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Poshmark on Wednesday reported first-quarter revenue growth of 42%, as consumers turned to the secondhand site to refresh their wardrobes without breaking the bank.
“There’s a real meaningful shift as people are preparing for reopening,” said Manish Chandra, founder and Chief Executive, in a phone interview. “So, we’re pretty optimistic that as people go out, go out on dates, go on trips, go to weddings — the demand for apparel, both on the demand side and on the supply side, is accelerating.”
Chandra said searches for “crop tops” doubled in March from a year ago. Searches for “jean shorts” were up 85%, he said, as people visited Poshmark to buy clothes for socializing again.
Here’s how the company did for the period ended March 31, compared with what analysts were anticipating, using a Refinitiv survey:
- Loss per share: 33 cents adjusted vs. 42 cents expected
- Revenue: $81 million vs. $77.2 million expected
Poshmark’s net loss widened to $74.5 million, or $1.19 per share, from a loss of $11 million, or 89 cents a share, a year earlier. Excluding one-time charges, it lost 33 cents per share, less than the 42-cent loss that analysts polled by Refinitiv were anticipating.
Revenue rose to $81 million from $57.1 million a year earlier, topping analyst estimates for $77.2 million.
Founded in 2011, the company’s online marketplace for secondhand clothes, shoes and accessories is akin to eBay and Etsy. Poshmark connects buyers with sellers, who often list items from their own closet, and makes money by taking a cut of every transaction.
Younger consumers are leading a shift to these types of internet marketplaces for secondhand goods. Mentions of thrift and consignment stores ranked No. 10 on a list of teens’ favorite places to buy clothes, up from 23rd a year earlier, per Piper Sandler’s biannual Gen Z survey that was released in April. Some favor these stores for the bargain prices, while others see it as a way to be more conscious about the environment.
During the first quarter, the number of active buyers on the site rose 18% from last year to 6.7 million. An active buyer is a unique user who has purchased at least one item from Poshmark in the trailing 12 months, regardless of returns and cancellations.
Poshmark continues to innovate and expand to new categories and regions. In the first quarter, it launched a pets category and expanded its business into Australia, marking its second venture overseas. It also started allowing users to sell and market their merchandise through short video clips in addition to still photos.
Poshmark said it expects second-quarter revenue in the range of $79 million to $81 million, with adjusted EBITDA of between $1.5 million and $2.5 million. Analysts had been looking for revenue of $79.3 million, according to Refinitiv data.
Poshmark shares debuted on Nasdaq on Jan. 14 at $97.50 per share. The stock has fallen since, hitting an all-time intraday low of $36.11 on April 20. Shares were trading Wednesday around $44.22.
Other players in the space include the luxury consignment site TheRealReal, sneaker reseller StockX and virtual thrift stores Depop as well as ThredUp. StockX last month completed a new funding round at a $3.8 billion valuation and is expected to go public later this year.