CERRITOS, Calif.—MMMK Development, Inc., a significant shareholder of Revolve Group , Inc. (NYSE:RVLV), reported a substantial sale of its Class A common stock, according to a recent SEC filing. The transactions, executed under a pre-established trading plan, occurred over three consecutive days, from November 20 to November 22.
The sales involved a total of 233,299 shares, fetching a cumulative value of approximately $8,044,594. The shares were sold at prices ranging from $33.33 to $35.72 per share.
On November 20, MMMK Development sold 73,783 shares at an average price of $33.33, followed by another sale of 13,456 shares at an average price of $33.76. The following day, 62,032 shares were sold at an average price of $34.70, and 26,021 shares at $35.03. Finally, on November 22, the company sold 69,930 shares at $35.19 and 1,533 shares at $35.72.
These transactions were part of a Rule 10b5-1 trading plan adopted by MMMK Development in December 2023. Following these sales, MMMK Development does not hold any remaining shares of Revolve Group's Class A common stock.
In other recent news, Revolve Group Inc. reported a robust growth in its Q3 performance, with net sales reaching $283 million, marking a 10% increase from the previous year. The company's net income saw a significant rise to $11 million, or $0.15 per diluted share, compared to $3 million in the same quarter last year. Adjusted EBITDA also grew by 85% to $18 million. These developments are attributed to improved logistics, a decrease in return rates, and strong performance in key categories like Fashion Apparel and Dresses.
Revolve has made strategic investments in AI technology, international expansion, and marketing initiatives. International sales grew by 20%, with a strong presence in the Chinese market. The company plans to open a Revolve Holiday Shop and a flagship store by mid-2025. The company's cash and cash equivalents stand at $253 million, with no debt, and a share repurchase program is ongoing.
However, inventory levels were higher than desired, but alignment with sales growth is expected by Q4. A slight decline in Q4 gross margin is anticipated due to markdowns and freight costs. Despite these challenges, Revolve's leadership remains optimistic about the company's trajectory.
InvestingPro Insights
The recent stock sales by MMMK Development align with several key metrics and trends observed in Revolve Group's (NYSE:RVLV) financial performance. According to InvestingPro data, Revolve's stock has shown remarkable strength, with a 138.88% price total return over the past year and a 111.22% return year-to-date. This impressive performance is further underscored by the stock trading at 97.66% of its 52-week high, indicating strong investor confidence.
However, potential investors should note that Revolve is currently trading at a high P/E ratio of 77.87 (adjusted for the last twelve months as of Q3 2024), which suggests a premium valuation. This is complemented by an InvestingPro Tip highlighting that the stock is trading at a high earnings multiple relative to its near-term growth prospects.
Despite the high valuation, Revolve maintains a solid financial position. An InvestingPro Tip reveals that the company holds more cash than debt on its balance sheet, which could provide financial flexibility in the competitive fashion retail landscape.
For those considering an investment in Revolve Group, it's worth noting that InvestingPro offers 18 additional tips that could provide deeper insights into the company's financial health and market position. These tips, available on the InvestingPro platform, could be particularly valuable given the stock's recent performance and the insider selling activity reported in the article.
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