Poshmark Inc. signage off the Nasdaq MarketSite during the company’s initial public offering (IPO) in New York, USA, on Thursday, January 14, 2021.
Michael Nagle | Bloomberg | Getty Images
Poshmark’s revenue exceeded analysts ’estimates, in its first financial report since it was made public in January. But the online second-hand clothing seller issued a weaker-than-expected sales outlook for the current quarter.
Poshmark shares fell more than 12% in out-of-hours trading.
Founder and chief executive Manish Chandra said in an interview that clothing demand is still suppressed in some parts of the United States, where stricter Covid restrictions remain.
“Different parts of the country behave very differently,” said Chandra, who pointed to Florida as a fast-growing market where customers look for suits and swimsuits in Poshmark, while New York continues to recover. “So we account for the differences at the state level.”
For the December 31 quarter, Poshmark’s loss was reduced to $ 4.06 million, or 31 cents per share, from a loss of $ 14.75 million, or $ 1.20 per share. a year earlier. After adjusting for spot items, the company earned 5 cents a share during the quarter.
Revenue rose 27% to $ 69.32 million from $ 54.74 million a year earlier. This was above the average revenue estimate of $ 68 million, reported by Refinitiv.
For the first quarter, Poshmark calls for revenue to be in the $ 75.5 million to $ 77.5 million range. Analysts had asked for an average of $ 79.2 million.
“Our platform is super adaptable and flexible,” Chandra said. “This has allowed us to be a growth engine in 2020, compared to many other places that have suffered.”
Poshmark went public in December and opened its first trading day on the Nasdaq on Jan. 14 at $ 97.50 a share. Shares have fallen since then, reaching an all-time intraday low of $ 44.11 last Friday. Shares closed Thursday at nearly 16%, at $ 59.46.
Founded in 2011, the company’s online market for second-hand clothing, shoes and accessories is similar to eBay and Etsy. Poshmark connects buyers with sellers, who often display items from their own closet. And you make money by reducing every transaction.
Consumers, especially the youngest, are increasingly turning to this type of Internet market for second-hand products. Several players are looking to gain market share, including luxury consignment site TheRealReal, shoe retailer StockX and online store ThredUp. The latter presented its IPO earlier this month.
Poshmark said its number of active buyers reached 6.5 million in the fourth quarter, up 20% year-on-year. The company defines active buyers as unique users who have purchased at least one item on the platform over the next twelve months, regardless of returns and cancellations.
Cowen & Co. has previously estimated that the resale market in the US is valued at between $ 30 billion and $ 35 billion.
Here’s the full press release on Poshmark’s earnings.