The fashion resale platform is approaching the holiday season with lowered expectations amid stiff competition in an increasingly crowded sector.

Reinhart said near-term demand was being impacted by a heavily competitive environment and “macro challenges remain for our most price-sensitive budget shoppers.” Even so, he touted ThredUp’s expanded premium mix and said the company was “acquiring a more premium customer at higher levels than ever and deprioritizing lower LTV budget customers.”

He also expressed caution about the upcoming holiday season and said that “deeper promotions may be required to maintain engagement.”

“We think retailers are going to be aggressive based on what we saw in October around Q4, they’re flushed with tariff refunds,” Reinhart said, adding that combined with an exceptionally competitive environment, “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 four.”

Another big problem for ThredUp, according to Reinhart, is the “frankly shocking” amount of money peer-to-peer fashion resale competitors are spending on promotions.

“As expected, these dollars have eroded some buyer share, especially among our price-sensitive customers,” Reinhart said. “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.”

William Blair analysts led by Dylan Carden said in a note that although ThredUp’s leadership touted some of its quarterly successes, the business's underlying fundamentals were unsteady.

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