LightInTheBox - Q1 2024

Transcript

Operator (participant)

Hello, ladies and gentlemen. Thank you for standing by for LightInTheBox's first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I would now like to turn the call over to your host, Miss Jenny Cai. Please go ahead, Jenny.

Jenny Cai (Head of Investor Relations)

Thank you, operator. Hello, everyone, and welcome to LightInTheBox first quarter 2024 earnings conference call. The company's earnings results were released via news wire services earlier today and are available on the company's IR website at ir.lightinthebox.com. On the call from LightInTheBox today are Mr. Jian He, Chairman and CEO, Ms. Yuanjun Ye, Chief Financial Officer, and Ms. Wenyu Liu, Chief Growth Officer. Mr. He will provide an overview of the company's strategies and the recent developments, followed by Ms. Ye, who will go over its financial results. Following our prepared remarks, we'll open the call to questions. Before we proceed, please note that today's discussion may contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from the company's current expectations. To understand the factors that could cause results to materially differ from those in forward-looking statements, please refer to the company's Form 20-F filed with the Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under the applicable law. Please also note that LightInTheBox earnings press release and this conference call includes the discussions of unaudited GAAP financial measures, as well as unaudited non-GAAP financial measures. Please refer to the company's earnings press release, which contains a reconciliation of the audited non-GAAP measures to the audited GAAP measures. Now, I'd like to turn the call over to LightInTheBox Chairman and CEO, Mr. He. Please go ahead.

Jian He (Chairman and CEO)

Good morning and good evening, everyone. Thank you for joining our first quarter 2024 earnings conference call today. We faced macroeconomic headwinds and increasing competition in the first quarter of 2024. This complex landscape drove an increase in traffic acquisition costs and the rate of our sales. We addressed the challenges with our development strategy, pivoting from prioritizing sales growth to focusing on profitability improvement. We also strive to grow our brand awareness with high-quality products and optimize consumption experience. We expect a rapidly evolving and a turbulent operating environment as we move through 2024. In response, we will maintain our focus on high-quality development and profitability. We are fostering new brands and initiating a series of strategy adjustments. Based on our industrial know-how, we aim to further differentiate our offering and better align them with the consumer preference and the demands.

Additionally, we will continue to refine our localized operations and the marketing campaigns in key markets, such as the United States, to bring on-trend products to more customers. We believe this initiative will optimize marketing ROI, drive user traffic, and cultivate a loyal customer base over time, strengthening our brand recognition and overall competitiveness. We will keep you updated on our progress in future calls. Delivering high-quality development and a sustainable long-term value for all stakeholders remains our ultimate goal. With that, I will now hand the call over to Yuanjun to go through our financial results.

Thank you, Mr. He. Good morning and good evening, everyone. Before we start a detailed discussion of our financials, please note that unless otherwise stated, all the financials we present today are in U.S. dollar terms. Now, let me share our financial performance for the quarter. In the first quarter, our total revenues decreased by 52% year-over-year to $71 million, primarily due to the macro headwinds and intensive competition. Our total operating expenses decreased by 47% year-over-year to $45 million from $87 million in the same period of last year. The decrease was mainly due to decrease of our revenues. Specifically, fulfillment expenses decreased by 33% year-over-year to $5.7 million. Selling and marketing expenses decreased by 53% year-over-year to $33 million.

G&A expenses decreased by 20% year-over-year to $7.3 million. As part of the G&A expenses, R&D expenses in the first quarter of 2024 were $4.6 million, compared with $5.2 million in the same quarter of last year. Going forward, we will execute our optimized brand strategy while leveraging our proprietary technologies to enhance our operational efficiency and customer service. Turning to our bottom line, net loss narrowed to $3.8 million from $4 million in the same quarter of 2023. Adjusted EBITDA was a loss of $3.1 million, compared with a loss of $3.1 million in the first quarter of 2024. As Mr. He mentioned, enhancing profitability will be our strategic priority this year. We are also dedicated to returning value to our shareholders through our share repurchase program.

As of April 17, 2024, the company had repurchased 3.2 million ADS, with a total aggregate value of approximately $3.5 million. Moving to the guidance. For the second quarter of 2024, based on information currently available and business seasonality, we expect total revenues to be between $60 million and $70 million. This concludes our prepared remarks. We'll be happy to take some questions now. Operator, please continue.

Operator (participant)

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. As there are no questions, I'm now about to turn the call back over to Jenny Cai for closing remarks.

Yuan Jun Ye (CFO)

Thank you once again for joining us today. If you have further questions, please feel free to contact LightInTheBox investor relations through the contact information provided on our website or Piacente Financial Communications. Have a good, great day.

Operator (participant)

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