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spk04: This earnings call may contain forward-looking statements as defined in Section 27A of the Security Act of 1933 as amended, including statements regarding, among other things, the company's business strategy and growth strategy. Expressions which identify forward-looking statements speak only as of the date the statement is made. These forward-looking statements are based largely on our company's expectations. and are subject to a number of risks and uncertainties, some which cannot be predicted or quantified and are beyond our control. Future developments and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In light of these risks and uncertainties, there could be no assurances that the forward-looking information would prove to be accurate. The company today's call is a supporting PowerPoint slide deck, which is available in the Western Relations section of the company's website at ir.charlesandcolvard.com slash events. The company will be hosting a Q&A session at the conclusion of the prepared remarks. If you have a question you'd like to submit, please email ir at charlesandcolvard.com. Please note that this event is being recorded. And I'd like to turn the conference over to Donald O'Connor. President and Chief Executive Officer. Please go ahead.
spk01: Good morning, everyone. Welcome to our third quarter fiscal 2022 earnings conference call. For Q3 fiscal 2022, we delivered $9.8 million in revenue, which represents a 3% increase over Q3 fiscal 2021. This is the third highest revenue for the quarter ending March 31st in our company's history. and now marks the highest three consecutive quarters by revenue to date of $33.8 million. That amount represents a 14% increase from the year-ago period and a 36% increase from the same period in 2020. We're proud to say this is an important milestone, seven consecutive quarters of top-line growth and profitability. We've achieved this momentum by making strategic investments by expanding our organic and digital marketing efforts, and by making a concerted effort to optimize our technology across our functional areas of the business. These business decisions continue to be focused in nature, and we feel such investments are necessary to elevate our direct-to-consumer engagement, further and expand our brand to presence, and capture a greater share of wallet. We believe these efforts are key reasons we are gaining traction in our aspiration to become the leader in made-not-mine fine jewelry, creating a unique value proposition as we position ourselves to capture more of the projected lab-grown market opportunity, with sales of lab-grown diamond alone now projected to reach $49.9 billion by 2030. Arcadia lab-grown diamond sales continue to rise and were up 141% for Q3 and 256% fiscal year to date, and our Forever One Moissanite sales remain strong. up 10% for Q3 and 20% fiscal year-to-date on charlesandcovert.com. As we continued to lean into our direct-to-consumer business, we realized a 22% increase in our charlesandcovert.com revenue versus the year-ago quarter and a 34% increase fiscal year-to-date. In spite of rising commodity prices and amid challenging global market conditions, Our blended margin remained strong at 49% fiscal year to date and 46% comp to Q3 2021. Our cash flow from operations for Q3 was a robust $1.1 million. We delivered $416,000 in income from operations or $339,000 in net income or one cent earnings per diluted share. In addition, we continue to strengthen our cash on hand by 11% from the year-ago quarter to $21.9 million, up from $19.7 million the prior year, which is also an 84% increase over our cash position for Q3 fiscal 2020. With all that said, we believe CTHR's share price trading below the book value at the end of Q3 presents an opportunity for us to initiate a stock repurchase program. Today, we announced our intent to buy back up to $5 million in CTHR stock over the next three years. As I mentioned earlier, we continue to make calculated investments in our direct-to-consumer online business segment, which now represents 65% of total sales, and website traffic and conversion continue to climb. And our average order value for Q3 fiscal 2022 was up 5% to last year at $1,200, all presenting an opportunity for long-term gains. In support of that, we continue to balance our inventory composition by broadening our fine jewelry assortment in line with consumer demands. During Q3, we were pleased to launch our new star series, which represents a distinct element of our signature floret design. Whether it's our broad bridal and anniversary selection available in both Forever One Moissanite and Cadia Lab Ground Diamonds, or our iconic patented signature collection with sales up for Q3 29% and 59% year-to-date, or our fashion-forward styling, we truly believe we appeal to a broad audience. As such, we are featured in Vogue, Forbes, Brides, Men's Health, Women's Wear Daily, and recently quoted in CNN Business, And with the surge in demand for lab-grown diamonds recently making global news, we look forward to additional exposure to come. As we strive to become a global leader in made-not-mine fine jewelry, we increased our finished jewelry inventory by 37% and decreased our loose jewels inventory by 5% from Q3 fiscal 2021. We believe this puts us in a strong position relative to our competition. Meeting our customers' requirements all despite the increased shipping and logistic constraints, worldwide supply chain issues, and global unrest, we have continued to proactively manage our resources to maintain our position in the market. So what does this mean? This means that we will be in a position to continue to fuel any strategic opportunity to reach our consumer directly, control their brand experience, and capture the sale. That's not to say that our traditional revenue, which was down 12% to the year-ago quarter, though remained up 7% fiscal year-to-date, doesn't provide for future growth opportunities and remain an integral part of our foundation and an important business segment for us. Matter of fact, we're placing additional emphasis on the trade in support of our distribution of brick-and-mortar partners through increased marketing co-op in order to maintain our Moissanite brand superiority in the market. which we believe generates valuable brand equity across all our sales channels, thereby elevating our overall business. We recently announced that Cooks and Gold, the largest wholesale company servicing the jewelry industry in the UK, has now joined our distribution network. We're pleased to have such a strong strategic partner in the UK and Europe to help further expand our brand presence. Additionally, We're excited about our most recent expanded assortments in our dropship programs on marketplaces and with our brick and mortar partners, Helzberg, Diamonds, and Macy's. We work diligently to maintain our in-stock rates to consistently be at or above 90% in response to customer demand and in compliance with the service level commitments of our marketplace and dropship partners, thus positioning us for greater conversion opportunities. Although both segments remain important, the dynamics of these businesses are fundamentally different and require distinctively different capital allocations and resources along with their respective shared services. We continuously make data-driven decisions to support our investment choices, which helps to ensure that we're getting the return on investment that maximizes our ability to drive revenue. While our Q3 sales and marketing spend was up from the year-ago quarter, It was down 39% from Q2, evidencing that we manage these levers to adjust spend as the direct-to-consumer business exponentially grows in proportion to our traditional segment. Look to us to adjust these thresholds as the business shifts and as we build consumer awareness and more customers choose to shop the Charles & Colbert brand directly. I'll provide some additional insights and our go-forward direction later on in the call But for now, I'll turn it over to Clint Peet, our CFO, to unwrap the numbers in greater detail.
spk05: Clint?
spk01: Thanks, Don.
spk05: Today, I'll provide a summary of key financials for our third fiscal quarter and nine-month period ended March 31st, 2022. Additional detail can be found in our earnings press release that we issued earlier this morning and our Form 10-Q, which we expect to file tomorrow. Please note that all percentage comparisons are to the year-ago quarter unless specified otherwise. We will begin with revenue. In total, net sales for Q3 2022 totaled $9.8 million versus $9.4 million, or an increase of 3%. And for the nine-month period ended March 31, 2022, net sales totaled $33.8 million versus $29.5 million, or an increase of 14% from the year-ago period. Net sales from my online channel segment, which includes charlesandcohar.com, MoistureNetOutlet.com, marketplaces, dropship retail, and other pure play outlets totaled $6.4 million for the quarter, or an increase of 14%. Online channel net sales for the nine-month period end of March 31, 2022 increased 19% to $21 million, or 62% of total net sales, while net sales from our transaction website, CharlesandCohler.com, increased by 34%. Net sales from our traditional segment, which consists of wholesale and retail customers, totaled $3.4 million for the quarter, a decrease of 12%, representing 35% of total net sales. Net sales for our traditional segment for the nine-month period at the end of March 31, 2022, increased 7% to $12.7 million, or 38% of total net sales. Finished jewelry net sales increased 19% to $7.4 million for the quarter, Finished jewelry net sales for the nine-month period ended March 31, 2022 increased 26% to $23.6 million, or 70% of net sales, up from 64% of total net sales in the year-ago period. Loose jewel net sales decreased 28% to $2.3 million for the quarter. Jewel net sales for the nine-month period ended March 31, 2022 decreased 5% to $10.1 million, or 30% of net sales. International net sales decreased 23% for the quarter and decreased 6% for the nine-month period ended March 31, 2022. Moving on, we delivered a gross margin of 46% for Q3 2022, steady to the year-ago quarter. For the nine-month period ended March 31, 2022, gross margins were at 49%. For Q3 2022, in support of our growth initiatives, total operating expenses increased 22% compared to the year-ago quarter. Sales and marketing expenses increased 33% to $2.9 million, and G&A expenses increased 1% to $1.1 million for the quarter. Net income for Q3 2022 was $339,000, or $0.01 per diluted share, compared with $1 million, or $0.03 per diluted share in the year-ago period. For the nine-month period into March 31, 2022, net income was $2.3 million, or $0.07 per diluted share, compared to $4.4 million, or $0.15 per diluted share in the year-ago period. Included in net income for Q3 2022 is income tax expense of $78,000, compared to $500 in the year-ago quarter. For the nine-month period into March 31, income tax expense was $485,000, compared to $1,500 for the year-ago period. Our weighted average shares outstanding used in the calculation of diluted earnings per share for the quarter were approximately 31.3 million shares at March 31, 2022, compared to 30.5 million shares at March 31, 2021. The increase in our weighted average shares outstanding of approximately 800,000 shares was driven by an increase in the options exercised by insiders in issuance of restricted stock to executives. Now let's move on to a snapshot of our balance sheet. Our liquidity and capital position remained healthy as we ended the quarter with $21.9 million in total cash, compared to $21.4 million at our last fiscal year end, June 30, 2021, and compared to $21.3 million in the previous quarter, increasing our cash position by $600,000. Our cash flow from operation remains positive at $1.1 million for the quarter. Our working capital increased to $32.5 million at March 31, 2022, compared to $30.1 million at June 30, 2021. In terms of other sources of liquidity, we have access to our $5 million cash-secured credit facility with JPMorgan Chase Bank. As of March 31, 2022 and through today, we have not accessed funds through the credit facilities. Inventory as of March 31, 2022, totaled $32.5 million, compared to $29.2 million as of June 30, 2021. Finished jewelry inventory was $16.4 million, compared to $12.3 million as of June 30, 2021. To maintain stock levels in support of our growing brick-and-mortar, dropship retail, and direct-to-consumer business requirements, loose jewels inventory was $16 million, compared to $16.8 million as of June 30, 2021. In summary, we are pleased with our progress and look forward to closing out our fiscal year 2022 soon.
spk01: With that, I'll turn the call back over to Don. Internally, for the past nine months, we've been increasing our creative horsepower and capacity to amplify our voice. We have been and remain focused on elevating the consumer experience at every major touchpoint for the brand. from overhauling the visual and messaging directives to reskinning our direct-to-consumer web presence to live streaming opportunities that enable us to interact with our consumers firsthand. In addition, we're excited to report that our 8,000-square-foot state-of-the-art production studio, along with our first retail signature showroom, are both on track to be completed in Q4. Wrapping up, I'd like to take a few minutes to showcase our marketing strategy and vision moving forward. We believe that while in this discerning consumer landscape, it is essential to have a quality product. We also believe that people don't just buy what you sell. They buy what you believe, what you stand for. This year, we revisited what makes us unique and what it is that we truly believe. Look to us to focus more on articulating that value to the customer and to our shareholders alike, creating a stronger value proposition. We've dedicated the time internally to explore what we stand for as a brand and as a corporation and are confident that we stand apart in both what we believe and what we create. Here's what we discovered. Charles & Colbert is a brand that is rooted in the values of love, trust, and consciousness. Love, we celebrate every facet of love for oneself, for one's partner, for the environment, and for each other. Through our product offerings, we seek to redefine the ways in which we can express our love. Trust is at the very core of our operations, from the origin of our materials to our people to our supply chain to our history of being leaders in the made gemstone category for almost three decades. And consciousness speaks to the fact that we are aware of our collective impact as a corporation on the planet and the industry and of our responsibility to our customers to constantly seek to be better. As the momentum for conscious consumerism grows and the focus turns towards ESG, we can no longer sit idle at the intersection of ethics and beauty. Consumers demand it. And we as a company need to be in a position to respond and to convey what we believe has set us apart from our peers for decades now. We have found that consumers today have become very vocal about the environmental and social impact of their fine jewelry. They want to know the origins of their diamonds and gemstones and be reassured they're conflict free and to be confident in the treatment of workers both at the company they're buying from and downstream. So what does this mean? They're embracing the choice we now provide to purchase a piece of fine jewelry that aligns with their values, and Lab-Grown Gemstones can deliver that in a way that Mined Diamonds simply cannot. As a brand that makes exclusively made, not mined, fine jewelry for the conscious consumer, we are committed to using only made, not mined gemstones, delivering 100% recycled precious metals, and offering the highest quality materials and craftsmanship in the market. For decades, we have been diligently working to revolutionize the industry, and we are proud to be able to make these unique claims today. It is now our time to shine. We continue to bring forward new product that integrates these commitments and reflects what our consumers are looking for. Our goal is to design and deliver incredible fine jewelry with an incredible experience that echoes what we believe, in the right channel, at the right place, at the right time. With that, I'd like to turn it back over to the operator to open the lines for questions.
spk04: Thank you. We'll now begin the question and answer session. To ask a question, you can press star and 1 on your touchpad phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To answer a question, please press star and 2. This time, we'll pause momentarily to assemble the roster. First question comes from Jason Yersiner, Bumbershoot Holdings. Please go ahead.
spk03: Good morning, and congrats on that continued progress. You mentioned seven consecutive quarters of growth and profit. When you contrast this with the share price, which you kind of mentioned, not reflecting that back all the way below book value now, just kind of asking it pretty directly, which of those two aspects, the growth and profit, what's your sense of which of those two Investors are probably more worried about not continuing and it not being a consecutive quarters for both when you know you report next quarter as you kind of straddle the line between Being a growth versus a value stock. Is it that the growth? Isn't going to materialize as you're thinking in the current consumer environment Or is your sense that people are more concerned than just the spending and you're going to kind of push the structure model a little bit too far
spk01: So let me try to understand. Hey, Jason, how you doing? Let me try to understand the question. So as it relates to book value, certainly our book value is right around $1.93 a share. So we believe that the current rate where we're trading at right now is definitely below book. We believe that we're not getting the credit that we deserve for delivering kind of the progress and the momentum that we've achieved over the last seven consecutive quarters. That's really important. Secondary, you know, there is definitely a shift in the business where we're looking for growth. We're going after the growth. So to the growth investor, you know, we certainly have something there. Also, we wanted to focus and key in on the value proposition of Charles & Colbert as a brand and the differentiation between us and the fact of the matter that we are, you know, in the ESG perspective of, you know, jewelry companies that provide, you responsible and ethically sourced products where we believe we're the leaders. Certainly with our Moissanite Forever One gemstones and then Arcadia lab-grown diamonds, it presents a unique opportunity to be able to invest in a company that's really positioned in a place. If your ethics and your belief is that you truly want to invest in a company that's mindful of a lot of different things that meets the consumer needs today, then we certainly appeal to that consumer long-term. Short term, you know, if people are just looking for, you know, quick results at the bottom line, we're trying to, you know, do a really good job in getting that growth and be mindful of the fact that we want to maintain profitability. So profitability to us and cash flow is very important, and that's what's helped us build up the cash, you know, in the last seven quarters, you know, to $21.9 million, which now presents an opportunity for us to take advantage of the low share price right now you know, as a company to be able to, you know, make an investment in ourselves for what we're doing and our accomplishments. As it relates to the value investor, you know, certainly there is still a tremendous cash position of $21.9 million with, you know, no debt. You know, we haven't exercised our line of credit at this point, you know, so we've been – I wouldn't say slow and steady. We've just been responsible, fiscally responsible with our money, with our capital, with our business, growing the business. But make no mistake, our mission and our goal is to drive shareholder value and grow the business exponentially. If you go back to the seven quarters, we've made significant strides from coming out of the gate. And if you look at the revenue right now, it's $33.8 million reported this quarter. That beats 2018 revenue, beats 2019 revenue, and beats 2020 revenue. So that's currently where we're at without reporting our Q4 and our year end. So we're pleased with that. So we've got the growth, and we think that's appealing. All you know, at the same time being profitable, you know, across, you know, across the, you know, pretty much across the channels and across the, um, quarters.
spk03: I don't know if that answers your question, but I guess, I guess that, well, you, from my perspective, you kind of done exactly what you're saying you're going to do. Uh, and the stock is not, not reflecting that. So when you speak to investors, what is your sense of which of those people are not, believing, I guess for right now, because from my perspective, you are doing both of what you're saying you're going to do.
spk01: So it's not a question of whether they believe or they don't believe in my opinion. It's a question of whether, you know, we're doing a good enough job and getting the word out. It's a question, you know, whether, you know, people are, you know, seeing who we are and what we're about and really just understanding the fact that there's an incredible micro cap company out there that's performing incredibly well and For me, by standards of all microcap companies, I think we're outperforming most in a lot of ways. And basically, if there's a tree growing in the forest, that's my exact analogy that I use, people may not hear it or may not see it. So our goal is to be able to continuously push the word. We need our investors that are currently in the space to be able to shout out. But if you look at the liquidity, the liquidity is not as strong as we would like it to be. But certainly, you know, we need to do a better job in, you know, kind of elevating, you know, kind of CTHR from an investment standpoint and a positioning. So we've been mainly focused on really driving the business, driving the growth and exceeding, you know, our own internal expectations every single day. But I do believe moving forward, you know, it's time for us, you know, as we say, it's time to shine. I mean, you know, that's kind of you know, really important across the board, but, um, we just really need to, uh, you know, get the word out there a little bit better.
spk03: Okay, great. Uh, well, I appreciate you taking, taking my questions. Thanks.
spk01: Okay, great. Thanks. Thank you.
spk04: The next question is from Paul Johnson, Harvard investor. Please go ahead.
spk07: Yes. Good morning. Um, Two questions, actually. One, just in terms of the shareholder value question. So I know management feels like they own a lot of stock, and you do. And so maybe you don't want to be taken on anymore. But if I recall correctly, it's only been Director Olin Sykes who's been buying in a meaningful way over the last year or two. And so... Can you make any comment about perhaps other insiders participating at these crazy levels?
spk01: Yeah, sure. So, you know, in full transparency, not every director or every individual has the means to be able to go into the market and purchase, right, or make investments. You know, everybody, you know, has their own investment strategy, and everybody has literally their own cash on hand or capital to be able to invest. If you look, you know, recently, you know, Clint, Pete, my CFO, and myself have just recently taken on a position, albeit not the strength of Alan Sykes. Alan Sykes, you know, I can't speak on his behalf, but certainly, you know, we're very pleased with his vote of confidence, you know, in his position. You know, and certainly we have insiders exercising their options as well as, you know, our directors exercising across the board. You know, and it's been quite significant from the shift, from the moment basically I took over as CEO seven quarters ago.
spk07: Okay, fair enough. Secondly, can you talk a little bit just about margins? I joined the call late, so maybe you already discussed this, but I just wanted to know – in terms of the whole supply chain issue and gross margins, what you're seeing going forward?
spk01: Yeah, great question. So our blended margin is actually up 1% year-to-date from last year. We were at 48 last year. We're at 49% this year. Certainly this quarter, we comped the last year's margin. We did see some margin creep related to, you know, commodity prices that shot up here recently. Certain lab-grown diamond pricing on the smaller goods certainly increased a little bit there. We believe that's going to stabilize. Certainly commodities and precious metals stabilized a little bit now and actually dropped down for a little bit around the 1800s, and now it's teetering a little bit back and forth. And, you know, we estimate that we'll get some stabilization, you know, based on, you know, based on the trend that I've been seeing myself and based on, you know, what our insiders are saying about the metals. So we believe moving forward we're going to be in a good position. We'll be able to stabilize and maintain that. You know, just like everyone else, we'll look at that closely and we'll make an executive decision to either do pricing increases across the board. I will tell you that shipping costs and expenses also have risen, so that's another factor there to kind of, you know, keep an eye on. One thing we pride ourselves on is free shipping across the board, so we're kind of analyzing all that and making mindful, responsible decisions. No indications that we will not be able to maintain our blended margin, and if there is an indicator there, we will make the adjustments accordingly.
spk07: Fair enough. And can you give us an update on your plan to open distribution centers in various countries? I saw the announcement regarding... the UK, and there was the previous announcement in China, I believe. Can you give us an update on any possible other expansions?
spk01: Yeah, so let me just address those two. So the Asia-Pac region obviously is having some difficulties with COVID still in the pandemic there. So we're basically pushing what we can there. We're excited about the international expansion between the UK and China. Cooks and Gold just for the mere fact that the international for us has not been the primary focus. You know, since I've taken over, we wanted to be able to own the United States. There's a huge market here, and we think we can capitalize on that market, and we've done so incrementally. But we're excited about the European side, and I think for right now that's where we're going to bookend between the Asia pack and Cooks and Gold in the Europe region and the U.K., but that's not to say that we wouldn't look to pull in some other things. We'll wait for the, you know, kind of the global uncertainty to kind of resolve itself and, you know, kind of go in the direction it's going to go before we make any type of decisions with that regard. Hope that answers your question.
spk07: It does. Thank you.
spk04: Thank you. Next question comes from Paul Bernanski of PZDA. Please go ahead.
spk06: Hi, guys. Thanks for taking the question. What percentage of your product assortment is proprietary jewelry design versus generic? And then second question, I was hoping you could provide some more color on the showroom and the live streaming strategy. Thanks.
spk01: Yeah, thanks. So we don't give out the numbers and kind of the product mix of what we do. What I can tell you that the lab-grown diamond aspect of our business is growing very nicely, and we're very pleased with that, and we've expanded the assortments considerably. If you kind of look at our catalog and go on charlesandcovert.com, you can essentially just look at the increase in volume of styling that's going there. Look to us to increase that even more. as the awareness and as the acceptability starts to increase, which we believe we're in a great position for, and we believe that we've created a destination for all things made not in mind, and that choice that we offer that consumer is becoming mainstream. So we think that's a really, really good thing for us. So I know you're looking for specific numbers, but at this point, it's a product category for us, but we don't disclose that, but it is incrementally growing pretty much by the day. But the customer and the consumer, if you look at our Moissanite business, it's still grown by 10%. And you look at the growth in the lab-grown diamond business for us, it's grown by 141%. So the growth is there. And we started out a little over a year ago, and we had basically a basic assortment. And now we've kind of grown that into from engagement to anniversary to now fashion and look to us to do a lot more in the fashion category. As it relates to our showroom, we anticipate that we'll get our first signature store opened sometime here shortly. I'm not going to give specific timing for that just because of the fact of constraints between inspections and final certificate of occupancy there. That's the same thing related to our showroom. through our digital studio. Let me talk a little bit about the digital studio and what that looks like. That digital studio works as a hub for Charles and Colvard. We can be self-serving, self-sufficient. We create our own video content, which we believe is the future. We believe that this digital studio capacity and capability will set us apart from anyone else in this industry. It'll give us the ability to push content whether it's shoppable video content, whether it's direct response content, whether it's just through TikTok, Instagram, Facebook, whether it's through our own social campaigns, it'll allow us to produce a tremendous amount of content where currently there are limitations and cost-prohibited aspects to bringing that content forward. And today's consumer, you have to be everywhere that consumer is, I know that's a cliche, and that consumer is gravitating to video. That consumer wants to interact. It has to be an intuitive, interactive experience, and we believe the studio, which is nearing completion here shortly, will give us an opportunity to phase in more and more content and then eventually get that video shopping capability up and running and the potential for direct response shopping through video. any means. It could be through direct TV. It could be through regular cable. It could be through YouTube TV. It's a pretty broad swat there that I gave you, but hopefully we understand that. Going back to the product category with our signature collection, which is our proprietary designs and everything, our sales are up 29% on that and 59% year-to-date, but the signature collection is very important to us because that's the differentiation between Charles and Colvard and other brands we believe that's our advantage and it also tells the story between the four C's and the elements of Charles and Colvard and what we're about and it's that red thread that you know I hate to use the term but I'll use your men ask or you know a Tiffany thread like you know like major brands that we think is resonating with our consumers and that percentage is growing. I don't give that percentage out to as well because it's also a product, but it is growing, and it represents a very significant part of our business now.
spk06: Great. Thank you very much. Thanks.
spk04: Again, if you have a question, please press star then one. Next question comes from Matt Calanda, Wealth Capital. Please go ahead.
spk02: Hey, guys. It's Mike Zabrin. I'm for Matt Calanda. Could you just help us break down online performance in the quarter specifically as it pertains to own site versus Amazon and comment on any web traffic or conversion trends you're seeing?
spk01: Yeah, sure. Hey, Mike, how you doing? So the bottom line is we do break out our online segments. Our CDC, are you talking about our charlesandcolvard.com business itself?
spk02: Yes. It's just kind of breaking out performance at Charles and Colvard versus Amazon performance and just web traffic specifically on the own site and any conversion trends you've seen.
spk01: Yeah. So our, you know, overall charlesandcolvard.com, we're up 34% fiscal revenue. year to date. So we're definitely seeing some real improvement there. And that is really kind of what we call the gift, the gift that keeps on growing and the gift that keeps on giving. I can tell you that, you know, overall, you know, if you look at our overall revenue at $33.8 million and look at our online business now, 65% of that, and you look at where we reported our online business today, that 34% is just about just shy of last year's full year. So that remains to be very, you know, remains very, very strong. We don't publish as far as the Amazons and the marketplace breakouts between the drop ships. Uh, but you know, it basically, um, you know, it's all about Charles and Colbert.com.
spk02: Got it. Okay. And maybe next, just speak to where AOV is ended up in the quarter and, how they're impacted by the current mix of lab-grown diamonds that we have.
spk01: Yeah, so going back also, you know, I think the online business, if you're asking, as far as charlesandcovar.com represents 62% of the revenue in our online business right now. So just to give you that specific.
spk05: Okay, got it.
spk01: Yeah, okay. So as far as our AOV, we reported that it's $1,200. So we're very excited about maintaining our AOV. We're also excited at the fact that on the LGD, even though there are higher ticket items, a lot of our products are in the anniversary band, in the fashion category, which helps us maintain a nice, strong blend of AOV. So it's not, you know, I know some of the other competitors are selling AOV, you know, a lot of large center stones and engagements that skews their AOVs a little bit. Uh, but the beauty of what we have going with our AOVs on the return aspect of the business, which we have very low return rates, uh, don't impact the business overall. So we're very pleased with the strength of our AOV at a $1,200 right now.
spk02: Got it. And last one for me, just on, On sales and marketing, last quarter we called out healthy ROAS metrics and new campaigns. Maybe if you could just provide an update on how these metrics have trended in the third quarter and quarter to date and speak to which channels have specifically performed the best.
spk01: Sure. So when we addressed the ROAS, it's for charlesandcovert.com. We believe that we've got these levers. We're pulling the levers in the right direction. As the business shifts more, 65% now being the online business and 62% representing Charles and Colvard, certainly we're paying very, very close attention. We're looking at the data every single day. I will tell you that our average ad spend year-to-date right now is about $375. And for the quarter, it's about close to $300. So that's basically a reduction. So we've been getting a little bit better, increasing our ROAS, increasing our ability to kind of drive, you know, the traffic and conversion, you know, meaningful. And basically we've reduced it by, you know, a hundred, a hundred plus dollars average ad spend for customer. So that's for a new customer. Yeah. Thank you.
spk02: Got it. That's helpful guys. Thank you.
spk04: Thank you. Next, we have a follow-up question from Paul Johnson, private investor. Please go ahead.
spk07: Yes, can you give an update on the Macy's and Dullesburg businesses? And then in terms of the expenses going forward, so looking at the nine-month figures, revenues were up 14%, which is good, but SG&A was up like 40%. Is that something that's going to be tailing off, or are we going to continue to see that kind of disparity between the growth and expenses relative to sales?
spk01: Yeah, so actually our spend is down 39% from last quarter. But look to us to make strategic investments. Let's talk a little bit about the businesses first. So Macy's remains very, very strong and a great strategic partner for us. Macy's in-store and Macy's online. I can tell you their online business, is performing quite well, and we're real excited about that. And as we announced here, we've expanded the assortments there on both sides of the house, between in-store and as well as online. Helzberg remains really a gem of an account, a gem of a customer and a business for us. It continues to grow, and as the lab-grown movement gets stronger and stronger, so does our business with Helzberg. Helzberg looked to us to continuously grow that business, continuously support it. We look forward to continuing that relationship. So we're in all the Helzberg doors, albeit they did reduce several doors through the pandemic, but the strength of the doors that they now have still remains very, very strong, if not even stronger than it was before the pandemic. So we're real excited there and their online business still remains incredibly strong So that that's real real good But in terms of the expenses going forward Can you just talk about that? Yes, so we'll continue to spend Specifically to build out resources, right? so that's really important to us as we continue to grow a larger business and Certainly, when I took over the business, we were at basically less than $30 million, and now we're increasing even greater. In order to get that incremental growth and that revenue, we need to be able to spend strategically. and the paid and social campaigns. We need to support the brick-and-mortar partners that I just spoke about between co-op programs. We need to support our traditional, you know, partners with trade. So we'll continue to be mindful. We'll continue to spend. I try not to get caught up in, you know, the increase on SG&A and, you know, what you're looking at. You know, I mean, you're trailing, you know, nine months. We're, you know, basically on a fiscal year today to the seven months. You pull in our last year, which was the first year I took over as CEO, tremendous growth and improvement there. But this year to date, we're seeing the same, but we are incrementally spending as we're driving the revenue side. So we'll be mindful of it. We'll pull the levers as we need, but we have thresholds in place for performance-based thresholds related to the ROAS. And then as the online business segment starts to become more of an integral part of our business, you know, right now currently representing the 65%, and let's just say that's where the growth is, right? Our traditional remains strong and keeps and maintains itself, but then the true growth is the direct-to-consumer, and as that exponentially grows, it's a different business, and that's why I tried to call that out during the script today. It's a completely different business, and the cost associated with, you know, bringing on the right talent and resources in marketing, in design, in overall collateral and support for that business and actually pushing out in this competitive landscape between paid and search terms and phrases, you know, we're going to continue to spend there. But again, still profitable, continue to grow top line and doing what we need to make this business an incredible business and find the catalyst that gets us to the, you know, $150, $100, $200 million range. Fair enough.
spk07: And in terms of the wholesale accounts, is there any possibility with, I don't know, someone like a Dillard's or even a Costco?
spk01: Yeah, so Costco is a great name. So what we're looking to do is do business with people that are solvent or we think that are really in good financial condition or presents the financial capability for long term. And In short, yes, we're constantly looking at those opportunities, the Helzberg-like opportunities. They're very rare to find right now. You know, certainly we think with Macy's and with Helzberg, we're with the two strongest. Costco has a different kind of business model where they, you know, supply certain components of the pieces. So it's a little bit different, but look to us to look for additional opportunities For all intents and purposes, I like to use the term tentacles that can connect to our main vault of inventory. So it's a great point. I appreciate you bringing it up. As many of those tentacles that we can connect to our vault of inventory, the better we are and the more growth we'll see. So look to us to bring on or be aggressive in bringing on more of those online partners to be able to connect to tentacles.
spk07: Very good. Thank you.
spk01: Thank you.
spk04: This concludes our question and answer session. I'll now take the time to conference back over to Mr. Donald Connell for closing remarks. Please go ahead.
spk01: On behalf of the entire Charles and Colvard team, I'd like to thank you for your time today and your continued interest in CTHR and looking forward to our fiscal year-end call. Stay tuned for Charles and Colvard's growth and path forward, and we're excited. So, thanks.
spk04: Welcome to Now Concluded. Thank you for attending today's presentation. You may now disconnect.
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