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Poshmark misses on Q2 earnings, set to focus on profitability

Yahoo Finance Live anchors discuss second-quarter earnings for Poshmark.

Video transcript

BRIAN CHEUNG: Well, second-hand fashion company Poshmark reporting a record eight million active buyers in the trailing 12 months. 70% jump in social interactions year-over-year. Brian Sozzi joins us here on set. Casual mode, you're already in Friday mode.

BRIAN SOZZI: Just trying to show off my arms, Brian.

BRIAN CHEUNG: We'll pull you back on here.

BRIAN SOZZI: You know?

BRIAN CHEUNG: OK, cool. Tell us about Poshmark.

BRIAN SOZZI: Yeah, Poshmark, we're seeing--

[LAUGHTER]

[INAUDIBLE]

BRIAN CHEUNG: Yeah, all right. All right, whatever. [INAUDIBLE]

BRIAN SOZZI: So Poshmark. Coming into the session, Poshmark shares were down about 16%. We had CEO Manish Chandra come on here and say, guys, look, back-to-school season looking pretty strong. So we're seeing a little bit of those losses claw back here.

But look, by and large, this is a company that needs to drive consistent profitability. Manish acknowledged that right out of the gate with us, saying, look, I think the Street wants to see profits for us. It's just not likely to happen this year.

BRIAN CHEUNG: Well, OK, so when it comes to this overall business model though, right? Like do you think that the stock reaction here tells you that there is an agnostic angle to this postpandemic world that maybe Poshmark was excited about prior to that has kind of deflated here?

BRIAN SOZZI: Well, I think if you talk to a lot of folks in the Street, they would have thought that Poshmark would have been profitable already. This is not a new company. It did not start during the pandemic.

Look at that chart here. It has been a very disappointing IPO for a business that has been around since 2011 selling high-end clothes that are essentially very high margin. And oh, yeah, look, a lot of influencers on the platform. Serena Williams is on the board.

Now, we asked Manish how he will use Serena, if she will be used anymore and that she is retiring. Didn't really give a clear answer on what she may or may not be doing. But again, you expect more from this platform, given the influencers that are on it, the merchandise, and its selling. And yes, it is viewed as a leader in its space.

BRIAN CHEUNG: What is this more comparable to, e-commerce company or a social media company?

BRIAN SOZZI: I would say it's an e-commerce company. So the Street lumps in Poshmark with the likes of Etsy, [INAUDIBLE], that type of company. But again, it's another money losing business that has to show profitability.

Now, if there's any positive here with this is that Manish acknowledged that they are starting to slow hiring. So the latest tech company to hit that buzzword that Wall Street wants to hear. Hey, we understand the environment we're in. We're reading the room. We're gonna pull back on some of these projects working on. We're gonna more-- just better focus on the people that we hire. And you know, maybe the Street will [? fix ?] [? it. ?]

BRIAN CHEUNG: I'm googling muscle T's on Poshmark right now. You can't come on the show without sleeves and then leave me to hang dry here because you can't see my-- you can't see my arms under this jacket.

BRIAN SOZZI: I have to be honest--

BRIAN CHEUNG: I have 15 seconds.

BRIAN SOZZI: --I look great--

BRIAN CHEUNG: I have 15 seconds.

BRIAN SOZZI: I look great-- I look great right now.

BRIAN CHEUNG: Yeah

BRIAN SOZZI: I hope our social media team takes a photo of this.

BRIAN CHEUNG: Someone cover these arms.

BRIAN SOZZI: I mean--

BRIAN CHEUNG: Oh, let's take a look at markets before we say goodbye here on the 11. We can see that markets right now still in the green because Brian is not wearing sleeves today.