Why The RealReal Stock Soared Today
Key Points
Customers are flocking to TheRealReal.com in search of savings.
Management sees much more growth ahead.
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Shares of The RealReal (NASDAQ: REAL) surged on Tuesday after the online marketplace for luxury goods delivered robust third-quarter financial results and boosted its full-year sales forecast.
As of 1:35 p.m. ET, The RealReal's stock price is up more than 35%.
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The luxury resale market is booming
In today's challenging economic environment, even buyers of high-end merchandise are seeking bargains -- and these shoppers are increasingly turning to The RealReal's marketplaces to find them.
The company's gross merchandise value -- the total dollar value of all transactions conducted on its platform -- grew by 20% year over year to $520 million. Active buyers increased 7% to over 1 million, while the average order value rose 12% to $584.
The RealReal's revenue, in turn, climbed 17% to $174 million.
Moreover, the luxury goods reseller's profitability is improving as it scales its platform. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) quadrupled to $9.3 million, or 5.4% of revenue, up from 1.6% in the third quarter of 2024.
The RealReal sees plenty of room for expansion
These strong results and encouraging ongoing sales trends prompted management to lift its full-year sales and earnings outlook. The company now expects revenue of $687 million to $690 million and adjusted EBITDA of $37.7 million to $38.7 million in 2025.
"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," CEO Rati Levesque said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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