The RealReal, Inc. (REAL) 10 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Paul Bieber	Head of Investor Relations
Julie Wainwright	Founder & Chief Executive Officer
Matt Gustke	Chief Financial Officer
Oliver Chen	Cowen
Erinn Murphy	Piper Sandler
Michael Binetti	Credit Suisse
Mark Altschwager	Baird
Edward Yruma	KeyBanc
Michael McGovern	Bank of America
Lauren Schenk	Morgan Stanley
Ike Boruchow	Wells Fargo
Alec Legg	B. Riley
Anna Andreeva	Needham
Marvin Fong	BTIG
Simeon Siegel	BMO Capital Markets

Call transcript

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Operator

Good day and thank you for standing by, and welcome to The RealReal Second Quarter 2021 Financial Results Conference Call. At this time, all participants' line are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to your speaker today, Mr. Paul Bieber, Head of Investor Relations. ahead. go Please

Paul Bieber

afternoon for Good Paul to RealReal's RealReal. The Head Thank quarter and ended call The at the Investor I'm June earnings of you. Relations welcome XX, Bieber, XXXX.

Relations discuss me Chief of we chance distributed letter and Matt website. to our Joining our Officer, our are to results Founder available release Julie Financial had and you Hopefully both that press earlier which are on Gustke. read today, Wainwright CEO, a Investor stockholder today and

I'd call. begin, you and we statements we and remind Before like the materially. that differ uncertainties, known will to during our statements course involve could actual unknown and make These forward-looking risks, of results this forward-looking

could report affect recent in operating our find most Form XX-Q on from in on earlier our can today. information risks, more uncertainties that You results periodic subsequent these earnings release and Form about quarterly XX-K, our reports and factors other

will have over press we'll measures that, to presentation for our straight financial earnings hand include release. non-GAAP to our and remarks, introductory GAAP Julie in Q&A. go comparable call the reconciliations addition, most I'll provided Julie? In measures certain we to With which then for the

Julie Wainwright

to you discuss Paul. joining Thanks, quarter results. And all for our thank us second

new report both to and continued at-home consignments repeat retail strong this another and pleased are of growth, consignors We our highest our momentum. of quarter driven numbers by We quarter. achieved

QX progress path QX XXXX GMV specifically, a very significant achieved gross getting in at-home. busy driver for improvement. in in quarter-on-quarter rates, same back As and profit order to $XX, GMV driving us with quarter XX% supply to quarter-on-quarter a also to period a year-over-year priorities; a We our QX key these while per QX and improvement made profit order, approximately compared was we increasing significant XXXX. growth XX% when XXXX. growth marketplace, resulted has to wasn't profitability. also both in this year-on-year $X gross per strong compared our the top driven and accelerated

as XX% of increasing are units consignments contributed a at-home in consignments and total total percentage Our QX. of

Our that's authentication center Arizona say well. future our facility, in going to growth to Phoenix accommodate I'm very move and happy the we to large accelerated

Austin, expansion; added Atlanta during QX. neighborhood Our Dallas store and we

Our XX% We to stores efficiencies our new QX, the in current in our continue the generation operations, consignments our The retail year. and In this enabled stores technology strong. pricing We open year believe business, our plan innovation; will to in generated of they engines. investments scale. And trends two of feature quarter. business our this in lastly, more differentiate about technology next we released next. authentication are and significant our and drive continue

make we and progress growth, GMV in per and with order efficiencies marketing. operations gross their Beyond profit

we our key forward. made support growth, stores path elements create to in these going of profitability. leverage but The not are only our and neighborhood All the have our investments for to meaningful potential Arizona also facility,

progress We and make quarter. are focused over significant the to achieving on expect profitability coming

drives these commitment ready strong questions. every team to results. for is entire with work delivering and QX dedication their I'd thank like always, we're TRR operator, hard our As And It in that, that the their day. for business

Operator

first of Oliver Your is Cowen. Instructions] question from [Operator Chen

is open. line now Your

Oliver Chen

growth your per and York, drivers of New and evolution just Thank profitability you On key Thank of you that supply love the ahead, managing as also very these thoughts markets, in order? much. and in the And capabilities. on you. opportunity what profit do see terms the in gross LA

Julie Wainwright

profitability. discuss going the with to I'm part path then over and last turn to drivers the to start I'm the to to it going key Matt

phenomenally York, both new performing buyers well. driving in both consigners new stores, our enough, oldest and and interestingly continuing are So LA and New are

to there bottom for allow be those going well. more better We store consignment - bottom below even to and the of bit us are the part to us. than especially mean, [indiscernible] mature, or an achieving expanding the doing reconfiguring They're where they're of York plan take New are the stores we're store, I New more little York a plan

So flagship Obviously, we well the we're we also we not and the flagship are are or expanding committed. stores, doing our They're better. as expanding are stores, neighborhood as stores. those thought

Matt Gustke

go I'll question. to first And Okay. the

overall So profitability. really profit per and the context on I was gross order your focus think drivers within of

kind thinking So profitability. framework of to overall how for emphasize about cover the that, I'm we're going

profit all, expected getting improvements First from focused increased From quarter-over-quarter per mid-XXs. on here the of we're $X, very forward, as a gross into quarter saw, further be quarter lower you And it. beyond higher at that, from time we and see And pre-COVID AOV. incentives continuing benefit from then exited incremental over expect QX shipping levels. buyer benefits do improvements full can to which

just of So that's kind you now and forwards context that are those the pieces really broader one small to the In from benefits we of neighborhood incremental get key there. going element. from that $XXX profitability just where are

costs ramping first $XXX been profit are top So, foreseeable sustain to put more XX% up at foremost you per fixed increases, In have minimal until that, Arizona in really fixed we're line percent stores comfortable was are in the come future. gross over in can $XX going post-IPO then which step XXXX what not to were so, got we range. versus a order still increasing and of going And saying $XX do I to we We've our to time issues, forward. getting comps That growing growing the forward We're remains to doing to is quarter. controlling combined think, two difficult July, growth out you're with actually GMV consistently release the well. get and XX the top is costs is plus as line costs. fixed up. profitability. increase and variable per And to which getting expect saw QX, see last in. growth. where continue very much that we we're neighborhood, the expenses all the order to margin us in the this point seeing that big get for contribution we we point small able from After very to

leverage expense the other the marketing top efficiencies will and carry the us efficiencies variable profit variable compounded in the and line. by gross line piece So to finish

Oliver Chen

you What growth you helpful. That that XX% you question, there? GMV Last Thank much. was some drivers so out annual further on Thank you very details be underlying the are regards. on would give called Any the helpful. confidence that best and letter.

Matt Gustke

Yeah, thanks. Oliver. Thanks,

in taking something we optimistic of to to where assumptions overall. of growth just share But of committing well-positioned with very diversified top that and the is this. a confidence Julie not and now reasonable. want in overall, market about of significant on coming out still and growing terms more but over of are, more that to we've like going in On market Keep COVID the from supply only in our think continue of us are TAM incremental unfair we We're start it overall where is that, gives that chime to mind I rounding I'll course the those tailwinds now, some might overall. COVID well So just penetration with feeling we're very forward. de-risked places; resale is error that coming

Julie Wainwright

are change at cohort the the new in side. shape with very we for always on assumptions looking and repeat versus also And any of if in there's course, and and our buyers seeing fact, cohorts. And good in our are consigners we

but year at about we this variant which don't consequently, do So next year, there assuming we're complete recognize year. we we next wild future - feel no do good our card, the shutdowns Delta foresee, the recognize we are feel And about we do confident here. again, is

Oliver Chen

Best very regards. you Thank much.

Julie Wainwright

Oliver. Thanks,

Operator

of from Murphy next Erinn Piper is question Sandler. Your

Your open. is line

Erinn Murphy

permit to capabilities thanks. and and clarification Great, got then a what what just for the a authentication second I've Matt. for you're little that share there? apparel time could then more you and on clarification you can got share just generation for on in Good and returns adding, you quick footwear I've one your bit to do measuring pricing if how And that should And afternoon. the about trends? are saw next of you Julie, quarter, Matt. Julian over

Oliver Chen

Sure.

apparel I'm to very So about actually first that. excited going of last up is we're so start again, because the with all,

our but it's seeing growth, high fact, not so actually longer And still in is a business, overall trends similar excited apparel exceeding that. In coming is We're there doing about as still it's is drag the July. well. so actually, is back. very footwear no And we're on it -

So, this is good news. all

year year-on-year I Now, ago. ready - to numbers and when was XX% was to year yeah, roughly even XX% of ago, [indiscernible] versus - same was up wear you can a comes also in versus - apparel exact period it fact, but footwear year the give

the and balance really of the for that's bodes So news good year. well

been then - machine us general, technology. using pricing. oversight. technology, velocity highest of price our overall get both terms In We've goal absolute unit vision about price human talk using board of $XX the we've an we and of And it using a seen, using by help falloff for to without When a in in with optimization, across sales. increase computer use is our pricing our to the learning we a by and lot

that. we to continues that and share the fair prices that consigner get are and wins that certainly obviously show So of higher improvement our

that. about excited there and we're progress measured that's how we've So the

it's And allows first flow two levels. actually team. us really of authentication, for change it For our to work the all,

even tour, is our on the a sales then up efficient business, that thing year on team going and human And unit. sometimes is arrange And other and measure to still actually that efficiency to technology us this especially an of and we on So, variant, are it are our both improve, making processing new we it solutions continue facility. Phoenix we of keeping office effective. more but market effectiveness Delta the depending side, to driven more

because comes able and it will impact. the So see - changes you'll it see to firsthand doing you huge think we we're anyone there even be can can about visually talk what I who

Erinn Murphy

profit obviously, in on it clarification level. you to for understand laid shareholder next exit over in is months getting still or Thanks. way Matt, we that the the was letter Should letter as XX this talk trying out it. And next for per then Got the XXX Just guide. take year? cards of to Thanks. to shareholder the months my the about, is a around be the in you, order, year XX plus the as that that for just language rate kind potentially gross

Matt Gustke

getting of do no Sure. $XXX full at main and previously. Yeah, but on And potential for of the said thing are year, by down walking means the we the milestones very put to certainly I kind we evidence, basis specific this next come end timeframes to kind we're and would year. see back, a trying year the approach of

Erinn Murphy

much. so Thanks

Operator

Your Suisse. of is from Binetti next question Michael Credit

Your line is now open.

Michael Binetti

move there what the the apples the here. trying order on Hey, towards then year, guys. few our gross from inputs apples you to can letter But maybe $XX think the just push XXXX. be $XX will the think to for order EBITDA a I can apples questions per we've to to noted been at since expenses we next the shareholder there in inputs get maybe expenses you that $XX get And could you over gap taking Thanks to to year? XXXX. the I the of variable the quite profit order comments end and were I'm see you a variable the that bit. where here? the as profitability apples are - number in and XX understand this rank the around see in to you number per And Matt, equivalent for you us XXXX of from connect it walk XXXX?

Matt Gustke

sure. Sure,

I think your all tracked question. of I parts

variable So, definition what let's with our start the first, expenses are.

three of big is the of pick, marketing, think cost cost ones, I our pack the our of work second from team. kind retail, variable of benchmark our the the variable sales is inbound, of include is get for that tier and operations, are they kind and And and cost So, the most operating to of To recent good the here sort to then retail XXXX from. there, our expenses. ship,

of our won't efficiency, of that, costs, the acquisition on marketing get we with basis engagement operations there's in continue. to a are milestone. that starts and efficiency retention, improving about to then those going top So, And XX% first really to just and strong over that see to with ones long that driving be really drivers standing track order think a all buyer strong cohorts compound no see the mentioned. per That's record reason or unit time. costs per I buyer Marketing by XX% on that improved profitability expenses. The to or aggregate, biggest we variable marketing

that's in On side, really leveraged make. the to product variable automation that of the we operation that of investments strength really continue we've made

are So, those seeing benefits we now.

continue We expect generate seeing of know, been - going being, you forward. to the forward. stores too leverage retail kind opening for them that we're we're And going to start then just as time will about so

all XX%. adds XX% to up to that So,

Michael Binetti

about you or other sale help inventory direct basis us gross I by guess terms. XXX just follow embedded, lower we you see by XQ costs we of to I what's think margin about on driven points, was down half think up about the the second And margins. in about think do just please? aged that, said Can follow where with as 'XX, acquisition the then that, if those one customer going think should

Matt Gustke

one Sure, question. first with your Yep. let start that remembering me

the on basis. X arriving, a of across that's it are really supply or as rebounded our de-emphasizing board the of strongly. percentage year-over-year was us function purposeful X channels a purchase inventory, margin have you down So, direct And points the

as just much. utilize that So, don't we

important So coming returns late business it's direct accounts, the from traditional to higher with margin piece. the the mix thing. the lowest dimensionalize is this of But

So than GMV. less of direct XX% overall piece business of is the the

go small on What for to is changes That metric look we base was have pretty to up. significant opportunity on other that $X impact increased profit Overall, the small per a continue to gross the the a and So, at. question? quarter-over-quarter see order the surface.

Julie Wainwright

impact. Marketing

Matt Gustke

can on been for at I'm efficient. to driving impact, going have other about except guidance I'm we than to being And improvements, see have where every that very XXXX. not we back Marketing we any long-term historically been provide that heading, year, nimble yeah, just confident say effective and continue very

Michael Binetti

guys. lot, a Thanks Alright.

Operator

Baird. Your is next question of Altschwager from Mark

now Your open. line is

Mark Altschwager

my Appreciate Good question. afternoon. Thanks. you taking

of So, from angle a another maybe little on a up profitability here. follow that bit the just path to different

are So, the the appreciate difficult, but break you year kind put of to expectations pieces backdrop at least guiding kind the for makes XX%. of forecasting that that to it's GMV this together

a by it about per pleased there's like would to you as later the back of door the room that knocking outlined with to of year, $X going especially on rate to nicely, improve. next GMV Gross of profit order be seem Next and for some part kind billion you're bounced year. efficiency initiatives, some you're sounds of run has Arizona. that It

on guess, as not you on I So guess components are moving wanting a this which - most that the kind components seems all I it call timeline bear kind these put that out direction, together, of kind here, us like I path in point. the the of but to of because risk given put at some things the you've of

there So, just would any clarity, further great. be

Matt Gustke

we line profitability. get the growth We'd current disclosures, term out in, to like are prudent the short-term of and which for short good proxy is negligible. incremental environment a love I going think top drive that simultaneously be - to about there. guess, are to I do thing commitment driving timeframe hearing in we pretty but and would seem doesn't we're the definitive and to obviously, putting love you're providing to are we guidance, is monthly the But benefit sort loud our continuing clear so the to it

much - our how to we're that's transparent provide going not approach less and it as transparency, path. on So, more

Mark Altschwager

was to bit follow think more remainder some just further just year. the kind the gross weighed the enough. build aged by down through line, context looks of up, inventory through Fair inventory direct some Matt, of on And a of and the you're just there any I a inventory, it guiding like working quick margin

risks? how So, just you're direct any of you. thoughts with opportunities side on the margin with kind managing the potential some Thank

Matt Gustke

So that let it we're with saying. start last not what me is part,

ago. balance, [indiscernible] we So our with of is doing about that year. inventory the be not a the that at were emphasis $XX the on end the We're of for nearly couple at of balance least of should quarters inventory million. That this QX

inventory the down of not pattern It the Point part late to that's always the we That - sell been been line, forever. up number number that's comment older forever is price the of returns two, through from the with overall new. one. over stays ultimately. a of time that the we So late the supply and point have margin direct period return end inventory lowest bringing do means has that is aged and And the piece us business. of part

this other expect going includes comments don't So We That on there's go. new nothing to it than quarter. inventory really up. not see

Mark Altschwager

Okay. Best luck. Thanks of for the clarification there.

Matt Gustke

care. Take

Operator

question Edward Yruma next from is of Your KeyBanc.

Your now is open. line

Edward Yruma

as thanks to metrics then sporting expansion far, on customer tests for those going you like inventory? to the guys kind kind acquisition any first, taking we seem and know any particular you how early through neighborhood guys, completed testing any hurdles guess you've I should you noticed and electronics up, are pause goods is follow to costs Hey, of Thanks. you once you're stores. to can meet. last, and give? this of questions. I And set sense but you're it of days kind obtaining about as categories hoping a guys And more the I thus know initial how that think we of other be indicated

Julie Wainwright

All right, Julie. so it's

you? are how Ed, hi, So

Edward Yruma

How are you?

Julie Wainwright

I are - good. we think

are good. We

in are ourselves early but not of excited luxury think with make into outdoor. the it. going So, I'm pretty a business. in the we predictions about It's as to thing, the just expansion, category lifestyle a collectibles, any a interesting particular, category we early, are we're day, very we we going going start are to large And they're so

We it of a like asking sounds us, for were these that, a actually the we it almost it so us while, consigners would to started categories. into week to and net add Our researched July. get third be just

very So new to our TAM, I actually for expands service our it would But us. expect it's very, level. expands it be

So, you part, Matt? And talk want great we first do really then, about to that. the about feel

Matt Gustke

sure. Yeah,

leverages add infrastructure, on all. that retail to does applied. really sales to footprint. so infrastructure So existing well, gets like also that our existing Not it authentication you how It our change, at how as and there and asked our

put just it's things. out better So, utilization make those making of

Julie Wainwright

retail then the stores. And retail store

Matt Gustke

there. there's in so kind a lot yeah, stores, Retail of

we're So, terms store acquisition not specific costs. disclosing numbers in of

going way about set some to new them, we're the through new things, XX Get case efforts to going to efficient some going around have consigners. through we consigners do. and marketing of couple more to surgical, do at then months. yet, said forward. have And exactly that acquisition Keep give in that remains all three retail acquire not source the and That mind has a the go It's, really a We that we're just to mature. doing more we stores case. is alone. even back were of been learn we'll and and previously. frankly, than tool very pause, reassess going effective what remains than to we're less in right, our It's the them to the come you're to time majority we didn't what we We're optimize the open,

from past stores take a to back. to good. quite that going and talked it's of are But in gather the bit the signs we've data little So early time come

in, a of the the rate seen that at for where halo store of with store the a which location. that period longer level on the the we're a coming value the they be importantly, then supply effect of consigners, then then grow opening on in that in and halo of large the or we've supply consistently growth in And market and of at it's and But most small accelerates number the generated new of demand our of time. stores, of value market stores and So impact looking and can depending quantity operate. course the course, row size higher continues to a stays

So a basis. an as accelerant by it on acts market market

forward. our before across see to many to portfolio play out how committing that want were So, going

Edward Yruma

guys. Thanks, it. Got

Operator

Your of America. next Bank Michael is question McGovern of from

is Your line now open.

Michael McGovern

you consigners I Hey, units little pick question. of to we've for QX? generating metrics wanted nation-wide? to of to just also other cases think the at-home then XX% to to cost taking about up cause for some in there concierge total to COVID wanted thanks call July might my point stores out kind gave appointments anything seen ask And high for some bit, June. of driving just continued the about he QX that seeing I as to that than Are around new framework. specific improve a any anything trend retail in secondly, Is trends quarter-on-quarter, ask out level specific call out? I XX%

Julie Wainwright

most in units July, have seeing felt, we're we impact do all not at centric So our I has areas of in-home from of the seeing We of a number we vaccination in terms have it's because in rate, experience an fact, to also variant, our from what think are also the and and at urban business - coming the increased. urban is any I actually, increase that nationally. think, Delta point, tend in higher this of most

have continues we're seeing second are we come back And that and people urban-driven units. back us and part? So an in in getting increasing business And excited the are at-home, to August.

Matt Gustke

OpEx. part the Yeah, second was around

see of growth. we - a on come some expect investing going increases volumes theme quarter-over-quarter and from basis anticipated the and to QX So general to ahead that's OpEx is

we have be specifically, facility, the so QX we which clean expenses be this down is extent out, coming to for volumes you're redundant product going into kind team, or for exit going then into to quarter, off, to higher in, of higher our sales the California where rolling cost So and at that'll some shut operations product the as with still coming basically duplicative marketing of in is will volumes and see our strong support as growth our in we our And invest period. QX. of the seasonal point

QX should ask pretty given be didn't sequentially so versus all different you QX. the I'll flat close dynamics, to but you, So OpEx, give

Michael McGovern

you great. that's Alright, Thank much. so

Operator

Your next is question Morgan of Lauren Stanley. from Schenk

now open. line Your is

Lauren Schenk

to third a quarter Great. I ask guide you GMV fact did. just you about didn't that give wanted and typically that the

curious the just so the that else be third or extrapolated as should guide plus in quarter letter seeing XX% you're that comment general if Thanks much. So something there. at shareholder sort the of for there's

Matt Gustke

I Okay. - interpretation not making. No, that's wouldn't the I'm that

Here's frequent we guidance it even results a but, actual replaced monthly with giving providing more disclosures of short-term basis. on

So results the you're going continue every those throughout seeing disclosures year. the to month, July are out,

the guidance So incremental benefit is de in minimis. the short considered providing term of

the this In difficult from the there was expecting difficult in of balance of comp terms of XXXX we're the of of more QX balance that of coming what in not that we're see August did strongest seeing, pretty But it this excess continuing as strong much off as but was growth well. and our one of quarter. XX% quarters quarter of no comp for July, IPO. our ever year-to-year you saw up decelerate beginning the of was the doubt is most to comps September in year, XXXX.

Lauren Schenk

Okay. Great.

Julie Wainwright

And case missed grow the July, for period release XX% so that's in did same not we you versus press Yes. in XX%, XX. XXXX,

Lauren Schenk

going there's you're rather forward. quarterly guidance get not sort of, going guidance short, the updates going you're giving But guess reason just to conclusion? Is for that - I the the than just Right. give is to monthly

Julie Wainwright

least of committed. year, the what that's balance At the for we

easier the every top recovery, you just COVID, its easier the on follow by we Just us business last line. month impacted single business and - for we to it because if be thought give our would for actual so year was

Lauren Schenk

Okay, thank you.

Operator

Fargo. Question is of Ike from Boruchow Wells

is now line open. Your

Ike Boruchow

Hey, months The gross I to I'm - margin the the margin margin. more. I excuse that happened a more would business this buying less you QX. understand decelerated like But would which But because exactly three direct say now up improve bit - everyone. three better what purposeful what trying good months you revenue, I bring have want would that looks gives ago up saying front, inventory that you it Matt, on into margin from sequentially great. dig sounds direct of afternoon, ago, guess, consignment I maybe me, be the guess you're you and little to did and margin. quarter direct it there gross assumed

And in understand a guess base, margins in I something about just way in then having just should think the we bit XX? closer quarter happening think there understanding little we trying XXs to and So just to I'm they're now of because think I that the we're revenue be if second and about they is a is used to trouble strategically it. there how should the

Matt Gustke

Sure.

So sustain changed our home, pressure or home well. a And our since in consignment to to that last is has our that business is quarter. growing buy in yeah, something takes inventory and back very our sourcing traditional recovery basis of off supply on and That growth.

purchase our not on being. time the inventory, the how the that So we for use taking just so foot gas to in capital to that's we're we prefer made our decision that that's isolation, not - off

really we the of that's But these in some the - get So think parts between of what business. there. lost can I seeing kind you're distinctions of the different

semi that's well. to business really trending going too small that drive Over The elements just is direct at just overall time fixed. because profit, keep business gross should business of the you should are of things. like business sort they're look margin purely the in parts size consignment If that the and the are the not is overall that up variable, in there both of

they get leverage, grow. as we some So

the part on trajectory. profit having is per be very guide [indiscernible] if impact It's we'll specific to but an of quarter that percent, transparent our gross Some business a not.

Ike Boruchow

Got it. Thanks, Matt.

Matt Gustke

value perspective up and seeing sell lower of rates. what vendor through And from the there is of is the part watches we're lots that inventory high of part value those handbags, on are carry There side structurally inherently sorry, things. follow - very the take high

growing recently. very So that strongly watches you're a are category seeing

terms part So our just of of systemic is take in rate structure. that

So to GMV a around bounce on that's of going small base going forward.

Ike Boruchow

Thanks again.

Operator

next Your line Anderson. of the from Susan comes question

line open. is Your

Alec Legg

Legg Susan. Hi, question. your Thanks for for taking it's on Alec

growth. GMV And you path would of and to picture the need you a would question When on opening facility a as likely other moving Just make the do into investments overall bigger new investments to assuming think one? to need what additional make or type annual profitability XX% growth? that bigger maintain that such you to then

Matt Gustke

great answer. pretty a with a question It's and simple

the profitability authentication at more be that about they're forward need we well fixed big in part a our warehousing fixed center. at obviously, year currently of overall, say. should or a But new And going of should Arizona a abstractly, capacity this network of years milestone five is the total us. costs, exit will have our not we levels will front time We fast base. With I that, very growth from cost at, grow past

So including fixed costs and store our include of estate, overhead our portfolio. all our those real functions,

So be rate very forward. growth that going a should modest

Paul Bieber

operator? Well

Operator

sir. Yes,

Your of from the Andreeva. Anna next question line comes

line is open. Your

Anna Andreeva

Thanks. and I guys. follow guess, and up from for a Great. our questions Thanks question that. congrats, taking One for Julie,

Julie, to cohorts, this anything number call about missed buyers previous So buyers the if quarter. Matt, demographically again, Can talk behavior to regionally? just that's some increased I'm different you I nicely And these out new sure to this. of of compared of maybe or the the not

expect should roll this in we million and third transient when DC Arizona to us these I just year. think quarter the about should for XX expect for the costs talked the remind from you costs we off? What

Matt Gustke

Okay.

Just I off. will start

Julie Wainwright

Yeah.

Matt Gustke

that's and in COVID you're non-recurring $XX for about inefficiency. right, Yes, the Arizona of costs up full million made Okay. expenses year

duplicative as labor this well quarter. costs. duplicative as quarter. will done, by will overlapping rent also exit exiting be overlapping The this as labor be both rent we The done So,

going a So, forward quarter And to is that going what's per until and dollars typical say change I could when but they're left knocked. those costs off, are wish I are costs million COVID. roll

Julie Wainwright

of getting little a our and significantly. actually we're in is - more base buyers, but younger And getting not seeing terms the it's bit male

So, just Xs are we bit engaged that with. Gen are little more a

are you If said plus of and approaching far value as now; ones, the majority buyer lifestyle with it we our as is go approaching, their that, can earliest Gen more base millennial the we is X, level. getting tell our But having males. pre-COVID is - and

we like getting, it's all more also level and younger us. So on getting hasn't male which and changed is level, some at good another for younger, it

Paul Bieber

next go question. Operator, to will the we

Operator

Marvin Your comes line from of next question Fong. the

Your line open. is

Marvin Fong

up Thanks I for the been XXX,XXX wanted me. history, even look in up Andreeva numbers buyer strong. what customers new Most buyer but level. very was asked noticed think that growth questions. thanks. are doing and incentives new quarter for you you said was all these Great, Good If that I like better follow Two I evening. just taking were guys to on back bringing the have Matt pre-COVID about better or a

down we and your didn't think So growth thoughts up just actually this for was about for apologies where your active of we should And our July AOV second you about level staying kind models, or buyer a out wanted question on, a you could if reach the addressed those XXX, then second kind just XXX elsewhere, levels? of bit. this little but quarter

great. comments there, Thank trend just drove some interested is apparel that'd up on you. and be mix AOV that, your the in total that Just what of going

Julie Wainwright

it address to over latter I'll then the Matt. kick and

June one more less so it high level. So to lowest at the more the was mixed COVID, to are But apparel tends tends apparel highs And before of AOV just for just shoes that it us our did versus in month May see it's to record which July, and and is had some still record itself the people because was months, a buying that Matt? still expensive. it did high and for - we a be to little July It's extent. trend they down be down month, AOV contemporary It's but more of record AOV, bit. then apparel in because

Matt Gustke

growth Yeah, the it's function I months. basic XX buyers a active metric I trailing buyer think in the think of broadly around of was generally, question your

So to COVID of and you're going we're it saw COVID. of kind lagging see the indicator - now a reacceleration that you pulling that deceleration during in the out both is

I to of on a at think most buyer use the metric trailing basis. useful is per active look that XX-month GMV

period, up about $XXXX, approaching shy we're this we were on to just You where is which of can see $XXXX, pre-COVID.

we growth need very, our necessarily increasing healthy. slightly time, - active contribution engaged. have It's attract because buyer to folks buyers the new growth we I tend are every a new ecosystem, doesn't business, very should see the buyer don't buyer the year. to our overall, basically of from So, buyer do that Over very growth think base

Marvin Fong

thanks, Appreciate it. Matt. Julie Thanks, and Gotcha.

Julie Wainwright

Sure.

Paul Bieber

the take will we last question. Operator,

Operator

question Simeon Your coming last from will Siegel. be

line Your is open.

Simeon Siegel

- Thanks. pricing you benefits gen seeing of was engine. ASP increase the ASP mentioned you think the much versus, mix from anyway Did you're on everyone. next afternoon, I how quantify shareholder Good to due to in the already letter

how as then guys. about latter, love hear the forward. Thanks, And that, about I'd moving to that. thinking you're So,

Julie Wainwright

this because, we're got optimization. yes, pricing in it's area us and our it we $XX business raise almost, literally great. that, for actually would overall, with we a can you we've obviously, how so So, did of - excited all here's the prices, And more, about key investment is

that, you to dropping. see having of last Now said is want the sales thing velocity

and every $XX it sometimes is do And portion I to because $X hopefully right it's line, it'll year. it see like a to bottom to So does this overall, expect continue continue to ongoing yield process enhances only an some but is and we drop of benefits, also satisfaction. it's benefits. the it iterative it important dollar that's consigners it to But us just said,

So positive for really both things, benefits Matt? And it. both are

Simeon Siegel

great. That's

Matt Gustke

it. covered I you've think and Yeah, basically

covered I think So letter. stockholder second we the in

starting business. QX. to that year-over-year, up the call ASP XX% So up earlier the were Julie ready in XX% in mentioned and was women's July, home shoes year-on-year in to mix so up and in wear

high. like-for-like our So, very that Julie implies per are transaction that Also, the was units as are mentioning. up prices

of So pre-COVID up purchases, a to the order continuance we're is high as per levels come the there seeing well. sustaining, value has but items strength

while. that a obviously, the high outcome saying - of been that's the are So we've for and record

Simeon Siegel

impact, you in grows? you. and thank you're return apparel then comment the impact expecting there terms of And if at mix maybe Matt, Great, all what can cancellations, from the there's an as

Matt Gustke

didn't it. what it stable. typically, - pretty on should But be comment we No,

at lower is just a COVID still think and normalized bit abnormally has during of low but I that's the it function return this point a largely category mix.

So going to trend a we don't frankly know exactly what over multi-quarter category is basis. mix

then return but we the quarter, in saw travel rates So, to year with is typically what this QX. QX the going of context frankly. they're rate consistent return be higher slightly should it a AOV, together and pretty within And

Simeon Siegel

luck Okay. Thanks year. a lot the for Best guys.

Matt Gustke

you. Thank

Julie Wainwright

Thanks.

Operator

will are Wainwright. There now at so back it Ms. no I questions this Julie to transfer time,

Julie Wainwright

your sure work you thank appreciate today. I'm joining appreciate that, your So do for time. got some We you do call to too. our We with questions we've and and

a Bye. talk Thanks. So to week QX we'll on results. you have great and

Operator

That conference concludes today's call.

a all Have disconnect. day. great now may You

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