The RealReal (Nasdaq: REAL)—the world’s largest online marketplace
for authenticated, consigned luxury goods—today provided a business
update in accordance with the SEC’s disclosure guidance with
respect to the ongoing COVID-19 pandemic.
The RealReal has seen substantial recovery in its business over
the course of the COVID-19 pandemic. From mid-March, when San
Francisco Bay Area shelter-in-place directives began going into
effect, through mid-April, Gross Merchandise Value (GMV) declined
approximately 44% year over year (YoY). Since then, GMV trends have
improved. April GMV declined approximately 33% YoY, and May GMV
declined approximately 19% YoY. GMV declines continued moderating
throughout May, with GMV declining 16% YoY from mid-May through the
end of the month. These GMV improvements have continued into June,
with GMV declining 11% YoY from June 1 through June 7. These growth
rates compare with YoY GMV growth of approximately 30% prior to the
shelter-in-place directives.
As previously disclosed, the company believes the primary
limitation on GMV has been its ability to process supply under the
shelter-in-place restrictions. Demand (as measured by four day
sell-through) remained healthy in April and May, and traffic
sessions remained positive for March, April and May on a YoY basis
despite significant reductions in advertising
spend.
The combined impact of a return to higher staffing levels in its
warehouses and efficiency benefits from investments in automation
have increased the company’s capacity to process new supply at
pre-COVID levels in terms of items per day. The RealReal is
well-positioned to continue recovering as supply trends improve,
subject to any new restrictions that may be placed on the company’s
operations by local or state government authorities in the future.
Supply units shipped to the company’s e-commerce facilities
increased approximately 47% month over month in May, though supply
units are still below pre-COVID levels. The company has conducted
nearly 20,000 virtual appointments since launching the service in
response to the pandemic, and interest in its vendor channel from
business sellers has increased 10 times vs. pre-COVID levels.
Together, virtual appointments and vendor interest have markedly
improved the company’s ability to source supply.
Given the return of processing capacity to pre-COVID levels and
continued improvements in supply and GMV trends, The RealReal has
begun reinvesting in growth as compared with planned expense
reductions of more than $70 million as detailed in our Q1 2020
earnings announcement on May 6, 2020. The company has recalled a
substantial portion of its furloughed employees and resumed
marketing investments and hiring in its technology teams. The
company will adjust operating expenses based on trends in the
business. In addition, certain COVID-driven operating expenses such
as PPE and deep cleaning services remain at elevated levels.
Conditions remain volatile with the company’s retail stores
temporarily closed except for consignment drop-off and continued
supply headwinds in areas such as New York City. In addition, the
continued evolution of the COVID-19 pandemic and social unrest may
disrupt the company’s operations, slow its ability to access supply
in consignors’ homes and, as a result, negatively impact consumer
demand. The RealReal will continue to closely monitor the
development of the COVID-19 pandemic; federal, state and local
operating restrictions; and changes in consignor and buyer activity
on its platform. The company expects to continue to adjust its
operating plans, and its actual results could differ materially
from those reflected in this press release.
The following table represents GMV trends for each month
beginning January 2020 through May 2020; the first and second half
of March, April and May; as well as the period June 1 through June
7:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January |
February |
March |
April |
May |
|
3/1-3/15 |
3/16-3/31 |
4/1-4/15 |
4/16-4/30 |
5/1-5/15 |
5/16-5/31 |
6/1-6/7 |
|
|
|
|
|
|
|
|
|
|
|
|
GMV |
Y/Y Growth |
28% |
30% |
-15% |
-33% |
-19% |
|
17% |
-44% |
-44% |
-21% |
-22% |
-16% |
-11% |
The information in this press release will be discussed on the
Stifel 2020 Cross Sector Insight Conference webcast later today and
reflects preliminary information available as of this date. You can
access this webcast on The RealReal’s investor relations page of
its website at
https://investor.therealreal.com/news-events/events.
The RealReal expects to release financial results for the second
quarter ended June 30, 2020 in early August.
About The RealReal, Inc. The RealReal is the
world’s largest online marketplace for authenticated, consigned
luxury goods. With a rigorous authentication process overseen by
experts, The RealReal provides a safe and reliable platform for
consumers to buy and sell their luxury items. We have 150+ in-house
gemologists, horologists and brand authenticators who inspect
thousands of items each day. As a sustainable company, we give new
life to pieces by hundreds of brands, from Gucci to Cartier,
supporting the circular economy. We make consigning effortless with
free in-home pickup, drop-off service and direct shipping for
individual consignors and estates. At our stores in LA, NYC and San
Francisco, customers can shop, consign, and meet with our experts.
At our 10 Luxury Consignment Offices, four of which are in our
retail stores, our expert staff provides free valuations.
Investor Relations Contact:Paul BieberHead of
Investor Relationspaul.bieber@therealreal.com
Press Contact:Erin SantyHead of
Communicationspr@therealreal.com
Forward Looking StatementsThis press release
contains forward-looking statements relating to, among other
things, the future performance of The RealReal that are based on
the company's current expectations, forecasts and assumptions and
involve risks and uncertainties. In some cases, you can identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “could,” “expect,” “plan,” anticipate,” “believe,”
“estimate,” “predict,” “intend,” “potential,” “continue,” “ongoing”
or the negative of these terms or other comparable terminology.
These statements include, but are not limited to, statements about
future operating results, including the amounts of our operating
expense and capital expenditure reductions and our strategies,
plans, commitments, objectives and goals, in particular in the
context of the impacts of the COVID-19 pandemic and the recent
social unrest. Actual results could differ materially from those
predicted or implied and reported results should not be considered
as an indication of future performance. Other factors that could
cause or contribute to such differences include, but are not
limited to, the impact of the COVID-19 pandemic on our operations,
any failure to generate a supply of consigned goods, pricing
pressure on the consignment market resulting from discounting in
the market for new goods, failure to efficiently and effectively
operate our merchandising and fulfillment operations and other
reasons.
More information about factors that could affect the company's
operating results is included under the captions “Risk Factors” and
“Management's Discussion and Analysis of Financial Condition and
Results of Operations” in the company's most recent Annual Report
on Form 10-K and subsequent quarterly reports on Form 10-Q, copies
of which may be obtained by visiting the company's Investor
Relations website at https://investor.therealreal.com or the SEC's
website at www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this press release, which are based
on information available to the company on the date hereof. The
company assumes no obligation to update such statements.
RealReal (NASDAQ:REAL)
Historical Stock Chart
From Jun 2024 to Jul 2024
RealReal (NASDAQ:REAL)
Historical Stock Chart
From Jul 2023 to Jul 2024