ThredUp Posts Strong Q4 Preliminary Results: What's More to Know?

Core Insights - ThredUp Inc. has reported preliminary fourth-quarter 2024 results that exceeded previous guidance, indicating a return to solid growth in its core business [1][7]. Financial Performance - Total revenues for the fourth quarter are projected to be between $66.7 million and $67.2 million, reflecting a 9% year-over-year increase and surpassing earlier predictions of $58 million to $60 million [7]. - Gross margin is expected to be in the range of 80.2% to 80.4%, an improvement from the previously forecasted range of 78.5% to 79.5% [7]. - Adjusted EBITDA margin is anticipated to be between 6.4% and 6.9%, significantly outperforming the earlier projection of flat to 2% [8]. - The net loss as a percentage of revenues is expected to be in the range of 12% to 12.6% [8]. - Combined revenues, including Remix's performance until its divestiture, are expected to be between $74.5 million and $75 million, representing an 8% year-over-year decline, but an improvement from the previously forecasted range of $67.2 million to $69.2 million [9]. Strategic Focus - The company has divested its European business to concentrate on the U.S. market, which has shown remarkable growth and efficiency [2]. - Management attributes the positive momentum to a strategic focus on the U.S. business and AI-driven improvements to the product experience [3]. - ThredUp plans to invest further in customer acquisition and retention, refine sourcing strategies, and enhance pricing algorithms to boost profitability [11]. - The company is expanding its AI-driven innovations, such as AI search and image recognition, to improve the second-hand shopping experience [12]. Market Performance - ThredUp's shares have increased by 49.7% in the past month, contrasting with a 5.6% decline in the industry [4].