Poshmark shares plunge more than 25% after lower sales in the third quarter

Shares of Poshmark Inc. were down more than 25% during the extended session Tuesday after the e-commerce retailer posted a surprising quarterly profit but reported sales below Wall Street views, blamed in part on privacy “headwinds” from Apple Inc. changes.

Poshmark POSH,
said it made $8.13 million, or 44 cents a share, in the third quarter, as opposed to a loss of $7.2 million or 9 cents a share in the same period a year ago, and the FactSet consensus favors a loss of 8 cents a share in the quarter.

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Sales rose 16% to $79.7 million, Poshmark said. Gross trade value grew 18% to $442.5 million, the company said. Poshmark sells both new and used items, and many of its customers are Gen Z and younger millennials.

Analysts polled by FactSet expected Poshmark to report revenue of $82.8 million in the quarter.

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“We delivered a solid quarter and our sixth straight quarter of operating profitability despite tough comparisons and the headwinds of Apple’s privacy changes,” CEO and founder Manish Chandra said in a statement.

The retailer was targeting fourth-quarter revenue of between $80 million and $82 million, which is in line with FactSet’s expectations of approximately $85 million.

Shares of Poshmark closed the regular trading day at 6% on Tuesday. The stock has lost nearly 30% in the past three months, as opposed to gains of about 6% for the S&P 500 index SPX,
in the same period. The company went public in January.