Resale platform Poshmark forecasted Q3 revenue well below analysts’ estimates as its marketing efforts are being curtailed by Apple’s new privacy controls that limit digital advertising tracking.
In April, Apple began requiring developers to seek users’ permission to gather data across other sites and apps. While the policy marked a win for data privacy advocates, it was protested by social media platforms that rely on extensive data tracking to market products to shoppers.
Poshmark is feeling the impact and it expects it to affect its performance in the near future. The company expects its Q3 revenue to reach $81 million to $83 million, with the mid-point below analysts’ estimates of $82.4 million.
Following Poshmark’s earnings call, the company’s stock tumbled by 7 percent in after-hours trading, settling 25 percent below its initial public offering in January this year.
The company’s CEO Manish Chandra believes that the impacts of Apple’s ad tracking policy are only temporary as Poshmark is heavily spending its marketing dollars on alternative channels such as TV ads and collaborations with influencers such as Marie Kondo.
“It will work itself out as we go through the quarter and the second half, largely because our channels are quite diversified and super adaptable,” Chandra told Reuters.
Still, the company will need to navigate the challenges associated with the spread of the delta variant — a factor that impacted the company’s Q3 outlook.
In Q2, Poshmark saw its revenue rise by 22 percent, reaching $81.8 million, which was ahead of the $80.3 million analysts had expected. The company benefited from consumers’ growing appetite for sustainable shopping.