Q2 2024 ThredUp Inc Earnings Call Transcript
Key Points
- ThredUp Inc (TDUP) achieved a 300 basis point increase in consolidated gross margin year-over-year.
- The US business posted a gross margin of 78.8%, which is 240 basis points higher than last year.
- ThredUp Inc (TDUP) launched new AI shopping products, including visual search and style chat, enhancing the customer shopping experience.
- The company saw an all-time high in orders and revenue per buyer in Q2, with more than $208 per active buyer in the US.
- ThredUp Inc (TDUP) plans to exit the European market, which is expected to immediately increase gross margins, improve gross profit growth, and accelerate the path to free cash flow.
- The European business struggled significantly, contracting 18% and posting a negative 23% adjusted EBITDA.
- The company experimented with new customer acquisition and promotions in the US, which did not perform as expected, resulting in acquiring 90,000 fewer customers.
- The challenging consumer environment, compounded by inflation, negatively impacted ThredUp Inc (TDUP)'s core customers.
- The company had to be more promotional in Q2, which negatively impacted unit economics and pulled forward lower quality revenue into June.
- ThredUp Inc (TDUP) expects the consumer environment to remain challenging, with potential worsening due to economic factors and the upcoming US election cycle.
Good day, everyone, and welcome to today's ThredUp Q2 2024 earnings call. (Operator Instructions)
Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Lauren Frasch, Head of Investor Relations.
Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp's second-quarter 2024 financial results. With me are James Reinhart, ThredUp CEO and Co-Founder, and Sean Sobers, CFO.
We posted our press release and supplemental financial information on our Investor Relations website at ir.thredup.com. This call is being webcast on our website, and a replay of this call will be available on the site shortly.
Before we begin, I'd like to remind you that we will make forward-looking statements during the course of this call, including, but not limited to, statements regarding guidance for the third and fourth fiscal quarters and full year of 2024.
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