ThredUP Surges as CEO Sees Tariffs Tilting Shoppers to Resale
Online resale marketplace ThredUP delivered better-than-expected first-quarter earnings Monday (May 5), reinforcing shoppers’ growing taste for secondhand clothing. And in a theme not sounded very often during this earnings season, CEO James Reinhart says the Trump administration’s proposed tariffs on Chinese imports could sharpen that advantage by making new clothes more expensive.
The Oakland, Calif., company reported revenue of $71.3 million for the three months ended March 31, a 10.5% jump from a year earlier and roughly 4% ahead of Wall Street estimates. Gross margin held near a hefty 79%, while an adjusted EBITDA profit of $3.8 million marked a swing from red ink a year ago. The net loss narrowed to $5.2 million, or $0.04 a share, and ThredUP lifted its full-year sales outlook to about $286 million at the midpoint, up from $275 million.
Reinhart told analysts that Washington’s move to tighten the “de minimis” exemption, which today lets low-value shipments from fast-fashion giants enter the U.S. duty-free, and talk of broader apparel tariffs could push up the cost of new clothing and curb production volumes abroad.
“If the price of new clothing goes up because of these tariffs, we believe this enhances the comparative value proposition for consumers who shop for used clothing on ThredUP,” he said.
Higher import duties could also level the playing field in marketing. Reinhart noted that big ad buyers such as Shein and Temu have already cut spending on Meta and Google, a shift that has eased the inflation in customer-acquisition costs ThredUP has battled in recent quarters. The company saw advertising costs “come down” in April, he said, though he expects digital-ad markets eventually to reprice.
Even before trade frictions surfaced in early April, ThredUP’s metrics were accelerating, the CEO added. Active buyers rose 6% to 1.37 million, and new-buyer additions spiked 95%, the best quarter in company history.
The marketplace’s artificial intelligence search tools, such as its new “Shop Similar” and visual-search features, are helping conversion rates climb and keeping the catalog of more than 4 million items “feel like shopping at your own personal boutique,” Reinhart said.
Investors cheered, sending ThredUP shares up nearly 16% in after-hours trading.
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