Rafael Henrique | LightRocket | Getty Images
Poshmark’s shares were down more than 11%, and ThredUp shares were down about 8% recently.
The decline in shares affected ThredUp’s first quarterly report as a public company. It debuted in March while Poshmark Shares have been public since mid-January.
ThredUp shares were up more than 42% since going public on Wednesday, bringing the company’s market cap to $ 1.9 billion. Poshmark shares have fallen more than 55% since going public, equating to a market value of $ 3.3 billion.
Both companies are digital marketplaces for used clothing, shoes and accessories Ebay and Etsy. Younger consumers in particular were there run a shift to places like Poshmark, ThredUp, Depop, The RealReal and StockX – with some preferring these stores for the bargain prices and others seeing shopping there as a way to be more environmentally conscious. These companies have also made it possible for many consumers to store their cabinets during the Covid pandemic and come with extra money.
The increasing interest in second-hand shopping has piqued investors’ appetite to buy in a space that has gained momentum. But the losses sparked a sell-off on Wednesday.
This is how both Poshmark and ThredUp developed in the first quarter.
Poshmark’s net loss for the period ended March 31 increased from a loss of $ 11 million, or 89 cents per share, 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 42% from $ 57.1 million last year to $ 81 million, beating analysts’ estimates of $ 77.2 million.
Poshmark expects revenues between $ 79 and 81 million for the second quarter. According to Refinitiv data, analysts had targeted sales of 79.3 million US dollars. Adjusted EBITDA between $ 1.5 million and $ 2.5 million is required.
“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.
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 market their goods through short video clips in addition to still images.
James Reinhart, co-founder and CEO of thredUP, speaks on stage during the TechCrunch Disrupt San Francisco 2019 at the Moscone Convention Center on October 2, 2019 in San Francisco, California.
Kimberly White | Getty Images Entertainment | Getty Images
ThredUp is investing in new warehouses and automation to meet customer demand and speed up deliveries. But that put pressure on profits.
ThredUp’s net loss for the period ended March 31 increased from $ 13.2 million, or $ 1.23 per share, to $ 16.17 million, or 86 cents per share, a year ago. Without one-off effects, it lost 17 cents per share.
Revenue rose 15.2% from $ 48.3 million a year ago to $ 55.7 million. That beat estimates for $ 48.4 million.
The company announced that the number of active buyers increased 14% year over year to 1.29 million and orders increased 18% to 1.13 million.
“We remain optimistic about long-term resale growth and see the first signs of a surge in buying enthusiasm as the US economy reopens,” said CEO and co-founder James Reinhart in a statement.
ThredUp claims revenue of between $ 53 million and $ 55 million for the second quarter. The full year revenue outlook is between $ 223 million and $ 229 million.