ThredUp Inc. TDUP reported fourth-quarter 2024 results, wherein the top line increased year over year and met the Zacks Consensus Estimate. However, the bottom line decreased year over year, missing the Consensus Estimate.
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In the fourth quarter, ThredUp completed the divestiture of 91% of its European business and Bulgarian subsidiary, Remix Global EAD ("Remix"), meeting the necessary criteria to report Remix as a discontinued operation.
In 2025, the company aims to leverage its multi-year investments in infrastructure and technology to accelerate growth while making steady progress toward long-term profitability targets.
ThredUp Inc. Price, Consensus and EPS Surprise
ThredUp Inc. price-consensus-eps-surprise-chart | ThredUp Inc. Quote
TDUP’s Quarterly Performance
ThredUp reported a loss of 19 cents per share, which lagged the Zacks Consensus Estimate of a loss of 7 cents. Also, the bottom line was wider than the loss of 14 cents in the year-ago quarter.
Revenues increased 9.5% year over year to $67.3 million. This strong performance was fueled by investments in marketing and inbound processing, AI enhancements to the customer experience, a renewed emphasis on its core business after the European divestiture, and pent-up demand following the election.
Consignment revenues grew 16.6% to $64.6 million from $55.4 million in the prior year, while Product revenues declined 55.8% to $2.7 million from $6 million. The Zacks Consensus Estimate of Consignment revenues was pegged at $51.3 million for the quarter under review.
Active buyers totaled 1.3 million, reflecting a 6% year-over-year decline, while order growth rebounded to 1.2 million, marking a 2% increase from the previous year.
Sneak Peek Into TDUP’s Margins & Costs
Gross profit marked a 14% year-over-year increase to $54.1 million. The gross margin was 80.4%, reflecting a 290-basis-point increase from the prior-year period, driven by a higher proportion of sales from consignment.
Operating expenses of $62.3 million increased 10.7% from $56.2 million in the prior-year quarter.
Adjusted EBITDA for the fourth quarter of 2024 was $5 million, doubling from $2.5 million in the prior year period. The adjusted EBITDA margin was 7.4%, reflecting an approximately 330-basis-point margin improvement year over year as the company leveraged its multi-year investments on higher revenues. The strong performance highlights how ThredUp's marketplace model drives significant margin flow-through on incremental revenues.
Sneak Peek Into TDUP’s Other Financials
The company ended the quarter with cash and cash equivalents of $31.9 million, and total stockholders’ equity of $56.3 million. Net cash provided by operating activities amounted to $4.9 million for the 52-week ended Dec. 31, 2024. Total CapEx for the quarter was $2.5 million, bringing the full-year total to $6.6 million. For 2025, the company expects the maintenance CapEx level to be $8 million.
TDUP Stock Past Three-Month Performance
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TDUP's 2025 Guidance
For the first quarter of 2025, ThredUp expects revenue of $67.5-$69.5 million, indicating a 6% year-over-year increase at the mid-point. The company anticipates a gross margin between 77% and 79%, and an adjusted EBITDA margin of 2.5-3.5%.
For 2025, ThredUp projects revenues between $270 million and $280 million, implying a 6% year-over-year increase at the mid-point. The company expects a gross margin between 77% and 79%, with the adjusted EBITDA margin remaining flat year over year at 3.3%.
This Zacks Rank #2 (Buy) company’s shares have gained 28.2% in the past three months compared with the industry’s growth of 1.2%.
Other Key Picks
Here, we have highlighted three other top-ranked stocks, namely BRF Brasil Foods SA BRFS, Post Holdings POST and Lancaster Colony Corporation LANC.
BRF is a Brazil-based food company focused on the production and sale of poultry, pork, beef cuts, milk, dairy products and processed food products. It presently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BRF's current financial-year earnings and sales indicates growth of 19.4% and 0.3%, respectively, from the year-ago reported figures. BRFS delivered a trailing four-quarter average earnings surprise of 9.6%.
Post Holdings is a consumer-packaged goods holding company involved in the production of center-of-the-store, refrigerated, foodservice, food ingredient and convenient nutrition product categories. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Post Holdings’ current fiscal-year earnings and sales indicates declines of 2.2% and 0.3%, respectively, from the year-ago reported figures. POST delivered a trailing four-quarter average earnings surprise of 22.3%.
Lancaster Colony is a manufacturer and marketer of specialty food products for the retail and foodservice markets. The company carries a Zacks Rank of 2 at present.
LANC delivered a trailing four-quarter earnings surprise of 1.7%, on average. The Zacks Consensus Estimate for Lancaster Colony’s current fiscal-year earnings and sales indicates growth of 6.1% and 3.1%, respectively, from the year-ago reported figures.
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