The RealReal reports GMV uptick of 4%, losses widen
Online luxury resale platform The RealReal announced on Tuesday total revenues for the first quarter fell 3% to $142 million, despite a single-digit uptick in gross merchandise value (GMV) for the three months ending March 31.
The San Francisco-based company said GMV increased 4% to $444 million, compared to the same period in 2022, while net losses widened to $82.5 million, compared to a net loss of $57.4 million last year.
The company said active buyer levels reached 1,014,000, an increase of 22%, while orders reached 891,000, an increase of 1%. Meanwhile, average order value was $499, an increase of 2% during the quarter.
“During the first quarter of 2023, we made progress on our financial and operating results. For the quarter, revenue exceeded the mid-point of our guidance, and adjusted EBITDA exceeded the high-end of our guidance range. We believe our strategy of re-focusing efforts on the higher margin consignment business is starting to deliver results," said John Koryl, chief executive officer of The RealReal, who was appointed to the position in January.
"During the first quarter, consignment revenue grew 22%, and direct revenue declined 49% year-over-year. Additionally, we made progress on minimizing lower-value consigned items. As a result of these actions, we expanded our gross margin in the first quarter, and we were able to deliver a higher take rate, more gross profit dollars, and improved profitability."
The earnings updates comes after The RealReal announced in February a cost reduction plan that will terminate approximately 230 employees, representing approximately 7% of its workforce, as it aims to cut costs amid growing pressure to achieve profitability.
"The early results from our key initiatives are encouraging, and we continue to believe that taking these steps will help us achieve profitability," added Koryl. "Importantly, we continue to project that we are on track to achieve adjusted EBITDA profitability on a full year basis in 2024.”
Looking ahead, the resale platform said its expects annual GMV to be between $1.7 and $1.8 billion.
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