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Poshmark (POSH) Q1 2021 earnings beat

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Poshmark shares fell more than 11% in expanded trading on Wednesday after the second-hand retailer said its sales in the second quarter could be weaker than the previous quarter, a sign that its growth may slow.

The company reported that first quarter revenue increased 42% year over year to $ 81 million. However, revenue for the second quarter is expected to be between $ 79 million and $ 81 million. According to Refinitiv data, analysts had targeted sales of 79.3 million US dollars.

Poshmark developed in the period to March 31, compared to the expectations of the analysts based on a refinitive survey:

  • Loss per share: 33 cents adjusted compared to 42 cents expected
  • Revenue: $ 81 million versus $ 77.2 million expected

Poshmark’s net loss rose from a loss of $ 11 million, or 89 cents per share last year, to $ 74.5 million, or $ 1.19 per share. Without a one-off cost, the company lost 33 cents per share, less than the 42 cents loss surveyed by Refinitiv.

Revenue rose to $ 81 million from $ 57.1 million a year ago, beating analysts’ estimates of $ 77.2 million.

Founded in 2011, the company’s online marketplace for used clothing, shoes, and accessories is similar to eBay and Etsy. Poshmark connects buyers with sellers, who often list items from their own closets, and makes money by cutting down on every transaction.

Younger consumers are leading to a shift to these types of internet marketplaces for used goods. According to Piper Sandler’s biannual Gen Z survey, published in April, mentions of used and consignment stores ranked 10th on the list of the most popular places to buy clothes for teens, up from 23 last year. Some prefer these stores for the bargain prices, while others see it as a way to be more environmentally conscious.

In the first quarter, the number of active buyers on the site increased 18% year over year to 6.7 million. An active buyer is a unique user who has purchased at least one item from Poshmark in the past 12 months, regardless of returns and cancellations.

Poshmark continues to innovate and expand into new categories and regions. In the first quarter, the company launched a pet category and expanded its business into Australia. This was the second company overseas. In addition, users could sell and market their goods through short video clips in addition to still images.

Poshmark expects adjusted EBITDA to be between $ 1.5 million and $ 2.5 million.

“There’s a really big change as people prepare to reopen,” said Manish Chandra, founder and CEO, in a phone interview. “So we’re pretty optimistic that when people go out, meet up, go on trips, go to weddings, demand for clothing increases on both the demand and supply sides.”

Chandra said searches for “crop tops” doubled in March from a year earlier. The search for “denim shorts” increased by 85% when people went to Poshmark to buy clothes again to make new contacts.

Poshmark shares debuted on the Nasdaq on January 14 at a price of $ 97.50 per share. The stock has since fallen, hitting an all-time intraday low of $ 36.11 on April 20. The shares were trading at $ 44.22 on Wednesday.

Other players in this area are the luxury broadcast website TheRealReal, the sneaker reseller StockX and the virtual second-hand stores Depop and ThredUp. StockX closed a new round of funding worth $ 3.8 billion last month and is expected to go public later this year.

The full Poshmark results publication can be found here.

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Robert Dunfee