ThredUp Exceeds Financial Expectations for Q4 Reporting Strong Growth and Improved Margins

Highlights:

ThredUp reports Q4 sales of $66.7 million to $67.2 million, beating its initial forecast of $58-$60 million.

Gross margin improved to 79.5%-80.4%, exceeding previous estimates.

Key background:

ThredUp, the leading online resale platform, has released its first financial results for the fourth quarter of 2024, exceeding its previous forecasts and showing strong growth. For the quarter ending December 31, 2024, the company reported net sales between $66.7 million and $67.2 million, which is a significant increase of 9% compared to the previous year. The figure surpasses the company’s previous forecast of $58 million to $60 million, marking a successful quarter for the online retailer.

In addition to exceeding sales expectations, ThredUp also posted impressive gains in key financial metrics. The company’s gross margin exceeded guidance, improving from 78.5% to between 79.5% and 80.4%. In addition, ThredUp’s adjusted EBITDA margin—another critical measure of profitability—increased to between 6.4% and 6.9%, well above the expected range of 1.0% to 2.0%.

James Reinhart, founder and CEO of ThredUp, attributed the company’s better-than-expected performance to several strategic initiatives. Notably, ThredUp’s increased focus on its US business and the development of its platform through AI-driven product development helped fuel growth. Strong financial results were also reinforced by increased operational efficiency, which contributed to the company’s investment in market infrastructure last year.

The results reflect ThredUp’s continued efforts to capitalize on the growing demand for sustainable fashion, as consumers increasingly seek alternatives to fast fashion. ThredUp’s ability to achieve significant scale growth, despite the challenges facing the broader retail sector, highlights the strength of its business model and its competitive position in the resale market. Looking ahead, ThredUp remains optimistic about its continued growth and will likely focus on strengthening its product offerings, particularly through technological innovation, to drive its momentum into 2025 and beyond.