The RealReal Inc. REAL has reported strong preliminary financial results for the fourth quarter and full-year 2024, indicating profitable growth for 2025 while successfully completing a strategic debt exchange to strengthen its financial position. 

The company, which operates as the largest online marketplace for authenticated resale luxury goods, announced that its Gross Merchandise Value (“GMV”) and adjusted EBITDA for the fourth quarter and full year exceeded the previous guidance.

REAL Stock Past Three-Month Performance

Image Source: Zacks Investment Research

REAL’s Financial Results: Key Insights

In the fourth quarter of 2024, GMV reached approximately $503.5 million, surpassing the prior guided range of $484 million to $500 million. Total revenues are estimated between $163.1 million and $164.1 million, aligning with previous estimation of $158 million to $165 million. Adjusted EBITDA for the quarter is expected to be between $10.7 million and $11.2 million, significantly exceeding the prior range of $6.5 million to $9.5 million.

For full-year 2024, GMV totaled approximately $1.829 billion. The prior guidance was $1.81 billion to $1.83 billion. Total revenues are expected to range between $599.6 million and $600.6 million, consistent with prior estimates. Adjusted EBITDA is estimated between $9 million and $9.5 million, well above the previously estimated range of $4.7 million to $7.7 million.

RealReal’s Q1 & Full-Year 2025 Outlook

The RealReal has also provided financial guidance for the first quarter and full-year 2025. For the first quarter of 2025, GMV is anticipated between $484 million and $492 million, with total revenues expected to range from $157 million to $161 million. Adjusted EBITDA is anticipated to be between $3 million and $4.5 million.

For full-year 2025, GMV is forecasted at $1.96 billion to $1.99 billion, with total revenues between $645 million and $660 million. Adjusted EBITDA is expected to range from $20 million to $30 million, indicating the company’s focus on operational efficiency and sustainable growth. The company will continue leveraging its data, technology and AI capabilities to expand margins and achieve operating leverage.

REAL’s Strategic Convertible Debt Exchange

In addition to its financial performance, The RealReal has completed a significant convertible debt exchange. The company executed private transactions with holders representing approximately 65% of its outstanding 1% Convertible Senior Notes, due 2028. Under these agreements, The RealReal issued approximately $147 million in new 4% Convertible Senior Notes, due 2031, in exchange for $183 million of the existing 2028 Notes. This strategic move reduced the company’s total indebtedness by approximately $37 million and extended a large portion of its 2028 debt maturities.

The company expressed confidence in its improved financial position, citing the continued execution of strategic initiatives. The debt restructuring follows a $17 million debt reduction in February 2024 and further strengthens The RealReal’s capital structure.

Final Words on REAL

The RealReal’s strong preliminary financial results, coupled with strategic debt exchange, position it for continued growth in 2025. With a focus on leveraging technology and expanding margins, The RealReal remains well-positioned to drive sustainable profitability and market leadership in the luxury resale industry.

This Zacks Rank #3 (Hold) company has gained 112.4% in the past three months compared with the industry’s 1.7% growth.

Key Picks

Some better-ranked stocks are Boot Barn Holdings, Inc. BOOT, lululemon athletica inc. LULU and Gildan Activewear Inc. GIL.

Boot Barn is a specialty retailer of premium, high-quality casual apparel. It sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s fiscal 2025 earnings and sales indicates growth of 21.4% and 14.9%, respectively, from the reported levels of fiscal 2024. BOOT delivered a trailing four-quarter average earnings surprise of 7.2%.

lululemon is a yoga-inspired athletic apparel company that creates lifestyle components. It has a Zacks Rank of 2 (Buy) at present. LULU delivered a 6.7% earnings surprise in the last reported quarter. 

The consensus estimate for lululemon’s fiscal 2025 earnings and sales indicates growth of 12.5% and 9.7%, respectively, from the reported levels of fiscal 2024. LULU delivered a trailing four-quarter average earnings surprise of 6.7%.

Gildan Activewear is a manufacturer and marketer of premium quality branded basic activewear. It carries a Zacks Rank #2 at present. 

The consensus estimate for Gildan Activewear’s 2024 earnings and sales indicates growth of 15.6% and 1.5%, respectively, from the reported levels of 2023. GIL delivered a trailing four-quarter average earnings surprise of 5.4%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

lululemon athletica inc. (LULU) : Free Stock Analysis Report

Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

Gildan Activewear, Inc. (GIL) : Free Stock Analysis Report

The RealReal, Inc. (REAL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research