ThredUp announced in its Q2 results it is evaluating strategic alternatives for its European business and intends to leave the market altogether.
The company is also evaluating strategic alternatives for its Remix business — a resale platform it acquired in 2021, which in 2023 generated net revenue of $63.5m and gross margin of 24.2%.
ThredUp's Q2 results for the period ending 30 June 2024 showed its Europe revenue of $13m was down 18% year-over-year. Its gross profit of $3.6m was down by a quarter (25%) year-over-year and its gross margin was 27.3% as compared to 29.8% for the second quarter 2023.
ThredUp CEO and co-founder James Reinhart explains: “While this quarter presented challenges in both the US and Europe, we have emerged with a renewed focus.
“Looking ahead, we are intent on enhancing our product experience through gen-AI, improving our unit economics and driving process improvements throughout our operations. As we become a US only business again, we expect to grow faster, with structurally higher gross margins, positive adjusted EBITDA, and free cash flow."
The company's Q2 revenue overall was $79.8m, representing a decrease of 4% year-over-year, it had a Q2 gross margin of 70.4% and an increase in gross profit of 1% year-over-year.
ThredUp reported a net loss overall of $14m or a negative 17.5% of revenue, for the second quarter, compared to a net loss of $18.8m, or a negative 22.7% of revenue for Q2 2023.
It had an adjusted EBITDA loss of $1.5m, or a negative 1.9% of revenue for the period, compared to an adjusted EBITDA loss of $5m, or a negative 6.1% of revenue for the same timeframe last year.
ThredUp's FY 2024 guidance is based on consolidated and US only operations and suggests consolidated revenue will be in the range of $298m to $302m with US revenue in the range of $247m to $251m.
It also expects a consolidated gross margin in the range of 69.6% to 70.6% and US gross margin in the range of 78.5% to 79.5%. Plus a consolidated adjusted EBITDA margin in the range of -3.3% to -2.3% and US adjusted EBITDA margin in the range of 1.0% to 2.0%.
The company says a recent business highlight was launching a new suite of AI-enabled search features to personalise the shopping experience, including improved search, image search, and style chat. These features are designed to enable ThredUp customers to easily discover and shop the company inventory of over 4m single-SKU items. These algorithms continuously learn and improve, providing customers with relevant and personalised results.
The company's third annual Impact Report for 2023 revealed it has extended the life cycle of 200m garments so far as part of its mission to create a circular economy.
