Will Revolve Group's AI Visual Search Improve Product Discovery?

Revolve Group, Inc. RVLV is preparing to enhance its on-site search capabilities with an AI-driven visual search feature that will allow consumers to upload images and discover similar products from its assortment. Customers can upload a photo of a dress worn by a celebrity, and the technology would identify the exact item, if available, as well as display similar products on Revolve Group. The innovation is expected to improve product discovery while increasing customer engagement and providing greater fashion inspiration.

The company expects the new technology to enhance product discovery while driving greater customer engagement and fashion inspiration. It also expects the technology to serve as a foundational technology for future enhancements. Testing of the new search capability on the REVOLVE website is scheduled to begin in the coming weeks. Revolve Group sees significant potential for AI to enhance personalization and help deliver the right products to customers at the right time. While the company believes it already has strong personalization capabilities, management views AI's potential as still being at an early stage.

The team continues to develop AI-driven enhancements, particularly around search. These improvements could make it easier for customers to find the products they are looking for, reinforcing search as an important building block for further personalization. Overall, Revolve Group's continued investment in AI-driven search could strengthen product discovery, customer engagement and fashion inspiration while providing foundational technology for future enhancements to the shopping experience.

The Zacks Rundown for RVLV

RVLV stock has risen 25.1% in the past three months compared with the industry’s 5.1% growth. The company currently carries a Zacks Rank #3 (Hold).

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From a valuation standpoint, RVLV trades at a forward price-to-earnings ratio of 24.38X compared with the industry’s average of 14.74X.

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The Zacks Consensus Estimate for RVLV’s current and next fiscal-year earnings implies a rise of 1.2% and 23.5%, respectively, from the year-ago period.

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Stocks to Consider

Some better-ranked stocks have been discussed below:

Kontoor Brands, Inc. KTB, a lifestyle apparel company, designs, manufactures, procures, sells, and licenses apparel, footwear, and accessories, primarily under the Wrangler, Lee, and Helly Hansen brands. At present, KTB carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for KTB’s current fiscal-year sales and earnings implies a decline of 14.3% and 6.1%, respectively, from the year-ago figures. KTB delivered a trailing four-quarter earnings surprise of 21.4%, on average.

Victoria’s Secret & Co. VSXY operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSXY carries a Zacks Rank of 2.

The Zacks Consensus Estimate for VSXY’s current fiscal-year sales and earnings implies growth of 9.1% and 55.7%, respectively, from the year-ago figures. VSXY has delivered a trailing four-quarter earnings surprise of 81.9%, on average.

Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.

The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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