Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

The RealReal Shares Skyrocket After Profitability Update

Shopping bags from the RealReal.
The luxury resale platform’s stock soared 30 percent Wednesday. (Courtesy)

The luxury resale platform’s stock soared 30 percent Wednesday, after exceeding Wall Street estimates for revenue and profit in its third-quarter earnings.

Analysts point to its gross margin improvements, as well as its adjusted EBITDA loss of $7 million, down from a $28.2 million loss in the same period last year. The company is slated to reach profitability next year, and its latest report shows that it’s well on its way.

”We are very pleased with the potential progress that we can make and deliver on that commitment,” chief executive John Korryl said in the earnings call Tuesday.

In the third quarter, The RealReal’s gross merchandise value, a metric of sales, fell 8 percent due to its strategic elimination of lower-value products. Earlier this year, the company announced it would be testing new revenue streams such as on-site advertising and warranty return insurance. Neither will launch until next year, according to Korryl.

ADVERTISEMENT

”[The RealReal] is making the necessary adjustments to improve profitability, and we’re starting to see these changes pay off,” Wells Fargo analyst Ike Boruchow wrote in a note Tuesday evening. “While this does come with a slow down in sales, margin improvements are hard to ignore.”

Learn more:

Inside The RealReal’s Big Reset

The luxury resale platform’s CEO John Koryl spoke with BoF exclusively about new revenue streams, consignment updates and other ways of reaching profitability after a decade of losses.

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

How Rent the Runway Came Back From the Brink

The rental platform saw its stock soar last week after predicting it would hit a key profitability metric this year. A new marketing push and more robust inventory are the key to unlocking elusive growth, CEO Jenn Hyman tells BoF.


Why Esprit’s Ambitious Rebrand Fell Short

The company is in talks with potential investors after filing for insolvency in Europe and closing its US stores. Insiders say efforts to restore the brand to its 1980s heyday clashed with its owners’ desire to quickly juice sales in order to attract a buyer.


How Adidas Sambas Took Over the World

The humble trainer, once the reserve of football fans, Britpop kids and the odd skateboarder, has become as ubiquitous as battered Converse All Stars in the 00s indie sleaze years.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
The Business of Beauty Global Awards - Deadline 30 April 2024
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
The Business of Beauty Global Awards - Deadline 30 April 2024