What caused TDUP's Q2 2024 earnings to miss forecasts?

ThredUp's Q2 2024 earnings missed forecasts due to a combination of factors: 1. **Transition to Consignment Model**: ThredUp is transitioning to a consignment model, which has led to a decline in product revenue while consignment revenues have increased. This transition has improved gross margins, as evidenced by the increase to 69.5% in the first quarter of 2024, up from 67.3% in the previous year. However, it has also muted revenue growth due to the accounting treatment of consignment sales, which recognizes revenue only when the item is sold rather than upon receipt. 2. **Strategic Investments in AI**: ThredUp has been investing significantly in AI, as evidenced by the launch of new AI-powered tools and features to enhance the customer experience. These investments are driving growth and improving customer engagement, such as a 32% year-over-year increase in new customer volume. However, these investments may have had an impact on short-term profitability. 3. **Macroeconomic Challenges**: ThredUp faces macroeconomic challenges such as inflation and higher interest rates, which can impact consumer spending and, consequently, its revenue. The company has expressed caution regarding these challenges and their potential impact on future performance. In summary, ThredUp's transition to a consignment model and strategic investments in AI, along with macroeconomic challenges, have contributed to its Q2 2024 earnings missing forecasts.