What happened?
Shares of online fashion resale marketplace ThredUp (NASDAQ: TDUP) fell 30.6% in the morning session after the company reported a wider net loss for the third quarter of 2026 and issued fourth-quarter revenue guidance that fell short of Wall Street expectations.
According to a company press release, ThredUp reported third-quarter revenue of $88.2 million alongside a gross margin of 78.2%, while adjusted EBITDA reached $3.5 million. However, the company's net loss widened to $5.5 million, deteriorating from a $4.2 million loss recorded in the prior-year period.
Management expected fourth-quarter revenue of $78 million at the midpoint, representing a 2.1% year-over-year decline. That guidance fell 9.6% below analysts' consensus estimates of $86.24 million, while the company's full-year revenue outlook also fell short of expectations.
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What is the market telling us
ThredUp’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. But moves this big are rare even for ThredUp and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 23.7% on the news that the company reported fourth-quarter results that beat on revenue but provided a first-quarter forecast that signaled slowing growth.
The company posted fourth-quarter revenue of $79.7 million, an 18.5% increase year-over-year that surpassed analyst projections, while its loss per share of $0.04 met expectations. However, investor focus shifted to the future outlook. ThredUp guided for first-quarter revenue of around $80 million. Although this figure was in line with consensus estimates, it implied a deceleration in year-over-year growth to 12.2%. This slowdown from the stronger growth rate reported for the fourth quarter appeared to be the main driver for the stock's sharp decline, overshadowing the otherwise solid results and a full-year revenue forecast that topped analysts' expectations.
ThredUp is down 75% since the beginning of the year, and at $1.53 per share, it is trading 82.5% below its 52-week high of $8.72 from December 2025. Investors who bought $1,000 worth of ThredUp’s shares 5 years ago would now be looking at only $78.13.
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