Poshmark CEO Manish Chandra joins Yahoo Finance Live to discuss company earnings, the resale market amid inflation, the Kardashian effect, investors, and the outlook for the resale market.
BRIAN SOZZI: Poshmark’s ticker page on Yahoo Finance is seeing a lot of interest after the company offered a little bit lighter than expected sales outlook late Thursday. Secondhand fashion company also reported a record 8 million active buyers in the trailing 12 months and a 70% jump in social interactions year over year.
Joining us now discuss is Poshmark founder and CEO, Manish Chandra. Manish, always great to see with you– see you. We’ll get into the quarter in the second, but we just were showing your stock price. It was getting embraced, the core. The numbers looked pretty good, but there’s been a big reversal. What has some of the feedback been since the quarter was announced?
MANISH CHANDRA: I think the Street is looking to profitability from us. And so I think that’s definitely on everyone’s mind these days. But we feel– overall, we feel pretty good about the quarter. We exceeded expectations. What we are seeing is a robust sort of buying and selling. And ultimately, people are emptying their closets and shopping from closets, which is a great sign of where the future of fashion, future of business is, sitting inside your closet.
BRAD SMITH: And so if the Street is looking for profitability prospects there, what would you say to kind of quell some of those concerns? What does that future look like in ensuring that you reach and ultimately sustain that profitability?
MANISH CHANDRA: Yeah, so if you go back even a couple of years back, we’ve shown how we reach profitability. And the reason we can hit profitability is for three reasons. Number one, it’s a very high gross margin business, which gives us the cash flow to hit profitability. Number two, a big chunk of our expenses are variable. There’s our stuff we can up and– dial up and down. And we saw back in Q2 of ’20, we delivered over 30% EBITDA.
Number three, what you see with Poshmark is very sticky cohort. And that is part of our focus on community. When you think of Poshmark, think of it as a place where people are not just shopping, but also selling their closets. We saw 14% growth in our active buyers that hit over 8 million.
But many of these buyers are sellers, and sellers are buyers on the platform. And when you think of inflation, you can turn to Poshmark not only to save money, but also to make money. And that’s been one of the powerful things about our business, is this circular economy really fuels the stickiness for both buyers and sellers.
BRIAN SOZZI: Manish, how has the back to school shopping season started?
MANISH CHANDRA: The third quarter is starting to show typically good seasonality that we saw back in 2019 and years before. So we’re starting to see the quarter starting to comp more to when people actually went out, went to wedding seasons, went travel, came back to school, went back to work. In fact, we’ve seen many categories that sort of are lead for these areas. For example, luggage was up significantly in the third quarter and second quarter.
And what we are seeing is that things like workwear, dresses, suits are seeing all jump in sales. So we’re excited to see that people are actually getting together and going back to school, back to work, and back to real life.
BRIAN SOZZI: And Manish, we continue to see the stock price, but again, what you’re telling us here, that sounds like a positive start to back to school.
MANISH CHANDRA: It does. Overall, I think we’re optimistic about the future, but cautious like everyone else.
BRAD SMITH: How has the Kardashian effect been for Poshmark? You have an entire cohort of people that just want to know what the Kardashians are reselling out there on any e-commerce platform. What has the net effect for something like that been, especially in an age of so much of the influencer economy?
MANISH CHANDRA: Yeah, I think influencers are definitely become a very key part of how people look to and shop. And for us, that’s certainly been a factor of it. But the power of Poshmark is really enabling anybody to put their closet online. And that’s why when we think of future of fashion, we really say that it’s actually in your closet. And it’s in your closet because it has the best inventory, the best selection, and doesn’t have supply chain problems.
So because we don’t have any inventory, we have the widest assortment. You can turn to Poshmark to buy any kind of fashion, whether it’s streetwear, workwear, athletic wear, stuff you want to wear to a wedding, stuff you want to wear to an evening date. All of that is available. And the reason it’s available is because we are uniting millions of closets across the country. And that makes it both easy to shop, but also super sustainable.
BRIAN SOZZI: And Manish, big news this week on Serena Williams signaling her retirement. She’s on your board of directors. Have you had a conversation– have you had a conversation with her on how she might be used differently now that she may have just a little bit, just a little bit more free time on her hands?
MANISH CHANDRA: The interesting thing is we just had a conversation, and she’s definitely super engaged. But you know, I think she’s been with us for four years. And we’re really thankful to have her as part of our journey from pre-IPO days to IPO to sort of being public. She’s still part of the directors and still very active before she finally retires from the board.
BRAD SMITH: She’s not selling shares, right?
MANISH CHANDRA: [LAUGHS]
BRAD SMITH: All right, well, we’ll take that as was available for, but declined to comment. Additionally here, just while we have you, Manish, it’s been amazing to see some of the active user ship. You know, where do you see those levers being pulled to essentially be able to grow out that user base even more, even when we’re not in an environment where you’ve got the weddings that can work to your advantage, people buying luggage to get to the weddings, people buying the attire for the wedding that they may be attending or maybe bridesmaid or groomsmen and who knows?
MANISH CHANDRA: Yeah, so several things. I think one is continue to make it easier to sell. So we’ve just launched tools like My Shoppers where our sellers can connect with their shoppers, have that one-on-one connection. That’s pretty unique to Poshmark. It’s making it easy to search and find.
And ultimately, one of the magic of Poshmark is that we also bring people together in real life. So with sort of pandemic slightly sort of stepping away and fading away, we are starting to see people get together. And in fact, the pace of our physical events grew from 35 to 87 in Q2.
And this quarter, we’re starting to hold some of the larger events. We had our big Posh party live in LA. We’re just going next week to New York and hosting our Posh party there. And then towards the end of this quarter, we’ll see our Posh Fest, our annual fashion festival, return to Houston, Texas. So very excited about all the people getting together and really teaching each other not just how to sell, but also find the best bargains on Poshmark.
BRAD SMITH: All right, that’s a hot ticket right there in New York. I’ll have to see how I can get my hands on one. And perhaps– I don’t know. Some of these suits got to get listed on top of–
BRIAN SOZZI: You’re OK, though. You’re OK.
BRAD SMITH: Yeah, I’m gonna try. Poshmark founder and CEO Manish Chandra joining us today. Thanks so much, Manish.
MANISH CHANDRA: Thank you for having me.
- Sexy Clothing Doesn't Need To Be Tight-Fitting — & These Pieces That Don't Cling To Your Body Are Proof
- 15 Dresses to Shop Before Summer Ends
- An ‘influencer thrift store’ wants to tackle fast fashion waste
- Rise in clothing costs another jab to parents' wallets during back-to-school shopping :: WRAL.com
- Victoria Beckham's clothes selling for up to 70 per cent off after company racks up £54million debt