This Luxury Retail Stock Is Up 81% in a Year, so Why Is One Fund Trimming Its Stake?

Kanen Wealth Management cut its stake in The RealReal (NASDAQ:REAL) by 2,338,820 shares last quarter, an estimated $30.54 million trade based on quarterly average pricing, according to a February 18, 2026, SEC filing.

What happened

According to a recent SEC filing dated February 18, 2026, Kanen Wealth Management LLC sold 2,338,820 shares of The RealReal, with the estimated transaction value at $30.54 million based on the quarter’s average share price. The quarter-end value of the fund’s stake shifted by $15.29 million, a figure that reflects both the share sale and changes in the company’s stock price.

What else to know

• Kanen Wealth Management’s stake in The RealReal now represents 8.91% of its 13F reportable AUM after the sale.
• Top holdings after the filing:
  • NYSE: COMP: $67.59 million (20.9% of AUM)
  • NASDAQ: ALLT: $45.04 million (13.9% of AUM)
  • NYSE: BNED: $30.81 million (9.5% of AUM)
  • NASDAQ: REAL: $29.34 million (8.9% of AUM)
  • NASDAQ: INSE: $24.84 million (7.7% of AUM)
• As of Thursday, REAL shares were priced at $12.39, up a staggering 81% over the past year and well outperforming the S&P 500’s roughly 16% gain in the same period.

Company overview

Company snapshot

• The Real Real offers an online marketplace for consigned luxury goods, including women's, men's, kids', jewelry, watches, and home and art products.
• The firm generates revenue by facilitating the resale of authenticated luxury items and earning commissions on each transaction.
• It targets consumers seeking authenticated, pre-owned luxury goods, with a focus on the U.S. market.

The RealReal operates at scale as a leading online platform for authenticated luxury consignment, leveraging a commission-based model and a curated product selection. Its strategy centers on trust, authentication, and a seamless resale experience, appealing to both consignors and buyers of luxury goods. The company's competitive edge lies in its rigorous authentication process and broad product assortment, positioning it as a key player in the luxury resale segment.

What this transaction means for investors

When a small-cap surges as much as The Real Real has, portfolio managers face a simple question: press the bet or harvest gains. That tension is especially sharp when the underlying business is finally showing operating leverage.

The company just capped a transformative year. On Thursday, The Real Real revealed that fourth quarter gross merchandise value jumped 22% to $616 million and full year GMV topped $2.13 billion. Revenue climbed 15% to $693 million for 2025, while adjusted EBITDA improved to $42 million from $9 million a year earlier. Meanwhile, active buyers reached 1.06 million, up 9% year over year.

Against that backdrop, trimming an 81% winner while it still represents nearly 9% of assets looks less like capitulation and more like risk control. (Though some of that surge has been post-Q4, the stock still surged about 50% last quarter.) Kanen’s portfolio skews toward concentrated small and mid caps, including Compass and Barnes & Noble Education. Recycling capital from a sharp outperformer into other idiosyncratic names fits that playbook.

For long-term investors, the real question is durability. If the company can sustain double-digit GMV growth and keep expanding margins, today’s volatility may matter far less than the structural shift toward authenticated resale.

Jonathan Ponciano 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.