The RealReal Connects in Q3 With 17% Increase in Revenues, Better Outlook

The luxury industry might be going a little sideways right now, but The RealReal Inc. has its sights set higher, raising its outlook for the year.

The resale pioneer’s third-quarter revenues increased 17 percent to $174 million, producing a gross merchandise volume of $520 million. Over the past year the company’s annual active buyer count rose by 7 percent to 1 million.

Third-quarter adjusted earnings before interest, taxes, depreciation and amortization rose to $9.3 million from $2.3 million a year earlier.

Adjusted losses per share narrowed to 4 cents from 9 cents in the third quarter last year, better than the 6 cent deficit analysts projected, according to Yahoo Finance.

Net losses totaled $54 million, including a $44 million loss on a change in the fair value of the company’s warrant liability.

Rati Levesque, chief executive officer of The RealReal, said: “We delivered another quarter of accelerating growth and expanded margins, with GMV up 20 percent and adjusted EBITDA ahead of expectations. Through execution against our strategic pillars — unlock supply through our growth playbook, drive operational efficiency and obsess over service — we are changing the way people shop. Given this continued momentum, we are raising our full-year outlook.”

Now The RealReal is looking for revenues to hit $687 million to $690 million this year, above the $675 million analysts forecast and the $667 million to $674 million the firm previously anticipated in August. Adjusted EBITDA is seen hitting $37.7 million to $38.7 million, up from the $29 million to $32 million it previously guided investors to.

Investors appreciated the progress and traded shares of the company up 7.1 percent to $12 in after-hours trading on Wall Street.

“Going forward, we see an opportunity to continue to build trust with our sellers and improve the customer experience through deeper consignor relationships, enhanced tools and insights, and ongoing AI initiatives,” Levesque said. “We are at the leading edge of a growing industry, which fuels our ability to shape the evolution of luxury resale and drive sustained profitable growth.”

While the big luxury brands spent the pandemic and post-pandemic era driving up prices on shoppers who were sitting at home and looking to spend, the sector is now feeling the aftereffects with much shakier sales in a challenging consumer landscape.

That’s given The RealReal a little extra room to navigate and pick up share as it seeks to transform the industry.