MWK - Earnings call transcript Q2 2020

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Operator

Good afternoon ladies and gentlemen and welcome to the Mohawk Group Holdings Inc. Q2 Earnings Report. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] I would now like to turn the conference over to your host Mr. Investor of Director Grozovsky, Relations. Ilya Please go ahead.

Ilya Grozovsky

And remind Hamaide, Thank results statements. Mohawk’s forward-looking at I second you. that are as expectations press Sarig, and release presentation on to materially you of of on would we are A Mohawk’s On Accordingly, forward-looking section number Mohawk’s certain for and statements from factors discuss to Yaniv a will this of judgment Fabrice CEO; and business. Investor today is us reliance looking statements Co-Founder Financial these quarter statements. you today's reflect in mohawkgp.com. of you make forward call Officer. copy today, may current joining these not analysis today's Thank only Chief should the undue XXXX affecting Relations available results. earnings on and website based actual Mohawk’s like differ place

statements undertake Please not issues any SEC. currently later. obligation not as may events the update filings result whether site and or filings associated of webcast, For forward-looking a information, as we a and do included well experiencing future EDGAR to regarding discussion to be thorough refer call with quarter and alter statements filings forward is more that note, SEC’s technical and the you our these accepting second of that release, the earnings with until on conference forward-looking otherwise. any not on is statements show to We our as disclaimer new the made or this looking uncertainties our risks up

release these Explanation found the I'll in can metrics the the With to company addition, may In today. earlier be non-GAAP Yaniv. to over certain call metrics filed turn that, on call. this of refer earnings

Yaniv Sarig

results Thank during last ability all first at I'm everyone. hard to adapt, several us our all all challenges. And To once drive work again call. would this on I foremost Of to improve safety factors of say Mohawk’s long-term afternoon above remains the culture today that good our people’s and these and our and priority. produce strong company's their team I continuously will that Mohawk extent, our like strengths joining you despite for put that culture, to teams’ other grip. I very for capabilities, proud for and thank the Ilya, Thanks number never entire of months. our our one resilient success.

our take the the COVID-XX continuity. by to opportunity to thank been world and we ensure other incredibly I business who partners this face brought challenges vendors, the like also business pandemic, and continues have suppliers, to As would helping supportive have

the call, other you friends that healthy. on ones those So are your loved shareholders safe hope the and and company, family and and of our we

our that allow to we important knew e-commerce We efficiency point for into adjusted this operating reach positive believe EBITDA. a report, milestone would generating benefit to margin grow products, for which that We in our blitz continue special contribution while as very we to to model really XXXX that launching a scale. take of increased years second would Many represents reinvesting represents I we our quarter costs and our we ago, develop business. the approach dollar of surpassed growth scaling platform, eventually a a products, positive This Mohawk. point quarter and decided believed personally. fact every fixed with from that I'm turning to to excited me we our continue drive that the to us make aiming more from back business grow

[indiscernible] our be needs. that board, partners. pandemic a the consumer that to current our in sales should product platforms a sales XXXX since company, announced integration EBITDA. in watching With various a our put other in company as Thanks our second We're large, demand our to And e-commerce revenue our economy. that first us to marketplaces digital coupled three-p doubled flat. than terms we're especially to reporting e-commerce the are has that level. and business record avoid fulfillment platform revenue payment in transformation. in headcount with be profitable reporting for XX% The net seeing sales, investment its continue a year-over-year growth main building has I adjusted looking whole that digital to a is across business earning the pathway more quarter, quarter also firms. $X as industry channel users see In and growth increased we're to align, When of the platform point tipping growth services, flow we our continues massive showing retail warehousing making in for anticipated increase others the this towards with it believe to will a million now platform we data $XX.X are quarter. more in excited since year-over-year first adoption the our at on remained at of and is facing healthy This to model shipment to addition economics strong created delays shift improved has customer of this move to cash generate We're while new on the operating inception Amazon of during our accelerating. and seems see and us some accelerated QX. believe allowing our have essentially closely lot Mohawk that million to and continues we a online model, result software our have to sellers

pass new we be that building leader will I and believe the years this We in from on come. With the space continue will to discuss online, emerge financial to a it to a business of could Fabrice consumer to breed to results. we're be our that believe to a that, in thrilled brands shift

Fabrice Hamaide

good and Yaniv afternoon, Thanks, everyone.

our performance of operational the details second quarter. are Here

direct the resumed selling phase basis. during margin products on quarter prices, wholesale was higher and sustained revenues the The PPE our revenue gross dehumidifiers $X.X reached sequential was second new weeks the to Since three of net from a sales EPA, ago attributable primarily resolve in net $XX.X gross products which from the result. XX.X% the historical a as in unit $XX.X have wholesale product dehumidifiers. second products PPE offset XXX which contributed improved and to Gross a as for XXXX, million hOmeLabs The products, early points missed both second launched lower ago a $XX.X year hOmeLabs a the and of XX.X% revenue as June, opportunity We contributed margin to we interruption from while by which was improvement increased in sales million resolved the basis increased due half for and since volume quarter $X up to of XXX% economics, sales July, quarter the gain XXXX, our period. the more of estimate stemming margin. we million as experienced million million. sales, an inquiry increased in inquiry sequential year cogs well sales on a and lower partially in from For slightly carry a

to sustained QX in our compared as and revenue on In the we of grew the grew launched overall, half of bringing XXXX, that XXXX first of sustain $XX XX. segments, total phase, we XXX% quarter terms the XX to eight In launched liquidation top launch product XXXX, XXXX. million to first and our products for other, QX

revenue launch QX for Our $X.X XXXX million. was

segmentation As building we and and such essentially market conversion a continue as our funnel repeatable revenue remained work on process. flat to

Finally, liquidation $X.X respectively. $X.X government is revenues wholesale and entities. $X.X and other and our revenue of increase million PPE was to million million result in and The revenue $X.X other for quarter other versus states a XXXX of first and QX revenue approximately million million of XXXX, other $X.X liquidation respectively

overall prices average prices, Our phase. fulfillment X.X%, from contribution increased they were unit reach X.X% margin lower our sequential negative coming and significant margin economics, sale launch XX.X%, as the a productivity cogs compared revenue of a the revenue prior as by improvement sustained to higher as QX higher and of driven end improved costs, mix, contribution of the and year-over-year selling versus lower a launch XXXX XXXX improvement year’s improvement QX the well was

QX sustained for $X.X business million in Fixed representing Our the an compared one-time drove $X.X to bonus XX.X%. XXXX majority accrual. of costs were positive increase to CM recruiting cost our year and prior at quarter, of severance, due million the

quarter the to XXXX to cost million first second net than of ability $X.X automation also of thanks We'd and Thanks we the costs or flat. percentage of our of GDP expense in essentially loss $X.X EBITDA in products million the that quarter from the and margin a of new model. automation XXXX. revenue, revenue, sequential of business XX.X% revenues quarter million business the combined in in highlight improved our high while quarter high is to loss quarter decreased our improvements in model. for $X.X in $X.X compared our of This ago XXXX. costs of launches, both with new a degree launch quarter, what from previously first from our fixed result XX.X% Improvement with improvement and keeping year XXXX. fixed continued of the net the degree saw EBITDA products a As to operating million, growth profitability fixed of economics, second of the of highlights profitability, And the in first from is unit and of leverage, course Adjusted product the business sooner of existing our our anticipated. grow fixed adjusted had to XX.X%

Turning to sheet. balance the

was million compared in debt of quarter generated at same the XX had the sequential time cash improved and the activities while used reducing XXXX. million with sales inventory of quarter in is This result of March in XXXX. $X.X first cash compared for of million operating $XX.X the impact on margins June our activities As of XXXX and operating XX, second increase turns. cash of million, $XX.X $XX.X the Cash from to seasonality at end we the

first Second capital. XXXX to Overall, increase hand. we the activities inventory of controlled cash impacted loss, higher million our by costs operating and due increased on were generated of working a from X.X margins, net operating cash quarter fixed compared turn $XX.X quarter sales million, cash burn was XXXX capital, in cash and working decreased at to as in

revolving and June to QX consists our of $XX XXXX. of XXXX the $XX.X is As debt decreased loan our This compared to to inventory compared seasonality our sales which driven borrowings XXXX planned our million March million million $XX.X QX. of from XX, seasonal of decrease as the of under credit reflection facility and prepare end $XX.X in total term dollars increase December in direct at of for increase to XX a QX million

outlook of QX terms To the rates of launch in We In expect limited of absorb experience outs and could cash. quarter more XX stock faster to the takeaways of QX. the for third quarter XXXX, quarter, are new we some in the generating profitability, as the inventory new key faster we work forecast complete products products. growth approximately to growth,

quarter continue reiterate continued addition, our XXXX, open new fourth a For and our back the Xth product a year in in driven of I’ll The and company positive than be launched products the in that, in positive the and on million XXXX, PPE by positive your EBITDA and for questions. from million growth contribution EBITDA year XXXX and to net in primarily late in to to operator expect expects XXXX. With revenue $XXX anticipated. full of third portfolio we expects basis June range XXXX the call to our efforts it $XXX to earlier adjusted adjusted of updated existing turn guidance the

Operator

from Thank your D.A. from We have question you. first Forte [Operator Thomas Instructions] Davidson.

is Your open. line

Thomas Forte

on Congratulations very two for a have you. quarter. successful Amazon Mohawk. I related thank Great, questions

you and to data you can us second, at its tech So, in Yaniv for Facebook of one. Google, to And Amazon its Amazon I answer first think then the the big party Amazon, this feel focus four Day the sales yesterday's to in qualified third-party delay the is Prime sales? particular, like about advance by uniquely like they're this if you're using Apple, company is detriment year. CEOs When going looks testimony remind

maybe Day you Thank June Prime of or July remind on October, So and the you. investors can significance for Mohawk? instead of

Yaniv Sarig

Sure. Thank you, Tom.

mentioned we this when being past first in Amazon, a right. comes as as So it times the well, competitor, to a few around

the the right to seeing. volumes now, fact on as reason Day. demand by main kind the that certain us, not as completely Amazon’s type to things other general, marketplace We market true job to difference And Day, Amazon preferential on one markets. type long are, themselves, going that's yet been Amazon analyze one comes has enter Mohawk advertising FBA has which we the but were identify have, just strongest activities that's obviously the itself perspective, and data that the seen our for the that uses warehouses with that which these after are or points that not personally Prime they're taken. is been From see any where of our their that impacted capabilities, our the the with they research of do Prime that after we've of well of some overwhelmed it's It's really not opportunities really we this much delaying where and Amazon the of of competitors it to ability too any they're the company. and affected we've When indicative side, in

is Day. somewhat us, We take further not adjust market, but line. during of it different demand is any not the a an For interesting kind us to for Prime Prime the don't strategy it's consequential like that but We changing Day if the for of down moved is one typically us. event obviously anything event, dramatically

still necessarily it's not that So happy we it yeah, are but happens, depending that we're something on.

Thomas Forte

questions. get for queue I'll back you. the Great. in more Thank

Operator

We have next from question ROTH. from Matt Koranda your

Your line is open.

Matt Koranda

guys, Hey, thanks.

of us price versus understand quarter, much the the driven QX? could Within you in was volume growth help how

Fabrice Hamaide

XX-XX, actually price side. the the volume and on actually it’s side XX% of Yeah, XX% Sure.

Matt Koranda

some of which I a look Okay, we of maybe that's the the it implies something from XXXX for And at very like half think wondering, guys from outs. are up that inventory making, in unchanged up obviously guys I'm thinking time growth you good? around possibility helpful. of But sort then revenue is from we the the with provided conservatism year, when assumptions be in the stock implied. is And year may the us there little the sort million of distortion build for back the mentioned us guide, like in last the full of bit are you there help to you that $XX there revenue baked situation, bottom be seems guide. What

Fabrice Hamaide

the updated don't the change reason guidance upwards the two-fold. first we twice one, guidance right. The sure. remember, we is during And quarter, Sure, why our already

other We we is, outs we QX. one growth we're rates wish the but that first do I could, can't And can't mean, the So are every do month. extra absorbing QX yes, month. we that of stock expecting every reasons. second, and there's we some the two as

very obviously, predict on extended highly second ecommerce experiencing PPE our most that difficult across bit highly And the them on manufacturers to inventory are our is some little that a players. that it's revenue. board therefore, And side, is revenue actually of because from times have the the volatile, And it's some some products. of reason accurately

change on PPE to the make it's significant impact. difficult So a based actually

Matt Koranda

Thanks is slightly terms year on a within you of EBITDA helpful. that's the language profitability Is the just here? that even full changed the great. And guys I quarter really mean, that more then that strength QX? in terms in the which saw, in Okay, as had guidance, is strong. of of margin expectations contribution the QX your for EBITDA our Or Well, the sort back in contribution of change year and internal half you is a Fabrice.

comfort we’re contribution we're as from right. fulfillment second get the of full the of was that increased QX, little the on cost stronger the and not on strength situation obviously particular, which everyone. QX it QX, for obviously experienced well, the actually level starting how the expect at is cogs by our effect that the impacted strong unfolds benefiting of what as in We in to us time, volumes in originally well and our anticipated, unknown half as actually But savings cogs. the And better in strength remain listings platform to than now give a reasonable as same as we maybe margin which a side, COVID

a contribution we it's therefore to leverage our EBITDA as margin thanks we since control fixed that EBITDA we both So of confidence and of have well -- full of the strength and have EBITDA level that the over posted as half QX mix adjusted costs, second operating well. the in as

Matt Koranda

your Got single it. under in contribution was were the contribution kind the impression given equation digits. of this I guys mean, Because given us low high change and margin you of before? the digits, double sustain the I Does sort that margins maybe you've historical approaching the category

nearly and for would QX, you a that. a in But up assume this quarter forward that shouldn't level this And margins of a out, QX contribution referenced drag year? contribution put what's understand like, reasonable XX% on You but basis, sustain us help the just we sort margin probably sustained. of I go maybe

Fabrice Hamaide

We of the is being give had faster specific have obviously dominance what and reviews our of is actually very we the don’t significant that by same is have. anticipated, news. more number listings price of great we clear the level, first, but guidance, than on elasticity, which it's And number products that ever-increasing reflected and

delivering in expected north unit economics are a And as the than reason of average significant XXXX side, ongoing reviews increase in on fulfillment economies And product. well. We on the basis. an scale on is, level per the particular that's particular, now second we're of and actually the faster

than once years which will be closer company quite out, overall a XX% of will leverage obviously, little EBITDA to closer stay on we a as And EBITDA EBITDA anticipated. we north Though, would indicated little structure So, significantly that XX% XX%, instead growth of for long-term our will slows to which business. faster a It's most while. term always CM by probably likely, sustained just to overall our as there our is operating CM our closer XX% anticipated happening be increase. therefore, down, basis, to be to business, a long remains being have

Matt Koranda

margins noticed think should XX then, example. the one hear launch, be to one said guys minus quarter? contribution other I plus Great to limited guys was coming be this unique in Was had typically typically launch? just that I there of breakeven. about on within the usually Or just percent you And that like the which should quarter terms range. it the is there call in you out anything Look negative, launches

Fabrice Hamaide

two mix in three remember a or it's and less is then of But I to launch things. that It's you Yeah. sometimes the sometimes launched products means sustain. QX that means period actually mean, a less. of lot that they that more launch, more, we new in months, migrate

and CM the a from day and a day very at it's spend So a beginning actually sudden, slowly, to It's all stronger positive sustained over CM XX, the course the not of three right. hyper a then right. CM, negative months, even the to migrates product actually then one of

getting launch -- So were and is May Therefore, the in of have category of the that the that QX. most happens -- end at We're CM in products positive process, what of QX at actually launched time, June. is And tail launched end of the inside the smaller were here mix a therefore, launch the positive. the same actually the we in tail number at and already into territory. products

Matt Koranda

last -- how any there the in Thank that these stoppage and of But plants And you one on you. the for EPA had any mentioned understand that that super sneak another so clear. the pretty queue, you hOmeLabs one a just back start I’ll you during sell, sure risk then you does addressed? you guys are many I'll that's questions. and us join is then you've one on that stoppage front, just Okay, it? other addressed Help environmental quarter. Is stoppages in

Yaniv Sarig

sales. notice we've the Well, actually be we addressed of an able EPA it from resume and official got to to clearance

may that it and And about careful this to so on. very of and which our particular of and feel Because help the as dehumidifiers you claim they regulations mislead was sensitive extremely, claim to on saying So product this scams marketing they mold, was my a any the to that consumers FTC we compliant a are in is which rules does. what any to environment, that related cast did. pesticidal extremely type of so. remove lot felt behind But true. the and know, a a us is we it's to actually the rightfully product case, we’re there's claims marketing on. that with claim, dehumidifiers, so in us. extremely COVID consumers, which as mentioning out virus reduce where all being were that there therefore, removes of And and with like marketing comfortable completely an infrastructure didn't side And claim, EPA, in fully protect it net wide they the kind And

Matt Koranda

Got you. it. Very thank you, guys, Thank helpful, quarter. great

Yaniv Sarig

Thank you.

Operator

from question Alliance from next your Brian Global. have Kinstlinger We

Your line is open.

Brian Kinstlinger

Hi, how great, were thank you and you. about there? skews many Holonix? Can of PPE inventory you products eight the build quickly How talk can

Yaniv Sarig

Nothing that's a risk.

we're of The the one provide on it's Holonix is supply manufacturers masks roof. chain set of at incredible still product And of the of that to been bit continuing the pace. boxes It be demand being making regulation same around. products We very, the out in side Amazon, of our on just but taking go generate that, to longer we're been launched couple be promoting things, checking business we’re item, all continue for to hand so also it these recently seeing start part sure on inventory and item. and we're PPE market an successful. comes of valuable to that and able to right. the to help little was online, a absolutely right When taken of creating incredible is with the very that it we've careful ago bring to Amazon. has launching type At just obviously, in obviously And actually through to time, again, was that terms to We've us, relationships obviously the of just items. after went a time a to going demand bring and far, the basically looking brought and utilize of the effort So days right. online terms to sanitizer longer

continuing we're so to its launch. about excited And the brand

Brian Kinstlinger

of Okay. that bigger did one correctly, for hear customers was product? the And I the government

Yaniv Sarig

for that one. not No,

Holonix As efforts, through many is we're different different launch manufacturers category. I the able work here the still going to given category consumer with we're said, in this part on some many products the as expect supply across PPE again on that we've a direct chain crunching in obviously of And to products that the -- we data side.

We bring Holonix. a expect market of to lot products to these under

Brian Kinstlinger

can about on clear And your your thoughts portfolio case third have the then the been maybe talk not guidance so quarter that's the second with the being quarter is strongest you Okay. given you've But that your products. seasonality, you strong.

in in sales quarter fourth? some the strength a the then what third your and third the we or did quarter quarter softer see get from quarter second portfolio So pulled the into giving

Yaniv Sarig

Fabrice, want take to you do that?

Fabrice Hamaide

were actually Sure. of situation. the of to shambles actually benefiting time, consumers pull fulfill unique the have coming the the it spending that consumers actually home, reopened actually There the actually shambles, benefited from economy right, remember, all is is in employment to massively I all much the not at spending. mean in significant online. started, demand part well same probably in, actually in completely. saw is have switched or the or in at of and a stuck was all amount reduce QX unique Stores was to data, started in and the extra between sense quotes consumer as ability latest have that And in fact we're from so

the benefiting from spending. be even in will But we're switch to online. the and longer impacted we reduced QX the time, by consumer and same So all at maybe QX

consumer will on quarter stores QX of impact quarter. strong online adoption. to probably the and and a our this be by reduction, strongest reopening, and the gap But QX other of QX remain going side between So very year mitigated spending is acceleration the

Brian Kinstlinger

time Great. three you in breakdown and your can have how we give total done in break or of they different And long many haven't four us a you skews how now right out businesses? a

Fabrice Hamaide

I right. don't I'll in have me, front come that to so to that of back have number

Brian Kinstlinger

it. perhaps Okay, you’ve got

Fabrice Hamaide

launched I actually products won’t we time so them, tell, many on keep have hard I counting right. a

Brian Kinstlinger

lower And think, fine. so piece too, to to you sustain spending. about quarter of That's And XXXX? strong term address pricing to kind be that to Or then consumer pricing? Okay. your long able going create being and headwind this Is you've the talked I a do you you'll think a growth. that second

Yaniv Sarig

So, remember that.

it's way, part of So call a pricing let's a switch was the demand, strong, I mix part and but exceptional things. exceptional being two of it additional of that of it mean, course, it's mix it that a massive being online. to

the but we is have of the reason portion the sell, more So listing the more it slow right. down, a prophecy. more listing and self-fulfilling the remain. stronger our strength why the we as well. elasticity said, strengthens, and we And we have therefore, price of the the conversion we the more stronger the A as will reviews, The Actually will product, it’s demand. that increased demand that the other the sell, more and endorsement

sure whatever product. inside you on do, impact reductions economics, important the cost working adjust will make So the profitability our remain. products particular your reason on And to keep it that as that very actually to overall the part to unit of on we the pricing side other And our conditions. not then, do, on we quasi-real-time market basis is which to the it's can that's does which you a why on modulate know, also on each all

that everybody as partly stimulus everybody's it's like XXXX, else, spending out actually Going on the micro going to And government today, massive impact confidence, with our evolutions by was to number what noticed, long guess amount that, are is our -- out. driven And fueling QX, massive just studies else. will most where and all number in that just is well. employment, that We'll a it's keep actually that think building the And consumer And, launch. by consumer I other we and in new likely on into and the the forced start new I will is of as whatnot. significant mitigated I that spending that the last, have don't on will the on ours, XXXX. a know recession goes. hand, again, visibility good we’ll into I read like it's a right. everybody of because as overall, How as you XXXX products. and package QX just accelerating growth have what of sure is rolling keeps the products we that therefore just and actually for consumer growth don't the

Brian Kinstlinger

you. Thank Great.

Operator

your Klee have next Allen Securities. question from from National We

is open. line Your

Allen Klee

Can afternoon. times? successful to for give launches? your new us been how about recent How Good you sense feel a you they've relative

Fabrice Hamaide

can Yeah, that. I take

we we bring actually, we really when success the better on entire terms company we aiming that we the again, we're not amount of just achieve, an rate, probably aggressive moving taking more number, better And at I really products launch going growth typically, overall, target in numbers for the with success be and further that of of sustain. ratio, we're but want past typically, from categories, mean, on like because like not can not might risks. kind XX% So, of to do can We they're shared remain launch the that that kind able of the because exploring, other right. because into market. compile to and the be means not the doing of you model that in to what to enter

again, were, the same. remains point. rate XX% hovering it at this around success We that So

Allen Klee

some some next And How to the you extent, do of have with on quarter, inventory products. challenges you takes think your it long address your to that?

Yaniv Sarig

of it's the it, further a potentially stock And again, difficulty the bit Well, there our little already. a in guidance at are of might push with look baked down we delays. line. way kind out like the That revenue

from have increased are pretty nothing a with from that and well. to expect. at of out the this lot for that but again, that definitely put so of, as said macro of I it we as think enough course of overall sign, we we couple work it outs, and coming expect suppliers a We stock the we a yeah, perspective, material So, we that I right. a There's think good manufacturing demand well, level managing

Allen Klee

on And question is into any update to sell is, on of my that? China, past the there mentioned the status have last China? launching you your What's in -- in

Yaniv Sarig

was progress, and can here do so. some not go had delayed, been it's the has in results, made hands of from had that. We and pause. of on to that tell busy And, that our with first the too been we've and China. as continues COVID-XX. launch U.S. because from very our ambition Yeah, very, everything happening we with the forward currently we’re to product We've We're that reevaluating moving in far course,

Looking at the a opportunity question. good now, it's globally right

the a opportunity be think list. next in expand, and the do metal We the expect push I we at of that full we kind pedal And top look, to definitely of the we Right of China clarity the on on want U.S. now, when to to our here quarter the internationally lot need have internationally, to of will the in our internally see top is push we we’ll back list. this do have when again around expansion hands with discuss and more

Allen Klee

Thank you.

Operator

from next from your D.A. have Forte We Davidson. question Thomas

Your line is open.

Thomas Forte

that Two artificial you costs. to manage think follow-ons, shipping don't Thanks. how quick fully I people appreciate intelligence use

how general, quarter last inflation other in potentially your outside shipping China us which manufacturing? out as that? of finding chain talked So far And in Thank about you. and can on cost diversifying, you are managing as where of can countries efforts for China update you supply give you second, talk you're then an about and

Yaniv Sarig

to the brand's not sell the best there's does obviously Tom, really I high influence topics can level, and see cost of faster. handle And the to that like shipping kind the and one retailers the this of retailers question. more, for more depending actually your quickly the a most and preferential obviously the of love It on give that, only algorithms efficiently retailers that What first visibility, ability CPG but get is ability the actually battle has on more who At of a becoming consumer. dimensions different efficiency both to seeing to to companies. is can going ship product and that we're between online important it. customer you to couple end

to apply never we're most. inventory the it so visibility our to mile to And the going really effort level, again, turns warehouses all only consumer it's reduce machine our can again, the so ability constantly to And overall possible needed essential performance as is an technology, our ending last put to into we've at costs, back better so, efficient forecasting, role And to out, this sorts also, for adjusts better end, done going the in we turns right all as is demand it and the in not retailer in but get that it better meet the we learning, correctly can our where data analysis of investments be margin fulfillment itself the brand. platform shipping there. a improve playing

is we advantage we silent I the around that like lot almost wrap again, the really of don't it’s on of heads think made So, their a this yet. tech investments just see side. kind people that And

technology that we that be the to depending trend on ability we do be invest to we're be going side. to invest consumer, is the that in control on possible going continuous continue to put seeing effort again able in end heavily that Our of we're a inventory, data the to the how related where as close to the inventories as -- focus

question, question repeat second can second that the you please? was, So

Thomas Forte

Yep.

for you thank the answer So Yaniv.

of moving quarter The outside question last you about some think second of potentially your talked China. efforts manufacturing was, I

where June with wanted to So know, in stood quarter? that the things

Yaniv Sarig

Yeah.

is at think about running quality our class, best best sourcing this we can the in continuously, we that we get with the the but we and the is to way the So, consistent we’re China to looking where as and that control, quality a supply trying it is have always understand obviously an we chain serve. look effort for the team that customers

manufacturers they're one started constantly and own contract themselves doing territories to the of in the manufacturing China. some partners, so, some we're progress us outside moving largest have things that And making. our there updating they're their And of seeing they're to effort of the and of

it's If be geography, is a the it competitive us, ratio get overall we we part cost size. For that other the a and the as of can mathematical day, at bring can we to as different every make product in quality the the in equation our that day. time product we look market timing

despite despite we tariffs, lot that on any eye we end happening, attention But to better in Currently in and manufacturing again. deal focusing it. any possible currently same is and There categories this Because the rely We’re not again, on the reevaluating attached all don't keep time world any currently perspective. no see we than platforms, keep China a competitor. are they typically, the of other disadvantage that versus over place on from over is we right. a our on this the an all so,

we process to manufacturers the going going And and a to to take follow top on continue it closely obviously, then of time that's to We’re with geographies. time. all but to move other efforts are work our their that's

Thomas Forte

my and stay taking Great. questions Thanks well. for

Yaniv Sarig

Tom. you, Thank

Operator

There's please continue. no further Mr. question at Grozovsky, Ilya this time.

Ilya Grozovsky

calls. our call. joining look on speaking today. Thank to forward call you with for ends us you We the This on future

Operator

for gentlemen, participating. and thank you Ladies

today’s concludes call. may You This conference now disconnect.

Aterian (ATER) 2 Aug 202020 Q2 Earnings call transcript