Nice. Military. I'm Dylan Cardin. I cover ThredUp for William Blair. There are disclosures on our website as it relates to compliance. We have James Reinhart, Sean Sobers, CEO, CFO respectively of the company. We're gonna do this as a fireside chat. Let's begin. Because this is a generalist audience, and I know you've been here several years, but, you know, every CEO should be able to pitch their business in two minutes. Just overview what you do, why you founded it, you know, value proposition, sort of start there.
Sure. Yeah. ThredUp, for those of you who do not know, it is a marketplace for secondhand clothing. We do just women's and kids. We make it easy for you to clean out your closet. We will send you this prepaid bag, or you can print a label online, fill it with all the stuff you are no longer wearing. We take it in one of our distribution centers around the country. We run four distribution centers around the country. We process all those goods. We put them online for you. We deliver this incredible secondhand online shopping experience, just like you are shopping anywhere else on the internet. When the items sell, we pay out the sellers. Whole business is on consignment. We repeat that millions and millions and millions of times every year.
What's being missed in that conversation is how you solve for the complexity of that supply chain.
Yeah. I think the way to think about the three pieces of competitive advantage in the business is we've built a marketplace that connects buyers and sellers. I think that's an important part. We've built an entirely new supply chain for secondhand. What we do in our distribution centers has really never been done before. It's like a reverse logistics business on steroids. If you think about all the clothing you're all wearing, there's no barcodes on it. The actual value of any garment in this room depends on what the supply and demand curve is of that garment at any one time.
We've built an incredible, proprietary data set to value that clothing. Data's hard, infrastructure's hard, marketplaces are hard.
I think what people tend to sometimes underappreciate about the story is we do all three of those hard things simultaneously all the time. I think that's what's built a real advantage for us, over the years.
The landscape itself, as far as sort of the decision tree that the consumer's making as to why they even shop you or even send you their goods, you're relatively sort of alone in that regard.
Yeah. I have this thesis that consumers are only getting lazier over time. Like, one of my, like, beliefs about the future is that we only get lazier. And so we make it really easy for people who historically, like, I'll ask, how many people in the room have sold something on eBay? Or like, okay. In the last, let me, let me constrain it. In the last year, have you sold, raise your hand if you've sold something on eBay? Okay. We got one. Okay.
Two, three maybe.
Two, three maybe. How many of you have given something away to Goodwill or charity in the last year? That is how I often describe, like, the TAM between, like, what we do on the sell, the supplier side versus the TAM of, say, a consumer selling their own stuff is we really compete with you all giving really great stuff away all the time. We emphasize that convenience part of the cleanup service.
Within the quadrant of the resale landscape, you know, you have a lot of people kind of fighting for the luxury space or the peer-to-peer space, right?
Yeah.
You are standalone in the online.
Yep.
I think that's another, yeah, right.
Yeah, yeah. So yeah, you have peer-to-peer, you know, you do all the work, Poshmark, eBay. We do all the work, you know, managed marketplace, ThredUp. and then mass or luxury, right? The RealReal does a wonderful job at the luxury end. There's a number of other players. we focus more on, the mass market or kind of bridge brand approach. And our point of view is that that market's six times the size of the luxury market and that it's much less competitive because of the moat that, that we've built. And so that's really our sweet spot.
All right. As far as the industry itself, resale's a very kind of complicated beast. I called you guys out a little bit in our GlobalData.
Yeah.
I called GlobalData out a little bit in their projections for the industry.
Yeah.
To be fair, they were kind of modeling that in the beginning of the pandemic. But, you know, where do you kind of see the size of the piece that you're addressing, how much of that is online at this point, and kind of what's that trajectory and what's like a reasonable industry growth rate, you think, from here?
Yeah. I think a reasonable industry growth rate from here is probably low double digits.
Okay.
I think that's reasonable. I think where the, and Neil Saunders at GlobalData would, if you were here, he would admit this, right? Cause we've been on panels together. He's like, what I'm trying to do is extrapolate what consumers say they're going to do in the future.
Right.
Because it's hard to size markets that are so nascent, right?
Yeah. Right.
What he's saying is when I interview young people, right, they go out and do panel data, 20-year-olds, 30-year-olds, and then teens, and they ask them, hey, what percent of the stuff are you shopping today is secondhand? You look at that in successive generations. The younger you get, the higher that percentage is. When you ask the same customers, and in the future, are you gonna purchase more or less secondhand? The younger you get, the higher that number is.
Right.
What Neil does is he says, if I just look at like a decade's set of cohorts and I extrapolate out what they say they're going to do, the numbers get really big.
Yeah.
He discounts them so that they seem reasonable to analysts like you.
I get the call out. I get the dynamic work.
Yeah.
Yeah.
The answer is I don't know how big it is, but I'm pretty sure that it's like not a fad.
Yeah.
and, you know, there's gonna be multiple winners.
Got it. Yeah. I mean, survey work, when you ask people, that's why I don't do survey work. When you ask consumers what they're about to do in the future.
Yeah. Yeah.
I mean, what are you gonna do tomorrow?
Yeah.
What are you gonna have for breakfast?
Yeah.
Okay. So let's talk about the business. You've seen some real nice inflection in the business, right? Can you kind of dissect why that started to happen all of a sudden, right? And then we can kind of sort of dig into the pieces of that.
Yeah. Sure. I think you have to separate a couple of things that are happening in the core US business. We can talk about those. Also, we've been this consolidated business with Europe for a long time. We bought a business in 2021, after we went public, a business called Remix. We were trying to do what we did in ThredUp in Europe. To make a very long story that requires more time, that business, like, did not work. As the market turned in 2022, it became very challenging to both operate the US business and invest in it the way we would like, as well as the European business.
The net effect of that is that as the US was making progress in generating some free cash flow, generating positive EBITDA, we could not reinvest those dollars back into the US business because we were using them to kind of, you know, manage what was happening, the loss-making that was happening in Europe. That was the way we had to run the business for a couple of years. Sean and I sat around, like, feeling like we're really constrained, right? It's like we can't invest in the US the way we would like. We were trying to get the European business to be where we wanted it to be. We divested of that business just shortly after the conference here last year. We announced that we were going to sell it, and we got rid of the business in November of 2024.
Really since then, we've been able to take the progress that we've been observing in the US for multiple quarters, and then we had some of the incremental cash flow to put into that. The combination of the core US business and product getting better, now having cash to put behind it has, I think, created this, you know, this positive flywheel. In fact, I was looking back to last year, because a lot of times people don't, like, when founders talk about the product getting better, people are like, yeah, yeah, yeah, yeah. Founders always think the product is getting better.
We're gonna talk about that.
The product, you know, I talked about it a year ago, like the product was really getting better built on an entirely new AI infrastructure. The impact of that was conversion rates started to go up. As you know, when conversion rates start to go up, like all kinds of magical things, like, happen in a business. Like CACs go down, LTVs go up, LTV to CAC ratios get really juicy, right? Product's getting better, consumers are happier, we no longer have the European business. I think that's what's driven the inflection.
I would add to that too is like on the U.S. side of the business, since we were consolidated, people did not really see what was happening. I think as of Q1's results, it was our seventh straight quarter in the U.S., or now the only business of EBITDA positivity, but it was all clouded, mixed in with the European business.
That's fair.
To that end, you quantified the, I think you quantified the impact of how much you had available. It was like $12 million put back into the investment that you've made in removing Europe.
I think more like $25 million.
$25 million.
Yeah. Almost of like what we would've been able to put in over the last six quarters.
Covering losses and just not having those operating costs.
Yeah. Yeah. And just, you know, not really being able to feel confident that if we put a dollar here, we're gonna generate the ROI that we want. Whereas, you know, before we went public, you know, ThredUp business in the last quarter before we went public in 2021, I think it was 47%. You know, like we know how to grow, we knew how to grow the US business. and so we're trying to get back to that, core engine.
I mean, just 'cause you said it, I'm not gonna hold you to 47%, but.
Please don't.
Yeah. Like what can you grow above the industry either because of online migration or because of, you know, awareness or capacity utilization, which I know has been sort of an issue for you historically?
Yeah. I mean, I think for a while we were growing well above the industry rate, and then we weren't, right? And so I think,
The industry wasn't growing presumably at that point.
The industry from like, you know, if you go back to, you know, when we started the business 2010, like it was very nascent. The first time we did the resale report was 2012, I wanna say.
Sounds right.
You know, the industry was like starting to accelerate, right? I think ThredUp was really both benefiting from this sort of macro and actually driving.
Catalyst.
You know, Catalyst for that. But look, I think we believe that we should be able to grow at or above the industry rate, for sure. And we're gonna do everything we can to do that.
The $25 million, how did that sort of, now that it was not covering Europe, how did that get invested in the business?
I mean, it's not like we, it wasn't like one big, like blank check, but I think it's, it's clear now our ability to invest in operations, put high-quality supply online, and invest in, in marketing growth, right? Now the CACs and LTVs, as I said, are better than ever. You're just more efficient. We just had, you know, incredible new customer growth quarter, which maybe we'll, we'll talk about, you know, strong new customer growth and continuing that momentum. Ops.
I would also add into is don't underestimate the value of the human capital that we were sending and spending in Europe. And I'm not talking about our salaries, but some of the smartest people in the company on the U.S. team.
We're focused.
We're trying to make the European results better. Not to keep piling on them, but it was a distraction from U.S. performance and the opportunity there. The inventory itself getting better, you've mentioned that now, I think, three quarters in a row.
Yeah.
Is that an awareness? Is that because there's sort of now that you're charging fees?
Yep.
That there's a different customer on the platform? Or how does that work?
Yeah. I think you sort of alluded to it. I think when we introduced fees about 18 months ago at this point,
Which are now uniform across the business.
Now uniform across the business.
Are $14 on a sliding scale.
$14.99 on a sliding scale. Yep.
Yeah.
Yep.
Based on what you sell.
Yes. No, no, no. You pay that no matter what. You pay the $14.99 no matter what.
You can get a discount if you have good product, I thought.
You can get a discount if you have good product, but you don't know that in advance.
Right. Yeah.
Yeah. Yeah. The idea when we launched fees was just to sort of improve kind of the, you know, leverage, offset some of the logistics costs and labor costs that are increasing. We did not actually anticipate how much better the supply would be and how much, and on a volume basis, how many more items we would get. If you sort of think about it, if you're a consumer now who has to pay, $14.99 is not a lot because we take it out of your payment on the backend, you're like, well, if I'm paying $14.99, I should put some good stuff in here, right? I should stuff this thing 'cause it's $14.99 whether there are 25 things in there or 30 things in there. You had this early effect of better supply, more of it.
What we introduced at the end of sort of Q3 of last year, we started in trial, and then we've accelerated our Consignment Premium Service, which instead of $14.99, we tried to do $34.99. In that model, there's.
$34.99?
$34.99.
Just figuring out what the last is.
Yeah. You get some, you get a slew of benefits with that.
That's the advanced one. That's the rush job.
Yep. You get advanced one and then you also get, you get longer consignment window, you get some price protection, you get a bunch of stuff, and that has just gone up and to the right. The mix of goods, I think the last time we talked about it was like 15%.
Yeah.
15% and growing.
That customer that's using that.
That mix of goods coming from the Consignment Premium Service has grown month over month since we launched it.
Wow.
I think what it speaks to is that there is this segment of customers who have, you know, some nice stuff, but this customer segment sits between The RealReal on the high end and sort of mass market ThredUp. They're like, this is like a real, I want a little bit more control over this DVF dress, right? She's like, I don't, The RealReal might not take it. I'm not sure I wanna sell it on ThredUp. With Consignment Premium, you have more control. Now you're getting that customer who we think is a great segment of sellers of the business.
I mean, your ASP difference between the two, like basic service versus a premium service, is almost double in the premium service.
Say that again. Sorry.
The ASP difference between the standard service and premium is double.
The mix of goods in there. Yeah.
Yeah. And what has that also done to, I know what it does to conversion. We've talked, you've talked about that.
Yeah.
What does it do from like a keep rate standpoint, right? 'Cause at one point I think when you were going public, it was like you kept 50% of everything you were taking in.
Yeah. Yeah.
You know, now that you're getting better product, presumably.
The yield on the bags are better.
Yield on the bags, yield on all the human capital, right? All of that, right?
Yeah. So I mean, as Sean said, you know, the price point, it's, it's not quite double, but it's like roughly double. But our cost to process that item is exactly the same, right? So you're immediately getting contribution margin leverage 'cause your processing costs are the same, whether the item is $25 or $50. And you're delighting the buyer. And a lot of those items need to be discounted less, right? Because they're in-demand items. The seller knows that, the buyer knows that. And so the unit economics, I think we said we're about 40% contribution was about 40% better for premium items.
In the first quarter.
Yeah.
I, you're not, I'm not gonna hold you to actual numbers here, but you know, you gave it the IPO. You gave, no, I mean.
It says that a lot.
I say that a lot, right? But it, this, I mean, this is it, right? This is the whole model. 'Cause I don't think what people really appreciate is just how much of a logistics play this is.
Yes.
You know, you have the fact that resale is growing in acceptance, losing its stigma, you know, increasingly moving online. You have the fact that no one's gonna try to solve for this very complicated problem.
Yeah.
And so when you went public, it was, the idea was that I think at the time it was like 47% unit contribution margin or something like that. Is that?
27%.
It was like 27.
Yeah.
27.
Yeah.
That was without Houston and Atlanta, your two now most automated distribution centers, right? It was before fees.
Yep.
It was before all that. How should people think? What you've done is you've, I think since that, grown your gross margin 10%.
Yeah.
Which is all the backend logistics.
Yeah.
Which is the easiest stuff to automate, right? Arguably.
It's like you studied the business.
Yeah.
Yeah.
Yes. No, you're right. Like you're getting leverage on the top.
You know where I'm going with this. I do. And so Sean, we've talked about, right?
Give me the updated 27%.
Yeah. So we actually announced on probably the last earnings call that contribution margin now are in the low 40s. I think we thought at the time of the IPO, we thought once we moved to the more automated DCs, which are in Dallas and Atlanta, they're the ones prior to that, we would gain 1,000 basis points. We are well past that now, and still working on improving it.
All the growth here is, so people know, is for the capacity utilization of these two facilities.
Correct.
At which point you're utilizing them to the tune of what, like a third?
We're two thirds at this point, but lots of room, lots of room to run. I think you have to combine the contribution margins with like the efficiency on the acquisition side to get kind of the full picture. Because part of the reason why we're able to like continue to invest on the growth side is, CACs are, CACs are coming down, right? Because conversion rate is up.
Okay.
LTVs are going up 'cause conversion rate is up. But the unit economics of those orders are going up. And so you're now generating actually more cash from every incremental order and your acquisition engine's working better. And so, you know, it's the first time I think Sean in a while has been like, hey, can the marketing team spend more money? Right? and so, normally, normally the CFO says, wants the marketing team to spend less money, right? so I think it's like a nice opportunity right now and, we're just gonna keep going.
CACs are only coming down in that with conversion. CACs are actually, dollar absolute CACs are increasing, no?
No. No. CACs are.
Is that because you're in Temu or is that?
We haven't talked about like the raw dollars, but I think they're not rising on a hard dollar basis. That isn't any machine or Temu. It's just the, it's, so you might be thinking about CPMs.
Yeah.
Right? The ag rates might have been going up, but the CACs, because of the conversion rate, have actually been coming down.
Interesting. I got lost in my own train of thought there.
On the Shein and on the Temu seat.
Yeah.
That then has, has since mid-April, you have seen about a 10%-15% reduction in ad costs on Google and Facebook, which, you know, our Q1 numbers were sort of, I think our should be decoupled. Like it was a strong Q1, it was a strong April. but you could in theory see some tailwinds from that, reduction.
Has that held?
so.
Shein and Temu?
The Shein and Temu. I mean, we've.
They're coming back, right?
They're coming back a little bit, but I mean, we just got a readout from the team that suggests like CPMs are lower than they were kind of pre, pre-liberation day announcement.
The marketing team has not stopped asking for more money.
Yeah.
Give me the updated philosophy on growth versus profitability at this point. And where I was really heading with that conversation is there's a lot more margin drivers in the business than when you commit it to like a 20% structural margin in it, right? I mean.
Yeah. I mean, I'll start. I think that this year is all about growth.
Right.
We wanna get, you know, back to like a level EBITDA compared to what we did last year. I think we guided the full year at 4%. For every dollar we're gonna beat on that 4% of revenue, we wanna put it back into the growth engine to get growth basically regenerated. We went from, you know, growing at six tenths of a percent last year to we grew 10% in Q1.
Right.
Let's reinvest and reinvest in marketing, reinvest in the product, reinvest in operations, bring stuff online and grow basically as fast as we can. Keeping EBITDA at the same rate as last year. This year is about that growth.
Is it the idea that if you accelerate growth to a certain level, then you'll just naturally start to see the flow through at that point?
Yeah.
Yeah. Yeah. Okay. And I, I guess also on that kind of logistics side, if you're growing faster, you know, you speak to like not needing to invest in more CapEx until like 2027, thereabouts?
Yep. Yep.
Does that change that in any capacity? I mean, I'm sure if you're going 25%, I'm sure, but.
Yeah, I think, yeah.
There's a level of growth that you can obtain and still have that be true again.
Yeah. We think, you know, between $500 million and $600 million, the business can, with its existing footprint, can do $500 million to $600 million in net revenue. The way to think about it is the capacity expansion in Dallas, which is, you know, we already have the full box, we just do not have it built all the way out. We estimate it is on a, $50 million, just to keep the math easier, right? If you put $50 million in CapEx into that building, that building can generate another $500 million in revenue.
Okay. And double.
You can basically get, again, rough numbers, tariffs and steel, there's a bunch, right? In general, we think you can get, we can get the business to a billion dollars in revenue with another incremental $50 million in CapEx.
Yeah. That's good.
Gosh. Good payback.
Good payback.
That's a good payback.
Better than the initial payback.
Yeah. Yeah. I mean, we've learned a lot and, you know, we're in a, we're really in our, I mean, realistically sixth or seventh generation of the automated facilities. Yeah, we've learned a lot about how to make those work.
I've closed as many facilities as you opened.
Right. Exactly. Yeah.
That's right. Yeah.
The other piece that I kinda wanted to touch on is just the user experience.
Mm-hmm.
Which I think is also driving kind of some of the.
Yes.
Conversion rates. Can you sort of walk people through how that's changed in recent quarters and what you're doing with your data effectively, right?
Yeah.
What you're doing with your AI is a huge piece of this.
Sure.
Freeform.
I think, if you go back 18 months, I sort of stood in front of the company at that January all hands in January 2024, and I was like, we're kind of burning the boats on the way we used to build product technology. We're gonna reinvent the product with an AI backend infrastructure. That began this journey of rebuilding the search function. Primarily we started with search. It used to be that we had a search team that worked for about seven years building this search product, right? Search is critical to commerce 'cause that's how a lot of people shop. Seven years, team of engineers working on this. In 90 days, our new AI team built a far superior search product.
Wow.
And so then we took that and they're still working on, on refining it. But then we took that basic infrastructure and then just start to build on top of it. The whole backend now is fundamentally like an AI driven, backend. Since then we've layered on like Image Search, which we, we've talked about, which is you can take pictures of anything, you can upload pictures of anything, you can anything you find, any image of any outfit you find anywhere in the universe, like you can upload to ThredUp and we will find that item, secondhand. We then launched sort of a sneakily great product, just called Similar Item Search.
Which is, it's so obvious when you describe it 'cause that's how people shop. But like in practice, like the technology of, okay, you're looking for that white blazer, right? Lily, right? White blazer, Lily.
She finds it on ThredUp and she's like, yeah, but I actually want like a nicer brand, right? You can click one little button and we'll find that exact same white blazer using image search, but hundreds of them. You can filter by brand, right? You can filter by price point. You can be like, actually, I want it in black. One tile, same exact, right? It allows you this pivot point in shopping, which is actually like how people shop in the real world, which is, you know, shocking. That worked really well. Then we launched the thing called Style Chat, which was a chat interface for, you could basically create any outfit you wanted.
So, right, if you were like, hey, I'm going to a conference in Chicago in June, can you come up with a set of outfits? Like you can do that right now, and work with our, like, style assistant. And then the most exciting one that we launched about a month ago is called Shop Social. One of the things we think is broken about the way consumers get insight is that you really get insight in your social, like social feeds of, like, what you see in the universe, TikTok, Instagram, Pinterest. So you've got all this social and then their shopping features just aren't amazing. Yeah.
Like they're kind of clunky. You're clicking back and forth. Now we've built an experience on ThredUp that you just put the links to your Pinterest shop, the link to your TikTok, the link to your Instagram. We will then ingest that content and use our AI technology to put together a style, an assortment that will just update in real time every time you load it. If you've not checked that out, like it, it's kind of amazing. I don't have a Pinterest. My 14-year-old daughter does. And like when I put it in there, it's just remarkable.
It's a product recommendation tool essentially based on your, essentially your, the entire history of your fashion.
Yeah. If you think about how the user then is interacting, like they're doing their, customers are doing the social thing, they're doing their social thing. You're doing your Instagram thing, you're doing your TikTok thing, you're pinning on Pinterest. Whenever you load the ThredUp app and go to your shop, shop social feed, we're just ingesting that. There's no like cross-posting and pasting and tagging. It's all native into the app. I think it, it's one of the most exciting things that like we've, that I've certainly felt like we've worked on. It still has a long way to go from a UI perspective. It's still a little clunky at points, but I'm excited about it. What's that?
When did that launch?
It launched last month.
Yeah.
We rarely at ThredUp talk about new hires, but if you go back and look, we hired a woman named Danielle Vermeer, who worked at Amazon in their resale business and then was CEO of a company that was sort of the TikTok of thrifting. We hired her in the fall and sort of put her with the team to focus on this. And, it's pretty fun.
What's amazing about it is if you go back to like the initial appeal of like the influencer marketing, it was a trust thing.
Yep.
Right? I mean, you were arbitraging consumer trust.
Mm-hmm.
That obviously ran in the wrong direction.
Yep.
And, right?
Yep.
You're just as good as Johnson & Johnson at this point. If you're, you're influencing yourself in any way, right?
Yes, exactly. Now you can just do your, you can, wherever you're getting your influence, if you just link that to your ThredUp profile, like we can just, we can basically, and the other thing is people, like we can like literally bring it in, but we can also interpret. Like a lot of people who don't actually understand even what their style is. It's kind of amazing when you do some user research and people put their links in there and then it like spits out like your style might be this. And you're like,
I do have a style.
Don't think I knew that, right? It's kind of a fun way to also help customers.
Tying it together, you talked about 95% new customer growth in the last quarter.
Yep.
I think what, total active customers are only up 6%?
Yes. Yeah. So trail active buyers is a trailing 12 month.
That's the different, right?
Yep.
You're one year, so it's not Apple's to Apple.
Right. No. Right. No.
I mean, the active customer, sort of the retention, right, as opposed to churn.
Yeah.
That kind of acceleration in new customers, I mean, 95% presumably is not the number, but sort of how do you think about, I mean, tell me if it is, but how do you kind of think about what this all, how this all translates from an active customer growth standpoint?
Yeah. I mean, like historically we've run the business, you know, we acquire new customers, like they retain over time. Like we just add a new cohort and we stack those cohorts over time. That's how we ran the business for many, many years. I think then when we pulled back on marketing spend, again, back to kind of the European piece, when we pulled back on marketing spend, what you saw last year was active buyers declined. We weren't.
Yeah.
Adding new customers at the rate that we had previously. Now we're sort of back in the new buyer game and more efficient, better product. We expect to kind of stack those cohorts. You should have some nice outsized new customer growth, right, until we comp.
Yeah.
into Q1 of 2026.
Okay.
but.
When you lapped that.
Yeah. When you lapped it, but setting that aside, like Q1 was the greatest number of new customers we've ever acquired in the history of the company. April was the single best month of new customers we've ever acquired in the history of the company. And, you know, I think that we feel confident like we can, we can keep doing that.
Even with more friction points effectively too.
Potentially. Yep.
Yeah. And the risk of, like you, you sort of alluded to the first quarter, the risk of kind of jiggering the algorithm and customer acquisition.
Yes.
Do you feel like you kind of have this at a place where there will not be those kind of major surprises at this point?
I do. I do. I mean, we definitely made some mistakes in Q1 of last year around trying to sort of shift the acquisition strategy on the fly. In hindsight, I think we probably would've done those things differently. I think we feel much better now about where retention is.
'Cause you were trying to essentially stimulate customer stickiness through a discount.
Yeah. We were basically.
You're doing it through a better product and experience.
Exactly. Right. And like I think what we thought at the time was we needed to acquire better customers, right, that would then retain better. What we realized, and I joke with, like what we realized is that they were not the problem. We were the problem, right? We needed a better product. It was not the customer that was not good. It was that we were not delivering, the mix of goods and the persuasion that we needed. Once we got back on track of just strong customer acquisition and then conversion rate on the product better, we have been much better off.
And then just walk through the year, the guide, you know, I mean, kind of how are you thinking about how much you've hedged? A lot of companies are, not a lot of companies, but there's a handful of companies out there kind of trying to really take down numbers based on consumer sentiment, right? They're doing it on both sides. They're taking the margin, which tariffs are not an issue for you guys. We're not talking about tariffs in this meeting, but at least on the.
You're gonna be the only meeting all day, huh?
Yeah. A hundred percent for me at least. You're not talking about the margin impact of it, but on the demand side, you know, how much have you kind of hedged this general demand in your category?
I think we're such a unique, different world than a lot of other people. One, we based guidance in Q2 and full year based on what we saw through April.
Yeah.
Real live data had nothing to do with tariffs, nothing to do with the de minimis tax rule being closed.
Yep.
It was real activity what we're seeing. It is not about hoping for something or worrying about something. I think in the unique case that we're not worried about that near-term future or even the rest of the year as it relates to the guide. I think we're logical about how we do guidance, right? We want to be able to meet our guidance or slightly exceed. That's kind of our approach, how it's always been.
I mean, look, there were consumer sentiment numbers out today that were like not great.
Right.
Right? I think we wanna be thoughtful around, you know, how does ThredUp show up in a world where sentiment's a little sour? If you kind of double-click into those numbers, everybody's been at a conference today, but I managed to double-click into them. What you see actually is it's really young people are the outlier on negative sentiment.
Customer.
Which is our customer. I just think we have an opportunity to really delight them by delivering great value, but I think we should also be cautious around how they behave over multiple quarters. I think in any scenario, I think we are well positioned at this point with the product experience and the selection.
That's in there 'cause we're getting the flag screen adapted. Thank you everyone for being here. Really appreciate it.
Thank you.
Breakout is.