Office reductions and layoffs didn’t spare Anywhere Real Estate from more losses last quarter.
The parent company of Corcoran, Coldwell Banker, Century21 and Sotheby’s International Realty finished the first quarter with a net loss of $138 million. The firm reported an operating EBITDA (earnings before interest, taxes, depreciation and amortization) last quarter of negative $52 million, down from $69 million a year earlier.
The company’s net loss is down from the $23 million first-quarter profit it reported one year ago, but a sharp improvement from its $453 million net loss in the fourth quarter.
Last quarter’s cost-cutting got the company about one-fourth of the way through its planned $200 million in budget cuts by the end of the year, roughly two-thirds of which it expects to be permanent.
But the savings weren’t enough for the real estate conglomerate to offset a slow market and rising legal costs: Quarterly revenue fell to $1.1 billion last quarter, down from $1.65 billion during the first three months of 2022. The roughly 30 percent decline was in line with the decrease in transaction volume over that period.
Anywhere is a defendant in several major antitrust and commissions-related lawsuits, the costs of which executives said “meaningfully impacted” its operating EBITDA.
The company hasn’t suffered further as a result of the collapses of Silicon Valley Bank and First Republic and the resulting slowdown in available jumbo loan credit, according to CEO Ryan Schneider.
“We haven’t seen any pressure on housing results because of mortgage collapse,” Schneider said on an earnings call. “We’ve seen a massive amount of pressure on housing results because of mortgage rates.”
Anywhere has been on a years-long quest to streamline its operations. It trimmed another $50 million last quarter via office closures and layoffs, including a 10 percent reduction of Coldwell Banker’s office footprint, according to CFO Charlotte Simonelli. The company is also integrating administrative operations in its title and mortgage sectors.
The company was free cash flow–negative by $120 million last quarter, a result Simonelli said was better than usual for the first quarter; the figure was negative $275 million a year ago. Anywhere had $122 million in cash on hand at the end of March.
Open volume outperformed closed volume last quarter into April, indicating positive future numbers. Anywhere projects its volume in the second quarter to be down 25 percent year-over-year and full-year 2023 volume to finish 15 percent to 20 percent below 2022 volume.
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