Sotheby’s reported a $7.1 million net loss for the first quarter of 2019, but a higher commission margin.
In Sotheby’s earnings call for the first quarter of 2019 (the period from January 1st to March 31st) on Thursday morning, the auction house’s CEO and president, Tad Smith, reported a net loss of $7.1 million, or the equivalent of ¢15 per share. The adjusted net loss for the period was $6.9 million, compared to an adjusted net loss of $5 million for the same period in 2018.
Smith noted that due to the seasonality of the auction schedule, Sotheby’s typically sees a net loss in the first and third quarters of the year. He also attributed the dip in part to a shift in auction schedules, which saw some $74 million in net auction sales from the spring auctions in Hong Kong moved back into the second quarter. Sotheby’s CFO Mike Goss optimistically noted that Sotheby’s auction commission margin is on the uptick, reaching 18.2% in 2019’s first quarter, an increase of 90 basis points from the first quarter of 2018.
Among the major sales in Sotheby’s first quarter, Smith noted smaller totals for February’s £87.7 million ($115.3 million) evening sale of Impressionist and modern art in London and the Asia Week sales in New York in March. One significant win was the house’s Contemporary Curated sale—the highest-ever grossing edition of that sale—which was held in New York in March.
Smith also highlighted major strides in the house’s online business, including a 23% increase in the total dollar amount Sotheby’s sold to online buyers in the first quarter of 2019 compared to the same period in 2018. He added that, in the same period, the house had 64% more online-only sales in total compared to a year ago. Sotheby’s online estimate platform also drove significantly more business in the first quarter of the year, with a 113% increase in the number of objects consigned through the portal.
Sotheby’s is set to unveil its revamped New York City galleries to the public on Friday, and has a number of star lots slated for this month’s bellwether auctions—including a Claude Monet haystack and a trio of major Mark Rotho paintings—when it and rival Christie’s will be selling some $1.8 billion worth of art. Still, it’s not only about big-ticket lots for Sotheby’s. In response to an investor’s comment that the house’s wares are out of his price range, Smith noted that “60% of the things we sold last year were under $10,000.”