Poshmark (POSH) 2020 Q4 earnings, first since IPO

Poshmark Inc. signage outside the Nasdaq MarketSite during the company’s initial public offering (IPO) in New York, USA, on Thursday, January 14, 2021.

Michael Nagle | Bloomberg | fake images

Poshmark’s revenue topped analyst estimates in its first financial report since it went public in January. But the second-hand clothing online seller issued a weaker-than-expected sales outlook for the current quarter.

Poshmark shares fell more than 12% in after-hours trading.

Founder and CEO Manish Chandra said in an interview that demand for clothing is still stifled in some parts of the US, where stricter Covid restrictions remain in place.

“Different parts of the country are behaving very differently,” Chandra said, citing Florida as a fast-growing market where customers look to Poshmark for dresses and bathing suits, while New York is still catching up. “So, we are accounting for the differences at the state level.”

For the quarter ended December 31, Poshmark’s loss was down to $ 4.06 million, or 31 cents a share, from a loss of $ 14.75 million, or $ 1.20 a share, a year earlier. . After adjusting for one-time items, the company earned 5 cents a share for the quarter.

Revenue increased 27% to $ 69.32 million from $ 54.74 million a year earlier. That was higher than the average revenue estimate of $ 68 million, reported by Refinitiv.

For the first quarter, Poshmark is asking for revenue to fall within a range of $ 75.5 million to $ 77.5 million. Analysts had been asking for an average of $ 79.2 million.

“Our platform is super adaptable and flexible,” said Chandra. “That has allowed us to be a growth engine in 2020, compared to many other places that have suffered.”

Poshmark submitted its application to go public in December and opened its first day of trading on the Nasdaq on January 14, at $ 97.50 per share. The stock has since fallen, hitting an all-time intraday low of $ 44.11 last Friday. The shares closed Thursday up nearly 16% at $ 59.46.

Founded in 2011, the company’s online marketplace 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 closet. And earn money by taking a part of each transaction.

Consumers, especially the youngest, are increasingly turning to these types of Internet markets in search of second-hand products. Several players are looking to gain market share, including luxury shipping site TheRealReal, sneaker reseller StockX, and online thrift store ThredUp. The latter submitted its IPO earlier this month.

Poshmark said its active buyer count reached 6.5 million in the fourth quarter, an increase of 20% year-on-year. Active shoppers are defined by the company as unique users who have purchased at least one item on the platform in the last 12 months, regardless of returns and cancellations.

Cowen & Co. has previously estimated that the resale market in the US is valued at $ 30 billion to $ 35 billion.

Find Poshmark’s full earnings press release here.


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