What happened

Shares of ThredUp (TDUP -5.94%) turned sharply higher on Tuesday, surging as much as 21%. As of 1:42 p.m. ET, the stock was still up 21%.

The catalyst that sent the online seller of second-hand goods higher was an earnings report that, while mixed, was better than investors had feared.

So what

ThredUp generated second-quarter revenue of $76.4 million, up 27% year over year, resulting in gross profit that climbed 19%. Unfortunately, the higher revenue growth did nothing to help the company's bottom line, as ThredUp reported a net loss that nearly doubled to $28.4 million, resulting in a loss per share of $0.29. 

To put those numbers in context, analysts' consensus estimates were calling for revenue of $72.2 million and a loss per share of $0.20, so the results were something of a mixed bag. 

There was some good news, however, as the company's customer and order numbers improved. Active buyers grew to 1.7 million, up 29% year over year, while orders of 1.7 million grew 40%.

Furthermore, ThredUp released its 10th Annual Resale Report, which suggests that the U.S. second-hand market is projected to more than double by 2026, topping $82 billion. This is expected to provide a generous tailwind for ThredUp's future prospects.

Now what

It wasn't even ThredUp's outlook that was driving the stock higher. For the upcoming third quarter, the company is forecasting revenue of $65 million at the midpoint of its guidance, which would represent growth of just 3% year over year. Management also trimmed its full-year outlook and is now expecting revenue in a range of $283 million to $287 million, down from its previously issued forecast of $315 million to $325 million. 

There simply doesn't seem to be any reason behind the stock's big move today, other than relief that things weren't as bad as many feared. Given the challenges that remain, investors should exercise care when investing in ThredUp, lest its results unravel further.