Revolve Earnings: Improving Top-Line Trends and Efficiency Efforts Underpin Strong Results

No-moat Revolve posted strong second-quarter results, with $282 million in sales and $0.21 in diluted EPS topping our respective $280 million and $0.15 estimates. With the firm's sales trajectory improving markedly throughout the quarter, we expect to lift our full-year sales estimate by about 2% to $1.10 billion and our full-year adjusted EPS estimates by a high-teens rate, with unexpected marketing leverage making up the difference. Barring any changes to our long-term expectations for 11%-12% operating margin and low-double-digit annual revenue growth over the next decade, we expect to nudge our $27 fair value estimate up by just a low-single-digit percentage. Shares continue to look attractive at current prices despite a 9%-10% surge in after-market trading.