• Total Revenue: Decreased by 63% year-over-year to $57 million.
• Gross Profit: $35 million, compared to $92 million in the same quarter last year.
• Gross Margin: Improved to 61% from 60% in the same period last year.
• Total Operating Expenses: Reduced by 63% year-over-year to $34 million.
• Fulfillment Expenses: Decreased by 50% year-over-year to $4 million.
• Selling and Marketing Expenses: Declined by 67% year-over-year to $25 million.
• General and Administrative Expenses: Decreased by 42% year-over-year to $6 million.
• Research and Development Expenses: $3 million, compared to $5 million in the same quarter last year.
• Net Income: $0.3 million, compared to $0.1 million in the same quarter last year.
• Adjusted EBITDA: $0.8 million, consistent with the third quarter of 2023.

• Warning! GuruFocus has detected 2 Warning Sign with LITB.

Release Date: December 10, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LightInTheBox Holding Co Ltd (NYSE:LITB) achieved profitability despite significant revenue fluctuations, focusing on protecting margins and enhancing profitability.
• The launch of the new brand Ador.com is transforming LITB from an e-commerce retailer into a brand for apparel design, offering proprietary apparel collections directly to consumers.
• Ador.com is delivering higher margins and offers high-quality clothing at prices 50% lower than similar brands, without sacrificing margins.
• The company has streamlined logistics and supply chain processes, resulting in a 50% year-over-year decrease in fulfillment expenses.
• LITB's gross margin improved to 61% in the third quarter, largely due to the positive impact of new product lines, particularly those for Ador.com.

Negative Points

• Total revenues decreased by 63% year-over-year to $57 million, primarily due to intense competition in the global e-commerce industry.
• Gross profit decreased to $35 million compared with $92 million in the same quarter last year.
• Selling and marketing expenses declined by 67% year-over-year, indicating a significant reduction in marketing efforts.
• General and administrative expenses decreased by 42% year-over-year, which may impact the company's ability to invest in growth initiatives.
• Research and development expenses were reduced to $3 million from $5 million in the same quarter last year, potentially affecting future innovation.

Q & A Highlights

Q: Can you elaborate on the strategic decision to focus on profitability rather than market share? A: Jian He, CEO: In 2024, we decided not to chase market share at any cost due to intense competition in the e-commerce industry. Instead, we focused on protecting our margins and enhancing profitability. This approach has allowed us to achieve profitability despite significant revenue fluctuations.

Q: What is the significance of the new brand Ador.com for LightInTheBox? A: Jian He, CEO: Ador.com represents our transformation from an e-commerce retailer to a brand-focused apparel designer. It is a design-driven venture that allows us to craft proprietary apparel collections, control quality, brand image, and ultimately, profitability. Ador aims to offer high-quality clothing at prices 50% lower than similar brands, without sacrificing margins.

Q: How did the new product lines impact the financial results? A: Yuanjun Ye, CFO: Our new product lines, particularly those for Ador.com, have positively impacted our gross margin, which improved to 61% this quarter from 60% last year. These products offer higher margins and have been well received by customers.

Q: What measures have been taken to reduce operating expenses? A: Yuanjun Ye, CFO: We achieved a 63% reduction in total operating expenses year-over-year, bringing them down to $34 million. This was due to a decline in revenue and effective operational efficiency enhancements. Fulfillment expenses decreased by 50%, and selling and marketing expenses declined by 67%.

Q: What are the future priorities for LightInTheBox? A: Yuanjun Ye, CFO: We will continue to prioritize efficiency and profitability improvement, focusing on the growth and development of our new initiatives, including our new brand operations and comprehensive service offerings for e-commerce companies. We are dedicated to pursuing high-quality development and delivering value to our shareholders.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.