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spk05: Good day and welcome to the Real Reels Q1 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Caitlin Howe, Senior Vice President of Investor Relations. Your line is open.
spk01: Thank you, Operator. Joining me today to discuss our results for the period ended March 31st, 2023, our Chief Executive Officer, John Corral, President and Chief Operating Officer, Rossi Levesque, and Chief Financial Officer, Robert Julian. Before we begin, I would like to remind you that during today's call, we will make forward-looking statements which involve known and unknown risks and uncertainties. Our actual results may differ materially from those suggested in such statements. You can find more information about these risks, uncertainties, and other factors that could affect our operating results in the company's most recent Form 10-K and subsequent quarterly reports on Form 10-Q. Today's presentation will also include certain non-GAAP financial measures, both historical and forward-looking, for which historical financial measures we have provided reconciliation to the most comparable GAAP measures in our earnings press release. In addition to the earnings press release, we issued a stockholder letter earlier today, both of which are available on our investor relations website. I would now like to turn the call over to John Correll, Chief Executive Officer of The Real Rails.
spk09: Thanks, Caitlin, and welcome to our Q1 2023 earnings call. Today, we reported financial results for the first quarter with revenue exceeding the midpoint of our guidance and adjusted EBITDA exceeding the high end of our guidance range. The improvement in profitability was largely driven by our ability to continue to grow a higher margin consignment business. During the first quarter, consignment revenue grew 22% and direct revenue declined 49% year over year. This resulted in our gross margin improving 980 basis points compared to the prior year. In addition, during the quarter, we increased take rate, reduced our company-owned inventory balance, and narrowed our adjusted EBITDA loss in both dollars and percentage compared to the prior year. We also took steps to reduce our cost base during the quarter. Beyond our financial metrics, we saw positive trends with total active buyers reaching over 1 million for the first time in the RealReal's history. We are also making progress on our customer satisfaction and consignor experience, which is critical to the long-term health of the business. Let me provide more details on our key initiatives. First, we made updates to our commission structure late last year, which are now starting to deliver results. If you remember, the goals of updating our commission structure were to optimize our take rate, limit consignment of lower value items, and increase consignment of higher value items. We believe the updates are mostly working exactly as we planned. Our Q1 take rate increased 170 basis points, lower value supply has decreased, and higher value supply has increased year over year. Therefore, the commission structure changes are doing well overall. One area where we have more work to do is in the mid-value supply. We are currently testing commission rates for different consignor cohorts at various price points to optimize our mid-value supply. In addition to supply, customer satisfaction and consignor experience continue to be a major focus area for the company. We have been busy rolling out our new consignor concierge team, which pairs each consignor with a small, dedicated team of consignment customer service experts. With the rollout now complete, the initial feedback from our new approach has been overwhelmingly positive. Our customer service ratings have increased, and it's helped us improve our net promoter score. Going forward, we will continue to look for ways to improve both the consigner and buyer experience. It's critical that we continue to improve our consigner experience and manage our costs effectively. Over the past two months, we have assessed our cost base and believe there is further opportunity to reduce our operating expenses. Our company-wide focus on managing costs, particularly those that do not directly impact our consigners and buyers, will be one of our keys to achieving profitability. The other key initiatives of optimizing product pricing and pursuing new revenue streams are making progress, and we look forward to discussing them more in depth in the coming quarters. With all these in mind, we are confident these key initiatives will help move the business to profitability, and we believe they will be particularly impactful in the back of this year. Overall, the business is headed in a positive direction. We're growing our consignment revenue. We're expanding both our gross margin and gross profit dollars, and we're improving our customer satisfaction and the consignor experience. We're also managing costs as we drive forward profitability. Given our strong Q1 results and our progress on initiatives, I reaffirm that we believe we will attain profitability on an adjusted EBITDA basis in full year 2024. With that, let's open the call for questions.
spk05: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. And our first question will come from the line of Kunal Madhukar With UBS, your line is open.
spk07: Hi, thanks for taking my question. One on the order volume. So the order volumes increase 1.5% year over year. And then in conjunction with that, can you talk about what you're seeing in the market from a consumer perspective and what are you seeing in the market from a consigner perspective? Thank you.
spk02: Sorry, Kunal, were you asking about the order, the number of orders?
spk07: No, I was initially within the context of like order volume increasing 1.1% year over year, 1.5% year over year. Wanted to understand what you're seeing in the market as far as demand is concerned and as far as supply is concerned.
spk02: Got it. Yeah. So a couple of different things as buyers are concerned and as well as sellers. I say that we are seeing, you know, we always look, I always talk about the top of the funnel and the engagement to the site, whether that's opportunities or leads on the consigner side. And on the buyer side, that sell-through, that's average selling price, average order value, and then units per transaction. Both of those are pretty healthy. On the buyer side, we are seeing sell-through stay pretty consistent, average selling price going up, active buyers have gone up year over year pretty significantly. And on the seller side, same thing. We're really focused, you know, I know that you listened and we were talking many times before, really focused on value and quality versus quantity. So that's what we're seeing on the consignor side as well. So pretty good and healthy engagement across the board.
spk07: Thank you. And as a quick follow-up, are trends in April any different from the trends that you saw in 1Q?
spk10: Yeah, this is Robert. We're not really going to give inter-quarter results for Q2, but our full Q2 guidance certainly incorporates anything that we've seen in April already, which is actuals at this point.
spk02: But I would say the trend has been pretty consistent on scholars' engagement for buyers and consigners. Yeah.
spk07: Got it. Thank you so much.
spk02: Thank you, Kunal.
spk05: One moment for our next question. And that will come from the line of Ike Buruchow with Wells Fargo. Your line is open.
spk06: Hey, everyone. I was just wondering from a demographic standpoint or income cohort, are you noticing any volatility or weakness at the higher tier part of the customer base? There's been some commentary out there from some of the luxury brands just that the U.S. consumer is becoming a little bit more pressure, they're shifting their purchases elsewhere. Just kind of curious if you guys are seeing that in the business and how you think about that. Thanks.
spk02: Yeah, so we are not seeing that right now. There's a few different ways that we look at that. We look at that, obviously, because we're a marketplace, both on the buyer and seller side. On the buyer side, like I mentioned, we're seeing average selling price and average order value going up. We're really focused on that mid and high value product. As you know, Ike, And as far as the consigner is concerned and those sellers that are giving us that product, those VIPs, as far as high and mid retail value is concerned, we are seeing pretty consistent across the board over the last few months. So it goes back to the health of the consumer in my mind. And, you know, we're cautiously optimistic that, you know, we'll see what happens over the next few months. Recession, are we in one, are we not? But, you know, we can report on our own metrics. And, again, we're cautiously optimistic that we're not seeing the trade down or average selling price decrease at this time. Great. Thank you.
spk05: Thank you. One moment for our next question. That will come from the line of Rick Patel with Raymond James. Your line is open.
spk12: Thank you. Good afternoon, everyone. I was hoping you could help us understand the assumptions going forward for gross margins. Very strong performance in the first quarter. I'm hoping you can help the puts and takes going forward as we think about the sustainability of the improvement you had in the first quarter.
spk10: Sure. Rick, this is Robert. I'll take that one. So we did see tremendous year-over-year improvement in our gross margins, almost 1,000 basis points. And I would say that it was primarily impacted by the shift in mix. You may recall that our direct revenue was percent of total revenue peaked last year in Q1. It was about 34% of our total revenue came from that lower margin direct business. And in Q1 of this year, we reduced that all the way down to 17%, 18%. which was our strategy and how we chose to proceed with our business and our path to profitability. So that had a tremendous impact on our gross margin. We also had the benefit of commission structure change. So that went into effect at the beginning of November last year. And we did across the board net increase our take rate. And that also had the impact of de-emphasizing and having us have less of the items under $100, which was also unprofitable. So those things definitely were part of our strategy, and I would describe those two changes as more structural and permanent, and even maybe a little bit more opportunity as we continue to reduce our direct revenue. Now, as we increase our direct gross margin. Now, actually, in that improvement of 1,000 basis points, there are some headwinds in there. There is a transitory headwind as we discount some of the owned inventory and get rid of the things that were harder to move. We have taken a tremendous hit on gross margin for the direct piece of our business. You saw it on reported results. It was actually slightly negative in Q1. That's transitory. There is still some of that left. I'm going to call it $5 to $10 million of inventory, of that type of inventory that may require some discounting. But once we get through that, you'll actually see our gross margins continue to improve. And so we are projecting going forward that we're going to continue to see improvement in gross margin, maybe not 1,000 basis points, but sequentially you might see another couple hundred basis points a quarter. getting to potentially high 60s by the end of the year.
spk12: That's very helpful. And can you also talk about supply procurement as you make changes to your take rate and the retail strategy? How do you feel about the flow of new products coming onto the platform and anything to call out in terms of getting more mid-level sellers on board?
spk02: Yes, sure, Rick. I can speak to that. So, as you know, we're focused on quality and value of products. So, really focused, again, on that high to mid-value tier. As far as how we think about our supply coming in for the rest of the year and so forth, we're really focused on the same strategies that we've talked about before and seeing some upside there. So, you know, we always joke that everything old is new again. Really, the relationships and the profile of our luxury managers We know that these more relationship-based sales team brings in better retail value. So really focused on that. Our referral program, we launched that a couple of months ago now, having a meaningful impact on Q1. We'll continue that. And then just a more personalized view on who we're acquiring on the marketing side. So again, VIP strategy, More lifetime value, focus on lifetime value as far as our marketing dollars and bringing in the right sellers. And so, a continued targeted approach there and focused on quality, not quantity, and then kind of our partnerships and affiliate programs as well.
spk12: Thank you very much.
spk05: One moment for our next question. And that will come from the line of Anna Andreeva with Needham. Your line is open.
spk03: Great. Thank you so much, and good afternoon. I wanted to follow up on the annual GMV guide for flat to down, which assumes a kind of similar flattish to downtrend in the back half. I was just hoping you could talk a bit more. What are you seeing with demand out there for your customer? And then secondly, John, I think you mentioned there additional opportunities to reduce costs that you guys are finding in the business. Could you extrapolate on that? Are there additional buckets of opportunity that you're seeing, and what's the timing on how those are expected to flow through the P&L? Thanks so much.
spk10: So, Anna, this is Robert. I'll just start with the numbers, just sort of reinforcing what you said. We see a very unusual pattern in our projected GMB this year that is not typical for our business, and it has been done quite purposefully. And so it's important to remember that the reduction in our direct business, which, you know, was a reduction of 50% year-over-year, will continue for some time. Now, direct business did peak in Q1. It started late. to flatten out maybe in Q2, and it really started to decline in Q3 and Q4. And so we're anniversaring that in terms of the headwind on overall GMV. And we talked about de-emphasizing items under $100. So we very intentionally reset the baseline, and we've talked about this being a reset year, but it's quite unusual to see our GMV and revenue decline from Q1 to Q2. Usually each quarter sequentially is a little better the quarter before ending with q4 being the highest quarter and so uh i think we'll get back to you know flattish in q4 although again we haven't given guidance for the out quarters but we are going to see this unusual trend of gmv and revenue going down instead of up from q1 And it is quite purposeful and intentional. It's what's driving our higher gross margin. And it creates what happened in Q1, where you see higher gross profit dollars on lower revenue dollars. And then I'll let the rest of the team talk to what we're expecting in terms of supply and demand and how that all washes out.
spk09: And thanks for the question. From a cost perspective, as you'd have any new CEO, you'd expect them to have their own perspective as they come to the table and know have help from a third party to review everything and the good news is rothy and robert had done a great job before i got here and we just had tweaking quite honestly and some of it has to do also with the nature of our business we're moving from a hyper growth maybe not as profitable as we needed to be to a huge emphasis on profitability and with that has come with some lower volume so we've had to optimize some pools not only on the support side but on the operations side so We're constantly trying to maintain flexibility. And, you know, you don't want to cut bone and muscle, but at the same time, you need to really optimize your costs to make sure that we can be profitable in the near term. And we're seeing a lot of benefits. Sometimes the costs can't change as quickly as the revenue is changing or the GMV is changing, but we're trying to keep pace as quickly as we can. And you'll see further optimizations in future quarters on that.
spk03: Got it. Thank you so much, guys.
spk05: Thank you. One moment for our next question. And that will come from the line of Noah Zetskin with KeyBank Capital Markets. Your line is open.
spk13: Hi there. This is Ashley on for Noah. Just with the ongoing macro pressure, I wanted to see how you're thinking about that trade-down effect you previously called out for the remainder of 2023 and then any opportunities you're currently seeing around new buyers. Thanks.
spk02: Yeah, sure. Hi, Ashley. As far as the trade-down effect that we saw earlier in the year, I'd say that we're not seeing that right now. We are seeing average selling price, if anything, go up for like-for-like items. The good thing about our business, as you know, consigned business, so if we do need to discount, our margins don't get squeezed. So, We aren't seeing that, and as our mix starts to change as far as higher value goods, more mid and high value, the AOV, ASP, all continued upside, and we do see a little bit more upside throughout the year there.
spk05: Thank you. And one moment for our next question. And that will come from the line of Marvin Fong with BTIG.
spk08: Good evening. Thanks for taking my questions. I guess I'd just like to try to understand better, you know, and I'm sorry if I missed this. I joined the call late. But, you know, are you in fact seeing, you know, the number of transactions for low-value goods coming down because the supply is coming down? And what, you know, are we seeing that impact you know, both in the numbers for the first quarter and for your full year guidance or how much of the guidance for the back half of the year, you know, related to, you know, the direct revenue coming down, some of the other things. So just trying to isolate, you know, how much of what's going on, you know, is due to, you know, just having fewer low price goods on the platform. So maybe just kind of speak to that.
spk10: Yeah, Marvin, this is Robert. So, As we mentioned earlier, it is true that we have intentionally reduced volume on low-priced items, and we have intentionally de-emphasized and, for the most part, stopped buying vendor wholesale or inventory. So we do expect that to continue, and that is reflected in our full-year guidance. But again, it is totally done as a strategic initiative to increase profitability and to focus on the things that are better for our business and our path to profitability. So it is reflected in our guidance and it is expected to continue. It's part of the reason that I had mentioned earlier why our gross margin is expected to continue to increase. And again, we are going to be generating more gross profit dollars and higher gross margin on lower revenues. And that makes our business less complex. There's less things to go wrong. It allows us to get a cost structure that matches that level of activity. All of that is very intentional in part of our focus on profitable growth and the path of profitability.
spk08: Gotcha. Great. Thanks, Robert. And I guess maybe another question for you or John. But, you know, as I look at your guidance, you know, if I just look at the consolidated take rate, it looks like it's you know, coming down a little bit compared to the first quarter. So should I just think of that as primarily driven by direct revenue coming down quarter over quarter and the marketplace take rate climbing? Or is the marketplace take rate increases kind of, you know, gone through the system?
spk10: Yeah, thanks for the question, Marvin. Just one thing. Direct business has no impact whatsoever on take rate. Take rate is entirely associated with our consigned business. Now, typically what we've said in the past is when you see a move in our take rate, in the past it's always been strictly a question of mix. When we sell higher price point, lower take rate items, proportionally more of that, take rate goes down. When we sell lower price point items with higher take rate, take rate goes up on average. And so it's not necessarily a bad thing, see take rate decline it may just be an indication we're selling more high value goods at lower take rate now the exception to that unfortunately there's always something weird in our results to explain you saw a tremendous increase in take rating q1 and that was not mix that was the commission change so we had two variables moving at the same time in q1 we had made this commission structure change in november And that did have an impact to raise take rate sort of across the board at every price point, more or less. Now, more so on low-value items and less so on high-value items. But we did see a change in take rate due to a structural change in our commission structure. And what you'll see from this new normal of mix, then you'll see take rate moving just based on are we selling more high-value goods or low-value goods with the associated lower or higher take rate. So that's what you're seeing going forward. Q1 is a little bit of an anomaly because it also had that one-time change of raising take rate across the board on average.
spk08: Got it. All right. Thanks a lot, Robert. Appreciate it.
spk05: And one moment for our next question. That will come from the line of Edward Yerma with Piper Sandler. Your line is open.
spk00: Hey guys, good evening and thanks for taking the question. I guess just first from a nomenclature perspective, could you maybe better define this mid-value? It's kind of a new term you guys haven't used in the past. Is it specific brands? Is it price points? And then in relation to trying to encourage more mid-value inventory, was there something in the pricing, or excuse me, in the grid change that maybe de-emphasized those products? And then finally, John, we'd love any observations. I know you've talked about costs. You've talked about some of the other initiatives that were already in flight. Any other observations operationally, the UI, the customer process that you can take from your previous experiences and bring to RealReal? Thanks.
spk02: Yes, thanks for the question. Mid-value is a newer terminology that we're using right now. So going back to the commission structure, we made that change in November. Really testing the elasticity of our service there. Good news is it did what we thought it would on the high value, bringing in more high value. Low value, less low value. Great news there. Mid value, we needed to tweak a little bit. So that's exactly right. We did have to, we made, I think we went a little too far in the med value area and we're tweaking that kind of range and you see those numbers getting better and as we tweak. But what mid-value means for us is about $200 to $750. High value is $750 plus. So we always said this would be a very dynamic strategy, and we kind of continue to tweak this commission structure, and that's kind of where we are optimizing at this moment.
spk10: And then I'll let you... And I would say under definitions, between $100 and $200 is... kind of low value, and under 100 is very low value. And for us, we primarily effectively try to eliminate very low value. We do have some low value between 100 and 200. It's going to be in our offering for a variety of reasons, but hopefully that gives you the definition you were looking for, Edward, on the price tranches. We think about it in terms of price tranches, which is how we're defining it. Exactly.
spk02: And as we tweak and kind of test, this mid-value based on different commission structures, we're seeing some upside there. So we're getting that just right in that area. And then I think you asked John about what other things.
spk09: From an observation perspective, a lot of marketplaces, obviously it's supply and demand, right? Supply is king here. So I've spent a lot of my time learning and doing anything I can to contribute to help increase the amount of supply that we can bring to this marketplace. You know, a lot of it's taking care of your consignors and forming emotional connections with them. A lot of my luxury background is really built around that. How do we form the relationship between the luxury manager and the consigner so that there's a great lifetime value there? We're not churning out these customers. But it's not just the sales team or the retail team that directly interacts with the first consignment or subsequent consignments. It's actually how are the goods handled and processed through the pipelines? So we've gotten a lot better at operational efficiency, getting things on the site from an SLA perspective, making sure any pricing discrepancies, things like that are addressed in a timely manner. It was a very minor highlight of my speech, but this concierge pod that works directly with the consignors and the luxury managers, now you actually basically have a team working together to resolve any issues. And, you know, normal retail businesses, you buy things from a company and sell them to a person. This has a person at both ends, and there's different levels of sophistication, different levels of complexity. We have to work through all that together, and we're getting so much better at it and having those teams work together. I think the word that Rasi just used in her answer with more testing and testing on commission structure changes and things like that, I think that's another thing that I'm going to bring from my background. We made a dramatic change. to commission structure in Q4 last year. My goal is to not do as many dramatic things because they have big risk to them. You can't really do that and reaffirm the belief that we're going to be profitable in 2024 if we take a dramatic swing and miss. So what you're going to see is a lot more tweaking, a lot more testing. You know, from the day I got here, we talked about the registration gate on the site. You can go to one page, but you can't go to any subsequent pages. That's the type of thing that we need to test. But again, that's more on the demand orientation. All my initial focus has been based on supply. And quite frankly, listen to the customers, improve the experience, and build a better business. That's what it comes down to.
spk00: Thanks so much.
spk05: Thank you. One moment for our next question. And that will come from the line of Tom Nixick with Wedbush Securities. Your line is open.
spk11: Hey, everybody. Thanks for taking my question. I apologize if this has been asked already. I'm bouncing between a couple of different earnings calls. The average order value, I think, was up something like 2%. And I guess I would think like with the concerted effort to you know, reduce lower-priced items, like on the side. I guess I would have thought that there would have been a bigger increase in AOV. Is that, you know, mixed shift just not as meaningful as I think it is? Or was there something else, you know, within the rest of the assortment that, you know, maybe, you know, there were category shifts or anything like that that were affecting the AOV?
spk02: Yeah, so AOV is about $500, almost $500 in Q1. And I will say a couple different things about that. As we continue this new strategy around de-emphasizing low value and more in the mid and high value, I do think you're seeing more upside throughout the quarters there. And then the other thing that you'll see is AST goes up. Sometimes you'll see units per transaction go slightly down. There is an inverse relationship there. But I think what we will see throughout the quarters is some continued upside in AOV.
spk10: Yeah, the 500 is not so bad either, Tom, as you think about it. It's an absolute number. I know it didn't change much year over year or sequentially, but I think it's moving in the right direction. It's a pretty healthy number. We saw average order value peak, you know, I think around Q3 of last year, and it was When we were really seeing people, especially during COVID, buying higher price point items like watches and handbags and jewelry. And so there was an expectation that average order value and average selling price would go down if that normalized. And what we've seen is a pretty decent result in Q1 at nearly $500 average order value. And again, the average selling price is increasing, not decreasing. And as Rachi said, we expect that trend to continue.
spk11: If I could just follow up there. When we think about getting to EBITDA profitability next year, is there more benefit that you expect to see next year from the elimination of low-value items, or will the improvement in profitability next year be more driven by top-line growth?
spk10: Yeah, I think it's going to – this is Robert. I think it's going to be both, Tom. At some point, we will anniversary the effect of reducing our direct business down to, call it, 15% to 18% of total revenue and really eliminating, as much as possible, items under 100. That will anniversary itself at some point. There will be what I would call a rollover effect into next year as you get a full year impact of us being at that – better mix level versus what's coming down during the course of this year. But I think you'll see benefit from both. We do expect to continue to grow this consigned business, as I said, in a very wide range we're providing at the moment, 10% to 20%. And so that will have benefits, it will create leverage, and it will be more profitable revenue and growth. And so all of those things come into effect in our projection that we're going to be positive adjusted EBITDA in 2024. You're also going to, by the way, you're going to get a full year effect of some of the cost cutting actions that we have more recently taken. Again, there'll be some point, some rollover effect of getting a full year impact of that in 2024 versus a partial impact in 2022.
spk11: Got it. Thanks, everyone. Best of luck the rest of the year.
spk05: As a reminder, if you would like to ask a question, please press star 1-1. One moment for our next question. That will come from the line of Lauren Shank with Morgan Stanley. Your line is open.
spk04: Great. Thanks. I just had two, if I can. The first was whether or not the shift away from some of the lower value items has impacted fire retention at all. And then the second is if there's anything more you can share on the new revenue opportunities that you identified and whether or not there's any upside from that contemplated in the full year guide. Thanks.
spk02: Hi, Lauren. I'll take the first one and I'll let John take the second part of your question. As far as low value and de-emphasizing the brands and items there, We're not seeing much of an impact on the retention side. We were pretty surgical when we went in and looked at which items or brands we were going to de-emphasize there and make sure. And then we also looked at the seller basket and the buyer basket as well to make sure that there was high infinity with the brands that we were cutting or low infinity in this case. So nothing alarming on the retention side there.
spk09: Yeah, and from an advertising perspective, there's minimal impact to 2023. A lot of it's back to the testing comment that I just made a moment ago. Some of it's listening to our customers. We need to offer products where we don't take returns on handbags right now. What if we actually offered return insurance, right? Those are the type of things that the market is asking for. We're going to bring those forward. At the same time, we have 32 million members and we have a lot of active members and we have a lot of page views and we haven't monetized that from an advertising point of view. So, you know, I don't want to talk about things that we haven't done yet. We've done enough that we have plenty to talk about there. But you will see a big commitment from us to turn on those type of things and bring those to green from a testing perspective. And then, you know, hopefully have an outsized impact in 2024 when we're doing it in a conscious and judicious way in the back half of this year.
spk05: Great. Thank you. Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to the RealReal CEO, Mr. John Corral, for any closing remarks.
spk09: Thank you for joining us today. Before we close the call, I want to take a moment to thank the RealReal team. You have all welcomed me into the organization and have already taught me a lot about the business. Thank you for your openness, enthusiasm, and commitment to our mission. We are excited about the direction of the business and look forward to partnering with you to keep making a difference in luxury resale and for the planet. Finally, I'd like to thank our more than 32 million members that are joining us on our mission to extend the life of luxury and make fashion more sustainable. Thank you very much.
spk05: Thank you all for participating. This concludes today's program. You may now disconnect.
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