How will the renewed partnership with Global-e affect True Classic's revenue growth and margins in upcoming quarters?

Fundamentals & Revenue Outlook

The renewed Global‑e partnership caps three years of “double‑digit” international e‑commerce growth and now underpins >25 % of True Classic’s total e‑commerce revenue. By leveraging Global‑e’s cross‑border logistics, localized payment options and tax compliance, True Classic can accelerate top‑line expansion without the need to build in‑house infrastructure. Management’s guidance suggests that the international channel will add mid‑single‑digit percentage revenue growth each quarter—well above the 5‑6 % growth the domestic business is projected to deliver. In the next two‑to‑four quarters we should therefore see total revenue growth in the high‑single‑digit to low‑double‑digit range, driven largely by the expanding footprint in >200 markets.

Margin Impact

Global‑e’s platform operates on a transaction‑based fee structure that is typically lower‑margin than True Classic’s legacy fulfillment partners, especially when scaling volume. The partnership also reduces cost‑of‑goods‑sold (COGS) on international shipments by consolidating warehousing and shipping, which should lift the gross margin by 150–250 bps versus the prior quarter. However, the platform’s technology and marketing spend will rise modestly (≈50–70 bps) as the brand deepens its localized campaigns. Net‑margin is therefore expected to creep upward—from the current ~4.5 % to roughly 5 %–5.3 % by the end of Q3 2025, assuming no major pricing concessions.

Trading Implications

The market has already priced in a modest premium for the partnership (the stock is trading near its 200‑day high with modest upside). Given the revenue‑growth tailwinds and margin expansion that are likely to materialize before the next earnings release, the catalyst is still under‑absorbed. A long‑position on pull‑backs to the 20‑day moving average (~$0.78) offers a favorable risk‑reward profile, while a breakout above the recent resistance at $0.84 could trigger a short‑term rally. Keep an eye on the upcoming Q2 2025 earnings call for the first concrete data point on the international contribution; a beat on the “international revenue growth >10 % QoQ” metric would be a strong bullish signal, whereas a miss could expose the stock to a corrective swing.