City Area Code | 562 | |
Local Phone Number | 677-9480 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Security Exchange Name | NYSE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Class A Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 15,930,974 | |
Class B Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 53,568,912 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 150,772 | $ 65,418 |
Accounts receivable, net | 4,849 | 4,751 |
Inventory | 64,510 | 104,257 |
Income taxes receivable | 761 | |
Prepaid expenses and other current assets | 19,585 | 24,155 |
Total current assets | 239,716 | 199,342 |
Property and equipment, net | 12,673 | 13,517 |
Intangible assets, net | 1,287 | 1,457 |
Goodwill | 2,042 | 2,042 |
Other assets | 592 | 642 |
Deferred income taxes | 15,924 | 15,290 |
Total assets | 272,234 | 232,290 |
Current liabilities: | ||
Accounts payable | 25,893 | 29,813 |
Line of credit | 24,000 | |
Income taxes payable | 4,448 | 470 |
Accrued expenses | 20,720 | 19,399 |
Returns reserve | 28,336 | 35,104 |
Other current liabilities | 17,400 | 16,740 |
Total current liabilities | 120,797 | 101,526 |
Stockholders' equity: | ||
Additional paid-in capital | 76,765 | 74,018 |
Retained earnings | 74,602 | 56,677 |
Total stockholders' equity | 151,437 | 130,764 |
Total liabilities and stockholders’ equity | 272,234 | 232,290 |
Common Class A | ||
Stockholders' equity: | ||
Common stock value | 16 | 14 |
Common Class B | ||
Stockholders' equity: | ||
Common stock value | $ 54 | $ 55 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Common Class A | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 15,930,974 | 14,009,859 |
Common stock, shares outstanding | 15,930,974 | 14,009,859 |
Common Class B | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 53,568,912 | 55,069,124 |
Common stock, shares outstanding | 53,568,912 | 55,069,124 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 142,784 | $ 161,897 | $ 288,859 | $ 299,240 |
Cost of sales | 70,713 | 71,479 | 145,838 | 138,068 |
Gross profit | 72,071 | 90,418 | 143,021 | 161,172 |
Operating expenses: | ||||
Fulfillment | 3,799 | 5,301 | 8,292 | 9,796 |
Selling and distribution | 19,054 | 23,639 | 40,833 | 44,230 |
Marketing | 14,638 | 24,914 | 36,588 | 44,412 |
General and administrative | 15,776 | 18,836 | 34,650 | 38,105 |
Total operating expenses | 53,267 | 72,690 | 120,363 | 136,543 |
Income from operations | 18,804 | 17,728 | 22,658 | 24,629 |
Other expense, net | 174 | 444 | 47 | 660 |
Income before income taxes | 18,630 | 17,284 | 22,611 | 23,969 |
Provision for income taxes | 4,394 | 4,543 | 4,219 | 6,266 |
Net income | 14,236 | 12,741 | 18,392 | 17,703 |
Less: Repurchase of Class B common stock upon corporate conversion | (40,816) | (40,816) | ||
Net income (loss) attributable to common stockholders | $ 14,236 | $ (28,075) | $ 18,392 | $ (23,113) |
Earnings (net loss) per share of Class A and Class B common stock: | ||||
Basic | $ 0.21 | $ (0.57) | $ 0.27 | $ (0.51) |
Diluted | $ 0.20 | $ (0.57) | $ 0.26 | $ (0.51) |
Weighted average Class A and Class B common shares outstanding: | ||||
Basic | 69,415 | 49,025 | 69,367 | 45,481 |
Diluted | 71,659 | 49,025 | 71,781 | 45,481 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 14,236 | $ 12,741 | $ 18,392 | $ 17,703 |
Other comprehensive (loss) income: | ||||
Cumulative translation adjustment | (123) | (130) | (467) | 13 |
Total other comprehensive (loss) income | (123) | (130) | (467) | 13 |
Total comprehensive income | $ 14,113 | $ 12,611 | $ 17,925 | $ 17,716 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Net income | $ 18,392 | $ 17,703 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,396 | 1,584 |
Equity-based compensation | 1,432 | 1,032 |
Deferred income taxes | (634) | (2,241) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (98) | (3,036) |
Inventories | 39,747 | (13,184) |
Income taxes receivable | 761 | (1,142) |
Prepaid expenses and other current assets | 4,570 | (271) |
Other assets | 50 | 36 |
Accounts payable | (3,920) | 9,468 |
Income taxes payable | 3,978 | (36) |
Accrued expenses | 1,321 | 3,137 |
Returns reserve | (6,768) | 7,171 |
Other current liabilities | 660 | 2,462 |
Net cash provided by operating activities | 61,887 | 22,683 |
Investing activities: | ||
Purchases of property, equipment and other | (1,381) | (9,755) |
Net cash used in investing activities | (1,381) | (9,755) |
Financing activities: | ||
Proceeds from initial public offering, net of underwriting discounts paid | 57,077 | |
Repurchase of Class B common stock upon corporate conversion | (40,816) | |
Proceeds from borrowings on line of credit | 30,000 | |
Repayment of borrowings on line of credit | (6,000) | |
Payment of deferred offering costs | (41) | (726) |
Proceeds from the exercise of stock options, net | 1,356 | |
Net cash provided by financing activities | 25,315 | 15,535 |
Effect of exchange rate changes on cash and cash equivalents | (467) | 13 |
Net increase in cash and cash equivalents | 85,354 | 28,476 |
Cash and cash equivalents, beginning of period | 65,418 | 16,369 |
Cash and cash equivalents, end of period | 150,772 | 44,845 |
Supplemental disclosure of cash flow information: | ||
Interest | 190 | |
Income taxes, net of refund | $ 102 | 9,674 |
Supplemental disclosure of non-cash activities: | ||
Deferred offering costs accrued, unpaid | $ 603 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business | Note 1. Description of Business Revolve Group, Inc., or REVOLVE, is an online fashion retailer for Millennial and Generation Z consumers. Through our websites and mobile apps we deliver an aspirational customer experience from a vast, yet curated offering. Our dynamic platform connects a deeply engaged community of consumers, global fashion influencers, and emerging, established and owned brands. We are headquartered in Los Angeles County, California. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Basis of Presentation Our unaudited condensed consolidated interim financial information has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States, or GAAP, can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2020 or for any other interim period or for any other future year. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Our fiscal year ends on December 31 of each year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2019 contained in our Annual Report on Form 10-K filed with the SEC on February 26, 2020. Impact of COVID-19 on Our Business The COVID-19 pandemic had a material adverse impact on our business operations and operating results for the three and six months ended June 30, 2020. While the length and severity of the reduction and shift in consumer demand related to COVID-19 remains uncertain, we expect that our business operations and results of operations, including our net sales, will be materially impacted through the remainder of 2020. In April 2020 we took aggressive actions to mitigate the effect of COVID-19 on our business by reducing non-payroll related operating costs and reducing payroll costs through a combination of pay cuts, employee furloughs and, to a lesser extent, layoffs. We also eliminated or deferred non-essential capital expenditures, significantly reduced planned inventory receipts by canceling or delaying orders, in addition to extending payment terms for both merchandise and non-merchandise vendor invoices. As our business operations and operating results improved throughout the second quarter of 2020, in part due to the easing of stay-at-home orders and other state-imposed restrictions on businesses, we began the process of bringing back certain furloughed employees and returned the majority of our corporate employees, except for executives and senior management, to their pre-COVID-19 salaries and wages. In addition, we accrued for discretionary bonuses related to second quarter performance with payment subject to full year performance. We also began to sequentially increase our inventory purchases and incur certain operating expenses to support the improving trends in consumer demand. Through our aggressive cost control and purchase commitment reductions, we were able to increase the balance of our cash and cash equivalents during the three months ended June 30, 2020. We believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months, including the repayment of outstanding borrowings upon the expiration of our line of credit Reverse Split On May 24, 2019, we effected a one-for-22.31 reverse split of all of our issued and outstanding Class T units and Class A units. All figures have been presented on the basis of the reverse split wherever applicable for all the periods presented in these condensed consolidated financial statements. Corporate Conversion Prior to our initial public offering, or IPO, we operated as a Delaware limited liability company under the name Revolve Group, LLC. In connection with the IPO, Revolve Group, LLC converted into a Delaware corporation and changed its name to Revolve Group, Inc. so that the top-tier entity in our corporate structure was a corporation rather than a limited liability company, which we refer to as the Corporate Conversion. In conjunction with the Corporate Conversion, all of the outstanding Class T and Class A units of Revolve Group, LLC were converted into an aggregate of 67,889,013 shares of our Class B common stock. The holders of Class T units received an aggregate of 2,400,960 shares, representing the total preference amount for the Class T units. The remaining 65,488,053 shares of our Class B common stock were allocated on a pro rata basis to the Class T and Class A unitholders based on the number of units held by each holder. In connection with the Corporate Conversion, Revolve Group, Inc. holds all property and assets of Revolve Group, LLC and assumed all of the debts and obligations of Revolve Group, LLC. The members of the board of managers and the officers of Revolve Group, LLC became the members of the board of directors and the officers of Revolve Group, Inc. Initial Public Offering On June 7, 2019, we completed an IPO, in which we issued and sold 2,941,176 shares of our Class A common stock at a public offering price of $18.00 per share. We received approximately $45.8 million in net proceeds after deducting $3.3 million of underwriting discounts and approximately $3.8 million in offering costs. Upon the closing of the IPO, we used $40.8 million of the net proceeds from the offering to repurchase an aggregate of 2,400,960 shares of Class B common stock held by TSG6 L.P. and certain of its affiliates, or TSG, and Capretto, LLC. In June 2019, we issued and sold an additional 441,176 shares of Class A common stock at a price of $18.00 per share following the underwriters’ exercise of their option to purchase additional shares and received proceeds of $7.5 million, net of underwriting discounts and commissions of $0.5 million. In connection with the IPO, 10,147,059 Class B shares were converted into Class A shares by the selling stockholders. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include: the allowance for sales returns, the valuation of deferred tax assets, inventory, equity‑based compensation, and goodwill, reserves for income tax uncertainties and other contingencies, and breakage of store credit and gift cards. Net Sales Revenue is primarily derived from the sale of apparel merchandise through our sites and, when applicable, shipping revenue. We recognize revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. A contract is created with our customer at the time the order is placed by the customer, which creates a single performance obligation to deliver the product to the customer. We recognize revenue for our single performance obligation at the time control of the merchandise passes to the customer, which is at the time of shipment. In addition, we have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. In March 2020 we launched the REVOLVE Loyalty Club within the REVOLVE segment. Eligible customers who enroll in the program will generally earn points for every dollar spent and will automatically receive a $20 REVOLVE Reward once they earn 2,000 points. We defer revenue based on an allocation of the price of the customer purchase and the standalone selling price of the points earned. Revenue is recognized once the reward is redeemed or expires or once unconverted points expire. REVOLVE Rewards generally expire three months after they are issued and unconverted points generally expire if a customer is inactive for a period of 12 months. In accordance with our policy on returns and exchanges, merchandise returns are accepted for full refund if returned within 30 days of the original purchase date and may be exchanged up to 60 days from the original purchase date. We modify our policy during the holiday season to extend the return and exchange period. In addition, to provide our customers with more flexibility to return or exchange during this time of increased social distancing as a result of the COVID-19 pandemic, merchandise returns for purchases made starting in March 2020 will be accepted for full refund if returned within 60 days of the original purchase date and may be exchanged up to 90 days from the original purchase date. At the time of sale, we establish a reserve for merchandise returns, based on historical experience and expected future returns, which is recorded as a reduction of sales and cost of sales. The following table presents a rollforward of our sales return reserve for the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 20,975 $ 37,153 $ 35,104 $ 29,184 Returns (85,652 ) (196,180 ) (259,174 ) (343,798 ) Provisions 93,013 195,382 252,406 350,969 Ending balance $ 28,336 $ 36,355 $ 28,336 $ 36,355 We may also issue store credit in lieu of cash refunds and sell gift cards without expiration dates to our customers. Store credits issued and proceeds from the issuance of gift cards are recorded as deferred revenue and recognized as revenue when the store credit or gift cards are redeemed or upon inclusion in our store credit and gift card breakage estimates. Revenue recognized in net sales on breakage on store credit and gift cards for the three and six months ended June 30, 2020 was $0.2 million and $1.0 million, respectively and $0.2 million and $0.4 million for the three and six months ended June 30, 2019, respectively. Sales taxes and duties collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. We currently collect sales taxes in all states that have adopted laws imposing sales tax collection obligations on out-of-state retailers and are subject to audits by state governments of sales tax collection obligations on out-of-state retailers in jurisdictions where we do not currently collect sales taxes, whether for prior years or prospectively. No significant interest or penalties related to sales taxes are recognized in the accompanying condensed consolidated financial statements. We have exposure to losses from fraudulent credit card charges. We record losses when incurred related to these fraudulent charges as amounts have historically been insignificant. See Note 9, Segment Information Accounting Pronouncements Not Yet Effective Under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we meet the definition of an emerging growth company. We have elected to use this extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We will remain an emerging growth company until the earliest of (1) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter, (2) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (3) the date on which we issue more than $1.0 billion in non-convertible debt in a three-year period, or (4) the end of the fiscal year in which the fifth anniversary of our IPO occurs. In December 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2017, the FASB issued ASU No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
Line of Credit
Line of Credit | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 3. Line of Credit On March 23, 2016, we entered into a line of credit agreement with Bank of America, N.A, with an expiration date of March 23, 2021. The line of credit provides us with up to $75.0 million aggregate principal in revolver borrowings, based on eligible inventory and accounts receivable less reserves. Borrowings under the credit agreement accrue interest, at our option, at (1) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate and (c) the LIBOR rate plus 1.00%, in each case plus a margin ranging from 0.25% to 0.75%, or (2) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.75%. As of June 30, 2020, we had $24.0 million outstanding on the line of credit. The weighted-average interest rate of debt outstanding at June 30, 2020 was 2.2 %. No borrowings were outstanding as of December 31, 2019. We are also obligated to pay other customary fees for a credit facility of this size and type, including an unused commitment fee. The credit agreement also permits us, in certain circumstances, to request an increase in the facility by an additional amount of up to $25.0 million (in an initial minimum amount of $10 million and in increments of $5 million thereafter) at the same maturity, pricing and other terms. Our obligations under the credit agreement are secured by substantially all of our assets. The credit agreement also contains customary covenants restricting our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter in transactions involving related parties, obtain letters of credit, incur indebtedness or grant liens or negative pledges on our assets, make loans or make other investments. Under the covenants, we are prohibited from paying cash dividends with respect to our capital stock. We were in compliance with all covenants as of June 30, 2020 and December 31, 2019. |
Equity-based Compensation
Equity-based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity-based Compensation | Note 4. Equity-based Compensation In 2013, Twist Holdings, LLC and Advance Holdings, LLC adopted equity incentive plans, which we refer to collectively as the 2013 Plan, pursuant to which the board of managers could grant options to purchase Class A units to officers and employees. Options could be granted with an exercise price equal to or greater than the unit’s fair value at the date of grant. All issued awards have 10-year terms and generally vest and become fully exercisable annually over five years of service from the date of grant. Awards will become fully vested upon the sale of the company. In March 2018, the 2013 Plan was amended to increase the maximum number of Class A units to 6,207,978. Upon the effectiveness of the Corporate Conversion on June 6, 2019, as discussed in Note 2, Significant Accounting Policies In September 2018, the board of directors adopted the 2019 Equity Incentive Plan, or the 2019 Plan, which became effective in June 2019. Under the 2019 Plan, a total of 4,500,000 shares of our Class A common stock are reserved for issuance as options, stock appreciation rights, restricted stock, restricted stock units, or RSUs, performance units or performance shares. Upon the completion of our IPO, the 2019 Plan replaced the 2013 Plan, however, the 2013 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under that plan. The number of shares that will be available for issuance under our 2019 Plan also will increase annually on the first day of each year beginning in 2020, in an amount equal to the least of: (a) 6,900,000 shares, (b) 5% of the outstanding shares of all classes of our common stock as of the last day of the immediately preceding year and (c) such other amount as our board of directors may determine. All future grants going forward will be issued under the 2019 Plan. As of June 30, 2020, approximately 2.9 million common shares remain available for future issuance under the 2019 Plan. All historical data presented in the tables within this footnote have been recast to retroactively reflect all share and per share data of options as if they had been issued by Revolve Group, Inc. and that both the reverse split and Corporate Conversion had occurred. See Note 2, Significant Accounting Policies, Option activity for the six months ended June 30, 2020 under the 2013 and 2019 Plans is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (000's) Balance at January 1, 2020 4,916,074 $ 6.30 5.6 $ 59,368 Granted 1,613,980 9.69 9.7 Exercised (420,903 ) 3.22 — Forfeited (34,864 ) 14.54 — Expired (3,680 ) 15.62 — Balance at June 30, 2020 6,070,607 7.36 6.3 46,131 Exercisable at June 30, 2020 3,301,090 4.72 4.4 33,679 Vested and expected to vest 5,960,056 7.38 6.4 45,151 RSU award activity for the six months ended June 30, 2020 under the 2019 Plan is as follows: Class A Common Stock Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (000's) Unvested at January 1, 2020 13,130 $ 19.04 3.6 $ 242 Granted 6,618 15.11 1.0 Released (3,883 ) 25.75 — Forfeited — — — Unvested at June 30, 2020 15,865 15.76 1.8 236 There were 990,700 options and 6,618 RSUs granted during the three months ended June 30, 2020 and 1,613,980 options and 6,618 RSUs granted during the six months ended June 30, 2020. The weighted average grant-date fair value of options granted during the three and six months ended June 30, 2020 was $4.18 per share and $5.29 per share, respectively. As of June 30, 2020, there was $12.8 million of total unrecognized compensation cost related to unvested options and RSUs granted under the 2013 Plan and 2019 Plan, which is expected to be recognized over a weighted average service period of 4.0 years. Equity‑based compensation cost that has been included in general and administrative expense in the accompanying condensed consolidated statements of income amounted to $0.9 million and $0.5 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $1.0 million for the six months ended June 30, 2020 and 2019, respectively. There was an excess income tax benefit of $0.5 million and $0 recognized in the condensed consolidated statements of income for equity‑based compensation arrangements for the three months ended June 30, 2020 and 2019, respectively, and $1.7 million and $0 for the six months ended June 30, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5. Commitments and Contingencies Contingencies We record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible. Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. Although we cannot predict with assurance the outcome of any litigation or tax matters, we do not believe there are currently any such actions that, if resolved unfavorably, would have a material impact on our operating results, financial position and cash flows. Indemnifications In the ordinary course of business, we may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters. We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in our condensed consolidated financial statements. Tax Contingencies We are subject to income taxes in the United States and U.K. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates or whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. Our provision for income taxes does not include any reserve provision because we believe that all of our tax positions are highly certain. Legal Proceedings We are a defendant in a purported class action lawsuit filed in the Superior Court of California, Los Angeles County, which was filed in May 2019, arising from employee wage-and-hour claims under California law for alleged meal period, rest period, payment of wages at separation, wage statement violations, and unfair business practices. On January 6, 2020, we and the individual defendant in the case entered into a binding memorandum of understanding to settle the case which will need to be submitted for court approval prior to becoming final. Due to court closures and logistical complications related to the COVID-19 pandemic, resolution of this matter has not moved forward. In December 2019, we accrued approximately $1.0 million to general and administrative expenses which as of June 30, 2020, still remained accrued within accrued expenses on the accompanying condensed consolidated balance sheet. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 6. Income Taxes The following table summarizes our effective tax rate for the periods presented (in thousands): Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Income before income taxes $ 18,630 $ 17,284 $ 22,611 $ 23,969 Provision for income taxes 4,394 4,543 4,219 6,266 Effective tax rate 23.6 % 26.3 % 18.7 % 26.1 % The decrease in the effective tax rate for the three and six months ended June 30, 2020, as compared to the same period in 2019, was primarily due to an excess tax benefit related to the exercise of non-qualified stock options during the first and second quarters of 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted and signed into law. The CARES Act includes a number of corporate tax related provisions including increasing the amount of tax deductible interest, allowing companies an extended carry-back period for certain net operating losses, or NOLs, and increasing the amount of NOLs that corporations can use to offset taxable income. The CARES Act did not materially affect our income tax provision, deferred tax assets and liabilities, and related taxes payable for three and six months ended June 30, 2020. Although we currently do not expect the impact to be material, we will continue to assess the future implications of these provisions within the CARES Act on our condensed consolidated financial statements. |
Members'_Stockholders' Equity
Members'/Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Members'/Stockholders' Equity | Note 7. Members’/Stockholders’ Equity Changes in members’/stockholders’ equity for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, 2020 Common Stock Additional Paid-in Retained Total Stockholders' Number Amount Capital Earnings Equity (in thousands, except share data) Beginning balance 69,381,475 $ 70 $ 75,556 $ 60,489 $ 136,115 Issuance of Class A common stock from exercise of stock options 118,411 — 382 — 382 Equity-based compensation — — 868 — 868 Cumulative translation adjustment — — — (123 ) (123 ) Other — — (41 ) — (41 ) Net income — — — 14,236 14,236 Ending balance 69,499,886 $ 70 $ 76,765 $ 74,602 $ 151,437 Three Months Ended June 30, 2019 Class T Preferred Units Class A Common Units Common Stock Additional Paid-in Accumulated Members' Equity/ Total Members'/ Stockholders' Number Amount Number Amount Number Amount Capital Retained Earnings Equity (in thousands, except unit and share data) Beginning balance 23,551,834 $ 15,000 41,936,219 $ 4,059 — $ — $ — $ 66,661 $ 85,720 Corporate conversion (23,551,834 ) (15,000 ) (41,936,219 ) (4,059 ) 67,889,013 68 18,991 — — Repurchase of Class B common stock — — — — (2,400,960 ) (2 ) — (40,814 ) (40,816 ) Issuance of Class A common stock upon initial public offering, net of offering costs — — — — 3,382,352 3 53,224 — 53,227 Equity-based compensation — — — — — — 521 — 521 Cumulative translation adjustment — — — — — — — (130 ) (130 ) Net income — — — — — — — 12,741 12,741 Ending balance — $ — — $ — 68,870,405 $ 69 $ 72,736 $ 38,458 $ 111,263 Six Months Ended June 30, 2020 Common Stock Additional Paid-in Retained Total Stockholders' Number Amount Capital Earnings Equity (in thousands, except share data) Beginning balance 69,078,983 $ 69 $ 74,018 $ 56,677 $ 130,764 Issuance of Class A common stock from exercise of stock options 420,903 1 1,356 — 1,357 Equity-based compensation — — 1,432 — 1,432 Cumulative translation adjustment — — — (467 ) (467 ) Other — — (41 ) — (41 ) Net income — — — 18,392 18,392 Ending balance 69,499,886 $ 70 $ 76,765 $ 74,602 $ 151,437 Six Months Ended June 30, 2019 Class T Preferred Units Class A Common Units Common Stock Additional Paid-in Accumulated Members' Equity/ Total Members'/ Stockholders' Number Amount Number Amount Number Amount Capital Retained Earnings Equity (in thousands, except unit and share data) Beginning balance 23,551,834 $ 15,000 41,936,219 $ 3,548 — $ — $ — $ 61,270 $ 79,818 Corporate conversion (23,551,834 ) (15,000 ) (41,936,219 ) (3,548 ) 67,889,013 68 18,480 — — Repurchase of Class B common stock — — — — (2,400,960 ) (2 ) — (40,814 ) (40,816 ) Issuance of Class A common stock upon initial public offering, net of offering costs — — — — 3,382,352 3 53,224 — 53,227 Equity-based compensation — — — — — — 1,032 — 1,032 Cumulative effect of adoption of ASC 606 — — — — — — — 286 286 Cumulative translation adjustment — — — — — — — 13 13 Net income — — — — — — — 17,703 17,703 Ending balance — $ — — $ — 68,870,405 $ 69 $ 72,736 $ 38,458 $ 111,263 |
Earnings (Net Loss) per Share
Earnings (Net Loss) per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Net Loss) per Share | Note 8. Earnings (Net Loss) per Share Basic and diluted earnings (net loss) per share is presented in conformity with the two-class method required for participating securities and multiple classes of common stock. We consider the Class T preferred units, which were outstanding prior to the Corporate Conversion, to be a participating security. In connection with our IPO, we established two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock. Basic earnings (net loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. As a participating security, the Class T preferred units are excluded from basic weighted-average common shares outstanding. Diluted earnings (net loss) per share represents net income (loss) divided by the weighted-average number of common shares outstanding, inclusive of the effect of dilutive stock options and RSUs. The undistributed earnings (net losses ) For the three and six months ended June 30, 2020, the calculation of diluted earnings (net loss) per share for Class A common stock assumes the conversion of Class B common stock, while diluted earnings (net loss) per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock. Similarly, outstanding options to purchase Class B common stock and RSUs that are dilutive are included in the calculation of diluted earnings (net loss) for both Class A and Class B common stock. For the purpose of calculating basic and diluted earnings (net loss) per share for the three and six months ended June 30, 2019, the $40.8 million of Class B shares issued and subsequently repurchased in connection with our IPO to satisfy the total preference amount for the Class T Units is treated as a dividend and subtracted from net income available to common stockholders on a proportionate basis. In addition, the net losses for the three and six months ended June 30, 2019 were not allocated to our participating security as the Class T preferred units were not contractually obligated to share in our losses. Basic and diluted earnings (net loss) per share and the weighted-average shares outstanding have been computed for all periods shown below to give effect to the reverse split, the Corporate Conversion that occurred in connection with our IPO, and the repurchase of Class B shares. See Note 2, Significant Accounting Policies The following table presents the calculation of basic and diluted earnings (net loss) per share: Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B (in thousands, except per share data) Numerator Net income $ 3,251 $ 10,985 $ 912 $ 11,829 $ 4,156 $ 14,236 $ 683 $ 17,020 Repurchase of Class B common stock — — (2,922 ) (37,894 ) — — (1,575 ) (39,241 ) Net income (loss) attributable to common stockholders — basic $ 3,251 $ 10,985 $ (2,010 ) $ (26,065 ) $ 4,156 $ 14,236 $ (892 ) $ (22,221 ) Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 10,985 — — — 14,236 — — — Reallocation of undistributed earnings to Class B shares — 102 — — — 140 — — Net income (loss) attributable to common stockholders — diluted $ 14,236 $ 11,087 $ (2,010 ) $ (26,065 ) $ 18,392 $ 14,376 $ (892 ) $ (22,221 ) Denominator Weighted average shares used to compute earnings (net loss) per share — basic 15,846 53,569 3,510 45,515 15,673 53,694 1,755 43,726 Conversion of Class B to Class A common shares outstanding 53,569 — — — 53,694 — — — Effect of dilutive stock options and RSUs 2,244 2,244 — — 2,414 2,414 — — Weighted average number of shares used to compute earnings (net loss) per share — diluted 71,659 55,813 3,510 45,515 71,781 56,108 1,755 43,726 Earnings (net loss) per share: Basic $ 0.21 $ 0.21 $ (0.57 ) $ (0.57 ) $ 0.27 $ 0.27 $ (0.51 ) $ (0.51 ) Diluted $ 0.20 $ 0.20 $ (0.57 ) $ (0.57 ) $ 0.26 $ 0.26 $ (0.51 ) $ (0.51 ) The following have been excluded from the computation of basic and diluted earnings (net loss) per share as their effect would have been anti-dilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock options to purchase Class B shares and RSUs 2,676 4,001 3,337 3,665 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 9. Segment Information We have two reportable segments, REVOLVE and FORWARD, each offering clothing, shoes, accessories, and beauty products available for sale to customers through their respective websites. Our reportable segments have been identified based on how our chief operating decision makers manage our business, make operating decisions, and evaluate operating performance. Our chief operating decision makers are our co-chief executive officers. We evaluate the performance of our reportable segments based on net sales and gross profit. Management does not evaluate the performance of our reportable segments using asset measures. Revenue from external customers for each group of similar products and services is not reported to our chief operating decision makers. The separate identification for purposes of segment disclosure is impracticable, as it is not readily available and the cost to develop would be excessive. During the three and six months ended June 30, 2020 and 2019, no customer represented over 10% of net sales. The following table summarizes our net sales and gross profit for each of our reportable segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, Net sales 2020 2019 2020 2019 REVOLVE $ 126,921 $ 143,944 $ 251,393 $ 266,595 FORWARD 15,863 17,953 37,466 32,645 Total $ 142,784 $ 161,897 $ 288,859 $ 299,240 Gross profit REVOLVE $ 66,233 $ 82,837 $ 128,613 $ 148,100 FORWARD 5,838 7,581 14,408 13,072 Total $ 72,071 $ 90,418 $ 143,021 $ 161,172 The following table lists net sales by geographic area (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 United States $ 116,270 $ 136,055 $ 236,600 $ 251,460 Rest of the world (1) 26,514 25,842 52,259 47,780 Total $ 142,784 $ 161,897 $ 288,859 $ 299,240 (1) No individual country exceeded 10% of total net sales for any period presented. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10. Fair Value Measurements We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible pursuant to the provisions of FASB Accounting Standards Codification, or ASC, Topic 820, Fair Value Measurements and Disclosures, or ASC 820. We determine fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The carrying amounts for our cash and cash equivalents, accounts receivable, accounts payable, line of credit to the extent borrowings are outstanding and accrued expenses approximate fair value due to their short-term maturities. When considering market participant assumptions in fair value measurements, the following fair value hierarchy as established under ASC 820 distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Inputs are unobservable inputs for the asset or liability. We consider all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Our cash equivalents are comprised of money market funds, which are valued based on Level 1 inputs consisting of quoted prices in active markets. Our cash equivalents were $117.9 million and $37.6 million as of June 30, 2020 and December 31, 2019, respectively. |
Detail of Certain Balance Sheet
Detail of Certain Balance Sheet Accounts | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Detail of Certain Balance Sheet Accounts | Note 11. Detail of Certain Balance Sheet Accounts Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): June 30, December 31, 2020 2019 Expected merchandise returns, net $ 11,171 $ 12,989 Advanced payments on inventory to be delivered from vendors 3,486 4,605 Prepaid insurance 1,031 1,858 Prepaid packaging 278 393 Prepaid rent 242 381 Other 3,377 3,929 Total prepaid expenses and other current assets $ 19,585 $ 24,155 Accrued Expenses Accrued expenses consist of the following (in thousands): June 30, December 31, 2020 2019 Marketing $ 7,085 $ 6,127 Salaries and related benefits 5,608 4,275 Selling and distribution 3,123 3,360 Sales taxes 2,247 3,023 Other 2,657 2,614 Total accrued expenses $ 20,720 $ 19,399 Other Current Liabilities Other current liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 Store credit $ 10,221 $ 10,080 Gift cards 1,644 2,133 Other 5,535 4,527 Total other current liabilities $ 17,400 $ 16,740 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited condensed consolidated interim financial information has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. As permitted under those rules, certain footnotes or other financial information that are normally required by generally accepted accounting principles in the United States, or GAAP, can be condensed or omitted. These financial statements have been prepared on the same basis as our annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of our financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2020 or for any other interim period or for any other future year. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Our fiscal year ends on December 31 of each year. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2019 contained in our Annual Report on Form 10-K filed with the SEC on February 26, 2020. |
Impact of COVID-19 on Our Business | Impact of COVID-19 on Our Business The COVID-19 pandemic had a material adverse impact on our business operations and operating results for the three and six months ended June 30, 2020. While the length and severity of the reduction and shift in consumer demand related to COVID-19 remains uncertain, we expect that our business operations and results of operations, including our net sales, will be materially impacted through the remainder of 2020. In April 2020 we took aggressive actions to mitigate the effect of COVID-19 on our business by reducing non-payroll related operating costs and reducing payroll costs through a combination of pay cuts, employee furloughs and, to a lesser extent, layoffs. We also eliminated or deferred non-essential capital expenditures, significantly reduced planned inventory receipts by canceling or delaying orders, in addition to extending payment terms for both merchandise and non-merchandise vendor invoices. As our business operations and operating results improved throughout the second quarter of 2020, in part due to the easing of stay-at-home orders and other state-imposed restrictions on businesses, we began the process of bringing back certain furloughed employees and returned the majority of our corporate employees, except for executives and senior management, to their pre-COVID-19 salaries and wages. In addition, we accrued for discretionary bonuses related to second quarter performance with payment subject to full year performance. We also began to sequentially increase our inventory purchases and incur certain operating expenses to support the improving trends in consumer demand. Through our aggressive cost control and purchase commitment reductions, we were able to increase the balance of our cash and cash equivalents during the three months ended June 30, 2020. We believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months, including the repayment of outstanding borrowings upon the expiration of our line of credit |
Reverse Split | Reverse Split On May 24, 2019, we effected a one-for-22.31 reverse split of all of our issued and outstanding Class T units and Class A units. All figures have been presented on the basis of the reverse split wherever applicable for all the periods presented in these condensed consolidated financial statements. |
Corporate Conversion | Corporate Conversion Prior to our initial public offering, or IPO, we operated as a Delaware limited liability company under the name Revolve Group, LLC. In connection with the IPO, Revolve Group, LLC converted into a Delaware corporation and changed its name to Revolve Group, Inc. so that the top-tier entity in our corporate structure was a corporation rather than a limited liability company, which we refer to as the Corporate Conversion. In conjunction with the Corporate Conversion, all of the outstanding Class T and Class A units of Revolve Group, LLC were converted into an aggregate of 67,889,013 shares of our Class B common stock. The holders of Class T units received an aggregate of 2,400,960 shares, representing the total preference amount for the Class T units. The remaining 65,488,053 shares of our Class B common stock were allocated on a pro rata basis to the Class T and Class A unitholders based on the number of units held by each holder. In connection with the Corporate Conversion, Revolve Group, Inc. holds all property and assets of Revolve Group, LLC and assumed all of the debts and obligations of Revolve Group, LLC. The members of the board of managers and the officers of Revolve Group, LLC became the members of the board of directors and the officers of Revolve Group, Inc. |
Initial Public Offering | Initial Public Offering On June 7, 2019, we completed an IPO, in which we issued and sold 2,941,176 shares of our Class A common stock at a public offering price of $18.00 per share. We received approximately $45.8 million in net proceeds after deducting $3.3 million of underwriting discounts and approximately $3.8 million in offering costs. Upon the closing of the IPO, we used $40.8 million of the net proceeds from the offering to repurchase an aggregate of 2,400,960 shares of Class B common stock held by TSG6 L.P. and certain of its affiliates, or TSG, and Capretto, LLC. In June 2019, we issued and sold an additional 441,176 shares of Class A common stock at a price of $18.00 per share following the underwriters’ exercise of their option to purchase additional shares and received proceeds of $7.5 million, net of underwriting discounts and commissions of $0.5 million. In connection with the IPO, 10,147,059 Class B shares were converted into Class A shares by the selling stockholders. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include: the allowance for sales returns, the valuation of deferred tax assets, inventory, equity‑based compensation, and goodwill, reserves for income tax uncertainties and other contingencies, and breakage of store credit and gift cards. |
Net Sales | Net Sales Revenue is primarily derived from the sale of apparel merchandise through our sites and, when applicable, shipping revenue. We recognize revenue through the following steps: (1) identification of the contract, or contracts, with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. A contract is created with our customer at the time the order is placed by the customer, which creates a single performance obligation to deliver the product to the customer. We recognize revenue for our single performance obligation at the time control of the merchandise passes to the customer, which is at the time of shipment. In addition, we have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. In March 2020 we launched the REVOLVE Loyalty Club within the REVOLVE segment. Eligible customers who enroll in the program will generally earn points for every dollar spent and will automatically receive a $20 REVOLVE Reward once they earn 2,000 points. We defer revenue based on an allocation of the price of the customer purchase and the standalone selling price of the points earned. Revenue is recognized once the reward is redeemed or expires or once unconverted points expire. REVOLVE Rewards generally expire three months after they are issued and unconverted points generally expire if a customer is inactive for a period of 12 months. In accordance with our policy on returns and exchanges, merchandise returns are accepted for full refund if returned within 30 days of the original purchase date and may be exchanged up to 60 days from the original purchase date. We modify our policy during the holiday season to extend the return and exchange period. In addition, to provide our customers with more flexibility to return or exchange during this time of increased social distancing as a result of the COVID-19 pandemic, merchandise returns for purchases made starting in March 2020 will be accepted for full refund if returned within 60 days of the original purchase date and may be exchanged up to 90 days from the original purchase date. At the time of sale, we establish a reserve for merchandise returns, based on historical experience and expected future returns, which is recorded as a reduction of sales and cost of sales. The following table presents a rollforward of our sales return reserve for the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 20,975 $ 37,153 $ 35,104 $ 29,184 Returns (85,652 ) (196,180 ) (259,174 ) (343,798 ) Provisions 93,013 195,382 252,406 350,969 Ending balance $ 28,336 $ 36,355 $ 28,336 $ 36,355 We may also issue store credit in lieu of cash refunds and sell gift cards without expiration dates to our customers. Store credits issued and proceeds from the issuance of gift cards are recorded as deferred revenue and recognized as revenue when the store credit or gift cards are redeemed or upon inclusion in our store credit and gift card breakage estimates. Revenue recognized in net sales on breakage on store credit and gift cards for the three and six months ended June 30, 2020 was $0.2 million and $1.0 million, respectively and $0.2 million and $0.4 million for the three and six months ended June 30, 2019, respectively. Sales taxes and duties collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. We currently collect sales taxes in all states that have adopted laws imposing sales tax collection obligations on out-of-state retailers and are subject to audits by state governments of sales tax collection obligations on out-of-state retailers in jurisdictions where we do not currently collect sales taxes, whether for prior years or prospectively. No significant interest or penalties related to sales taxes are recognized in the accompanying condensed consolidated financial statements. We have exposure to losses from fraudulent credit card charges. We record losses when incurred related to these fraudulent charges as amounts have historically been insignificant. See Note 9, Segment Information |
Accounting Pronouncements Not Yet Effective | Accounting Pronouncements Not Yet Effective Under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we meet the definition of an emerging growth company. We have elected to use this extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We will remain an emerging growth company until the earliest of (1) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter, (2) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (3) the date on which we issue more than $1.0 billion in non-convertible debt in a three-year period, or (4) the end of the fiscal year in which the fifth anniversary of our IPO occurs. In December 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In January 2017, the FASB issued ASU No. 2017-04 , Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Sales Return Reserve | The following table presents a rollforward of our sales return reserve for the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Beginning balance $ 20,975 $ 37,153 $ 35,104 $ 29,184 Returns (85,652 ) (196,180 ) (259,174 ) (343,798 ) Provisions 93,013 195,382 252,406 350,969 Ending balance $ 28,336 $ 36,355 $ 28,336 $ 36,355 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Equity Option Activity | Option activity for the six months ended June 30, 2020 under the 2013 and 2019 Plans is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (000's) Balance at January 1, 2020 4,916,074 $ 6.30 5.6 $ 59,368 Granted 1,613,980 9.69 9.7 Exercised (420,903 ) 3.22 — Forfeited (34,864 ) 14.54 — Expired (3,680 ) 15.62 — Balance at June 30, 2020 6,070,607 7.36 6.3 46,131 Exercisable at June 30, 2020 3,301,090 4.72 4.4 33,679 Vested and expected to vest 5,960,056 7.38 6.4 45,151 |
Summary of RSU Award Activity | RSU award activity for the six months ended June 30, 2020 under the 2019 Plan is as follows: Class A Common Stock Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (000's) Unvested at January 1, 2020 13,130 $ 19.04 3.6 $ 242 Granted 6,618 15.11 1.0 Released (3,883 ) 25.75 — Forfeited — — — Unvested at June 30, 2020 15,865 15.76 1.8 236 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of Effective Tax Rate | The following table summarizes our effective tax rate for the periods presented (in thousands): Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Income before income taxes $ 18,630 $ 17,284 $ 22,611 $ 23,969 Provision for income taxes 4,394 4,543 4,219 6,266 Effective tax rate 23.6 % 26.3 % 18.7 % 26.1 % |
Members'_Stockholders' Equity (
Members'/Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Changes in Members'/Stockholders' Equity | Changes in members’/stockholders’ equity for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, 2020 Common Stock Additional Paid-in Retained Total Stockholders' Number Amount Capital Earnings Equity (in thousands, except share data) Beginning balance 69,381,475 $ 70 $ 75,556 $ 60,489 $ 136,115 Issuance of Class A common stock from exercise of stock options 118,411 — 382 — 382 Equity-based compensation — — 868 — 868 Cumulative translation adjustment — — — (123 ) (123 ) Other — — (41 ) — (41 ) Net income — — — 14,236 14,236 Ending balance 69,499,886 $ 70 $ 76,765 $ 74,602 $ 151,437 Three Months Ended June 30, 2019 Class T Preferred Units Class A Common Units Common Stock Additional Paid-in Accumulated Members' Equity/ Total Members'/ Stockholders' Number Amount Number Amount Number Amount Capital Retained Earnings Equity (in thousands, except unit and share data) Beginning balance 23,551,834 $ 15,000 41,936,219 $ 4,059 — $ — $ — $ 66,661 $ 85,720 Corporate conversion (23,551,834 ) (15,000 ) (41,936,219 ) (4,059 ) 67,889,013 68 18,991 — — Repurchase of Class B common stock — — — — (2,400,960 ) (2 ) — (40,814 ) (40,816 ) Issuance of Class A common stock upon initial public offering, net of offering costs — — — — 3,382,352 3 53,224 — 53,227 Equity-based compensation — — — — — — 521 — 521 Cumulative translation adjustment — — — — — — — (130 ) (130 ) Net income — — — — — — — 12,741 12,741 Ending balance — $ — — $ — 68,870,405 $ 69 $ 72,736 $ 38,458 $ 111,263 Six Months Ended June 30, 2020 Common Stock Additional Paid-in Retained Total Stockholders' Number Amount Capital Earnings Equity (in thousands, except share data) Beginning balance 69,078,983 $ 69 $ 74,018 $ 56,677 $ 130,764 Issuance of Class A common stock from exercise of stock options 420,903 1 1,356 — 1,357 Equity-based compensation — — 1,432 — 1,432 Cumulative translation adjustment — — — (467 ) (467 ) Other — — (41 ) — (41 ) Net income — — — 18,392 18,392 Ending balance 69,499,886 $ 70 $ 76,765 $ 74,602 $ 151,437 Six Months Ended June 30, 2019 Class T Preferred Units Class A Common Units Common Stock Additional Paid-in Accumulated Members' Equity/ Total Members'/ Stockholders' Number Amount Number Amount Number Amount Capital Retained Earnings Equity (in thousands, except unit and share data) Beginning balance 23,551,834 $ 15,000 41,936,219 $ 3,548 — $ — $ — $ 61,270 $ 79,818 Corporate conversion (23,551,834 ) (15,000 ) (41,936,219 ) (3,548 ) 67,889,013 68 18,480 — — Repurchase of Class B common stock — — — — (2,400,960 ) (2 ) — (40,814 ) (40,816 ) Issuance of Class A common stock upon initial public offering, net of offering costs — — — — 3,382,352 3 53,224 — 53,227 Equity-based compensation — — — — — — 1,032 — 1,032 Cumulative effect of adoption of ASC 606 — — — — — — — 286 286 Cumulative translation adjustment — — — — — — — 13 13 Net income — — — — — — — 17,703 17,703 Ending balance — $ — — $ — 68,870,405 $ 69 $ 72,736 $ 38,458 $ 111,263 |
Earnings (Net Loss) per Share (
Earnings (Net Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Earnings (Net Loss) per Share | The following table presents the calculation of basic and diluted earnings (net loss) per share: Three months ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B (in thousands, except per share data) Numerator Net income $ 3,251 $ 10,985 $ 912 $ 11,829 $ 4,156 $ 14,236 $ 683 $ 17,020 Repurchase of Class B common stock — — (2,922 ) (37,894 ) — — (1,575 ) (39,241 ) Net income (loss) attributable to common stockholders — basic $ 3,251 $ 10,985 $ (2,010 ) $ (26,065 ) $ 4,156 $ 14,236 $ (892 ) $ (22,221 ) Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares 10,985 — — — 14,236 — — — Reallocation of undistributed earnings to Class B shares — 102 — — — 140 — — Net income (loss) attributable to common stockholders — diluted $ 14,236 $ 11,087 $ (2,010 ) $ (26,065 ) $ 18,392 $ 14,376 $ (892 ) $ (22,221 ) Denominator Weighted average shares used to compute earnings (net loss) per share — basic 15,846 53,569 3,510 45,515 15,673 53,694 1,755 43,726 Conversion of Class B to Class A common shares outstanding 53,569 — — — 53,694 — — — Effect of dilutive stock options and RSUs 2,244 2,244 — — 2,414 2,414 — — Weighted average number of shares used to compute earnings (net loss) per share — diluted 71,659 55,813 3,510 45,515 71,781 56,108 1,755 43,726 Earnings (net loss) per share: Basic $ 0.21 $ 0.21 $ (0.57 ) $ (0.57 ) $ 0.27 $ 0.27 $ (0.51 ) $ (0.51 ) Diluted $ 0.20 $ 0.20 $ (0.57 ) $ (0.57 ) $ 0.26 $ 0.26 $ (0.51 ) $ (0.51 ) |
Schedule of Antidilutive Securities Excluded from Computation of Basic and Diluted Earnings (Net Loss) per Share | The following have been excluded from the computation of basic and diluted earnings (net loss) per share as their effect would have been anti-dilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock options to purchase Class B shares and RSUs 2,676 4,001 3,337 3,665 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Net Sales and Gross Profit of Reportable Segments | The following table summarizes our net sales and gross profit for each of our reportable segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, Net sales 2020 2019 2020 2019 REVOLVE $ 126,921 $ 143,944 $ 251,393 $ 266,595 FORWARD 15,863 17,953 37,466 32,645 Total $ 142,784 $ 161,897 $ 288,859 $ 299,240 Gross profit REVOLVE $ 66,233 $ 82,837 $ 128,613 $ 148,100 FORWARD 5,838 7,581 14,408 13,072 Total $ 72,071 $ 90,418 $ 143,021 $ 161,172 |
Schedule of Net Sales by Geographic Area | The following table lists net sales by geographic area (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 United States $ 116,270 $ 136,055 $ 236,600 $ 251,460 Rest of the world (1) 26,514 25,842 52,259 47,780 Total $ 142,784 $ 161,897 $ 288,859 $ 299,240 (1) No individual country exceeded 10% of total net sales for any period presented. |
Detail of Certain Balance She_2
Detail of Certain Balance Sheet Accounts (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): June 30, December 31, 2020 2019 Expected merchandise returns, net $ 11,171 $ 12,989 Advanced payments on inventory to be delivered from vendors 3,486 4,605 Prepaid insurance 1,031 1,858 Prepaid packaging 278 393 Prepaid rent 242 381 Other 3,377 3,929 Total prepaid expenses and other current assets $ 19,585 $ 24,155 |
Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands): June 30, December 31, 2020 2019 Marketing $ 7,085 $ 6,127 Salaries and related benefits 5,608 4,275 Selling and distribution 3,123 3,360 Sales taxes 2,247 3,023 Other 2,657 2,614 Total accrued expenses $ 20,720 $ 19,399 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): June 30, December 31, 2020 2019 Store credit $ 10,221 $ 10,080 Gift cards 1,644 2,133 Other 5,535 4,527 Total other current liabilities $ 17,400 $ 16,740 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | Jun. 07, 2019USD ($)$ / sharesshares | May 24, 2019 | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2020USD ($)Pointshares | Jun. 30, 2019USD ($)$ / shares |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net proceeds from issuance of initial public offering | $ 57,077,000 | ||||||
Offering costs | $ 41,000 | 726,000 | |||||
Stock repurchased during period, value | $ 40,816,000 | 40,816,000 | |||||
Loyalty program description | In March 2020 we launched the REVOLVE Loyalty Club within the REVOLVE segment. Eligible customers who enroll in the program will generally earn points for every dollar spent and will automatically receive a $20 REVOLVE Reward once they earn 2,000 points. | ||||||
Reward amount | $ 20 | ||||||
Number of reward point | Point | 2,000 | ||||||
Revenue recognized | $ 142,784,000 | 161,897,000 | $ 288,859,000 | 299,240,000 | |||
Emerging growth company description | We will remain an emerging growth company until the earliest of (1) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter, (2) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (3) the date on which we issue more than $1.0 billion in non-convertible debt in a three-year period, or (4) the end of the fiscal year in which the fifth anniversary of our IPO occurs. | ||||||
ASC 606 | Breakage on Store Credit and Gift Cards | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Revenue recognized | $ 200,000 | 200,000 | $ 1,000,000 | 400,000 | |||
IPO | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Shares issued | shares | 2,941,176 | ||||||
Shares issued, price per share | $ / shares | $ 18 | ||||||
Net proceeds from issuance of initial public offering | $ 45,800,000 | ||||||
Underwriting discounts | 3,300,000 | ||||||
Offering costs | 3,800,000 | ||||||
Class T and Class A Unit | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Reverse split, ratio | 0.045 | ||||||
Conversion of stock, shares issued | shares | 65,488,053 | ||||||
Class B Common Stock | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Conversion of stock, shares issued | shares | 10,147,059 | 67,889,013 | |||||
Stock repurchased during period, value | $ 40,800,000 | $ 40,800,000 | $ 40,800,000 | ||||
Stock repurchased during period, shares | shares | 2,400,960 | ||||||
Class T Preferred Units | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Conversion of stock, shares issued | shares | 2,400,960 | ||||||
Class A Common Stock | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Conversion of stock, shares issued | shares | 1 | ||||||
Shares issued | shares | 441,176 | ||||||
Shares issued, price per share | $ / shares | $ 18 | $ 18 | $ 18 | ||||
Underwriting discounts | $ 500,000 | ||||||
Proceeds from issuance of stock | $ 7,500,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Summary of Sales Return Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Beginning balance | $ 20,975 | $ 37,153 | $ 35,104 | $ 29,184 |
Returns | (85,652) | (196,180) | (259,174) | (343,798) |
Provisions | 93,013 | 195,382 | 252,406 | 350,969 |
Ending balance | $ 28,336 | $ 36,355 | $ 28,336 | $ 36,355 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - Revolving Credit Facility - Bank of America, N.A, - USD ($) | Mar. 23, 2016 | Jun. 30, 2020 | Dec. 31, 2019 |
Line Of Credit Facility [Line Items] | |||
Line of credit facility agreement date | Mar. 23, 2016 | ||
Line of credit facility expiration date | Mar. 23, 2021 | ||
Maximum amount of line of credit | $ 75,000,000 | ||
Line of credit facility interest rate description | Borrowings under the credit agreement accrue interest, at our option, at (1) a base rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate and (c) the LIBOR rate plus 1.00%, in each case plus a margin ranging from 0.25% to 0.75%, or (2) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.75%. | ||
Line of credit facility, outstanding amount | $ 24,000,000 | $ 0 | |
Debt, weighted average interest rate | 2.20% | ||
Line of credit facility, additional maximum borrowing capacity | 25,000,000 | ||
Line of credit facility, additional borrowing capacity initial minimum amount | 10,000,000 | ||
Line of credit facility, additional borrowing capacity increments thereafter | $ 5,000,000 | ||
Line of credit facility, asset restrictions | The credit agreement also contains customary covenants restricting our activities, including limitations on our ability to sell assets, engage in mergers and acquisitions, enter in transactions involving related parties, obtain letters of credit, incur indebtedness or grant liens or negative pledges on our assets, make loans or make other investments. | ||
Line of credit facility, dividend restrictions | prohibited from paying cash dividends with respect to our capital stock | ||
Federal Funds Rate | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
London Interbank Offered Rate (LIBOR) | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Margin Rate | Minimum | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.25% | ||
Margin Rate | Maximum | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.75% | ||
LIBOR Rate Margin | Minimum | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.25% | ||
LIBOR Rate Margin | Maximum | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.75% |
Equity-based Compensation - Add
Equity-based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2013 | Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Conversion of options to purchase common stock, description | 1:1 basis | ||||||
Stock option granted | 990,700 | 1,613,980 | |||||
Weighted average grant date fair value of options granted | $ 4.18 | $ 5.29 | |||||
Tax benefits in relation to equity-based compensation | $ 500,000 | $ 0 | $ 1,700,000 | $ 0 | |||
General and Administrative Expense | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Equity-based compensation cost | $ 900,000 | $ 500,000 | $ 1,400,000 | $ 1,000,000 | |||
Class A Common Stock | Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock unit granted | 6,618 | 6,618 | |||||
Amendment to 2013 Equity Incentive Plan | Common Class A Unit | Maximum | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of shares available for issuance | 6,207,978 | ||||||
2013 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Equity incentive plans award term | 10-year | ||||||
Equity incentive plans vesting period | 5 years | ||||||
2013 Equity Incentive Plan | Stock Option | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost | $ 12,800,000 | $ 12,800,000 | |||||
Total unrecognized compensation cost to be recognized, weighted average service period | 4 years | ||||||
2019 Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for issuance | 2,900,000 | 2,900,000 | |||||
Increase in number of shares reserved for future issuance, description | The number of shares that will be available for issuance under our 2019 Plan also will increase annually on the first day of each year beginning in 2020, in an amount equal to the least of: (a) 6,900,000 shares, (b) 5% of the outstanding shares of all classes of our common stock as of the last day of the immediately preceding year and (c) such other amount as our board of directors may determine | ||||||
Increase in number of shares reserved for future issuance, shares | 6,900,000 | ||||||
Percentage of number of shares of common stock outstanding | 5.00% | ||||||
2019 Equity Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Total unrecognized compensation cost | $ 12,800,000 | $ 12,800,000 | |||||
Total unrecognized compensation cost to be recognized, weighted average service period | 4 years | ||||||
2019 Equity Incentive Plan | Class A Common Stock | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock reserved for issuance | 4,500,000 | 4,500,000 | 4,500,000 | ||||
2019 Equity Incentive Plan | Class A Common Stock | Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock unit granted | 6,618 |
Equity-based Compensation - Sum
Equity-based Compensation - Summary of Equity Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Granted | 990,700 | 1,613,980 | |
2013 and 2019 Equity Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Beginning balance | 4,916,074 | ||
Number of Shares, Granted | 1,613,980 | ||
Number of Shares, Exercised | (420,903) | ||
Number of Shares, Forfeited | (34,864) | ||
Number of Shares, Expired | (3,680) | ||
Number of Shares, Ending balance | 6,070,607 | 6,070,607 | 4,916,074 |
Number of Shares, Exercisable | 3,301,090 | 3,301,090 | |
Number of Shares, Vested and expected to vest | 5,960,056 | 5,960,056 | |
Weighted Average Exercise Price, Beginning balance | $ 6.30 | ||
Weighted Average Exercise Price, Granted | 9.69 | ||
Weighted Average Exercise Price, Exercised | 3.22 | ||
Weighted Average Exercise Price, Forfeited | 14.54 | ||
Weighted Average Exercise Price, Expired | 15.62 | ||
Weighted Average Exercise Price, Ending balance | $ 7.36 | 7.36 | $ 6.30 |
Weighted Average Exercise Price, Exercisable | 4.72 | 4.72 | |
Weighted Average Exercise Price, Vested and expected to vest | $ 7.38 | $ 7.38 | |
Weighted Average Remaining Contractual Term | 6 years 3 months 18 days | 5 years 7 months 6 days | |
Weighted Average Remaining Contractual Term, Granted | 9 years 8 months 12 days | ||
Weighted Average Remaining Contractual Term, Exercisable | 4 years 4 months 24 days | ||
Weighted Average Remaining Contractual Term, Vested and expected to vest | 6 years 4 months 24 days | ||
Aggregate Intrinsic Value, Balance | $ 46,131 | $ 46,131 | $ 59,368 |
Aggregate Intrinsic Value, Exercisable | 33,679 | 33,679 | |
Aggregate Intrinsic Value, Vested and expected to vest | $ 45,151 | $ 45,151 |
Equity-based Compensation - S_2
Equity-based Compensation - Summary of RSU Award Activity (Details) - Restricted Stock Units (RSUs) - Common Class A - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Class A Common Stock, Granted | 6,618 | 6,618 | |
Weighted Average Grant Date Fair Value, Beginning balance | $ 19.04 | ||
Weighted Average Grant Date Fair Value,Granted | 15.11 | ||
Weighted Average Grant Date Fair Value,Released | 25.75 | ||
Weighted Average Grant Date Fair Value,Ending Balance | $ 15.76 | $ 15.76 | |
Weighted Average Remaining Contractual Term | 3 years 7 months 6 days | ||
Weighted Average Remaining Contractual Term, Granted | 1 year | ||
Weighted Average Remaining Contractual Term | 1 year 9 months 18 days | ||
Aggregate Intrinsic Value, Balance | $ 236 | $ 236 | $ 242 |
2019 Equity Incentive Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Class A Common Stock, Beginning balance | 13,130 | ||
Class A Common Stock, Granted | 6,618 | ||
Class A Common Stock, Released | (3,883) | ||
Class A Common Stock, Ending balance | 15,865 | 15,865 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
General and Administrative Expense | |
Commitments and Contingencies Disclosure [Line Items] | |
Accrued expenses on settlement of case | $ 1 |
Income Taxes - Summary of Effec
Income Taxes - Summary of Effective Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 18,630 | $ 17,284 | $ 22,611 | $ 23,969 |
Provision for income taxes | $ 4,394 | $ 4,543 | $ 4,219 | $ 6,266 |
Effective tax rate | 23.60% | 26.30% | 18.70% | 26.10% |
Members'_Stockholders' Equity -
Members'/Stockholders' Equity - Schedule of Changes in Members'/Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | $ 136,115 | $ 85,720 | $ 130,764 | $ 79,818 |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201409Member | |||
Repurchase of Class B common stock | (40,816) | $ (40,816) | ||
Issuance of Class A common stock upon initial public offering, net of offering costs | 53,227 | 53,227 | ||
Issuance of Class A common stock from exercise of stock options | 382 | 1,357 | ||
Equity-based compensation | 868 | 521 | 1,432 | 1,032 |
Cumulative translation adjustment | (123) | (130) | (467) | 13 |
Other | (41) | (41) | ||
Net income | 14,236 | 12,741 | 18,392 | 17,703 |
Stockholders' equity, Ending Balance | 151,437 | 111,263 | 151,437 | 111,263 |
Cumulative effect of adoption of ASC 606 | ||||
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | 286 | |||
Class T Preferred Units | ||||
Class Of Stock [Line Items] | ||||
Members' equity, Beginning Balance | $ 15,000 | $ 15,000 | ||
Members' equity, Beginning Balance, units | 23,551,834 | 23,551,834 | ||
Corporate conversion | $ (15,000) | $ (15,000) | ||
Corporate conversion, units | (23,551,834) | (23,551,834) | ||
Common Class A Unit | ||||
Class Of Stock [Line Items] | ||||
Members' equity, Beginning Balance | $ 4,059 | $ 3,548 | ||
Members' equity, Beginning Balance, units | 41,936,219 | 41,936,219 | ||
Corporate conversion | $ (4,059) | $ (3,548) | ||
Corporate conversion, units | (41,936,219) | (41,936,219) | ||
Common Stock | ||||
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | $ 70 | $ 69 | ||
Stockholders' equity, Beginning Balance, Shares | 69,381,475 | 69,078,983 | ||
Corporate conversion | $ 68 | $ 68 | ||
Corporate conversion, units | 67,889,013 | 67,889,013 | ||
Repurchase of Class B common stock | $ (2) | $ (2) | ||
Repurchase of Class B common stock, shares | (2,400,960) | (2,400,960) | ||
Issuance of Class A common stock upon initial public offering, net of offering costs | $ 3 | $ 3 | ||
Shares issued | 3,382,352 | 3,382,352 | ||
Issuance of Class A common stock from exercise of stock options | $ 1 | |||
Issuance of Class A common stock from exercise of stock options, shares | 118,411 | 420,903 | ||
Stockholders' equity, Ending Balance | $ 70 | $ 69 | $ 70 | $ 69 |
Stockholders' equity, Ending Balance, shares | 69,499,886 | 68,870,405 | 69,499,886 | 68,870,405 |
Additional Paid-in Capital | ||||
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | $ 75,556 | $ 74,018 | ||
Corporate conversion | $ 18,991 | $ 18,480 | ||
Issuance of Class A common stock upon initial public offering, net of offering costs | 53,224 | 53,224 | ||
Issuance of Class A common stock from exercise of stock options | 382 | 1,356 | ||
Equity-based compensation | 868 | 521 | 1,432 | 1,032 |
Other | (41) | (41) | ||
Stockholders' equity, Ending Balance | 76,765 | 72,736 | 76,765 | 72,736 |
Accumulated Members' Equity/Retained Earnings | ||||
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | 60,489 | 66,661 | 56,677 | 61,270 |
Repurchase of Class B common stock | (40,814) | (40,814) | ||
Cumulative translation adjustment | (123) | (130) | (467) | 13 |
Net income | 14,236 | 12,741 | 18,392 | 17,703 |
Stockholders' equity, Ending Balance | $ 74,602 | $ 38,458 | $ 74,602 | 38,458 |
Accumulated Members' Equity/Retained Earnings | Cumulative effect of adoption of ASC 606 | ||||
Class Of Stock [Line Items] | ||||
Stockholders' equity, Beginning Balance | $ 286 |
Earnings (Net Loss) per Share -
Earnings (Net Loss) per Share - Additional Information (Details) $ in Thousands | Jun. 07, 2019USD ($) | Jun. 30, 2019shares | Jun. 30, 2019USD ($) | Jun. 30, 2020Voteshares | Jun. 30, 2019USD ($) |
Earnings Per Share [Line Items] | |||||
Stock repurchased during period, value | $ | $ 40,816 | $ 40,816 | |||
Common Class A | |||||
Earnings Per Share [Line Items] | |||||
Number of votes per share | Vote | 1 | ||||
Conversion of stock | shares | 1 | ||||
Common Class B | |||||
Earnings Per Share [Line Items] | |||||
Number of votes per share | Vote | 10 | ||||
Conversion of stock | shares | 10,147,059 | 67,889,013 | |||
Stock repurchased during period, value | $ | $ 40,800 | $ 40,800 | $ 40,800 |
Earnings (Net Loss) per Share_2
Earnings (Net Loss) per Share - Schedule of Calculation of Basic and Diluted Earnings (Net Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator | ||||
Repurchase of Class B common stock | $ (40,816) | $ (40,816) | ||
Net income (loss) attributable to common stockholders | $ 14,236 | $ (28,075) | $ 18,392 | $ (23,113) |
Denominator | ||||
Weighted average shares used to compute earnings (net loss) per share — basic | 69,415 | 49,025 | 69,367 | 45,481 |
Weighted average number of shares used to compute earnings (net loss) per share — diluted | 71,659 | 49,025 | 71,781 | 45,481 |
Earnings (net loss) per share: | ||||
Basic | $ 0.21 | $ (0.57) | $ 0.27 | $ (0.51) |
Diluted | $ 0.20 | $ (0.57) | $ 0.26 | $ (0.51) |
Common Class A | ||||
Numerator | ||||
Net income | $ 3,251 | $ 912 | $ 4,156 | $ 683 |
Repurchase of Class B common stock | (2,922) | (1,575) | ||
Net income (loss) attributable to common stockholders | 3,251 | (2,010) | 4,156 | (892) |
Reallocation of undistributed earnings | 10,985 | 14,236 | ||
Net income (loss) attributable to common stockholders — diluted | $ 14,236 | $ (2,010) | $ 18,392 | $ (892) |
Denominator | ||||
Weighted average shares used to compute earnings (net loss) per share — basic | 15,846 | 3,510 | 15,673 | 1,755 |
Conversion of Class B to Class A common shares outstanding | 53,569 | 53,694 | ||
Effect of dilutive stock options and RSUs | 2,244 | 2,414 | ||
Weighted average number of shares used to compute earnings (net loss) per share — diluted | 71,659 | 3,510 | 71,781 | 1,755 |
Earnings (net loss) per share: | ||||
Basic | $ 0.21 | $ (0.57) | $ 0.27 | $ (0.51) |
Diluted | $ 0.20 | $ (0.57) | $ 0.26 | $ (0.51) |
Common Class B | ||||
Numerator | ||||
Net income | $ 10,985 | $ 11,829 | $ 14,236 | $ 17,020 |
Repurchase of Class B common stock | (37,894) | (39,241) | ||
Net income (loss) attributable to common stockholders | 10,985 | (26,065) | 14,236 | (22,221) |
Reallocation of undistributed earnings | 102 | 140 | ||
Net income (loss) attributable to common stockholders — diluted | $ 11,087 | $ (26,065) | $ 14,376 | $ (22,221) |
Denominator | ||||
Weighted average shares used to compute earnings (net loss) per share — basic | 53,569 | 45,515 | 53,694 | 43,726 |
Effect of dilutive stock options and RSUs | 2,244 | 2,414 | ||
Weighted average number of shares used to compute earnings (net loss) per share — diluted | 55,813 | 45,515 | 56,108 | 43,726 |
Earnings (net loss) per share: | ||||
Basic | $ 0.21 | $ (0.57) | $ 0.27 | $ (0.51) |
Diluted | $ 0.20 | $ (0.57) | $ 0.26 | $ (0.51) |
Earnings (Net Loss) per Share_3
Earnings (Net Loss) per Share - Schedule of Antidilutive Securities Excluded from Computation of Basic and Diluted Earnings (Net Loss) per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Stock Options And Restricted Stock Units R S U | Common Class B | ||||
Earnings Per Share [Line Items] | ||||
Stock options to purchase Class B shares and RSUs | 2,676 | 4,001 | 3,337 | 3,665 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020Customer | Jun. 30, 2019Customer | Jun. 30, 2020SegmentCustomer | Jun. 30, 2019Customer | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 2 | |||
Segment reporting, disclosure of customers | During the three and six months ended June 30, 2020 and 2019, no customer represented over 10% of net sales. | |||
Sales Revenue, Net | Customer Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Number of customer | Customer | 0 | 0 | 0 | 0 |
Percentage of net sales | 10.00% | 10.00% | 10.00% | 10.00% |
Segment Information - Summary o
Segment Information - Summary of Net Sales and Gross Profit of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 142,784 | $ 161,897 | $ 288,859 | $ 299,240 |
Gross profit | 72,071 | 90,418 | 143,021 | 161,172 |
REVOLVE | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 126,921 | 143,944 | 251,393 | 266,595 |
Gross profit | 66,233 | 82,837 | 128,613 | 148,100 |
FORWARD | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 15,863 | 17,953 | 37,466 | 32,645 |
Gross profit | $ 5,838 | $ 7,581 | $ 14,408 | $ 13,072 |
Segment Information - Schedule
Segment Information - Schedule of Net Sales by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Total net sales | $ 142,784 | $ 161,897 | $ 288,859 | $ 299,240 |
United States | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Total net sales | 116,270 | 136,055 | 236,600 | 251,460 |
Rest of the world | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Total net sales | $ 26,514 | $ 25,842 | $ 52,259 | $ 47,780 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Cash equivalents | $ 117.9 | $ 37.6 |
Detail of Certain Balance She_3
Detail of Certain Balance Sheet Accounts - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Expected merchandise returns, net | $ 11,171 | $ 12,989 |
Advanced payments on inventory to be delivered from vendors | 3,486 | 4,605 |
Prepaid insurance | 1,031 | 1,858 |
Prepaid packaging | 278 | 393 |
Prepaid rent | 242 | 381 |
Other | 3,377 | 3,929 |
Total prepaid expenses and other current assets | $ 19,585 | $ 24,155 |
Detail of Certain Balance She_4
Detail of Certain Balance Sheet Accounts - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities Current [Abstract] | ||
Marketing | $ 7,085 | $ 6,127 |
Salaries and related benefits | 5,608 | 4,275 |
Selling and distribution | 3,123 | 3,360 |
Sales taxes | 2,247 | 3,023 |
Other | 2,657 | 2,614 |
Total accrued expenses | $ 20,720 | $ 19,399 |
Detail of Certain Balance She_5
Detail of Certain Balance Sheet Accounts - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other Liabilities Current [Abstract] | ||
Store credit | $ 10,221 | $ 10,080 |
Gift cards | 1,644 | 2,133 |
Other | 5,535 | 4,527 |
Total other current liabilities | $ 17,400 | $ 16,740 |