Revolve Group Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 1, 2023

There are 17 speakers on the call.

Operator

Good afternoon. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Revolve's Third Quarter 2023 Earnings Conference Call. All participants are in a listen only mode. After the speakers' presentation, we will conduct a question and answer session.

Operator

As a reminder, this conference call is being recorded. I would now like to turn the call over to Eric Randerson, Vice President of Investor Relations at Revolve. Thank you. Please go ahead.

Speaker 1

Good afternoon, everyone, and thanks for joining us to discuss Revolve's Q3 2023 results. Before we begin, I'd like to mention that we have posted the presentation containing Q3 financial call highlights to our Investor Relations website located at investors. Revolve.com.

Speaker 2

I would also like

Speaker 1

to remind you that this conference call will include forward looking statements, Including statements related to our future growth and profitability, inability to generate cash flow, macroeconomic industry trends, our competitive position, Our business, operations and marketing initiatives and investments, average spending per active customer, category expansion, international expansion, Our inventory balance and management and our outlook for net sales, gross margin, operating expenses and effective tax rate. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially from these statements, Including the risks mentioned in this afternoon's press release as well as other risks and uncertainties disclosed under the caption Risk Factors and elsewhere in our filings with the Securities and Exchange Commission, Including without limitation our annual report on Form 10 ks for the year ended December 31, 2022 and our subsequent quarterly reports on Form 10 Q, all of which can be found on our website at investors. Revolve.com. We undertake no obligation to revise or update any forward looking statements or information except as required by law. During our call today, we will also reference certain non GAAP financial information, including adjusted EBITDA and free cash flow.

Speaker 1

We use non GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. The presentation of this non GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to The financial information prepared and presented in accordance with GAAP and our non GAAP measures may be different from non GAAP measures used by other companies. Reconciliations of non GAAP measures to GAAP measures as well as the definitions of each measure, their limitations and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our Co Founders and Co CEOs, Mike Karen Nicolas and Michael Mente as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions.

Speaker 1

With that, I'll turn it over to Mike.

Speaker 3

Hello, everyone, and thanks for joining us today. I will begin with a recap of our Q3 results, followed by updates on some key operating priorities and multiyear growth initiatives consistent with our focus on investing for the long term to maximize shareholder value. Net sales decreased 4% year over year to $258,000,000 in the Q3, a slight improvement from the 6% decline in the Q2 of 2023. Call. We believe spending on discretionary products by our consumer demographic is being pressured by many factors, particularly in the U.

Speaker 3

S, Including persistent inflation compounded by higher interest rates, reduced savings and significant uncertainty in the macroeconomic and geopolitical climate. Net sales in the U. S. Decreased 5% year over year and net sales in international markets decreased 1% year over year. The relative outperformance in international was driven by exceptional growth in Mexico that was offset by declining sales in Australia and China, Two regions impacted by economic challenges and currency headwinds.

Speaker 3

By segment, Revolve net sales decreased 2% year over year With going out styles like dresses detracting from growth against difficult comparisons, it's important to keep in mind that as previously shared, We have operated with new inventory buys down by a mid teens percentage year over year through the 1st 3 quarters of 2023. A highlight of the Revolve segment is our accelerated growth in beauty net sales that validates our long term opportunity for category expansion. Michael will talk more about this exceptional execution of our beauty playbook in his remarks. Forward net sales decreased 14% year over year within a luxury sector that is recalibrating after 2 years of extraordinary growth coming out of COVID. Aspirational luxury consumers who were flush with cash 18 months ago Just don't have the same capacity to spend in the current environment.

Speaker 3

As a relevant benchmark, Bank of America recently reported that its credit card data reflects a 16% year over year decrease in luxury fashion spending by U. S. Consumers in the Q3. As we entered the year, a top priority was rebalancing our inventory. We achieved this objective in the Q3 as the spreads between our year over year inventory and sales trends were favorable in the Q3 for the first time in more than 2 years.

Speaker 3

This very important milestone was driven by the Revolve segment, where the year over year decline in inventory was steeper than the year over year decline in net sales by several points. Shifting to the Ford segment. While I'm thrilled with our successful effort to rebalance total company inventory, which has been beneficial to cash flows, The composition of our forward segment inventory is not yet optimal. As mentioned on previous calls, it will take longer to fully rebalance inventory forward Considering the current challenges in the luxury industry as well as markdown restrictions from luxury brands that extend the timeframe for rebalancing our forward inventory. Moving to key metrics.

Speaker 3

As a company passionate about serving our customers incredibly well, I'm excited and proud that we crossed The 2,500,000 active customer threshold in the 3rd quarter. Notably, active customers increased by 52,000 in the 3rd quarter, 53% higher than our growth in the Q2 of 2023. The improved results benefited from year over year growth in new customers and an efficient cost of acquisition that callings year over year. Most gratifying is that our net promoter and customer satisfaction scores were higher than in any prior Q3 for at least 5 years. Not surprisingly, average spending per active customer has decreased year over year in the current environment.

Speaker 3

Yet we hear loud and clear that our customers absolutely love Revolve. We view the lower average spending per active customer as a temporary dynamic that will normalize over time as the environment improves. Shifting to profitability. We are proud to be one of the only fashion e commerce companies that generates consistent profitability and cash flow, A meaningful competitive advantage that allows us to invest through business cycles. Net income was $3,000,000,000 or $0.04 per diluted share, A decline of 73% year over year that was negatively impacted by an accrual for a pending legal matter equivalent to $0.07 per diluted share.

Speaker 3

Adjusted EBITDA was $9,000,000 a decline of 46% year over year, which reflects a lower gross margin and continued pressure on selling and distribution and fulfillment expenses, primarily due to the higher return rate year over year, partially offset by increased marketing efficiency. Very important is our ability to continue to generate strong cash flows. Cash generated from operations and free cash flow were $12,000,000 $11,000,000 in the 3rd quarter, a year over year increase of 25% and 33% respectively. Our strong balance sheet enabled us to confidently invest our free cash flow into our $100,000,000 stock repurchase program announced last quarter Without sacrificing investment in the business, we deployed $12,600,000 to repurchase approximately 907,000 shares of Class A common stock during the Q3 at an average cost of $13.87 per share. Since we view the current environment as a near term headwind And remain confident in our longer term opportunity to drive growth and profitability, we view stock repurchases as an attractive and accretive use of our capital.

Speaker 3

Moreover, in a time when many fashion e commerce peers have significantly reduced investment to limit their cash burn, our long term mindset, strong balance sheet and consistent cash flow generation to give us the confidence to continue to prudently invest throughout the cycle. Our long term approach to investment decisions should allow us to emerge in an even Stronger competitive position when the environment improves. With that in mind, I will now offer updates on our important growth and efficiency initiatives that we believe will further strengthen our foundation for profitable growth over the long term. We remain extremely committed to driving cost efficiencies within our global shipping 6 operations. The successful launch I discussed last quarter of consolidated customer return shipments from Canada to the U.

Speaker 3

S. And local refulfillment for certain product returns in the UK have reduced costs as intended, but were overshadowed in our financials by the higher return rate year over year. Building on our early success in the coming months, we plan to extend our local re fulfillment of certain product returns to Europe. We expect this initiative to reduce shipping costs and provide even Faster service for our valued European customers. I'm also excited by our innovation in establishing alternative shipping arrangements in certain U.

Speaker 3

S. Regions that reduced our shipping costs in these regions, even further improved shipping timelines, particularly on the weekends. It is early days, Yes, we see great potential for our many initiatives to drive efficiency and even further improve on our exceptional service levels. With the increase in return rate year over year being such a headwind on our financial results, I'm spending a great deal of time and focus with the team on initiatives designed to reduce the return rate and make returns more session. A recent survey on our product returns indicates that nearly 2 thirds of returns relate to size and fit, validating our opportunity to move the needle over time As we believe we can leverage technology to do a much better job communicating the fit and sizing before the purchase.

Speaker 3

Some early results are promising. The virtual try on and size comparison feature tool launched last quarter on forward for handbags and accessories has shown excellent results in reducing return rates for customers who engage with it. We are planning to meaningfully extend the tool's availability and have recently launched it on the REVOLVE site as an AB test. We have also recently launched product videos on the product detail page for several brands and very soon we will launch product fit guides to test additional efforts to reduce the sizing uncertainty. If these efforts prove successful, the financial benefits should be compelling.

Speaker 3

Consider that for every one point decrease in our return rate, We would expect to realize cost savings of approximately 30 to 50 basis points in reduced selling and distribution and fulfillment costs. A reduced return rate would also drive higher net sales due to a lower percentage of orders being returned. We're also very focused on further expanding our capabilities in growth opportunities within Own Brands. As shared on recent earnings calls, the softening consumer demand in recent quarters has led us to be more conservative in planning our Own Brands inventory buys Since own brand required deeper inventory commitment per style than our 3rd party brands and the lower mix of own brands year over year is a driver of the gross margin decline I mentioned since owned brands have a much higher gross margin. Nonetheless, we are excited by and continue to invest in the long term potential in owned brands, which offers huge potential for product differentiation and margin expansion.

Speaker 3

Consider that our Revolve segment gross margin of 55% reported today Was in the same zone as the Revolve segment gross margin in the Q3 of 2019, even though the own brand mix of the Revolve segment net sales in the Q3 of 2023 It was roughly half of the owned brand mix in the Q3 of 2019. This comparison illustrates the opportunity to drive margin improvement from owned brand expansion in the coming years if we can continue to raise the bar through our ongoing investments. Lastly, we continue to expand the use of AI and machine learning across several key areas of our operations to drive growth and efficiency. I am excited about our current application of AI technology that allows our customers to visually search for similar styles without any keywords. Currently in beta testing, the compelling user experience is especially relevant for driving discovery Among the tens of thousands of styles on Revolve, we are also gearing up to launch a personalized recommendations landing page for returning customers, conference.

Speaker 3

Leveraging outstanding development work by our data science team to tap into our deep data insights. We believe the increasingly personalized site experience will provide a more engaging and rewarding shopping experience and based on prior efforts could lead to improved conversion rates. I'm pleased with our team's execution on these important initiatives that are key building blocks for our continued long term growth and profitability. In summary, while we face a multitude of challenges in the current environment, we will remain on offense. We continue to focus on our competitive advantages of technology innovation, Operating efficiency and brand building to guide us through these uncertain times as we invest in the long term opportunity ahead of us.

Speaker 3

Now over to Michael.

Speaker 2

Thanks, Mike, and hello, everyone. It's been a challenging few quarters contending with the macro environment and cycling through comparisons against the period of pent up consumer spending coming out of COVID. As a relevant benchmark, consumer sentiment in the U. S. Is currently 64, which is well below the consumer sentiment during the depths of COVID.

Speaker 2

Nonetheless, as CEOs of a growth company, Mike and I are not satisfied with our current results. Keeping a list in a current difficult macro environment, we expect to outperform the benchmark as we have spent most of the 20 years since we founded Revolve. We have some work to do. Our team is up to the challenge, and I feel great about our early progress and growth initiatives and strategies that we believe offer exciting potential for our future. Our long history operating the business has taught us that periods of macro challenge Can often present opportunity for market disruption.

Speaker 2

With our strong financial position, our fast paced and nimble operating structure and our innovative entrepreneurial mindset, We believe we are well positioned to drive improved results. So I will provide an update on what has me excited about our future. First, We have some impactful and innovative brand marketing activations in the works for the Q4 into early 2024 that I'm truly excited about. An important element of our brand building and our event planning strategy is to stay nimble, be relevant, fashion exciting. Our marketing plans for the Q4 and into early 2024 Capture the strategy and our efforts to drive the greatest impact from our passionate community of consumers, influencers and brands.

Speaker 2

1 of our Cornerstone brand building events And the Q4 will be in an international region where we see a great deal of opportunity for future growth in the years ahead. This follows on the heels of a highly successful activation in Mexico, where our 3rd quarter sales and customer growth were again truly exceptional. Help to Buy further advances in service levels that drove another exceptional quarter of triple digit growth in new customers. As we exit the Q4 and extending into 2024, We have a number of activities planned featuring both Revolve and Thornton that we are very excited about. We will share more details on these plans at a later date.

Speaker 2

We We're also leveraging our core competencies in disruptive marketing and technology innovations to drive results and lay the foundation for future growth. Mike talked about how we are leveraging AI for personalization and visual search on our website. Beyond this, it is important to understand that we are testing the use of AI broadly throughout the organization in an effort to drive growth and efficiency. In the coming weeks, we will also be experimenting with AI design images on our website and mobile apps, which is successful and proved to be a real game changer. We see many more applications for leveraging AI in the marketing realm, building on the success of our innovative AI billboard campaign launched earlier this year.

Speaker 2

Finally, on Friday, we will launch 1,000 Revolve from 3 emerging designers featuring new collections that were created entirely using AI design. Produced by the 3 winners of the 1st ever AI Fashion Week, looks are incredible and will be exclusively available for sale on Revolve. And as a company known for leading innovation on social channels, it is exciting to see our collaboration with TikTok Shop showing a great deal of promise in the early stages. Net sales generated from TikTok Shop increased meaningfully in the Q3 compared to the Q2 of 2023, even though we only made available a limited selection of products on TikTok Shop. A key contributor to us is our proven ability to create compelling content for social channels and engage with influencers to drive awareness and impact combined with the conversion driven nature of the TikTok platform.

Speaker 2

Looking forward, we see an exciting opportunity to further leverage our experience in the TikTok platform and expand the range of Revolve products and categories that will resonate with a large audience of Gen Z consumers and content creators on TikTok. To capitalize on the exciting growth potential within this new channel, we recently launched a series of live streaming content videos Intending to further engage the TikTok community with product insights, styling tips and exclusive offerings. We also recently launched a dedicated TikTok beauty account with beauty specific content that will also have a beauty focused store within TikTok shop. Beauty is a great category fit considering that TikTok has a The medical beauty community and that beauty is ideal for influencers to create compelling educational video content. For years, the viral nature of TikTok has been a Powerful catalyst for the beauty category.

Speaker 2

And now with TikTok Shops, consumers can discover and purchase products in one place. Speaking of beauty, I'll wrap up the commentary on our newer categories where we continue to see a lot of growth potential. The men's and beauty categories achieved strong double digit sales growth in the 3rd quarter, Further validating our opportunity for category expansion. Beauty was a standout performer, so I'll focus my remarks here. Beauty net sales increased 44% year over year and Our team has done an incredible job executing, improving all aspects of the beauty business and in bringing on impact on new beauty brands to help drive the 36 point improvement in our year over year growth rate compared to the Q2 of 2023.

Speaker 2

Most exciting is our momentum in attracting impactful new beauty brands, It was even stronger entering the Q4. In October, we added a full range of products on one of the most coveted beauty brands, Laura Mercier to both Revolve and FORWARD. This is a huge win that we believe may help build momentum in attracting other top beauty brands. Also earlier this month, we extended our top selling beauty brand on Revolve, Charlotte Tilbury, to listen to Ford as well. And right away in the 1st week, Charlotte Tilbury became our top selling beauty brand on Ford.

Speaker 2

We expect several more impactful beauty brands to launch in the coming weeks just in time for the holidays. Our goal is to become the preferred beauty destination for our customers. A big part of achieving this goal is having the right selection. We believe that as we continue to optimize our beauty assortment, our loyal customers will buy more and more beauty from us because we have earned their address through our brand curation and best in class customer experience. We are off to a great start with the brand additions I mentioned and a healthy pipeline of brands interested in partnering with us in 2024.

Speaker 2

In closing, while we continue to face challenges in the near term, our team is energized by the opportunity to drive improved results across a wide range of longer term initiatives that leveraged the core competencies that have served us well in the past 20 years. I want to express a heartfelt thanks to our talented team for their incredible efforts and persistence, particularly in the last 2 years. Now I'll turn it over to Jesse for a discussion of the financials.

Speaker 4

Thanks, Michael, and hello, everyone. I'll start by recapping our Q3 results and then close with updates on recent trends in the business and commentary on our cost structure as we look ahead. Starting with the Q3 results. Net sales were $258,000,000 a year over year decrease of 4% within an environment for consumer discretionary spending that remains quite challenging. Revolve segment net sales decreased 2% And forward segment net sales decreased to 14% year over year in the 3rd quarter.

Speaker 4

By territory, domestic net sales decreased 5% and international net sales increased 1% year over year. Active customers, which is a trailing 12 month measure, increased by 52,000 customers during the Q3. Our active customers crossed the 2,500,000 customer milestone for the first time, an increase of 12% year over year. Our customers placed 2,100,000 orders in the 3rd quarter, an increase of 9% year over year. The increase in orders placed was offset by a decrease in average order value or AOV and the year over year increase in the return rate.

Speaker 4

AOV was $2.99 a decrease of 7% year over year against an elevated AOV comparison of $3.20 in the Q3 of 2022. That was the highest we have ever reported. Shifting to gross profit. Consolidated gross margin was 51.7%, slightly below our guidance range. The decrease of 127 basis points year over year primarily reflects a lower mix of net sales at full price and a lower mix of own brand net sales within our Revolve segment compared to the Q3 of 2022.

Speaker 4

As you can see from our segment gross profit disclosures, The year over year comparison for segment gross margin is more favorable at Revolve than forward, which reflects the great progress we have made rebalancing the Revolve segment inventory. As Mike alluded to, while we have made progress with rebalancing forward, we still have some work to do to fully optimize the forward segment inventory. Moving on to operating expenses. The quick summary is that better than expected marketing efficiency in the Q3 was offset by our fulfillment as a percentage of net sales coming in slightly higher than our outlook. Fulfillment costs were 3.6 percent of net sales.

Speaker 4

The increase of 56 basis points year over year was primarily due to a year over year increase in our return rate, a year over year decrease in AOV, increased rent expense and other costs of operating our recently expanded fulfillment network and higher wages for our fulfillment center staff. We expect to realize efficiencies on Fulfillment expense as a percentage of sales in the coming years as we grow into and optimize our increased fulfillment center capacity. Selling and distribution costs were 19% of net sales. The increase of 170 basis points year over year is primarily due to the higher return rate and lower AOV. We are aggressively pursuing initiatives both to reduce our shipping and logistics costs and to address the increasing return rate.

Speaker 4

Our marketing investment represented 15.4 percent of net sales, a decrease of 123 basis points year over year, reflecting a reduction in brand marketing investment and events in the Q3 of this year as compared to last year, as well as year over year efficiency and performance marketing statement as a percentage of net sales. The reduced brand marketing investment year over year is largely due to a shift in timing from the Q3 to the Q4, with a very active calendar of brand building events in the Q4 of this year heading into 2024. General and administrative costs were 35,200,000 call, including the $6,600,000 accrual for a pending legal matter. Excluding the legal accrual, Our G and A costs came in slightly lower than our outlook for the Q3. Net income of $3,000,000 or $0.04 per diluted share was impacted by the accrual for the pending legal matter equivalent to $0.07 per diluted share.

Speaker 4

The 73% year over year decline in net income was also impacted by the net sales decline, a year over year decrease in gross profit and continued pressure on certain operating expenses. Adjusted EBITDA was $9,000,000 a decrease of 46% year over year. Moving to the balance sheet and cash flow statement. Inventory at September 30, 2023 was $203,000,000 a decrease of 5% year over year and down 1% sequentially from the Q2 of 2023. The year over year decline was 1 point steeper than our net sales decline, illustrating the progress we have made in rebalancing our inventory.

Speaker 4

Net cash provided by operating activities and free cash flow in the 3rd quarter increased by a strong double digit percentage year over year. For the 9 months ended September 30, 2023, net cash provided by operating activities This was $47,000,000 and free cash flow was $44,000,000 an increase of 37% and 44% year over year, respectively. We put our cash flow to work towards the new $100,000,000 stock repurchase program announced last quarter. We repurchased approximately 907,000 shares call. Class A common stock during the Q3 at an average cost of $13.87 per share.

Speaker 4

Approximately $87,000,000 remained available under the repurchase program at quarter end. As of September 30, 2023, cash and cash equivalents were $267,000,000 An increase of $23,000,000 or 9% year over year, and we had no debt. Cash and cash equivalents decreased by $2,000,000 on a sequential basis versus the Q2 of 2023 as a result of our stock repurchases. Now, Let me update you on some recent trends in the business since the Q3 ended and provide some direction on our cost structure. Starting from the top, line.

Speaker 4

The top line pressure we experienced in the Q3 has continued with net sales for the month of October 2023 down a low single digit percentage year over year. To assist in your modeling of our net sales in the Q4 of 2023, I want to highlight that our net sales comparisons are more difficult in the months of November December on both a 1 year basis and on a multiyear basis when compared to the October comparison. Consistent with the 3rd quarter results, During October, year over year net sales comparisons in the Revolve segment continued to outperform the Forward segment. I would also like to highlight At our October net sales in the Middle East, which has been a growth driver for international, were impacted by the war in Israel. Our hearts go out to everyone affected at home and abroad, conference call.

Speaker 4

Suffering tragic loss and hardship surrounding the recent events in the Middle East. Shifting to gross margin. We expect gross margin in the 4th quarter of 2023 of between 51.7% 52%, implying a year over year increase in gross margin compared to the Q4 of 2022. Taking into account our 3rd quarter performance, we have fine tuned our gross margin outlook for the full year 2023 to between 51.8% 51.9%. Fulfillment.

Speaker 4

We expect fulfillment as a percentage of net sales to be around 3.6% for the Q4 of 2023 and now expect fulfillment to represent 3.5% of net sales for the full year 2023. Selling and distribution. We expect selling and distribution costs for the Q4 of 2023 to be approximately 19%, consistent with the Q3 results and 18.7 percent of net sales for the full year 2023. The slight increase from our Previous full year 2023 guidance primarily reflects a higher than expected return rate that has overshadowed early efficiency gains resulting from our shipping and logistics efficiency measures. Looking beyond the Q4, in 2024, we believe we can begin to benefit from our concerted efforts to drive efficiency in our shipping and logistics operations globally.

Speaker 4

Marketing. We expect our marketing investment in the Q4 of 2023 to represent between 17% 17.2% of net sales. For the full year 2023, we have narrowed our expectation for marketing investment to represent between 16.2% to 16.3% of net sales, which is unchanged at the midpoint from our prior full year range. General and administrative. We expect G and A expense of approximately 29 $600,000 in the Q4 of 2023 $121,500,000 for the full year 2023.

Speaker 4

This increase in our full year G and A outlook is entirely due to the $6,600,000 accrual for a pending legal matter recorded in the 3rd quarter. And lastly, we continue to expect our effective tax rate to be around 24% to 26%, consistent with the last several quarters. To recap, we are laser focused on the large market opportunity ahead of us, leveraging our strong financial position and consistent with our focus on the long term, We will continue to prudently invest in a multitude of initiatives that we believe can extend our competitive advantages and maximize shareholder value in the years ahead. Now we'll open it up for your questions.

Operator

Our first question comes from Edward Yruma from Piper Sandler. Please go ahead. Your line is open.

Speaker 5

Hey, good afternoon guys. Thanks for taking the question. I guess first wanted to understand a little bit more about TikTok Shops. Is it your sense that this is an incremental call. Customer or is this a customer that would have maybe seen the media on Instagram and then gone on the site?

Speaker 5

I'm just trying to understand maybe kind of how does the all in economics of it look? And And then I guess just to get maybe a little bit more further clarity on getting the forward inventory numbers in line, is that a multi quarter kind of goal or do you think get it the quarter 2. Thank you.

Speaker 3

Yes. Hi, Ed. I'll take the first one on TikTok Shop. Our sensei stuff, what we've seen thus far is that It's more of an incremental customer. The nature of the orders is fairly different from what we typically see within kind of our other channels, Which is an exciting opportunity.

Speaker 3

And kind of the other thing I'd point out is the channel is still very new and nascent. It's going to evolve a lot in the coming months. We've already seen it be very dynamic within just kind of the initial months that we've been operating. So, there's still a lot to play out here.

Speaker 4

Yes, Nandita, this is Jesse. On the forward inventory, of course, a lot of this is dependent on what happens in the macro environment looking ahead. But No, we'd say it's not 3 quarters, it's probably more like that 2 quarter scenario. So we're probably not quite there by year end, but as we get into the back half of Q1 is our best estimate at this point before rebalance on the inventory perspective on forward.

Speaker 5

Thank you.

Speaker 3

And Ed, actually one clarification I'd add on the incremental customer. Just from a definitional standpoint, you should just be aware that we don't count those as Additional active customers because they're coming into a marketplace and they're all tied to essentially Sort of single account within our system and we don't have those customer emails. We do have names and shipping addresses though and plenty of ways to certainly engage with those Chip, talk

Speaker 6

shop. Got it. Thank you.

Operator

Our next question comes from Oliver Chen from TD Cowen. Please go ahead. Your line is open.

Speaker 7

Hi, Michael, Mike and Jesse. Regarding the environment and what you're seeing with return rates, It sounds incrementally worrisome given that focus. The customer macros may be out of your control. So would love Your thoughts on how that's interplaying with the future of return rates and also as we look forward to average order value. And then on the customer acquisition costs, it sounded like the marketing efficiency was encouraging.

Speaker 7

What's driving that and what are you forecasting Going forward for customer acquisition costs. Thirdly, related to the first question, promotions, just wanting your base case for The promotional environment because the whole industry is experiencing a lot of the cautionary comments you made. Thank you.

Speaker 3

Yes. So I'll maybe kind of start With the end of your question. With regards to promotional environment, we're definitely seeing increased promotional activity, particularly within Ford In the luxury segment, for Revolve, we certainly see it as well. We do think Revolve has the ability to stay above The fray with regards to that. But at the same time when consumers are feeling pressured, it certainly does have an impact Within Revolve, and we've seen that.

Speaker 3

Jesse, you want to take the AOV question and the marketing Kind of projections.

Speaker 4

Yes. On AOV, kind of separate from the return rate, we did see pressure on AOV this quarter as you can see, Maybe starting from the top with the segment breakdown. Forward is relatively flat, so it's more about Increase in the AOV on the Revolve side, but there was also an impact with the shift from Forward to Revolve. And as you know, Forward carries AOV that's 2.5 times that of Revolve. So when we do see that shift, we do see pressure on AOV.

Speaker 4

And within the Revolve segment that was a decrease of about 6% just shy of 6% and that was largely due to both units per order and ASPs. And that was in part due to that mix in shift towards beauty that carries that lower ASP. I think a lot of moving pieces there and then on top of comping to a record high AOV in the prior Q3. Looking ahead, we'd expect that to balance out, I would say. We're not going to be up against such a significant comp and full price mix is getting back To a really healthy place.

Speaker 4

And then maybe on the marketing efficiency was another piece of your question there. We did see efficiency on the CACs this quarter, so that was really encouraging. And to be fair, a part of that was due to timing. So we did shift some of the brand marketing activities out of Q3 into Q4 and into Q1. Yes, there is a piece there, but there was also efficiency on the performance marketing side, which we're really encouraged about.

Speaker 4

And then maybe I'll kick it back to Mike.

Speaker 3

Yes. And then to address the first part of your question on the return rate, we do think the environment is playing a large role, just You're kind of seeing how consumer confidence is so low right now, even lower than COVID deaths. There's certainly a lot of disparate indicators out there, but I think whether you look at Luxury spending data from Bank of America consumer confidence or other things and certainly what we're seeing with our customers. I think she's not feeling in a good place and that's affecting the return rate. That said, we definitely recognize it's a very important cost pressure.

Speaker 3

We're laser focused on it and we're not happy that Our business is not as solidly profitable right now as we want it. We're still in more challenging times delivering Cash flow and earnings, but it's not at the level we want. And so we're laser focused on that and we certainly hope to drive some

Operator

Our next question comes from Mark Altschwager from Baird. Please go ahead. Your line is open.

Speaker 2

Good afternoon. Thank you.

Speaker 8

So a lot of the headwinds you cite are more macro in nature. Given the macro picture remains Uncertain and challenging heading into 2024. Do you think it's reasonable to expect top line growth in the first half of next year? Are there incremental levers you see for next year to better offset the macro headwinds versus what you've experienced thus far in 2023? I guess, anything you can share on how you're thinking about that would be helpful.

Speaker 8

And then, I have

Speaker 4

a follow-up on gross margin. Yes. Maybe I'll start and then if anybody else has anything to add. We're not going to comment too much beyond what we've said in the script. We did comment that October is down low single digits, but we are up against some slightly more difficult comps in November December.

Speaker 4

So we just want everybody to keep that in mind. To your point, macro is very uncertain. There's a lot of good things happening internally. But to your point, a lot of it is Macro driven at this point. So we're going to continue to stay nimble, invest where we think there's meaningful return in the marketing and We'll get back to inventory growth at least on the Revolve side as we get into early next year.

Speaker 4

So we're optimistic about that, but Not much more beyond that that we can say at this point given all the uncertainty.

Speaker 8

Thank you. And then, Jesse, can you help us Better understand the factors that drove Q3 gross margin a bit below the guidance. And then just given the better inventory position, do you see Less risk for Q4 and zooming in on Revolve, I mean, the gross margins there have been a bit more stable the last couple of quarters. Is 55% kind of the right level to be thinking about? Thank you.

Speaker 4

Yes. Maybe I'll start with the Revolve, Even though that was kind of a lesser impact this quarter, the year over year decline there is roughly split half and half Between the full price to markdown shift, we were slightly lower on full price this year, this quarter than last year's Q3. Again, that's in a really healthy place if you compare it to pre COVID, but still relative to last year it is lower. And then owned brands is the other half of that Year on year decline where own brand mix was lower this year than it was last year. A lot of opportunity there, but given the comments in the prepared remarks, we are more cautious on that Own brand inventory in times when we're pulling back and managing that inventory balance.

Speaker 4

So that's not Revolve said. And to your point, more stable and Kind of less risk there as we look into Q4. On the forward side, this is where year on year significant Decline in margin and also sequentially, which was, I wouldn't say, maybe surprises, too aggressive. But we are working through the inventory. It is taking longer.

Speaker 4

The macro pressures are adding to that and kind of extending the timeframe there. And then add on the promotional environment, we did move more aggressively into that markdown call. And the markdowns were more significant than they were in Q2 and last year. So I think we're probably at or near the trough on forward, But we probably have another couple of quarters of challenge there.

Operator

Our next question comes from Rick Patel from Raymond James. Please go ahead. Your line is open.

Speaker 4

Thank you. Good afternoon, guys. You touched on it, but I'm hoping you can expand on how you're planning inventory for the spring of 2024. It sounds like you're seeing Signs of encouragement for the Revolve brand and the beauty category, but just hoping for more color there and if there's any other areas of the business that are worth Calling out from an inventory planning perspective. Yes, yes.

Speaker 4

Maybe starting with Revolve to your point. We are further ahead on the inventory rebalancing and feel good about that inventory turns are up year on year. And feel good about that inventory turns are up year on year. So we're at the point now where we'll start to see buys increase year on year as we get into Q1 of 2024. On the forward side, as I mentioned, we've still got another quarter or 2 of rebalancing there.

Speaker 4

So the Kind of lean into inventory will be a couple of quarters lagging. So we're probably not looking probably looking more at like midyear on the forward side. And then own brands is a longer tail. It takes longer to kind of recalibrate and spin that up. So I think as we approach the back half of next year, seeing Some increases there, but as a percentage of the overall mix, not factoring anything dramatic In for 2024 on own brand mix, different from where we're at today.

Speaker 4

And maybe just to touch on Beauty as well, because we are really excited about the Beauty. The brands that we've added in Q3 are really healthy roster and Michael mentioned this on the prepared remarks, really healthy roster of brands Coming on in Q4 and into 2024. So really excited about that area.

Operator

Our next question comes from Kunal Madhukar from UBS. Please go ahead. Your line is open.

Speaker 9

Hi, thanks for taking the question. Call. One on active clients, that number is still growing. Can you talk about where that you're adding active clients, Whether it is U. S, international and any demographic that you could give us?

Speaker 9

And second, on the efficiency on the marketing side, Is that driven by lower price on a per ad basis or is that driven by better targeting or better maybe channel mix? Thank you.

Speaker 4

Yes. Hey, Kunal. On the first one on active customers, by geography, it skews Hi. On a growth perspective, international versus domestic. So roughly not in line, but it's a similar dynamic to our overall Sales growth, RISI, international outpacing domestic.

Speaker 4

Within domestic, you see Markdown growth outpacing the full price growth, but full price still very strong and Call it, 2 thirds plus almost 3 quarters of the new customers are coming from full price still. So a really healthy customer base. And then Revolve Forward, again, similar to the net sales dynamics where forward legs that of Revolve, it's similar on the new customer side.

Speaker 3

Yes. And then in terms of the marketing efficiency, it's a combination of things. We've been tweaking Kind of the performance marketing budget over the past few quarters, running kind of various And kind of adding to our ability to optimize the marketing. And I'd say really we're kind of halfway through that future or that process. So It's a little bit of that and then it's a little bit of timing in terms of brand marketing activities, which are more

Speaker 2

long term in terms of

Speaker 3

how they impact the business. But overall, we that really was one of the bright spots The quarter that we're able to have strong active customer growth with some more efficient marketing.

Operator

Our next question comes from Dhanush Stykhtar from BTIG. Please go ahead. Your line is open.

Speaker 10

Hi. Good afternoon, everyone. I want to ask a bit more about returns and some of the initiatives you have to improve bit certainty. I think you talked about A few initiatives, virtual try on, videos, product fit guides, but it seems like they're all in the kind of earlier stages of rollout. So I just wanted to understand when we could see them rolled out more broadly.

Speaker 10

And then on that, within selling and distribution expense, I think you're targeting 18.7% this year and you've talked about kind of the high 17% range, maybe even the low 17% longer term. Just any structural changes to that thinking based on what you're seeing on return rates now? Thank you.

Speaker 3

Yes. So in terms of the return initiatives, they are in the earlier stages. And in terms of broader rollout, it's going to be a couple of things. 1, we need to see There's significant on the impact that we're trying to make. And then 2, for a number of them and it depends on kind of which one, but a number of them Require a lot of manpower to do well.

Speaker 3

Now, manpower that's well worth it compared to the cost savings, but it will take time to kind of ramp that up once we get So the full confirmation that these targeted efforts worked, then we have to roll them out more broadly and make sure we have the right team to support. And then in terms of selling and distribution costs and kind of We'll forecast on those going forward. I'd turn it over to Jesse.

Speaker 4

Yes. Hi, Jeanine. Yes. We got hit on a number of fronts on that selling and distribution this quarter. The return rate was a big factor, in that year over year increase that we saw.

Speaker 4

Lower AOV also had a pretty significant impact there. And those two call. We had some really great cost savings initiatives that started to take place and really have an impact in Q3, but not enough to offset those Two factors. So if you look on a cost per order basis, the cost per order on selling and distribution was actually lower by call it 4% year on year. So Some good early gains there, just not enough to offset the pressures that we saw this quarter.

Speaker 4

So we factored that into our guidance for Q4 And taking a cautious stance there. But as we look ahead into 2024, we are optimistic. And we're in the early stages of those efficiency and cost savings initiatives. So we are optimistic. I think it's probably from the time we talked last quarter, it's the timeline has probably extended given some of the Increased pressures that we've seen in return rate kind of at those elevated levels.

Speaker 4

Also on a sequential basis, we saw fuel tick up again. So it's kind of up 10% sequentially from just last quarter. We're still lower on a year over year basis, but some of those things just

Speaker 11

work in our favor

Speaker 4

this quarter, but feel optimistic over the mid to long I'm on that line item.

Operator

Our next question comes from Alice Zhao from Bank of America. Please go ahead. Your line is open.

Speaker 12

Hi, thanks for taking my question. Where do you see Beauty shakeout as a percentage of sales longer term? How quickly are you expanding that business, signing up new brands? What's the crossover for customers that purchase apparel versus beauty now? How much lower is beauty AOV?

Speaker 12

What and what are long term margin implications if you have a higher percentage of beauty longer term? Just more details on beauty would be helpful since it seems to be the one kind of category bright spot.

Speaker 2

Yes, this is on the right spot, but definitely Beauty is really, really shining. Long term wise, we look at kind of historic competitors, whether it be Previous generation kind of like legacy players like the department stores like Nordstrom or Neiman's and things like that. And we triangulate, call it 15 ish percent, Some of the competitors we've seen higher are closer to 20%. But ultimately, in a mature state, we think the business should be something in that zone. So we have a long way to go.

Speaker 2

Of course, over the long term, we anticipate kind of our core apparel business to continue to grow. So we think that from a dollar's perspective, that 15% to 20% will hopefully just get larger and larger over time. So moving targets there. So quite excited about that. Of course, it's super obvious that Customers are buying clothes to go out.

Speaker 2

Of course, they're wearing makeup and beauty. So, of course, that natural fit there. Long term wise, we're looking at economics. Yes, Jesse is probably the best person in terms of talking about the puts and takes and the long term opportunity there.

Speaker 4

Yes, yes, sure. And maybe just to corroborate kind of something Nicole mentioned 15% plus or minus of our new customers came from Beauty. So, it shows the potential of that mix increasing over time and some of that overlap that we do experience. And then those BB customers do come back and purchase that higher AOBs over time, similar to our overall customer, but at a greater kind of increased AOB basis. Opportunity to continue to upsell across all those beauty customers.

Speaker 4

From a kind of an economic standpoint, so gross margin is call. Lower on those beauty products, but other things to keep in mind as we work down through the contribution margin, the return rate is Significantly lower. So we're talking kind of mid single digit return rate versus our overall return rate is much higher than that. So we think it's a very healthy customer, it's very healthy kind of product category to have and balance out the mix there.

Operator

Our next question comes from Ashley Owens from KeyBanc Capital Markets. Please go ahead. Your line is open. Great. Thanks for taking the question.

Operator

Just would be curious to hear comments on the inventory mix within Ford kind of as it stands today. Are there any categories that you feel are closer to being right sized? And then inversely, any that you're having a harder time clearing through that are creating some of those rebalancing lags? Thanks.

Speaker 3

Yes. So as a whole, we certainly have too much inventory. It is concentrated in brands that have more markdown restrictions That kind of prevent us from going through a normal kind of markdown cadence on the website itself. And then from a category standpoint, It is concentrated in categories that tend to hold their value well, things like handbags, Shoes, accessories, logoed products. So we feel good from that standpoint.

Speaker 3

But it's certainly been a challenging situation and A bit frustrating that the inventory still isn't fully rebalanced, but to Jesse's earlier comments, we're hopeful in the coming quarters we'll Start to see

Speaker 6

that churn.

Operator

Our next question comes from Dylan Carden from William Blair. Please go ahead. Your line is open.

Speaker 13

Thank you. I know you're not going to give a Hard numbers, but

Speaker 6

can you at least sort of somehow give us a sense

Speaker 13

of the dynamics on sort of the return number. Is it sort of increasing steadily quarter? Is it something that's stabilizing just at a higher rate? Just trying to get my hands around.

Speaker 3

Yes. I'm sure there's a lot of moving parts every quarter and we certainly break it down in a number of different ways. So I couldn't give you a conclusive answer on that, but I'd say directionally as we interpret the data, there was continued pressure in Q3 And it didn't look like a stabilization in Q3. Now whether it was continued increasing kind of quarter over quarter rise is hard to say because there's too many moving parts quarter by quarter in terms of mix shifts and other dynamics, but we haven't seen clear signs of stabilization.

Speaker 6

Okay. And it's something

Speaker 13

I caught in passing in the prepared remarks. Is there a dynamic in the model now where if your sales come in higher than you expect, Your earnings actually come in lower because they

Speaker 4

come with higher returns.

Speaker 13

Is that a dynamic that was a play in this quarter? Did I misunderstand that?

Speaker 4

No, I don't think not necessarily. I think a lot depending on the mix and AOV is of course, but I would say, yes, not directly a result of net sales coming in.

Speaker 3

In general, higher net sales are good for everything in clean marines. Obviously, it depends on the dynamics where marketing expenditure is higher, where gross margins lower, where return rates higher, But all things being equal, more net sales is a good thing.

Speaker 6

Okay, great. That's all for me. Thanks.

Operator

Our next question comes from Simeon Siegel from BMO Capital Markets. Please go ahead. Your line is open.

Speaker 11

Thanks. Hey, guys. Good afternoon and I appreciate you making your comments regarding Israel. So congrats on topping the $2,500,000 How are you thinking about the active customer trajectory for the short and longer term opportunity from here? Are you seeing any meaningful spending pattern differences in the new customers versus the existing?

Speaker 11

And then just how do the existing active customers breakdown between domestic and international? Thanks.

Speaker 4

Yes. Let's see. I think new customers continue to grow on the new customer front and holding up on the active customer front. That growth is compressing As we work through these quarters, so the year on year growth for active customers is going to be a little bit lighter in Q4 than it is in Q3. And over time, those 2 will get back to kind of call it the old days after we cycle out of all these comps where the net sales and the active customer growth are plus or minus in the same zone.

Speaker 4

And what we're seeing from the new customers, nothing significant that pops out from a Particular cohort of new customers, all cohorts are behaving relatively the same. You do see differences And we're shifting between full price and markdown and the beauty customer is new to us. So we'll see how that plays out over the long term. But as mentioned, those customers Are coming back at higher average order value, so we're optimistic about that. And then I'd say no significant difference between the Kind of retention patterns between domestic and international.

Speaker 4

A lot of that is dependent on the localization efforts that we've made over the past Several years, so that retention dynamic is much stronger given the free shipping, free returns and the customer experience that we've optimized over the last few years.

Speaker 11

Okay. And then just how many of the customers are international? And then if I Ken, within AOV, did you or could you know what ASP was versus units per order? And I think that's an LTM number. How was AOV or ASP for this quarter versus the prior year period.

Speaker 11

Thank you.

Speaker 4

Yes. So I guess not breaking out specifically the international versus domestic active customers that is roughly in the same zone as the domestic. But keep in mind that for or sorry, international SKUs a little bit heavier forward, so it would be a little bit lighter on a customer versus revenue basis. On AOV and ASP versus UPO, there was a decrease in both of those, both ASP And UPO. UPO was the biggest impact this quarter on a year over year basis.

Speaker 4

And some of that was due to the shift in mix towards beauty and Typically that TikTok shop, there are a lot of single item orders, so that skewed the, UPO lower. On top of that, Q3 of last year, we had a really phenomenal UTO quarter. So there's a little bit of a dynamic there. And then ASP and this is all on the Revolve side because forward is plus or minus in the same zone on AOV. So ASP on Revolve was also down year on year and much of that was due to the shift in mix to beauty.

Speaker 4

If you kind of strip beauty out, ASPs were Up a healthy number outside of that beauty category, so largely due to mix on both of those factors.

Operator

Our next question comes from Jim Duffy from Stifel. Please go ahead. Your line is open.

Speaker 14

Hi, this is Peter McGoldrick on for Jim. Thanks for taking our question. I wanted to ask on social marketing, you offered some valuable insight on customer engagement through TikTok, Driving the playbook for customers in beauty. Could you provide some sense of how important this channel is To driving platform discovery for new customers overall, perhaps size it against the magnitude of static posts on Instagram?

Speaker 2

Yes. Overall, we see the long term trend being that TikTok is the growing platform with and of course with growing platforms provides growing opportunity. Instagram being a little bit more mature is, of course, very, very important for us and something we're still very focused on. But of course, staying on top of where the puck is moving, pay attention to TikTok and Development's down to success there is very, very, very quite encouraging. As Mike mentioned on some earlier questions and such that it is very dynamic and very early.

Speaker 2

So we're Quite excited with the early success. The early success in direct selling has succeeded, mature success in Instagram direct selling and being in the early, early zone that If TikTok gets this right, it could be massive, very, very massive, but at this point, it's very early, but super encouraging.

Speaker 14

Thanks. And then I just had one follow-up on Mexico. This market continues to show strong customer traction. Can you size this business as an overall mix of international and offer some sort of guide as to How big this could be or contribute to revenue looking ahead?

Speaker 3

Yes. So it's really I mean, one of our more important international markets, it's in our top five countries now, I mean, in terms of size. And It's certainly a meaningful portion of the mix, but at the same time, we do sell worldwide. So it's not like it has some You know dominant share, but it's starting to get to a size where at the current growth rates, it does have a meaningful impact on the overall growth of the international business. We're hopeful we can continue our efforts there and it will drive more and more to total growth as that market gets larger and larger.

Operator

Our next question comes from Matt Koranda from Roth MKM. Please go ahead. Your line is open.

Speaker 15

Hey, guys. Just wanted to see if we could back up real quickly to the October trend that you mentioned, the down low single digits. It just doesn't sound like a big deceleration despite all the concerns and the headwinds that your consumer is facing. So Anything you can unpack for us as to why that's holding up despite some of the incremental headwind she's facing? And then just, Jesse, maybe any monthly comp dynamics to call out For the Q4 as we think about modeling top line growth.

Speaker 2

Yes. I would agree that, of course, we're not happy with a negative growth quarter, but if you're looking at the big Sure. It could be a lot worse. I think it really kind of highlights the competitive landscape where us being a premium player, we're competing against You know the legacy players of decades ago and we continue to do that quite well, especially in terms of challenge. We see stiff, Very intense competition in luxury zone, with conglomerates and we also see at the kind of mass market zone with the rise And against the incumbents we see at home, they're taking over that business.

Speaker 2

But in the middle premium zone, we are unique and we don't face Any direct mod of competitors. So I think that the long multi decade trend of us competing against legacy players continues to Be a long term trend that ultimately would drive continued success.

Operator

And then

Speaker 15

just Jesse, maybe on the monthly call out, Jeff, you could, that'd be great.

Speaker 4

Yes. Nothing significantly incremental to what we mentioned on the call in that November December are slightly tougher both on a 1 year And a multiyear comparing to 2019 basis. So we just wanted to call that out, so you could factor that into the Q4. But yes, nothing more outside of that.

Speaker 15

Okay, got it. And then just I was

Speaker 1

a little surprised to see

Speaker 15

you guys leaning into the marketing spend in the Q4 commentary Despite somewhat of a weak environment, so are we seeing an opportunity to play offense to for customer acquisition? Is there brand spend going on in the 4th quarter? Just maybe Help us understand sort of the incremental lean in there.

Speaker 9

Yes. I would say it's

Speaker 2

a long term offense. In times like this, We really see that competition and the appetite. A lot of your intuition, I think, It's quite common and I think that's kind of how a lot of people approach the situation. But I think it's kind of seeing when people are zagging and being optimistic when people Especially when the core business is strong and especially when we have a long term mindset. So we do see opportunities coming up and we'll continue to invest.

Operator

We have time for one more question and it will come from Tom Nikic from Wedbush Securities. Please go ahead. Your line is open.

Speaker 16

Hey, guys. Thanks for squeezing me in. Jesse, I think obviously your margins have come under pressure in the last couple of years. Is there any way we should or could think about what is recoverable and what may be structural Relative to, I guess, margins that we were seeing a couple of years ago.

Speaker 4

Yes, great question, Tom. Yes, I think a large portion of it is recoverable. I think if you start at the gross margin level, we are coming off of an inventory rebalancing period. We're still Pressured by forward, something that Mike mentioned in his prepared remarks that I think is important in that we're roughly in the same zone on gross margin For Revolve now as we were in 3Q of 2019 despite the fact that own brands is half the mix that it was back then. So I think that shows 1, the great success we've made on both own brand and third party gross margin standalone.

Speaker 4

And then second, the opportunity we have looking ahead as we increase Keep that own brand mix. So that's number 1. And I would say largely recoverable and not just recoverable, but getting in excess of where we were kind of pre COVID levels. Fulfillment, we're at a point now where we're getting pressured by again return rate, the AOV, Also capacity, where we expanded our fulfillment footprint last year around this time. We haven't fully optimized, fully grown into that.

Speaker 4

So There is opportunity there. So that is maybe not 100%, but largely recoverable. Selling and distribution is call. Given the return rate pressure that we've experienced, the increase in rates over the past several years, fuel in particular. We do think there is a lot of opportunity there and we have a lot of initiatives that play internally.

Speaker 4

We're already starting to see the savings there. But that is, I would say recoverable, but not to the extent of those other 2. If we can't get return rates, right size, Which we think there's a lot of opportunity there. Marketing is a lever we can pull. It's either called out a recoverable or unrecoverable.

Speaker 4

That's Kind of an opportunity and a lever we can pull on. And G and A is very recoverable and has a lot of leverage As we look ahead and get back into growth territory and get some scale leverage There. So and if you look at that line item, a couple of points over the last 3 years, we think that's achievable over the next few years as well.

Speaker 16

Understood. Thanks, Jesse. Best of luck for the rest of the

Speaker 6

year. Thanks.

Speaker 3

Thank you.

Operator

This concludes today's Q and A session. I would like to turn the call back to management for closing remarks.

Speaker 2

Hey, guys. Thanks for joining us for another quarter. I'm excited to continue to stay focused. Call. Our team is working on a lot of exciting things as they know.

Speaker 2

So excited to share the positive exciting results of the hard work and the foundation that we're laying now. Thanks, guys.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

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Earnings Conference Call
Revolve Group Q3 2023
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