Please ensure Javascript is enabled for purposes of website accessibility

The RealReal's Q1 Net Loss Was Narrower Than Expected

By Eric Volkman - May 7, 2020 at 7:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company missed on revenue, however.

The RealReal (REAL -15.51%) released its first-quarter 2020 results after market hours on Wednesday, revealing low double-digit growth in several key line items.

The luxury fashion consignment specialist managed to grow revenue by 11% on a year-over-year basis to $78.2 million. On gross merchandise value (or GMV, defined by the company as "the total amount paid for goods across our online marketplace in a given period") that rose 15%. Non-GAAP (adjusted) net loss deepened to almost $33.8 million, or $0.39 per share, from the Q1 2019 loss of $24.4 million.

An upscale merchandise display from the RealReal.

Image source: The RealReal.

This meant a mixed quarter for The RealReal. The company's revenue fell short of the average analyst estimate of $81.3 million, but the net loss was narrower than the expected $0.42 per share.

Like many other businesses, particularly in the consumer goods sphere, The RealReal has struggled in the face of the economic downturn caused by the SARS-CoV-2 coronavirus. Through mid-March, the company says, year-over-year GMV growth was above 30%; after that, it turned sharply negative, declining by roughly 40% to 45%. 

Encouragingly, The RealReal added that both GMV and customer traffic trends "have improved modestly." It did not, however, provide more detail. Still, the company is battening down the hatches while the outbreak persists.

"Faced with the unknown duration of the pandemic, we've focused on reducing operating expenses to weather these new challenges and preserving liquidity to ensure we are well positioned for the future," management said. That future is uncertain for The RealReal; in mid-March, it pulled both its Q1 and full-year 2020 guidance.

On Wednesday, The RealReal's shares dipped by 2.5% while the main stock indexes generally rose.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The RealReal, Inc. Stock Quote
The RealReal, Inc.
REAL
$3.05 (-15.51%) $0.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
379%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.