ThredUp Is ‘Cautious’ on State of the Consumer

The resale platform ThredUp reported its strongest year-over-year growth in nearly four years, buoyed by record new customer acquisition and higher engagement from existing buyers.

But consumers are cautious moving into the holidays, according to commentary on the conference call after the market closed on Monday (Nov. 3).

Company materials indicated that revenue rose 33.6% to $82.2 million for the quarter ended Sept. 30.

CEO James Reinhart credited the results to what he called “exceptional customer growth and orders in our business,” with new buyer acquisition up 54% year over year and active buyers up 26%. Orders climbed 37% from a year earlier. He added that October was “the best month for new customer acquisition in our history,” up 81% year over year.

Balancing Growth and Caution

Despite the strong quarter, Reinhart said the company remains “cautious on the state of the broader American consumer” and expects price sensitivity to remain a defining feature of holiday spending.

“Price and value will be of utmost importance this holiday season,” he said, noting that the shift in spending patterns could favor secondhand retail, even as consumers pull back in other categories.

CFO Sean Sobers said the guidance for the fourth quarter reflects both the positive trends in the business and the seasonal slowdown that typically follows October’s strength. He guided revenue growth in the current quarter to 14% year over year at the midpoint.

Shares slipped 3% Monday in after-hours trading.

Sobers added that while the company remains cautious heading into the holidays, it plans to continue reinvesting in marketing and inbound processing.

Rebrand, AI Tools

Reinhart took note of the September launch of a rebranded experience on ThredUp. “The unifying theme is ‘fashion meet forever,’ which speaks to our ambitions of building a more emotional long-term relationship with our customers,” he said.

The rebrand coincided with the debut of two AI-driven features: the Daily Edit, which refreshes each user’s curated selection of 100 items daily, and the Trend Report, which combines internal data with social trends to generate real-time style suggestions. Reinhart said both tools have boosted conversion rates and engagement.

Asked about the performance of the company’s new personalization and premium supply offerings, Reinhart said, “Premium has really grown nicely this year from really zero to north of 20%. I think there’s more room to run on it.”

P2P and Resale-as-a-Service

Beyond the marketplace, ThredUp continues to diversify supply channels. Reinhart said the company’s Resale-as-a-Service (RAS) model, which powers branded resale programs, added New York & Co. and CodeAvoxie during the quarter.

“The pipeline feels very good for some of these brands to either sign for the first time or switch over,” he said.

He also previewed ThredUp’s next growth vector: a peer-to-peer marketplace now in closed beta. The platform allows users to sell directly to one another, while ThredUp vets sellers and manages returns.

By leveraging ThredUp’s logistics network, he said, “we can now offer this as an option to buyers, given our power to resell returned items in our marketplace.” Sellers, he added, will be able to choose between direct selling and the company’s traditional clean-out kit model.

He argued that existing peer-to-peer platforms have “lost the plot a little,” creating an opening for ThredUp to introduce more curation and trust. “I think that’s the path we’re on.”

He added that ThredUp’s continued investment in AI and first-party data will strengthen its competitive position in the evolving resale landscape. “In resale, supply is the name of the game,” Reinhart said. “I think we’re continuing to distance ourselves from others and having the best supply out there.”