LightInTheBox Holding Co Ltd
NYSE:LITB
Earnings Call Analysis
Q4-2023 Analysis
LightInTheBox Holding Co Ltd
LightInTheBox, a global online retail company, concluded the year 2023 on a positive note, with a significant revenue increase of 25% year-over-year, amounting to $629 million. This growth was buoyed by the company's strategic focus on apparel, which represents a substantial 80% of its total revenues. Their practiced investment in technology and data analysis paid off by deepening insights into consumer behavior and aligning products and marketing strategies accordingly. Additionally, efforts to enhance profitability resulted in a narrowed adjusted EBITDA loss of $6.3 million, a 34% improvement compared to the previous year.
Looking ahead to 2024, LightInTheBox anticipates a shifting operating environment with increasing industry competition. In response, the company aims to enhance customer experience and localize operations in key markets, with a particular emphasis on the United States. These initiatives form part of a broader strategy to improve brand awareness, attract organic traffic, and bolster overall brand competitiveness. Staying true to its dedication to sustainable development, LightInTheBox is resolved to continue adding value for its shareholders in the long run.
The fourth quarter financials revealed a contrasting scenario – a 13% revenue drop to $136 million when juxtaposed with the rest of the year's performance. This decrease came predominantly from the apparel segment, which declined by 12% year-over-year. Despite the fall in revenues, the gross margin climbed to 56%, up from 54% a year ago, highlighting the company's adept management of its core offerings. Alongside, an emphasis on operational efficiency contributed to a 10% reduction in operating expenses, which totaled $80 million.
The strategic move to control spending led to a considerable contraction in net losses, from $48.3 million in the fourth quarter of 2022 to $4.3 million in the same quarter of 2023. Full-year financials further showcased this trend, with the reported net loss shrinking to $9.6 million from $56.6 million in 2022. The year-over-year moderation in total operating expenses to $370 million is indicative of the company's successful cost optimization efforts.
With sights now set on the first quarter of 2024, LightInTheBox forecasts net revenues to fall between $70 million and $80 million. This guidance comes in light of the currently available information and the commonly experienced business seasonality. The strategic initiatives underway and the company's agile adaptation to market conditions pave the way for potential continuation of the positive trajectory seen in 2023.
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Hello, ladies and gentlemen. Thank you for standing by for LightInTheBox' Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded.
I will now turn the conference call over to your host, Ms. Jenny Cai. Please go ahead, Jenny.
Thank you, operator. Hello, everyone, and welcome to LightInTheBox' Fourth Quarter and Full Year 2023 Earnings Conference Call. The company's earnings results were released via Newswire 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. Yuan Jun Ye, Chief Financial Officer; and Ms. Wenyu Liu, Chief Growth Officer. Mr. He will provide an overview of the company's strategies and 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 applicable law. Please also note that LightInTheBox earnings press release and this conference call include discussion 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 unaudited non-GAAP measures to the unaudited GAAP measures.
Now I'd like to turn the call over to LightInTheBox' Chairman and CEO, Mr. He. Please go ahead.
Good morning, and good evening, everyone. Thank you for joining our fourth quarter and full year 2023 earnings conference call today.
In 2023, as we strategically focused on high-quality development, we delivered hard-won results and the challenging micro environment and increasingly competitive landscape. Notably, our full year revenue reached $629 million, up 25% year-over-year. Apparel remains our strategic core category and drive our sales, accounting for over 80% of total revenues. Thanks to our continuous efforts and the investment in our technologies and data analysis capabilities.
We gained a great understanding of evolving consumption patterns, enabling us to better align our products, services and the marketing strategies with the consumer preference and the demands. More encouraging, we are able to improve our profitability, is our 4-year adjusted EBITDA loss, narrowing by 34% year-over-year to $6.3 million.
Heading into 2024, we are seeing an evolving operating environment and the increasing sales industry compensation. To navigate this market dynamics, we place a greater emphasize on enhancing customer experience in the holding our localized operations in key markets such as the United States to bring high-quality [ long-term ] offering to more customer worldwide.
Meanwhile, we will continue strengthening our brand awareness and visibility to attract organic traffic from potential customers, increase marketing efficiency and improve the brand overall competitiveness. As always, we are committed to pursue healthy, sustainable development and delivering value for our shareholders in the long run.
With that, I now hand the call over to Yuan Jun to go through our financial results.
Thank you, Mr. He. Good morning and good evening, everyone. Before we start the 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 start with our financial highlights for the quarter.
In the fourth quarter, our total revenues decreased by 13% year-over-year to $136 million. Revenues from apparel decreased by 12% year-over-year to $109 million, representing 80% of our total revenues compared with 79% in the same quarter of 2022. Gross margin was 56% in the fourth quarter compared with 54% a year ago due to an increase in apparel sales as a percentage of revenue. Our total operating expenses decreased by 10% year-over-year to $80 million compared with $89 million in the same period of last year. The decrease was mainly due to our ongoing efforts to enhance our operational efficiency. Net loss was $4.3 million compared with $48.3 million in the same quarter of 2022. The difference was primarily due to a onetime impairment charge in the fourth quarter of 2022.
Now let me walk you through our 2023 full year financials. Total revenues reached $629 million, an increase of 25% year-over-year from $504 million in 2022. Revenues from apparel increased by 30% to $580 million in 2023 compared with $400 million in 2022 and represented 82% of total revenues in 2023 compared with 79% in 2022. Total operating expenses were $370 million compared with $289 million in 2022, primarily due to expenditures on marketing expenses. Fulfillment expenses and G&A expenses were 5.5% and 5.4% of total revenues, respectively, both representing percentage decreases from the same period last year. Net loss was $9.6 million compared with $56.6 million in 2022.
Moving to the guidance for the first quarter of 2024. Based on information currently available and business seasonality, we expect net revenues to be between $70 million and $80 million.
This concludes our prepared remarks. We'll be happy to take some questions now. Operator, please continue.
[Operator Instructions] We are showing no questions. I'd like to turn the call back over to the company for closing remarks.
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 great day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.