ThredUp Stock Climbs Thanks to Tariff Immunity
Secondhand clothing retailer ThredUp saw its stock climb Monday (April 28) ahead of its next earnings report.
As Seeking Alpha reports, analysts note that the consignment company ended the last quarter on a high note, while facing less exposure to tariffs.
“Entering FY25, the company was seeing encouraging momentum, highlighted by a positive inflection in active buyers in Q1 to date, solid customer retention, and a growing supply of premium apparel,” said analyst Dana Telsey, per the report.
“Reflecting this positive setup, management issued mid-to-high single-digit revenue growth guidance for both Q1 and the full year,” Telsey added. “Topline gains are expected to be driven by new buyer acquisition, ongoing investments in AI to improve the shopping experience and demand-generation initiatives, resulting in flat YoY adjusted EBITDA margins.”
The report added that Telsey Advisory Group sees the reinvestments by ThredUp as healthy, especially after it exited its international operations and focused on a more streamlined model. ThredUp’s proprietary platform, logistics infrastructure and curated experience all give the retailer a distinct edge in an otherwise fragmented market, the report added.
As noted here earlier this month, ThredUp’s shares had — as of April 20 — risen 31% while the S&P retail select index declined by 7%.
A report by the Financial Times on this phenomenon argued that secondhand sellers can attract bargain-hunting shoppers, appeal to consumers who wish to sell items for extra cash, sell merchandise that is immune from the tariffs and increase prices because sellers of new imported goods will have to do the same.
In addition, this sector typically does well during economic downturns and has been drawing in younger consumers.
Still, some analysts warn secondhand sellers could face inventory challenges if consumers hold on to their existing items, and could envision consumers purchasing fewer goods of any kind due to economic uncertainty.
ThredUp said in March, before the tariffs were announced, that it projected revenue in the range of $67.5 million to $69.5 million in the first quarter and between $270 million and $280 million for the year, PYMNTS reported.
“Given the uncertain consumer environment and the impact tariffs might have, secondhand could become an attractive option,” ThredUp CEO and Co-founder James Reinhart said on an earnings call.
ThredUp is expected to release its next earnings results May 5.
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