REALREAL Reports Second Quarter FY2023 Earnings Results on June 30, 2023
August 20, 2023
🌥️Earnings Overview
REALREAL ($NASDAQ:REAL) announced their earnings results for the second quarter of FY2023 on June 30 2023. Total revenue for the quarter was USD 130.8 million, a decline of 15.3% compared to the same period in the previous year. Net income for the period was USD -41.3 million, which was an improvement from the -53.2 million reported in the same quarter of FY2022.
Market Price
On Tuesday, June 30th 2023, REALREAL reported its second quarter earnings results. REALREAL stock opened the day at $2.2 and closed at the same price, down by 2.7% from its previous closing price of $2.2. The company is actively taking steps to minimize losses and maximize efficiency in order to remain competitive in the current market. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Realreal. More…
| Total Revenues | Net Income | Net Margin |
| 575.12 | -209.7 | -32.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Realreal. More…
| Operations | Investing | Financing |
| -64.51 | -47.98 | 2.3 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Realreal. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 458.72 | 734.3 | -2.7 |
Key Ratios Snapshot
Some of the financial key ratios for Realreal are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 22.8% | – | -34.6% |
| FCF Margin | ROE | ROA |
| -19.6% | 47.9% | -27.1% |
Analysis
As an analyst at GoodWhale, I recently completed a comprehensive analysis of REALREAL‘s fundamentals. Based on our Star Chart, REALREAL is classified as a ‘cheetah’, meaning that the company has achieved high revenue or earnings growth, but is considered less stable due to lower profitability. Given this information, I believe that certain types of investors may still find value in the company. For example, those focused on growth potential or short-term returns may be interested in investing in REALREAL. However, investors looking for stability or long-term returns may find the company to be a high-risk investment. The health score for REALREAL is 2/10 based on its cash flows and debt-to-equity ratio, indicating that the company is less likely to safely ride out any crisis without the risk of bankruptcy. Furthermore, REALREAL is strong in growth and weak in asset, dividend and profitability which could further affect its stability in the event of market downturns. More…
Peers
The RealReal Inc is a luxury consignment company that sells pre-owned designer items. The company competes with PChome Online Inc, Tapestry Inc, and Carvana Co. The RealReal Inc has a competitive advantage because it is the only luxury consignment company that is publicly traded. The company also has a competitive advantage because it has a brick-and-mortar store in addition to its online presence.
– PChome Online Inc ($TPEX:8044)
PChome Online Inc is a Taiwanese company that provides an online marketplace for consumers in Taiwan. The company has a market cap of 5.88B as of 2022 and a Return on Equity of 3.34%. PChome Online Inc operates an online marketplace that sells a wide variety of merchandise, including books, electronics, and home appliances. The company also provides a range of services, such as online payment and shipping.
– Tapestry Inc ($NYSE:TPR)
Tapestry, Inc., is an American luxury fashion holding company based in New York City. It was founded in 2016 as a result of the merger of Coach, Inc. and Kate Spade & Company. The company operates several major brands in the luxury fashion market, including Coach, Kate Spade, Stuart Weitzman, and Tapestry Collection.
Tapestry’s market capitalization is $7.57 billion as of 2022. The company’s return on equity is 28.67%. Tapestry is a luxury fashion holding company that operates several major brands, including Coach, Kate Spade, Stuart Weitzman, and Tapestry Collection.
– Carvana Co ($NYSE:CVNA)
Carvana Co is a company that operates an e-commerce platform for selling used cars. The company has a market cap of 1.94B as of 2022 and a return on equity of -183.76%. Carvana Co’s market cap is lower than the average for companies in the same industry, and its ROE is significantly negative. The company’s business model is not sustainable in the long term, and it is likely that Carvana Co will eventually go bankrupt.
Summary
RealReal’s second quarter earnings for FY2023 demonstrated a decrease in revenue of 15.3% year over year. Despite the decline, the company reported an improvement in net income from -53.2 million in the same quarter of the prior year to -41.3 million. Investors should closely monitor RealReal’s ability to reduce expenses and generate higher revenue in order to remain profitable. The company must also be able to effectively capitalize on potential opportunities and adjust to changing market conditions.
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