ThredUp Presents Q2 2024 Results: US Market Shows Positive Trends, but Europe Remains a Challenge

ThredUp, one of the leading companies in the field of second-hand online sales, recently presented its results for the second quarter of 2024. CEO and co-founder James Reinhart, along with CFO Sean Sobers, provided insights into the past months and the company's upcoming strategies. At the beginning of the conference call, Reinhart emphasized that the company continues to invest in artificial intelligence (AI) and marketplace innovations. Despite these advancements, the company faced significant challenges in the second quarter, particularly in the European market. Here, revenue fell by 18%, leading to a negative EBITDA of 23%. This development prompted the company to decide to withdraw from the European market and explore strategic alternatives. In contrast, the US market showed positive results. ThredUp's US business demonstrated growth projections in gross margins and EBITDA, despite the generally challenging economic conditions marked by inflation and shifting consumer behaviors. "Our US business development remains strong," said Reinhart. "We are seeing increasing gross margins and positive EBITDA." However, the adjustment in the customer acquisition process at the beginning of the year proved less successful. Despite extensive testing and restructuring, ThredUp was unable to achieve the expected customer growth, resulting in a loss of 90,000 potential customers. This change had to be reversed in early June, leading to immediate improvements. Regarding pricing and promotions, a flexible approach was evident over the past year. Since mid-2022, ThredUp has adjusted prices and promotional activities to stimulate customer demand, which resulted in mixed outcomes. A significant development for the company is the introduction of new AI-powered shopping features, now available to all customers. These include a visual search that aims to elevate the shopping experience to a new level. "This is the most significant product launch since ThredUp's founding over ten years ago," emphasized Reinhart. In the mid-term, ThredUp expects a strained consumer sentiment and therefore plans to make its investments cautiously and focus on optimizing US operations. Sobers added that ThredUp remains on a healthy financial footing despite the current challenges, and no significant declines in liquidity are expected. The outlook for the second half of 2024 remains challenging; however, ThredUp is confident in continuing to invest positively in the US market with a focused approach and enhancing profitability.