Poshmark Inc. signage outside 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 surpassed analysts’ estimates in its first financial report since it went public in January. But the online second-hand seller has reported a weaker-than-expected sales outlook for the current quarter.
Poshmark’s shares fell more than 12% in trading after the exchange closed.
Founder and CEO Manish Chandra said in an interview that demand for clothing is still suppressed in parts of the U.S., where Covid’s stricter restrictions remain in place.
“Different parts of the country are behaving very differently,” said Chandra, citing Florida as a fast-growing market, where customers look for dresses and swimsuits at Poshmark, while New York is still recovering. “Therefore, we are accounting for the differences across the state.”
For the quarter ended December 31, Poshmark’s loss decreased 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 single items, the company earned 5 cents per share during the quarter.
Revenue rose 27%, to $ 69.32 million, from $ 54.74 million a year earlier. This was greater than the average revenue estimate of $ 68 million reported by Refinitiv.
For the first quarter, Poshmark expects revenue to be in the range of $ 75.5 million to $ 77.5 million. Analysts were asking for $ 79.2 million on average.
“Our platform is super-adaptable and flexible,” said Chandra. “This allowed us to be an engine of growth in 2020, compared to many other places that have suffered.”
Poshmark went public in December and opened its first trading day on Nasdaq on January 14, at $ 97.50 per share. The stock has since plummeted, hitting its all-time high of $ 44.11 of all time last Friday. The stock closed Thursday with an increase of almost 16%, to $ 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 list items from their own closets. And you earn money from a portion of each transaction.
Consumers, especially the younger ones, are increasingly turning to these types of markets on the Internet for second-hand products. Several players are looking to gain market share, including luxury referral website TheRealReal, sneaker retailer StockX and online store ThredUp. The latter filed for an IPO earlier this month.
Poshmark said its count of active buyers reached 6.5 million in the fourth quarter, an increase of 20% year on year. The company defines active buyers as unique users who have purchased at least one item on the platform in the past 12 months, regardless of returns and cancellations.
Cowen & Co. previously estimated that the resale market in the United States is valued at $ 30 billion to $ 35 billion.
Find the full press release on Poshmark’s earnings here.