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Poshmark’s sales exceeded analyst estimates in its first financial report since going public in January. However, the online secondhand clothing seller announced a weaker than expected sales outlook for the current quarter.
Poshmark’s stock fell more than 6% in after-hours trading.
Founder and CEO Manish Chandra said in an interview that demand for clothing is still being suppressed in parts of the United States where stricter Covid restrictions are in place.
“Different parts of the country behave very differently,” Chandra said, citing Florida as a strong growth market with Poshmark customers searching for dresses and swimsuits while New York is still catching up. “So we take into account the national differences.”
For the quarter ended December 31, Poshmark’s loss decreased from a loss of $ 14.75 million, or $ 1.20 per share, last year to $ 4.06 million, or 31 cents per share. Adjusted for one-off effects, the company earned 5 cents per share in the quarter.
Revenue increased 27% from $ 54.74 million a year ago to $ 69.32 million. That was higher than Refinitiv’s reported average revenue estimate of $ 68 million.
For the first quarter Poshmark claims sales between 75.5 and 77.5 million US dollars. Analysts had asked for an average of $ 79.2 million.
“Our platform is super adaptable and flexible,” said Chandra. “That has enabled us to be a growth engine in 2020 compared to many other places that have suffered as a result.”
Poshmark went public in December and opened its first day of trading on the Nasdaq on January 14 at a price of $ 97.50 per share. The stock has fallen since then, hitting an all-time intraday low of $ 44.11 last Friday. The stock closed nearly 16% on Thursday at $ 59.46.
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 it makes money by cutting off every transaction.
Consumers, especially the younger generation, are increasingly turning to such types of internet marketplaces for used goods. A number of players aim to gain market share, including the luxury broadcast website TheRealReal, sneaker reseller StockX and the virtual thrift store ThredUp. The latter announced its IPO earlier this month.
Cowen & Co. previously estimated that the US resale market is valued at $ 30 billion to $ 35 billion.
The full press release on Poshmark’s results can be found here.