ThredUp (TDUP) Cuộc họp công bố kết quả kinh doanh quý 3 năm 2026: GMV kỷ lục, hạ định hướng quý 4

Điểm nhấn chính

• ThredUp đã báo cáo doanh thu quý 3/2026 đạt 88,2 triệu USD, tăng 7,4% so với cùng kỳ năm trước. GMV tăng 20% khi số lượng sản phẩm bán ra tăng 17%, cả hai chỉ số đều đạt mức kỷ lục theo quý.
• Biên lợi nhuận gộp giảm 120 điểm cơ bản xuống 78,2%, phản ánh các chương trình khuyến mại mạnh mẽ hơn. EBITDA điều chỉnh đạt 3,5 triệu USD, tương đương 4,0% doanh thu.
• Số người mua đang hoạt động trong 12 tháng qua tăng 16% lên mức kỷ lục 1,8 triệu người, trong khi số lượng đơn hàng theo quý tăng 17% lên 1,9 triệu đơn. Tỷ lệ chuyển đổi cải thiện 13%, và tỷ lệ giữ chân khách hàng từ đơn thứ nhất sang đơn thứ hai tăng 12%.
• Mức giá chi trả cho mỗi sản phẩm giảm từ 21 USD trước tháng 6 xuống còn 18 USD và duy trì ở mức này, bất chấp tỷ trọng hàng cao cấp gia tăng. Ban lãnh đạo cho biết sự sụt giảm này xuất phát từ chính sách giá và các chương trình khuyến mại nhằm chuyển đổi nhóm khách hàng nhạy cảm về giá.
• Ban lãnh đạo đã hạ dự báo quý 4 xuống mức doanh thu từ 77 triệu USD đến 79 triệu USD và biên EBITDA điều chỉnh từ âm 4% đến âm 2%, viện dẫn áp lực tiêu dùng, cạnh tranh gay gắt cùng môi trường mua sắm mùa lễ hội có mức độ khuyến mại cao.
• Kế hoạch sơ bộ năm 2027 của ThredUp đặt giả định điều kiện kinh tế vĩ mô và cạnh tranh không cải thiện, với doanh thu tăng trưởng ở mức một con số thấp, biên EBITDA điều chỉnh đi ngang so với năm 2026 và tiếp tục tạo ra dòng tiền.

Dữ liệu tài chính quan trọng

Hiệu quả kinh doanh và vận hành

Tốc độ thu hút và mức độ tương tác của khách hàng vẫn duy trì mạnh mẽ. ThredUp ghi nhận các mức kỷ lục mới về số người mua mới, người mua đang hoạt động, lượng đơn hàng và phiên truy cập. Chi tiêu quảng cáo trên Meta tăng 76% và Pinterest tăng 39% so với cùng kỳ năm trước. Trên Meta, lượng khách hàng mới tăng 132% trong khi chi phí thu hút khách hàng giảm 24%.

Nguồn cung cũng được mở rộng. Lượng yêu cầu nhận Túi thanh lý (Clean Out Kit) tăng 30% tính từ đầu năm đến hết quý 3, và tỷ trọng các bộ sản phẩm cao cấp duy trì ở mức khoảng 15% tổng nguồn cung. Vuori, Farm Rio, Tuckernuck và Cotopaxi đều đạt mức tăng trưởng hơn 50% trên nền tảng.

Công ty đã ra mắt bảng tin khám phá Lean Back thế hệ tiếp theo trên nền tảng web và web di động vào tháng 10. Tính năng Khớp chính xác (Exact Match) đã khả dụng trên các danh mục chủ lực, với hơn 20% mặt hàng niêm yết được khớp thành công. Ban lãnh đạo cho biết các công cụ này đang mang lại những cải thiện bước đầu về tương tác và tỷ lệ chuyển đổi.

ThredUp đang đẩy mạnh hoạt động bán hàng qua livestream sau khi triển khai trên Whatnot vào cuối tháng 9. Ban lãnh đạo cho biết 75% khách hàng của ThredUp Live trên Whatnot chưa từng mua hàng từ ThredUp trước đây, trong khi giá bán trung vị của các mặt hàng có cùng thời gian lưu hành cao hơn 52% so với trên sàn giao dịch cốt lõi. Công ty dự kiến sẽ có hàng chục người dẫn chương trình và tối đa 10 studio phát sóng lên tới 18 giờ mỗi ngày trên nhiều nền tảng vào cuối năm.

Bán hàng trực tiếp đạt tốc độ tăng trưởng GMV ước tính theo năm khoảng 10 triệu USD, với hơn 200.000 sản phẩm được niêm yết và mức giá niêm yết bình quân cao hơn gấp đôi so với sàn cốt lõi. ThredUp cũng đã đưa vào hoạt động hàng chục gian hàng Lean Back Creator Commerce đầu tiên và đặt mục tiêu đạt hơn 100 gian hàng vào cuối năm.

Dự báo của ban lãnh đạo

Tại điểm giữa của khoảng dự báo doanh thu quý 4, ban lãnh đạo dự kiến mức giảm 2% so với cùng kỳ năm trước. Dự báo doanh thu cả năm hàm ý mức tăng trưởng 9% tại điểm giữa.

Đối với năm 2027, định hướng kế hoạch sơ bộ của công ty đặt mục tiêu doanh thu tăng trưởng ở mức một con số thấp, biên EBITDA điều chỉnh đi ngang so với năm 2026 và tiếp tục tạo ra dòng tiền. Ban lãnh đạo cho biết kế hoạch này dựa trên giả định các điều kiện kinh tế vĩ mô và cạnh tranh giữ nguyên, đồng thời chỉ bao gồm đóng góp khiêm tốn từ các sáng kiến mới.

Rủi ro và các yếu tố cần theo dõi

ThredUp dự kiến sẽ tiếp tục chịu áp lực từ nhóm khách hàng nhạy cảm về giá. Ban lãnh đạo cho biết tác động này diễn ra rõ nét nhất ở nhóm khách hàng bình dân, trong khi khách hàng có thu nhập cao hơn lại cho thấy tỷ lệ mua lặp lại và chi tiêu mạnh mẽ hơn.

Công ty ước tính các đối thủ cạnh tranh trong mảng bán lẻ ngang hàng (P2P) có thể chi tới 0,5 tỷ USD cho tiếp thị trong nửa cuối năm 2026, chưa bao gồm các khoản trợ giá vận chuyển. Ban lãnh đạo ước tính áp lực doanh thu quý 4 đối với ThredUp do tác động này là khoảng 5 triệu USD và dự báo chi tiêu cạnh tranh ở mức cao sẽ còn tiếp diễn trong một thời gian nữa.

Các chương trình khuyến mại mùa lễ hội là một mối lo ngại khác. Ban lãnh đạo dự kiến các nhà bán lẻ quy mô lớn hơn sẽ tiếp tục tung khuyến mại mạnh mẽ và cho rằng ThredUp có thể cần giảm giá sâu hơn để duy trì mức độ tương tác. Lượng hàng tồn kho cũ đang chịu áp lực lớn nhất, với các mặt hàng trước đây bán ở mức 20 USD nay phải thanh lý ở mức khoảng 17 đến 18 USD sau 45 đến 90 ngày.

Ban lãnh đạo cũng lưu ý rằng việc bổ sung thêm nguồn cung không nhất thiết sẽ tạo ra mức tăng trưởng nhu cầu tương ứng. Ưu tiên trong ngắn hạn là mở rộng tệp người mua trước khi đẩy mạnh tăng trưởng nguồn cung một cách quyết liệt hơn.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

• Lý do hạ dự báo quý 4: Ban lãnh đạo viện dẫn quy mô chi tiêu của các đối thủ cạnh tranh, nhu cầu tháng 10 yếu hơn dự kiến và triển vọng các chương trình khuyến mại mùa lễ hội diễn ra rầm rộ hơn. Quý 4 theo truyền thống cũng là quý có kết quả kinh doanh yếu nhất của ThredUp.
• Áp lực cạnh tranh: Công ty cho biết một phần thị phần khách hàng bình dân đang chuyển dịch sang các sản phẩm đồ phong cách cổ điển (vintage) và nền tảng Depop. Tuy nhiên, ban lãnh đạo ghi nhận không có tác động nào đến nguồn cung từ người bán hay chất lượng nguồn cung.
• Hiệu quả kinh tế của mô hình bán hàng qua livestream: ThredUp cho biết việc giới thiệu trực tiếp giúp duy trì mức giá cao hơn nhờ việc người dẫn có thể trực tiếp minh họa và trao đổi về sản phẩm. Khách hàng cũng tự trả phí vận chuyển, tỷ lệ hoàn trả hàng thấp hơn và không có mã giảm giá trong trải nghiệm bán hàng qua livestream mặc định.
• Các giả định cho năm 2027: Triển vọng sơ bộ dựa trên giả định rằng các điều kiện kinh tế vĩ mô và cạnh tranh hiện tại sẽ không cải thiện cũng như không xấu đi. Các sáng kiến mới như bán lẻ qua livestream, thương mại đại lý AI (agentic commerce) và thương mại nhà sáng tạo nội dung (creator commerce) dự kiến sẽ chưa có đóng góp đáng kể trong giai đoạn này.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good afternoon, and welcome, everyone, to the ThredUp Third Quarter 2026 Earnings Call. [Operator Instructions]

Today's conference is being recorded. At this time, I would like to turn the conference over to Lauren Frasch, Head of Investor Relations. Please go ahead.

Lauren Frasch

Good afternoon, and thank you for joining us on today's conference call to discuss ThredUp's financial results. With me are James Reinhart, ThredUp's 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 IR 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. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Actual results could differ materially. Please refer to our earnings release and supplemental financial information and our Forms 10-K and 10-Q for more information on these expectations, assumptions and related risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and the supplemental financial information, which are distributed and available to the public through our Investor Relations website located at ir.thredup.com. Now I'd like to turn the call over to James. James?

James Reinhart

Good afternoon, everyone. I'm James Reinhart, CEO and Co-Founder of ThredUp. Thank you for joining our third quarter 2026 earnings call. Today, I'll cover our Q3 results, ongoing innovation across the product experience and what we're seeing in the broader demand environment. Then Sean will take you through the financials and our outlook. We'll close with a question-and-answer session.

First, let me start with our Q3 results. Revenue in the third quarter was $88.2 million, up 7% year-over-year and up 20% on a two-year average basis. Gross margin was 78.2%. Adjusted EBITDA was $3.5 million or 4% of revenue, all were in line with our guidance. Underneath the financial results, customers bought more from us in Q3 than ever. We shipped more items and drove more GMV in Q3 than any quarter in our history.

GMV grew 20% year-over-year by selling 17% more items. That growth rate is nearly 3x our revenue growth, speaking to the considerable value we're delivering to buyers and an important part of our current strategy to maintain steady buyer engagement. Active buyers on a trailing 12-month basis grew 16% to $1.8 million and orders grew 17%. However, as we look ahead, the key governor on our growth is how much of our top line sales we can flow through our unit economics given the demand environment.

To help bridge record sales in Q3 with lower net revenue, we want to provide some incremental disclosure. From Q4 2024 through Q2 2026, we delivered steady unit economic growth with price paid per item rising from $19 to $21. Beginning in June, price paid retreated to $18 per item and has remained there since, even as our premium mix expanded. That reflects the promotions and pricing actions we took to convert price-sensitive shoppers in a more competitive environment.

Zooming out, we believe that two things are true at the same time. Over the short term, we see some willingness to pay headwinds and our guidance reflects that. I do not want to downplay the challenging operating environment, and our team is laser-focused on managing through this volatility. But we also see substantial upside ahead, not just from the potential of recovering unit economics, but from the investments we are choosing to make right now instead of flowing dollars to the near-term bottom line.

We are optimistic that when we look back at this time, we will see that the foundational seeds for our future growth were being planted right here in 2026. In terms of how the business is executing, I would like to start with what's continuing to work for us. New customer acquisition and engagement remain robust.

Q3 was another record for new buyers acquired, active buyers, orders and sessions. Customer acquisition costs remain attractive as we continue to push into higher-quality channels with Meta spend up 76% and Pinterest up 39% year-over-year in Q3. We're acquiring a more premium customer at higher levels than ever and deprioritizing lower LTV budget customers.

Our product experience keeps getting better, too. Conversion rate is up 13% year-over-year and early customer retention, which we think about as first to second order is up 12% year-over-year.

We've accomplished this in part by ensuring great deals, but also by improving the browsing experience. In October, after almost a year of iteration, we launched the next generation of our Lean Back Discovery experience to users on web and mobile web. This is a personalized, infinitely scrollable feed that replaces our traditional carousels.

Think TikTok style real-time personalization while shopping the long tail of secondhand products. We think it could be a major breakthrough as it rolls out to mobile apps in advance of the peak holiday season.

On the other side of the marketplace, supply has also never been stronger. Clean Out Kits requests were up 30% year-to-date through Q3, and we've welcomed a record number of sellers so far this year. And it isn't just volume. Premium continues to become a bigger share of bags processed, leading to brands like Vuori, Farm Rio, Tuckernuck and Cotopaxi, each growing more than 50% year-over-year on our platform.

Overall, our premium cleanout kits continue to grow steadily as a portion of our mix and remain in the mid-teens as a percentage of our overall supply. With more premium supply coming online, we are constantly probing to push our unit economics higher and return them to our pre-June 2026 levels, and this can provide significant upside to the business as we look to sell tens of millions of items in 2027.

Now I'd like to comment on near-term demand. In my view, two things are at play.

First, macro challenges remain for our most price-sensitive budget shoppers. This is consistent with what we saw last quarter. But given more recent news that many larger retailers are flushed with tariff refunds, we think the holiday period may be more competitive than we anticipated and that deeper promotions may be required to maintain engagement.

Second, peer-to-peer fashion resale competition is growing rapidly. It shows up as a massive unprecedented influx of competitive marketing spend and order subsidies. We now estimate this could be as much as $0.5 billion in the second half of this year alone, plus shipping subsidies to support GMV growth. As expected, these dollars have eroded some buyer share, especially among our price-sensitive customers.

Fortunately, we have not observed any impact on our sellers. While we take this pressure seriously, we are taking the long-term view. Interest in secondhand is accelerating and other companies are paying for it. By our estimates, more money will be spent in the U.S. this year, encouraging people to buy and sell secondhand than we have spent in our lifetime. At the end of the day, we believe that three things are going to be true in the next year or two.

The demand environment will eventually improve. Our category is going to be bigger than we originally thought and our differentiated unique product offering will resonate with many more buyers and sellers. Of course, we need to execute at a high level in this environment, and we are iterating around these challenges with specific tactics.

First, differentiating our supply value proposition. As more people look to sell secondhand, we are capturing that awareness by emphasizing our premium service and that clear convenience advantage. Our cleanup model, where we do all the work for the seller stands clear apart from a crowded field of undifferentiated peer-to-peer companies. Second, accelerating the shift in our buyer acquisition and retention mix. We continue to move spend out of Google and into Meta and Pinterest, where lifetime values are higher and acquisition costs are stable.

In Q3, Meta and Pinterest doubled their share of new customers versus a year ago. On Meta, new customers grew 132%, while CAC fell 24%. Third, modernizing and improving the product experience. With millions of unique items, helping new to secondhand customers find the right one quickly drives conversion and retention.

Exact Match is live across our key categories with over 20% of listed items now matched, so customers find their size, quality or price faster. Lean Back Discovery is already paying dividends here with early improvements in engagement and conversion. Collectively, these moves help us build a more durable competitive advantage rather than simply venting growth.

Marketing and order subsidies only get you so far. We believe that a best-in-class supply chain, smarter acquisition and a better product experience are what win customers over time, and they're how we stay clearly differentiated even when the market feels noisy today. While we play defense and iterate on our market positioning, we are also playing offense, investing in multiple areas we believe will define resale in 2027 and beyond. Each runs on assets we spent more than a decade building. We own the product and the resale infrastructure, and that lets us do things others can't easily replicate.

First up is live selling. We are all in on live selling and broadcasting directly from studios within our distribution centers. Our goal is to become the dominant enterprise reseller of secondhand live. The live selling industry in the U.S. is growing rapidly, 4x faster than the resale industry according to eMarketer. In late September, we launched our first live shows on whatnot. By year-end, we expect to have dozens of hosts up to 10 studios streaming up to 18 hours a day across multiple live selling platforms. A few early data points have increased our ambition.

First, 75% of those customers who shopped ThredUp Live on whatnot have never purchased on ThredUp.

Second, comparing similar aged items sold between our core marketplace and whatnot, the median live selling ASP runs 52% higher on whatnot. Also, buyers pay for shipping. There are fewer returns and items can be fulfilled efficiently through our distribution infrastructure. All of this leads to superior unit economics. We are hyperscaling into this market with significant investment of time and attention in Q4.

Second, Agentic commerce. Here, we have taken an assertive posture. AI agents are first-class shoppers on ThredUp. Our bet is that agents can sift through millions of one-of-a-kind items far more efficiently than any person, and our managed supply gives them clean, structured data to work with. That could open ThredUp to a much larger part of our addressable market, shoppers who don't have the time or attention for the resale treasure hunt.

We're opening our catalog to agents on the AI platforms customers already use and building the secure access layer that lets them act on a customer's behalf. We anticipate this will be a growing opportunity in 2027 and beyond.

Third, creator commerce for resale. The same styling, exact match and similar search technology that powers our browsing experience is now being leveraged for creators. We are calling this Lean Back Creator Commerce. It lets any influencer or creator launch a secondhand affiliate storefront built automatically from their style profile, social feeds and our inventory. It's a set it and forget it program that could scale to thousands of creators, helping them earn passive income while we deliver compelling secondhand content to their audience. Our first dozen creators are live now with a target of more than 100 by year-end.

Fourth, direct selling. Our direct selling offering, complementing our cleanout program is on a roughly $10 million GMV run rate, having launched widely in June. There are now more than 200,000 high-quality listings available with average listing prices more than double our core marketplace. In late August, we tempered growth to refine the shipping, cart and checkout experience and make sure that it complements our core business. We remain ambitious with this channel, and we will be again stepping on the gas pedal as we head into the holiday selling season. Our infrastructure provides valuable differentiation in the form of returns management, trust and authentication and customer service. The goal remains gradual supply consolidation, Clean Out customers who sell some items elsewhere can now do all of it on ThredUp.

Over time, we can become the one-stop shop for convenience, price maximization and trust. Stepping back, I want to close with an important reminder of the unique competitive advantages that we've built because I believe it's at times like these that they end up underappreciated.

First, our brand. We have a brand loved by millions of customers. We see this primarily in the cohort data of our most established customers who are shopping at ThredUp as much as ever. In Q3, 70% of our revenue came from customers who are purchasing their eighth or more order from ThredUp. 35% of the revenue came from those purchasing their 50th or more order. That is true customer stickiness.

Second, our supply chain. We built a name brand reverse logistics supply chain that is hard to replicate. Competitors have spent enormous sums this year, and our supply is stronger than ever. As is true for any scaled marketplace where supply is the ultimate constraint, a robust and resilient supply chain remains foundational to long-term success.

Third, our infrastructure. Our purpose-built infrastructure is a key differentiator, providing the technological and logistical edge that underpins our long-term prospects. It's why when new points of distribution become available, we can surge into them quickly. Live signed straight from our distribution centers is just the most recent example. We process single SKU apparel at industrial scale. advances in process and technology and AI keep extending that lead.

Fourth, our data and our ability to move fast. Our managed marketplace ingests millions of data points that sharpen acceptance, merchandising, photography, pricing and marketing. This year, we leveraged this data to maintain strong engagement and conversion among more customers than ever. That data is why we ship AI-driven products as fast as we do.

Exact Match, our real-time personalization engine and the Lean Back Discovery feed have all materially improved the customer experience this year. Speed is now one of our most durable advantages, and we believe it will help us win in any shift to agentic commerce for resale. While consumer demand ebbs and flows, we believe that true long-term value creation and defensibility reside in our infrastructure.

Our scaled reverse logistics and single SKU processing capabilities built over the last 15 years simply cannot be replicated with short-term capital. They are the moat of our managed marketplace and resale platform, and they become more valuable as secondhand goes mainstream, whether a buyer finds us on our site, in a live stream through an agent or through a partner.

In closing, having founded ThredUp more than 15 years ago, I've run this business through several cycles. Consumer health waxes and wanes, competitors enter and exit. Meanwhile, our supply advantage grows, our infrastructure and data moat widens and the network effects of our marketplace compound. Each time, ThredUp has come out stronger and more differentiated. I believe this time will be no different, especially as the category is now growing faster than ever.

Our guidance tells you about the dynamics at play in the next quarter. But our unique defensible assets and culture of innovation tell you about the next 10 years, and we remain bullish on that future.

Now I'll turn it over to Sean.

Sean Sobers

Thanks, James. I'll begin with an overview of our results and follow up with guidance for the fourth quarter and full year of 2026. I will discuss non-GAAP results throughout my remarks.

For the third quarter of 2026, revenue totaled $88.2 million, an increase of 7.4% year-over-year. Our performance was primarily a result of growth in buyers and sessions, driven by new buyer acquisition and incremental promotional activity. We finished the quarter with a record 1.8 million active buyers for the trailing 12 months, up 16% over the same period last year, while we had 1.9 million orders in the third quarter, up 17% year-over-year.

For the third quarter of 2026, gross margin was 78.2%, a 120 basis point decrease versus the same quarter last year as we leaned into promotions. As James discussed earlier, we saw our customer become incrementally more selective in Q3, requiring additional discounts to convert and pressuring revenue per item. For the third quarter of 2026, GAAP net loss was $5.5 million compared to GAAP net loss of $4.2 million in the same quarter last year.

Adjusted EBITDA was $3.5 million or 4% of revenue for the third quarter of 2026, representing a 60 basis point decrease over the same quarter last year.

Turning to the balance sheet. We began the quarter with $57.4 million in cash and securities and ended the quarter with $57.6 million. We invested $2 million in CapEx and generated $200,000 in cash in Q3.

Turning to guidance. We are adjusting our Q4 outlook to reflect consumer headwinds, competitive pressure and the highly promotional holiday environment. As James discussed, our fundamentals remain strong with more buyers shopping with us more frequently and purchasing more items than ever before. However, willingness to pay has softened, and we expect to rely more heavily on promotions than originally planned, resulting in lower net revenue and pressure on our bottom line.

In the fourth quarter, we now expect revenue in the range of $77 million to $79 million, representing a 2% year-over-year decline at the midpoint and an 8% two-year average growth rate. Gross margin in the range of 76.5% to 77.5%; adjusted EBITDA in the range of a negative 4% to a negative 2% of revenue and basic weighted average shares outstanding of approximately 133 million shares.

For the full year of 2026, we now expect revenue in the range of $337.7 million to $339.7 million, reflecting 9% year-over-year growth at the midpoint and a 14% two-year average growth rate. Gross margin in the range of 78.5% to 78.7%, adjusted EBITDA in the range of 2.4% to 2.8% of revenue and basic weighted average shares outstanding of approximately 131 million shares.

Lastly, we continue to expect to be cash flow positive for the full year. Now I'd like to provide a few preliminary thoughts around 2027. We are operating in a unique and challenging consumer environment, and our 2027 planning process currently assumes this landscape remains unchanged. From where we stand today, our view of 2027 contemplates low single-digit revenue growth and flat adjusted EBITDA margins versus 2026 with continued cash generation.

We will provide a more detailed outlook on our Q4 earnings call in March. Importantly, we stand behind our long-term growth and margin targets. The fundamentals of our business are strong. Our consumer experience is the best it's ever been, and we continue to deliver significant value to our buyers. Our priorities are clear: execute at a high level, manage expenses thoughtfully and stay disciplined on share dilution. We remain confident that we will manage through this challenging time and resume progress towards our long-term goals.

James and I are now ready for your questions. Operator, please open the line.

Operator

[Operator Instructions]

We'll take our first question from Ike Boruchow at Wells Fargo.

Phần hỏi đáp

Irwin Boruchow

Two questions for me. I guess the first is, so it's the second guide down in as many quarters, understanding the macro is challenging and getting a little bit worse. Just on the 4Q guide down specifically, just what would you say is specifically the main driver there relative to 90 days ago? And then to that point, can you maybe talk about the exit rate on 3Q, just how much that kind of influenced your decision?

James Reinhart

Yes, it's James. Yes, I mean, I think the big change from last quarter -- I mean, obviously, we did not want to guide down twice in a row, right? So something materially changed, and that was the observability on the competitive environment. I think when we came into last quarter, we were seeing some of this end of July spend from competitors. But then we really started to see through Q3 kind of the magnitude of that. And so then as we got into Q4, October, I think consistent with what some others have said, was a little bit more challenging, I think, than we anticipated.

On top of that, we think retailers are going to be aggressive based on what we saw in October around Q4, they're flushed with tariff refunds. And so when you kind of put all of those together, Ike, it sets up for us being concerned about holiday. And ThredUp is not traditionally a strong holiday destination. It's always our weakest quarter of the 4. And so that's what's changed. But this competitive pressure, is just something we did not anticipate and the quantum of the spend is frankly shocking for reasons I can get into if you'd like, but that was really the driver.

Irwin Boruchow

Got it.

James Reinhart

Ahead I would say, yes, the exit rate on Q3, I mean, I think there was not a lot of signs where we were feeling momentum into Q4 towards the end of September. And then I think October was, as I said, softer than we expected. And so we just think the setup in holiday is challenging. And if you remember, Ike, last quarter, we were really an early call and an early indicator of what we thought others were going to talk about as being a challenging environment. And my guess is you're going to hear more of the same over the next few weeks. And we just get to be lucky enough to be the first to explain what we're seeing.

Irwin Boruchow

Got it. And then a follow-up for you or Sean. I would like to understand a little bit more how you came to your initial thoughts on 2027 and the plan you guys are laying out. And then if there's any shaping, maybe you could add to that as well.

Sean Sobers

Yes, I mean, I think from a 2027 perspective, we looked at what we knew through the end of October to kind of bake that in. So not expecting anything to get better from a macro or competitive standpoint and knowing that Q4 will likely be a little challenging, but we built out 2027 that way with no assumption around certainly getting better or getting worse.

And I think as James talked on the call, like all the initiatives that you talked about, I think we -- it's so early days. We have just little pieces of that in the 2027 outlook. So it's not material yet. That's what I would say, just to think about that if you're going there and all the things that James talked about.

Operator

We'll move next to Matt Koranda at ROTH Capital.

Matt Koranda

I guess just maybe on the Q4 lower sales outlook. Is there any way to isolate, I guess, how much of that downward revision comes from sort of the promotional pressure that you highlighted and I guess, the need to compete with retailers are going to be more promotional versus how much do you think you're just losing customers, whether longer term or temporarily to the peer-to-peer competitors that are subsidizing demand?

James Reinhart

Yes. Matt, yes, I mean, I think it's a peer-to-peer pressure, we estimate it's probably about $5 million in Q4. I think the macro and kind of the broader, I think, retail holiday environment is the rest. But Matt, just to like put that into context is these competitors in peer-to-peer are going to spend $0.5 billion that's our estimate in the second half of the year to erode effectively $5 million in wallet share. on the demand side and to have zero impact on our supply.

And so when we look at this, it seems -- again, we take it very seriously, and we're going to operate through it. But it seems wholly irrational around the spend. We have competed against businesses like this for more than a decade. There have been peer-to-peer businesses that have come and gone. None of them have really been able to drive durable unit economics and durable growth. I actually think, Matt, like it speaks to the challenges in the business model. If you indulge me for a minute, like I just think these business models don't work in fashion resale in the U.S.

You have low switching costs, you have low margin, the race to the bottom, and there are no network effects in these businesses because if there were companies wouldn't have to spend 50%, 60%, 70% of their revenue on marketing, right? The whole point of building a network effects business is that you actually can scale that. And what you see and what you've seen consistently over the past 10 years is the inability for that to actually scale. And the minute that these companies pull back on marketing, growth slows, churn ramps up.

And we built ThredUp very specifically to be different than these business models. And the idea was to invest in infrastructure, durable assets that actually can create like a sustainable advantage. And I'd like to point out that we've never spent any money acquiring sellers -- we've obviously invested in infrastructure. And despite this $0.5 billion in spend, it had 0 impact on our supply chain. And I think supply is the most important thing in this market. And so it's a long way of saying like I don't get it in Q4. We take it seriously. We're prepared for it to endure into 2027. But I'm pretty bullish that the category is growing faster and our differentiation will ultimately win the day even if it might be painful in the short term.

Matt Koranda

Okay. I appreciate that elaboration, James. That makes sense. I guess how should we think about how long the -- like the duration of spend could last from those competitors, I guess? Like I'm not asking you to speak for them, but maybe just in the way that you guys pick it apart internally there, like how do you think about how long the spending bliss could last and how you sort of endure that over, I guess, the next few quarters into '27?

James Reinhart

Yes. I mean our expectation is it's going to continue. I think we acknowledge that these are smart companies with smart leaders. But we've competed against smart leadership before, but like the laws of physics remain. You have to move goods from one house to another. And so when you're subsidizing shipping transactions and losing money on every order, like at some point, it catches up with you. And so my perspective is this will endure for some time.

Then eventually, there will be some rationalization in the market. I don't know if that will be in the next couple of quarters, Matt, or it will take a year. But we're certainly expecting to sort of iterate and operate our business around it. And I think all the initiatives that we spoke to are kind of like moving the theater of battle to an area where we can be more competitive. So we'll just continue to do that. And then I would say just like we also -- we expect the macro to be challenging. But maybe after the election results last night, things might improve, but we're certainly not counting on it in the '27 numbers.

Operator

We'll go next to Bobby Brooks at Northland Capital Markets.

Robert Brooks

I just want to dive a little bit deeper into the live shopping strategy. It's really interesting to hear you really kind of, I think hyperscaling into that was the word you used, James. But I was curious to hear a little bit more on how you select the products going in there? And is that changing as you expand the number of shows? I get that each session has like a different item type that focuses on like a different starting price point. But like how do you actually select the items that are going to go on the live stream?

James Reinhart

Bobby, yes, I am very, very bullish now on live selling because -- what's really interesting about that is this market opportunity is that you're seeing customers move into live selling at really astonishing rates. Just on whatnot, numbers out last month where you had 650,000 new customers joining every week.

So what it says to me, Bobby, is like this is a very big fast-growing category. When I think about how do you compete in this category, one of the hardest things to do is to actually have access to supply to scale into this market. And we have all of that. And so when I look at like our unique advantages in live selling is we've got tremendous product. We've got all the right data to how do you price it, merchandise it in a live selling format. And so it gives me a lot of excitement around the ability to scale.

You can do some simple math on posts and hours and revenue per hour and get pretty excited about where we can take this business. Then how we pick the product is, I think we've built technology on the back end, Bobby. So for example, when we want to launch a denim show, we've got 0.5 million pieces of denim coming in and out of our facility. And with a handful of clicks, we can assemble a denim show that has 200,000, 300,000, 500,000 pieces of denim that we can immediately drop into a live format. So I think it's, again, leveraging our infrastructure, the technology a bunch of the work we've done with Exact Match and similar search to really scale this very, very quickly. That's what we're going to do or that's what we've been doing over the last month. If you watch this space for us, you'll see us invest in it pretty significantly.

Robert Brooks

Yes. That's super helpful detail. And then just on -- it seems -- you gave some really insightful stats on just like the difference in buyer type, I think, and it was like 60% were new to ThredUp.

James Reinhart

75% new.

Robert Brooks

Yes. Okay. And are you seeing those new folks that are buying through your whatnots channel? Do they then go and check out the website? And have you seen like conversion rates there? Are you speaking to anything there? Just wanted to kind of hear more just on those trends.

James Reinhart

Yes. I mean two things on that. I mean one is, yes, these are all net new customers to ThredUp. And we're seeing some signs of customers understanding the brand coming back. So the answer is yes, we're seeing some of it. It's also a very effective way to just build the brand, tell stories, provide some texture to our distribution center. People love seeing our distribution centers. And so I think it actually helps build the brand on top of the customer acquisition piece, Bobby.

Then the other piece is that the unit economics are superior. And so in a live format, you're actually able to, in many instances, charge more than we would be able to charge in the core business, given our ability to merchandise and tell stories. I think there's really an opportunity here where it's a scalable channel, superior unit economics and customer acquisition leverage -- and I think that having that all be together is what makes me pretty excited for how we roll this out. But again, it is early, and we have to do all those things, and that will take some hard work and some solid execution.

Robert Brooks

For sure. And just last one for me, something that stuck out there in your comments there was you're actually seeing you're getting better pricing on items going through the whatnot channel than you might just listing it on the website because that's super surprising me because it's like when I think of some of the live selling and I'll check out, it's just like usually really like really good deals going on or like relatively like something where like the seller is like, I kind of wish I didn't sell it here because it went lower than what they were expecting. So is that the opposite for you guys? And basically, the reason you're able to do that is just all the data that you guys have and kind of how you're looking at what you're going back into the first -- your answer on the first question. I just want to make sure I'm hearing that right because that's really impressive. That's.

James Reinhart

Yes. What it is -- think about the reason why you can get higher prices on some items relative to the core marketplace is there's something about being able to see the product live. The host can talk about the handbag. They can talk about the denim. And so I think it more mimics what secondhand or resale might look like in a consignment store, whereas online, you can only do so much.

And so to me, I think it's a combination of being able to see the product. And then also the default experience for live selling is the customers pay for shipping. And so customers are paying for shipping themselves. once they buy one item, then they stick around to see what else they can bundle from that show. And so the live selling dynamics are attractive in that sense, right? There isn't a race to the bottom on shipping or subsidies. There are no coupon codes, right, Bobby. So those are the types of things that I think allow us to command a higher price on a lot of the items.

Operator

We'll take our next question from Jonna Kim at TD Cowen Securities.

Unknown Analyst

This is Gabriel Lagar on for Jonah. We have two. The first one is on promotions. As you lean into promotions, what are you seeing from those customers after the initial purchase in terms of repeat behavior or additional engagement? And then as a follow-up, you have mentioned that premium mix continues to expand. Can you talk a little bit more about what you're seeing from that premium customer base and whether there's any difference in behavior from your broader customer base?

James Reinhart

Gabriel, on the promotional piece, I think, generally speaking, it's not necessarily like a first promotion, second promotion type of dynamic. I would encourage you to think about it more broadly across the assortment. We have to be a little bit more promotional as items age. And so what we said on our last call is we've really tried to protect discounting on our fresher inventory.

But as the items get older, 45, 60, 90 days older, items that we used to be able to sell for $20 out the door are items now that we can only sell for $17 or $18. And so that, I think, is the pressure that we're seeing. And we're trying to be disciplined with our fresh inventory to not discount that. And so it is more on the aged assortment. Then on the second one, on the premium side or from our premium customers, yes, it's clear that our wealthier customers are doing much better. You can see that in the repeat rates, how much they're spending.

So yes, the pressure that we're seeing is more acute on that budget shopper. And I think that's going to continue for a little while. And I think what we're trying to do from an acquisition retention strategy as well as a seller mix strategy is move incrementally upmarket. And so we're doing that kind of across the product assortment, buyers and sellers.

Operator

We'll take our next question from Dylan Carden at William Blair.

Dylan Carden

I'm curious -- so people are spending -- you're having to discount your version of discount. Is there not some offset here in more dynamic search? You've been calling out kind of higher conversion for a couple of quarters and being able to flow more through and sell more units? Or are you limited by kind of what you can get into the system to be able to do that?

James Reinhart

Yes, we're selling more units than ever, but I think we've now hit a point where I think if we were to push unit volume even higher, I don't actually see -- and we've tested some of this, Dylan. I don't think there's a marginal benefit there. I think the demand curve for the existing buyer base willingness to pay, I think we've hit kind of a steady state. And so I think we don't see where if we were able to process 10% more items as an example, that all of a sudden that could translate in a perfectly elastic way into 10% more demand. We continue to kind of probe that. But I think right now, more broadly, we need to continue to build the buyer base before we ramp up supply even more aggressively.

Dylan Carden

And the level of visibility you have as to sort of which specific competitors are taking that $5 million. Is that something you have high confidence in? Or is that just sort of based on what you see the behavior? I think it's sort of a free shipping initiative. Is that kind of how you're pinpointing it? And I guess, what caused that change in behavior to the extent that you can speculate? And you were asked a duration question, I guess, maybe I'll ask it again.

James Reinhart

No. I mean, Dylan, we can look a little bit around where share is going. And we definitely see our budget shopper clearly going more to vintage. We see some share going to Depop, but I think it's slightly more elevated on a relative basis. But you can't ignore that when you are confronted with $0.5 billion in spend that there's going to be some collateral damage. Dylan, just to emphasize, that's more money than we spent in our entire existence on marketing.

So the idea that, that type of quantum would take out $5 million in share to me, like speaks to like why it doesn't feel like the most efficient way to grow a business. And so again, we take it seriously. But if I had told you people were going to spend $0.5 billion, I think you would have expected more erosion. And the final piece on that is -- and then for it to have zero impact on our supply and the quality of our supply, I think, again, speaks to just the quality of our brand, the differentiation of the business model and the stickiness of our customer base.

Sean Sobers

Dylan, the spend that these folks are making isn't really directed at ThredUp. It's essentially like we're caught in the crossfire a little collateral damage on that front.

Dylan Carden

You don't think it's personal.

Sean Sobers

It feels personal.

Dylan Carden

Ike asked, I'm curious, is the 2% decline at the midpoint, is that exacerbated because to your point, it is sort of your lowest volume quarter. And when you're kind of shaping out '27, again, I appreciate we're in a low visibility environment, would you expect to kind of remain in negative territory to start lapping some of this, I guess, is sort of the question.

James Reinhart

Yes. I think the acute nature of the spend, the current macro and just holiday pressure, Dylan, I think it's important because it is typically our slowest quarter. And when I think about our customer base, the budget shopper who has limited discretionary dollars around the holiday. I just think that, that -- and again, this is part of this is us trying to predict the future. We think there's going to be more pressure to shop holiday gifts to buy new for that discretionary dollar. So that might mean that there's fewer dollars to shop used because despite progress in people shopping used around the holiday, we talked about this in the holiday report, I still think it's not the norm. And so that's why we're sort of trying to provide as much clarity as we can around Q4 and what might happen.

Operator

And that concludes our Q&A session. I will now turn the conference back over to James Reinhart for closing remarks.

James Reinhart

Well, thank you, everyone, for joining us on the call. Thank you, especially to the ThredUP team for your hard work and specifically on continuing to innovate on behalf of the customer and invent the future of resale. And I'm excited to be on that journey with you and look forward to catching up with you on our next call. Thanks.

Operator

And this concludes today's conference call. Thank you for your participation. You may now disconnect.