The RealReal reports Q3 loss of $43 million
San Francisco-based digital-first fashion consignment marketplace The RealReal announced a net loss of $43.3 million, or $0.49 per share, for the third quarter on Monday, as gains in direct revenue failed to make up for declines in consignment and services. The company’s net loss for the same period in the previous year was $25.3 million, or $0.30 per share.
For the third quarter ended September 30, 2020, the platform’s total revenue came to $78.1 million, improving 16% quarter over quarter, but falling 4% when compared to the $81.5 million reported by The RealReal in the prior-year period.
Consignment and service revenue for the quarter totaled $64.4 million, down 7% from $69.2 million year over year, while direct revenue was $13.6 million, increasing 11% from $12.3 million. Quarter over quarter, consignment and service revenue rose 15%, and direct revenue jumped 25%.
Overall, the company’s GMV in Q3 decreased 3% year over year to $245.4 million, but made progress compared to the previous quarter, posting a sequential increase of 17%.
“Improving trends in New York City and Los Angeles, momentum with virtual appointments and continued strength in the The RealReal B2B vendor program improved our ability to source supply in Q3 and contributed to improving quarter over quarter GMV trends,” said The RealReal CEO Julie Wainwright in a release. “We were pleased with our GMV performance in Q3 despite the difficult Y/Y comparison and continued Covid headwinds.”
Year to date, The RealReal’s total revenue was $213.7 million, falling 5% from $224.3 million in the same period in the previous year. This reflected a decrease of 4% in consignment and service revenue, which came to $176.6 million, and a 6% decline in direct revenue totaling $37.1 million.
The company’s net loss for the nine-month period was $124.5 million, or $1.43 per share, compared to a loss of $78.7 million, or $2.28 per share.
Due to continued uncertainty concerning the evolution of the Covid-19 pandemic, The RealReal did not provide financial outlook. However, Wainwright struck an optimistic tone when speaking about the prospects of the company.
“We are laser focused on making the operational changes and strategic investments that will position us to emerge from Covid a stronger, more agile company prepared to capitalize on the significant luxury resale market opportunity in front of us,” she said.
Since the end of September, The RealReal has announced a partnership with Gucci, which has seen the platform launch a dedicated online shop featuring pre-owned items from the Italian luxury brand.
The company has also opened its largest brick-and-mortar store to date in Chicago. Along with the new location, The RealReal’s physical footprint includes two stores in New York City, one in Los Angeles and another in San Francisco, as well as 10 consignment offices run by the company.
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