Howard Lorber, Chairman, Douglas Elliman Real Estate.
Illustration by Lanette Behiry/Real Estate News

Douglas Elliman still sees hope in luxury after a tough Q2 

The company reported significant year-over-year declines, with revenue taking a nearly 25% hit — but numbers were much improved over Q1.

August 11, 2023
3 minutes

Douglas Elliman's losses slowed in the second quarter, and the company continues to believe the luxury market is poised for a comeback.

"As we have stated before, the luxury markets in which Douglas Elliman operates are usually the first markets to emerge from a down cycle as buyers are less mortgage-reliant," Chairman, President and CEO Howard Lorber told investors in the quarterly earnings call.

Second quarter revenues of $275.9 million were down year-over-year from $364.4 million, as was net income, coming in at a loss of $5.2 million compared to a gain of $10.2 million a year ago. But the company's financials showed solid improvements over the first quarter

"Our average sales price per transaction remained strong at $1.64 million for the second quarter and was the highest quarterly average since the second quarter of 2022," Lorber said. "We believe this improvement validates both the expertise of our agents and the luxury markets we serve as well as the stability of the luxury markets more broadly."

Key numbers

Revenue: $275.9 million, down from $364.4 million in the same period last year but an improvement over $214 million in Q1.

Cash and cash equivalents: $130.4 million, up from $123.7 million in the first quarter of this year.  

Net income/loss: Net loss of $5.2 million, down from net income of $10.2 million during the same period last year, but up from a substantial $15.1 million loss in the first quarter.

EBITDA (earnings before interest, taxes, depreciation and amortization): A loss of $2.6 million, compared to income of $19.2 million in Q2 2022. Losses improved significantly from $14.4 million in Q1.

Transactions: Gross value of $9.9 billion on 6,038 transactions, down from $13.6 billion on 7,789 transactions during the same period last year. Transactions were up more than 30% from Q1.

Agent count: 6,900

What Douglas Elliman had to say

While acknowledging the "headwinds" facing real estate, Lorber said the company has made adjustments that will get it through. He pointed to the company's improving balance sheets in the past few quarters. "Our second quarter 2023 results showed improvement from the previous three quarters in terms of revenue and average selling price per home."

Lorber also pointed to cost-cutting measures including a reduction of 45 staff positions, cutting sponsorships and advertising spends, and consolidating office space. The combined cuts, said Lorber, have saved the company $2 million in its general and administrative spending, and $2.2 million in operating and support expenses compared with the same time period last year.

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