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Earnings call: LightInTheBox reports Q1 2024 financial results

EditorAhmed Abdulazez Abdulkadir
Published 05/30/2024, 12:56 AM
© Reuters.
LITB
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LightInTheBox Holding Co., Ltd. (NYSE: LITB), a global online retail company, reported a significant decrease in total revenues by 52% year-over-year to $71 million for the first quarter of 2024, citing macroeconomic headwinds and increased competition. The company's net loss narrowed slightly to $3.8 million, compared with $4 million in the same quarter of the previous year. LightInTheBox's management emphasized a strategic shift towards profitability improvement and brand development in response to the challenging operating environment.

Key Takeaways

  • LightInTheBox's total revenues decreased by 52% year-over-year to $71 million.
  • Net loss for the quarter narrowed to $3.8 million from $4 million year-over-year.
  • The company is pivoting from prioritizing sales growth to focusing on profitability.
  • Operating expenses decreased by 47% to $45 million year-over-year.
  • LightInTheBox repurchased 3.2 million ADS at an aggregate value of approximately $3.5 million.

Company Outlook

  • LightInTheBox expects total revenue for Q2 2024 to be between $60 million and $70 million.
  • The company plans to maintain focus on high-quality development and profitability.
  • LightInTheBox aims to optimize marketing ROI and cultivate a loyal customer base, particularly in key markets like the United States.

Bearish Highlights

  • Intense competition and macroeconomic challenges impacted the company's performance.
  • A significant decrease in revenue was reported due to these external factors.

Bullish Highlights

  • LightInTheBox is implementing a series of strategic adjustments to foster new brands and differentiate its offerings.
  • The company is refining localized operations and marketing campaigns to strengthen brand recognition and overall competitiveness.

Misses

  • Total operating expenses, although decreased, still comprise a substantial portion of the reduced revenue, indicating cost pressures.

Q&A Highlights

  • No questions were asked during the Q&A session of the earnings call.

LightInTheBox's management team, including Chairman and CEO Mr. Jian He and CFO Ms. Yuanjun Ye, outlined the company's strategic response to the current economic landscape. The company is adjusting its focus from sales growth to profitability and brand awareness, leveraging high-quality products and an optimized consumption experience. Despite the downturn in revenue, LightInTheBox is taking measures to enhance operational efficiency and customer service through its proprietary technologies. The company's share repurchase program also reflects a commitment to shareholder value. Looking ahead, LightInTheBox anticipates continued challenges but remains dedicated to adapting its strategies to navigate the evolving market.

InvestingPro Insights

LightInTheBox Holding Co., Ltd. (NYSE: LITB) is navigating a complex market with strategic shifts aimed at improving its financial health. Our InvestingPro Insights reveal a nuanced picture of the company's current valuation and financial standing.

InvestingPro Data highlights a Market Cap of approximately $74.48 million, indicating the company's size in the competitive online retail space. Despite the challenging economic environment, LightInTheBox has maintained a Gross Profit Margin of 57.18% over the last twelve months as of Q4 2023, showcasing its ability to retain a significant portion of revenue after accounting for the cost of goods sold. This margin is particularly relevant as the company strives to improve profitability.

However, the company's struggle for profitability is underscored by a negative P/E Ratio (Adjusted) of -7.63, reflecting investor concerns about future earnings potential and the company's ability to reverse its net loss position.

Among the InvestingPro Tips, two are particularly pertinent to the article's context:

1. LightInTheBox is trading at a low revenue valuation multiple, which may attract investors looking for undervalued opportunities in the e-commerce sector.

2. The company's short term obligations exceed liquid assets, a financial stress point that aligns with the article's emphasis on the company's need to shift towards profitability and operational efficiency.

For readers interested in a deeper analysis, InvestingPro offers additional tips on LightInTheBox, including insights into cash burn rates and stock performance trends. There are 8 more InvestingPro Tips available, which could further guide investment decisions. To access these valuable insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/LITB.

Full transcript - Lghtntbx Hld Adr (LITB) Q1 2024:

Operator: Hello, ladies and gentlemen, thank you for standing by for LightInTheBox's First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. I would now like to turn the call over to your host, Ms. Jenny Cai. Please go ahead, Jenny.

Jenny Cai: Thank you, operator. Hello, everyone, and welcome to LightInTheBox First Quarter 2024 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. Yuanjun 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 US 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 includes discussions 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's Chairman and CEO, Mr. He. Please go ahead.

Jian He: Good morning, and good evening, everyone. Thank you for joining our first quarter 2024 earnings conference call today. We faced macroeconomic headwinds and increasing competition in the first quarter of 2024. This complex landscape drove an increase in traffic acquisition costs in the rate of our sales. We addressed the challenges with our development strategy, pivoting from prioritizing sales growth to focusing on profitability improvement. We also strove to grow our brand awareness with high-quality products and optimize our consumption experience. We expect a rapid evolving and a turbulent operating environment as we move through 2024. In response, we will maintain our focus on high-quality development and profitability. We are fostering new brands and initiating a series of strategy adjustments. Based on our industry know-how, we aim to further differentiate our offering and better align them with the consumer preference and demands. Additionally, we will continue to refine our localized operations and the marketing campaigns in key markets such as the United States to bring unchain products to more customers. We believe this initiative will optimize marketing ROI drive user traffic and cultivate a loyal customer base over time, strengthening our brand recognization and overall competitiveness. We will keep you updated on our progress in future calls [Technical Difficulty] delivering high-quality development and sustainable long-time value for all stakeholders remains our ultimate goal. With that , I will now hand the call over to Yuanjun to go through our financial results.

Yuanjun Ye: Thank you, Mr. He. Good morning, and good evening, everyone. Before we start a detailed discussion of our financials, please note that unless otherwise stated, all the financials we present today are in US dollar terms. Now let me share our financial performance for the quarter. In the first quarter, our total revenues decreased by 52% year-over-year to $71 million, primarily due to the macro headwinds and intensive competition. Our total operating expenses decreased by 47% year-over-year to $45 million from $87 million in the same period of last year. The decrease was mainly due to decrease of our revenues. Specifically, fulfillment expenses decreased by 33% year-over-year to $5.7 million. Selling and marketing expenses decreased by 53% year-over-year to $33 million. G&A expenses decreased by 20% year-over-year to $7.3 million. As part of the G&A expenses, R&D expenses in the first quarter of 2024 were $4.6 million compared with $5.2 million in the same quarter of last year. Going forward, we will execute our optimized brand strategy, while leveraging our proprietary technologies to enhance our operational efficiency and customer service. Turning to our bottom line. Net loss narrowed to $3.8 million from $4 million in the same quarter of 2023. Adjusted EBITDA was a loss of $3.1 million compared with a loss of $3.1 million in the first quarter of 2024. As Mr. He mentioned, enhancing profitability will be our strategic priorities this year. We are also dedicated to returning value to our shareholders through our share repurchase program. Since April 17, 2024, the company had repurchased 3.2 million ADS with a total aggregate value of approximately $3.5 million. Moving to the guidance. For the second quarter of 2024, based on information currently available and business seasonality, we expect total revenue to be between $60 million and $70 million. This concludes our prepared remarks. We'll be happy to take some questions now. Operator, please continue.

Operator: Thank you. [Operator Instructions] As there are no questions, now I'd like to turn the call back over to Jenny Cai for closing remarks.

Jenny Cai: Thank you once again for joining us today. If you have further questions, please feel free to contact LightInTheBox's Investor Relations through the contact information provided on our website or Piacente Financial Communications. Have a great day.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect your lines.

End of Q&A:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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