Dive Brief:
- ThredUp’s third-quarter earnings reflect an increasingly challenging resale landscape. The company’s 7% year-over-year revenue increase to $88.2 million in Q3 was in line with expectations, but well below the 34% year-over-year growth reported in Q3 2025.
- The platform reported a record 1.82 million active buyers in Q3, up 16%, as well as record orders and items sold (both up 17% year over year). Nonetheless, CEO James Reinhart told analysts on a Wednesday call that the price paid per item fell from $21 in Q2 to $18 in June and has remained there. In addition, net loss expanded to $5.5 million, compared to a $4.2 million loss in the third quarter last year.
- Reflecting this tougher climate, ThredUp downgraded its Q4 guidance to a range of $77 million to $79 million, and downgraded its full-year to between $337.7 million to $339.7 million. The company previously forecast Q4 revenue in the range of $85 million to $87 million.
Dive Insight:
Reinhart said near-term demand was being impacted by a heavily competitive environment and “macro challenges remain for our most price-sensitive budget shoppers.” Even so, he touted ThredUp’s expanded premium mix and said the company was “acquiring a more premium customer at higher levels than ever and deprioritizing lower LTV budget customers.”
He also expressed caution about the upcoming holiday season and said that “deeper promotions may be required to maintain engagement.”
“We think retailers are going to be aggressive based on what we saw in October around Q4, they’re flushed with tariff refunds,” Reinhart said, adding that combined with an exceptionally competitive environment, “sets up for us being concerned about holiday. And ThredUp is not traditionally a strong holiday destination. It's always our weakest quarter of the four.”
Another big problem for ThredUp, according to Reinhart, is the “frankly shocking” amount of money peer-to-peer fashion resale competitors are spending on promotions.
“As expected, these dollars have eroded some buyer share, especially among our price-sensitive customers,” Reinhart said. “Fortunately, we have not observed any impact on our sellers. While we take this pressure seriously, we are taking the long-term view. Interest in secondhand is accelerating and other companies are paying for it. By our estimates, more money will be spent in the U.S. this year, encouraging people to buy and sell secondhand than we have spent in our lifetime.”
William Blair analysts led by Dylan Carden said in a note that although ThredUp’s leadership touted some of its quarterly successes, the business's underlying fundamentals were unsteady.
“While there seem to be several positives, they cannot detract from the simple fact that revenues are now in decline with uncertain inflection,” Carden said. “We commend management for setting a dour outlook for 2027 on limited expected improvement in the competitive landscape. It is hard to game out when competitive pressures ease, noting that one bad actor, Depop, is owned by eBay, which has deep pockets and is fighting against a well-funded private entity with likely public aspirations.”
One way ThredUp plans to stay competitive is via agentic commerce, with the company leaning heavily into artificial intelligence agents.
“AI agents are first-class shoppers on ThredUp,” Reinhart said. “Our bet is that agents can sift through millions of one-of-a-kind items far more efficiently than any person, and our managed supply gives them clean, structured data to work with.”
In October, Reinhart discussed the expenses associated with scaling the company’s AI use at the RetailClub AI Festival conference.
“I was both surprised and didn’t care at all,” Reinhart said.
