How second-hand retailers navigate high inflation

Shares of ThredUp are trading lower on Tuesday despite the company’s positive fourth quarter results. The company beat revenue expectations, posting $81.39 million against an expected $80.33 million, up 15% from a year ago. The company also forecasts that the global second-hand market could reach a valuation of over $350 billion by 2027.

William Blair Consumer Research Analyst Dylan Carden joins Yahoo Finance to discuss the company’s performance against the consumer environment, where discounted branded or quality goods are a “winning equation.” He also notes the impact of reduced stigma surrounding second-hand goods, particularly among younger generations.

Carden also weighs in on ThredUp’s potential to withstand recession or inflationary pressure: “They showed in the pandemic they weren’t necessarily macro-proof. The business collapsed along with any other apparel retailer, and that was simply because they are selling a fair amount of goods for people going into the office or for occasion-based. So to the extent you have a consumer making a decision between buying Lululemon (LULU) at Lululemon or Lululemon at ThreadUp, the same discretionary overhang is gonna impact this business as much as any other. It’s not countercyclical.”

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Editor’s note: This article was written by Nicholas Jacobino