Lightinthebox Holding Co Ltd (NYSE:LITB) Q1 2019 Earnings Conference Call - Final Transcript

Jun 24, 2019 • 08:00 am ET

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Lightinthebox Holding Co Ltd (NYSE:LITB) Q1 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Jian He

employees toward building the long-term success of the business and to weathering challenge in order to regain growth momentum.

Let me go into a little more detail. First, the strategy of shifting our focus from geography markets, towards generating sales in categories that have higher gross margins such as weddings and events, fast fashion, home and garden, sports is generating solid results. We are also integrating high-quality suppliers from Ezbuy's network, improving supply chain management and reducing procurement cost, which has resulted significant improvement in inventory turnover efficiency.

Second, the integration of operation between Ezbuy and LightInTheBox continues to progress well. Cost of revenue decreased year-over-year and sequentially as we continue to create new synergies between Ezbuy and LightInTheBox and optimize operational efficiency. Sales and marketing expense, as a percentage of revenue also continued to trend down, falling to 18.3% during the quarter, from 23% during the same period last year and 20.5% last quarter. We are working with suppliers of product categories that allow more flexible payment terms and are also seeing increases in repeat purchase. As we continue to integrate our systems and optimize our product recommendation algorithm to recommend more cost-efficient products to users.

The consolidation of four warehouse into two, was completed during the quarter as well. We are also creating more opportunities to consolidate digital marketing, shipping, order fulfillment and further drive down cost over time. We incurred a one-time charge of approximately $3 million, which was split between G&A and fulfillment expense during the quarter in connection with warehouse and operational team consolidation, which we are confident will improve our overall operational efficiency over the long-term and strengthen our competitive position.

I'm very pleased with the progress we have made so far and the direction we are moving forward with to implement these initiatives and a number of others (inaudible) will continue to improve efficiency and fully leverage the synergies between LightInTheBox and Ezbuy.

I will now hand the call over to Wenyu to go through the financials for the quarter.

Executive
Wenyu Liu

Thank you, Mr. He. As I review our financial results, let me remind you about a few things. All numbers quoted are in USD dollars; all the percentage changes refer to year-over-year unless otherwise noted.

So to start, total revenues decreased by 27.4% year-over-year to USD50.9 million. Revenues from product sales were $49.8 million compared with $60.6 (ph) million in the same quarter of 2018. Revenues from service and others were $1.1 million compared with $4.1 million in the same quarter of 2018. As a percentage of total revenues, service and others accounted for 2.2% in the fourth quarter of 2019.

The number of orders for product sales was 2.6 million compared with 1.3 million in the same quarter of 2018. The number of customers for product sales was 0.6 million compared with 1 million in the same quarter of 2018. Product sales from the apparel were $14.4 million compared with $19.9 million in the same quarter of 2018. As a percentage of