In a Nutshell: Julie Wainwright, chief executive officer and founder, said, “We are thrilled to report our first quarter as a public company. We generated 51 percent year-over-year revenue growth and 40 percent year-over-year GMV growth while driving marketing leverage and making progress with key strategic initiatives.”
The company completed its initial public offering at the end of June.
Wainwright told Wall Street analysts Tuesday that the company’s “mission is to empower consigners and buyers to extend the life of cycle of luxury goods in a way that honors the luxury brands.” She noted that the firm continues to invest in its technology platform, as well as logistics infrastructure.
“Our scale and global reach and the data we leveraged from millions of transactions at our marketplace allow us to quickly sell and to optimize pricing for our consigners,” she added.
The cycle is a continuous one, as the “more consigners we aggregate, the more products we get, which then in turn attracts more buyers,” she said, adding that buyers also become consignors and vice versa.
Wainwright said The RealReal is looking to expand its store footprint over the next few years, and added that the company will be “strategic and judicious with our store rollout strategy.” The plan is to open two stores per year, focusing on the east and west coasts.
As for inventory, it’s coming in through the three stores, although much of the product comes from white glove in-home visits. A small component comes from vendors, although the CEO said that’s just 5 percent of the total business for “ad hoc product and opportunistic–opportunities from that channel.”
Net Sales: Total revenues at The RealReal rose 51.1 percent to $71 million from $47 million. Revenues were comprised of a 43.9 percent increase in consignment and service revenue to $60.7 million, and direct revenue that more than doubled to $10.3 million from $4.8 million.
The company ended the quarter with three stores, one in Los Angeles, and two in New York, in SoHo and the Upper East Side.
The company said the average order value for shoppers was $452.61, compared with $453.32 in the same year-ago quarter. The gross merchandise volume, or GMV, from repeat buyers was 83.1 percent, versus 82.9 percent a year ago. GMV for the second quarter rose 40 percent to $228.5 million.
Earnings: The RealReal widened its net loss to $26.9 million, or $2.83 a diluted share, from a net loss of $18.9 million, or $2.28, a year ago. On a non-GAAP basis, the diluted net loss per share was $2.50.
For the third quarter, the company guided its GMV range to between $233 million to $2.39 million. For the year, the estimate for GMV was $974 million to $988 million.
CEO’s Take: Wainwright said, “As we continue to unlock supply, invest in our technology platform and instill trust in our marketplace, we are revolutionizing luxury resale and delivering tremendous value to our consignors and buyers.”