Shares of The RealReal (REAL -8.81%) were higher on Thursday after the luxury-fashion consignment specialist reported a loss for the first quarter that was less than Wall Street had expected and said that its sales remained strong.
As of 2:30 p.m. EDT today, shares were trading up about 8.3% from Wednesday's closing price.
The RealReal reported its first-quarter results after the market closed on Wednesday, and they weren't bad. Its adjusted net loss of $0.39 per share beat Wall Street's $0.42 per-share loss estimate, even though its revenue ($78.2 million) was a bit less than analysts had forecast.
The RealReal does have four brick-and-mortar stores that have been closed since mid-March amid the coronavirus pandemic, but nearly all of its revenue is generated via its online storefront. Investors had expected that to shield the company from the sharp revenue declines reported by brick-and-mortar-dependent competitors, and it did, but not right away.
During the company's earnings call, CEO Julie Wainwright said that The RealReal did see sales drop sharply for about 10 days in late March, but then they bounced back.
"Our demand is clearly there, and it's at pre-COVID levels," Wainwright said.
Citing the ongoing uncertainties, The RealReal declined to give updated guidance for 2020, saying only that it's focused on preserving liquidity for the time being.
Still, as a mostly online consignment store handling luxury goods, it doesn't have to worry about lease payments for shuttered stores or inventory growing stale as, say, an upscale department store might. That should make it somewhat easier to conserve cash until its faithful customers (83% of its sales were to repeat buyers in 2019) are willing to spend again.