The Ratings Game: The RealReal shows strength of its secondhand luxury model in first post-IPO report
RealReal Inc. stock soared after earnings indicated that even when luxury goods are sold at a discount, The RealReal’s secondhand goods are still in high demand.
reported sales in line with expectations during its first quarterly announcement post-IPO. Gross merchandise volume (GMV) rose 40% year-over-year to $228.5 million.
Shares were up in Tuesday after-hours and in Wednesday premarket, though they fell about 5% in early trading alongside many others after concerns about global economic data.
The RealReal stock began trading on June 28.
“We view the positive after-market stock reaction reflects some easing of investors’ concerns on higher promotions in the luxury space weighing on The RealReal’s growth trajectory,” Cowen analysts led by Oliver Chen wrote.
“We acknowledge that average order value (AOV) was flat year-over-year due to earlier-than-expected promotions in the luxury space. However, management highlighted promotional trends in 3Q appear similar to prior years and they expect AOV in 3Q to improve year-over-year.”
Analysts say they’re “encouraged” by the loyalty of the customer base and its progress in automation.
The RealReal’s Chief Executive Julie Wainwright said department store discounting isn’t new for the company and it has already seen a fast recovery. The impact is felt more in women’s clothing.
“I would say if department stores g