ThredUp and The RealReal report standout Q2 results, combining AI, customer growth, and cultural momentum to cement resale’s place at the center of fashion’s future
The momentum in resale has shifted from cautious optimism to full-throttle confidence. Two of the sector’s most recognizable names — ThredUp and The RealReal — are closing the summer with earnings that make the business case for secondhand fashion almost irresistible. Both reported strong growth for the second quarter of 2025, driven by a mix of loyal customers, new shoppers, and technology designed to make the hunt for pre-loved pieces smarter and more seamless.
ThredUp, which operates as one of the largest online resale marketplaces for everyday and accessible fashion, posted another quarter of double-digit sales gains. Revenue climbed to just under $78 million, up notably from last year, with more buyers and more orders than ever before. Gross profit also rose, and the company narrowed its losses compared to the same period in 2024. Even more telling for investors: adjusted earnings, a measure of operating performance, doubled year-over-year.
The platform now serves well over a million active buyers, and the number of individual orders placed this quarter grew by more than 20 percent. “Driven by strong customer and order growth, we are extremely pleased with our second quarter performance,” said ThredUp CEO and co-founder James Reinhart. “We are now more than 18-months into our AI-led product journey, and are proud to see positive results compound in new buyer and seller growth.” His reference to artificial intelligence is more than a nod to tech trends—it signals a transformation in how secondhand items are surfaced, priced, and recommended to shoppers.
Guidance for the rest of the year suggests ThredUp is expecting the momentum to hold. Third-quarter revenue is projected to rise roughly a quarter compared to last year’s period, while full-year sales are expected to land just above the $300 million mark. Margins, the measure of how much profit is left after covering costs, are holding steady near the high-seventies in percentage terms — a level more often associated with luxury retail than resale.
On the other end of the market, The RealReal, known for authenticated luxury consignment, has delivered its best quarter to date. Revenue reached $165 million, with gross merchandise value — the total worth of goods sold on the platform — also increasing at a healthy clip. Profitability is improving, too: adjusted earnings swung into positive territory after being in the red last year. Losses have narrowed, and the company’s average order value has climbed to nearly $600, a reflection of both the luxury brands on offer and consumers’ willingness to invest in them when prices are favorable.
The second quarter was a breakout performance for The RealReal, further validating the success of its strategic roadmap as strong execution fueled top-line momentum and margin expansion. “There’s a rising tide in luxury resale that we’ve helped to pioneer,” chief executive Rati Levesque said in the earnings call. “Now we’re capitalising on it and accelerating it. Resale is a smart choice for a luxury-minded consumer, and price increases in the primary market due to tariffs or other factors make our value proposition even more compelling.”
The company credits a combination of operational discipline and strategic bets on marketing, AI, and automation. A restructured commission model and new customer service features have played a role, as has the broader economic environment: with tariffs and price hikes making new luxury goods even more expensive, The RealReal’s authenticated inventory looks increasingly appealing. Its domestic supply chain also helps it sidestep some of the costs that are challenging traditional retail imports.
Projections for the months ahead are optimistic. Management has raised its full-year forecast, now expecting gross merchandise value of just over $2 billion and revenue close to $675 million. Those are milestones not just for the brand, but for resale as a whole—proof that luxury secondhand can operate at a scale once reserved for traditional retail.
The broader resale landscape
The success of ThredUp and The RealReal comes as secondhand fashion is moving from a niche interest to a mainstream shopping habit. Industry forecasts suggest the global apparel resale market could nearly double in the next five years, approaching $40 billion in value. The drivers are a blend of consumer values and practical considerations like cost savings and access to rare or discontinued items.
Artificial intelligence is quickly becoming the connective tissue of this evolution. For ThredUp, it’s about making the vast catalogue of listings searchable in intuitive ways, helping customers discover exactly what they want, or something they didn’t know they wanted, faster. For The RealReal, it assists in authentication processes, inventory sorting, and personalized recommendations. The result is a smoother experience that feels less like sifting through a thrift store rack and more like browsing a curated boutique.
Customer loyalty is deepening, too. ThredUp’s active buyers and order volume both jumped by double-digit percentages this quarter, while The RealReal not only grew its buyer base but increased what those customers are willing to spend per transaction. That combination — more shoppers and higher spend — is the engine behind their expanded guidance.
These gains also arrive against a backdrop of shifting perceptions. Once, secondhand shopping carried a stigma. Today, influencers post “thrift hauls” on TikTok, luxury stylists source archival runway pieces from consignment sites, and sustainability-minded consumers talk openly about buying pre-owned as a badge of honor. The RealReal’s focus on authenticity and ThredUp’s scale in everyday apparel cater to different ends of this spectrum, but both benefit from the same cultural tailwinds.
Margins tell a story, too. Both companies are operating with gross profit margins north of three-quarters of sales — a figure that underscores how resale’s business model can generate strong returns without the same costs of producing new goods. That profitability potential is drawing investor interest and could invite more entrants into the market, from specialty boutiques to big-box retailers testing resale initiatives.
The economic climate is another accelerant. With tariffs pushing up the cost of new imports and inflation squeezing household budgets, shoppers are more willing to explore pre-owned. In luxury, where price increases from heritage brands have been steady, authenticated resale offers an entry point without sacrificing quality. In mid-market fashion, platforms like ThredUp deliver brand-name styles at a fraction of retail, while giving sellers an easy way to clean out their closets and earn money in the process.
This dual-platform surge offers a glimpse of resale’s next chapter: a space where technology, consumer values, and market forces converge to create a sector that is both financially and culturally resonant. As Reinhart noted, AI is now embedded in product strategy, and for Levesque, the category’s growth is a cultural moment. The numbers matter, but the bigger picture is this: resale is no longer the alternative — it’s the evolution of fashion itself.
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