Rent the Runway Inc (RENT) 2023 Q2 法說會逐字稿

Hello, and welcome to Rent the Runway's Second Quarter 2023 Earnings Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Rent the Runway 2023 年第二季獲利結果電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

I'll now turn the call over to Rent the Runway General Counsel, Cara Schembri. Cara, please go ahead.

我現在將電話轉給 Rent the Runway 總法律顧問 Cara Schembri。卡拉，請繼續。

Good morning, everyone, and thanks for joining us to discuss Rent the Runway's Second Quarter 2023 results. Joining me today to discuss our results for the quarter ended July 31, 2023, our CEO and Co-Founder, Jennifer Hyman, and CFO, Sid Thacker.

大家早安，感謝您加入我們討論 Rent the Runway 2023 年第二季的業績。今天，我們的執行長兼聯合創辦人 Jennifer Hyman 和財務長 Sid Thacker 與我一起討論截至 2023 年 7 月 31 日的季度業績。

During this call, we will make references to our Q2 '23 earnings presentation which can be found in the Events and Presentations section of our Investor Relations website. Before we begin, we would like to remind you that this call will include forward-looking statements. These statements include our future expectations regarding financial results guidance and targets, market opportunities and our growth. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially. These risks, uncertainties and assumptions are detailed in today's press release as well as our filings with the SEC, including our Form 10-Q that will be filed later today. We undertake no obligation to revise or update any forward-looking statements or information, except as required by law.

在本次電話會議中，我們將參考我們的 23 年第 2 季收益簡報，該簡報可以在我們投資者關係網站的「活動和簡報」部分中找到。在開始之前，我們想提醒您，本次電話會議將包含前瞻性陳述。這些陳述包括我們對財務績效指導和目標、市場機會和我們的成長的未來預期。這些陳述受到各種風險、不確定性和假設的影響，可能導致我們的實際結果出現重大差異。這些風險、不確定性和假設在今天的新聞稿以及我們向 SEC 提交的文件（包括將於今天稍後提交的 10-Q 表格）中進行了詳細說明。除法律要求外，我們不承擔修改或更新任何前瞻性陳述或資訊的義務。

During this call, we will also reference certain non-GAAP financial information. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Reconciliation of the GAAP to non-GAAP measures can be found in our press release slide presentation posted on our investor website and in our SEC filings.

在本次電話會議中，我們也會參考某些非 GAAP 財務資訊。此非 GAAP 財務資訊的呈現不應被孤立地考慮或作為根據 GAAP 呈現的財務資訊的替代。 GAAP 與非 GAAP 衡量標準的調整可以在我們的投資者網站上發布的新聞稿幻燈片簡報以及我們向 SEC 提交的文件中找到。

And with that, I'll turn it over to Jen.

有了這個，我會把它交給 Jen。

Thanks, Cara, and thank you, everyone, for joining. I want to start by talking about our progress in Q2, starting with our strong bottom line performance and momentum towards profitability. We're pleased that we exceeded our Q2 profitability guidance by remaining disciplined, adjusted EBITDA margins had a historic high at 10.2% in Q2 driven by fulfillment efficiencies, strong gross margins and fixed cost control.

謝謝卡拉，也謝謝大家的加入。我想先談談我們在第二季的進展，首先是我們強勁的底線表現和獲利勢頭。我們很高興我們透過保持嚴格的紀律超越了第二季度的獲利指引，在履行效率、強勁的毛利率和固定成本控制的推動下，第二季調整後的 EBITDA 利潤率達到 10.2% 的歷史新高。

And notably, today, we announced that we have accelerated our plan to be free cash flow breakeven before cash interest expense to full year '24. For some time now, we've been focused on taking decisive actions that the goal to bring Rent the Runway to profitability. And we believe now is the right time to accelerate our efforts.

值得注意的是，今天，我們宣布，我們已經加快了在 24 年全年實現現金利息支出前自由現金流盈虧平衡的計劃。一段時間以來，我們一直致力於採取果斷行動，目標是讓 Rent the Runway 獲利。我們相信現在是加快我們努力的正確時機。

Our growth and improvement story starts with our cash, where we've made immense progress. We've transformed a business that consumed almost $100 million in cash in full year '22, to a business that will consume around $50 million in cash in full year '23 and will break even next year less cash interest expense. We believe that a key part of getting to profitability is also making decisive choices that are prioritizing the medium and long-term health of the business over short-term revenue gains and lower margin customers.

我們的成長和進步故事始於我們的現金，我們在這方面取得了巨大的進展。我們已經將 22 年全年消耗近 1 億美元現金的企業轉變為 23 年全年消耗約 5000 萬美元現金的企業，並且明年將在扣除現金利息支出後實現盈虧平衡。我們認為，實現獲利的關鍵部分還在於做出果斷的選擇，優先考慮業務的中長期健康狀況，而不是短期收入成長和利潤率較低的客戶。

Next, Q2 was the fifth consecutive quarter of positive adjusted EBITDA. We've made significant improvements over the past several years, reducing both our fixed and variable cost structure and growing our margins. Cost discipline continues to be firmly embedded in to Rent the Runway's culture. Our '22 restructuring was clearly an important step, and we have continued to make progress on optimizing costs during the first half of full year '23. Our teams are continuing to examine our cost structure to assess additional steps we can take to remain agile, flexible and able to achieve our profitability goals in a range of revenue scenarios.

接下來，第二季是連續第五個季度調整後的 EBITDA 為正值。在過去幾年中，我們取得了重大改進，減少了固定和變動成本結構並提高了利潤。成本紀律繼續牢固地融入 Rent the Runway 的文化中。我們的「22」重組顯然是重要的一步，我們在「23」全年上半年在優化成本方面繼續取得進展。我們的團隊正在繼續檢查我們的成本結構，以評估我們可以採取的其他步驟，以保持敏捷、靈活並能夠在一系列收入情況下實現我們的獲利目標。

Going up to gross margins. We've continued to improve performance in our fulfillment operations and in how we acquire inventory. Even as we changed our subscription programs to offer customers 25% more value in every shipment in Q1. Our fulfillment costs have improved primarily by focusing on labor productivity and transportation efficiencies. The strength of our inventory expense is a reflection of the continued impact of product acquisition mix changes towards more efficient channels.

毛利率上升。我們不斷提高履行營運和庫存獲取方式的績效。即使我們更改了訂閱計劃，為客戶在第一季的每批發貨中提供 25% 的額外價值。我們的履行成本主要透過關注勞動生產力和運輸效率而得到改善。我們庫存費用的強勁反映了產品採購組合向更有效率管道轉變的持續影響。

Lastly, I want to acknowledge our Q2 miss on revenue. We had a slight revenue miss due to lower-than-expected active subscriber count primarily driven by lower early term subscriber retention, which we believe to be attributed to inventory debt levels that were too low. Reserve, our onetime event rental business also declined year-over-year which we believe was the result of greater focus on subscription in our marketing efforts and on our site as we discussed last quarter as well.

最後，我想承認我們第二季的營收未達預期。由於活躍用戶數量低於預期，我們的收入略有下降，這主要是由於早期用戶保留率較低所致，我們認為這歸因於庫存債務水平過低。我們的一次性活動租賃業務 Reserve 也同比下降，我們認為這是我們的行銷工作和網站更注重訂閱的結果，正如我們上季所討論的那樣。

Our goal is driving this business to free cash flow profitability less cash interest expense next year. To do so, we are making deliberate choices that we anticipate will negatively impact short-term revenue and subscriber count. We're planning to be less promotional and focus more on rebuilding our high-margin reserve business. We also plan to pull back on marketing spend to prioritize inventory in-stock rate.

我們的目標是推動該業務明年實現自由現金流獲利，減去現金利息支出。為此，我們正在做出深思熟慮的選擇，我們預計這些選擇將對短期收入和訂閱者數量產生負面影響。我們計劃減少促銷力度，更專注於重建我們的高利潤儲備業務。我們還計劃削減行銷支出，優先考慮庫存率。

Above all, we're empowering our leaders to make the right choices to drive profitability. We do not waver from our long-term belief in the enormous market opportunity for rental. As a result, we are focused on creating a sustainable business so that we can control our own destiny and capture as much of the large and growing market as possible over the upcoming years.

最重要的是，我們正在授權我們的領導者做出正確的選擇來提高獲利能力。我們始終堅信租賃市場存在巨大機會。因此，我們專注於創建可持續發展的業務，以便我們能夠掌控自己的命運，並在未來幾年內盡可能多地佔領龐大且不斷增長的市場。

Before I discuss the positive improvements we've made to the customer experience in the first half, I want to discuss what we believe are the two biggest challenges we had, lower inventory depth than needed and a softer reserve business. We learned a lot in Q2 about the criticality of inventory depth to the customer experience. We started Q2 with a record number of subscribers and on the heels of our extra item plans launched in April. While we had enough inventory overall to serve our customer base during the quarter, we did not have enough depth in new styles and as a result, our in-season in-stock rates were down 17% versus Q2 last year. We have data that indicates that an inventory depth issue was the primary driver of lower early term subscriber retention and therefore, lower active sub count.

在討論上半年我們對客戶體驗所做的積極改進之前，我想先討論一下我們認為面臨的兩個最大挑戰：庫存深度低於所需水平以及儲備業務疲軟。我們在第二季學到了很多關於庫存深度對客戶體驗的重要性。繼四月推出額外商品計畫之後，我們第二季的訂戶數量創歷史新高。雖然我們在本季度有足夠的庫存來服務我們的客戶群，但我們對新款式的深度不夠，因此，我們的當季庫存率比去年第二季度下降了 17%。我們的數據表明，庫存深度問題是早期訂戶保留率較低以及活躍子數較低的主要驅動因素。

To take a step back, we fully transitioned from our unlimited swap program to fixed swap plans in 2021 and 2022 was our first year of operating these programs in a more normalized environment where customers were going to offices and out to events again. In 2022, we revamped success metrics for inventory in fixed swap programs, shifted our go-forward strategy away from a breadth strategy to focus on a depth strategy and established inventory availability as one of our key strategic pillars for 2023.

退一步來說，我們在 2021 年從無限掉期計劃完全過渡到固定掉期計劃，2022 年是我們在更加規範化的環境中運營這些計劃的第一年，客戶將再次前往辦公室和參加活動。 2022 年，我們修改了固定掉期計畫中庫存的成功指標，將我們的前進策略從廣度策略轉變為專注於深度策略，並將庫存可用性確定為我們 2023 年的關鍵策略支柱之一。

The most important component of this strategy is greater investment in depth of styles and brands, we know she wants. So we are in stock more of the time. Given the nature of a 6-month fashion buying cycle, we were able to implement our learnings from 2022 and impact our Q3 and Q4 2023 buys with higher depth, which is now coming to life in our fall 2023 assortment. As we shared previously, we expected that the customer impact would begin to be felt on this time line, which was key in informing our original back half-weighted growth expectations for full year '23.

這項策略最重要的組成部分是對款式和品牌深度的更大投資，我們知道她想要的。所以我們很多時候都有庫存。鑑於6 個月的時尚購買週期的性質，我們能夠實施2022 年以來的經驗教訓，並以更高的深度影響我們2023 年第三季度和第四季度的購買，這一點現已在我們的2023 年秋季產品系列中得到體現。正如我們之前分享的，我們預計客戶的影響將在這個時間線上開始顯現，這對於我們最初對 23 年全年的半加權成長預期至關重要。

However, we believe that the lag between the time of the buy and live to site impacted the customer experience more than we expected in Q2, particularly for new customers, given the high growth we experienced in Q1. In a fashion rental business, availability changes moment to moment, and we have observed that new customers are more likely to be disappointed by lower in-stock rates because they expect to see the items they got excited about while browsing as a prospect.

然而，我們認為，考慮到我們在第一季經歷的高速成長，購買和上線時間之間的延遲對第二季客戶體驗的影響超出了我們的預期，特別是對於新客戶而言。在時尚租賃業務中，供應情況隨時都在變化，我們觀察到，新客戶更有可能對較低的庫存率感到失望，因為他們希望在作為潛在客戶瀏覽時看到他們感興趣的商品。

Retention of tenured customers continue to be strong because they understand that when they don't see something they've parted one day, they're confident they'll be able to rent soon. We believe that this issue is temporary in nature. Depths of our 2H 2023 buy are expected to be approximately 1.7x the depth of our 1H '23 buys, which would increase our in-stock rate by 700 to 1,000 basis points.

長期客戶的保留率仍然很高，因為他們明白，當他們有一天看不到自己已經離開的東西時，他們相信自己很快就能租到。我們認為這個問題本質上是暫時的。我們 2023 年下半年購買的深度預計約為 23 年上半年購買深度的 1.7 倍，這將使我們的庫存率增加 700 至 1,000 個基點。

We have acquired even higher depth in our most popular brands and in key items, we have confidence our customers will want this fall and winter. Functionally, we expect this will be felt by customers throughout the second half of Q3 as they're refreshing their fall wardrobe and through to Q4. We anticipate that this will result in a meaningfully better customer experience and improve retention in the near to midterm.

我們在最受歡迎的品牌和關鍵商品上獲得了更高的深度，我們相信我們的客戶會在今年秋冬獲得想要的產品。從功能上講，我們預計客戶在第三季下半年和第四季都會感受到這一點，因為他們正在更新秋季衣櫃。我們預計這將在近期到中期帶來更好的客戶體驗並提高保留率。

While 2H depth will be a huge improvement over 1H, customer behavior in Q2 illuminated that we should go even further on our depth strategy. To that end, we have further expanded our depth plans for '24. We expect that we will see continued improvement on in-stock in the first half of 2024 as a result of this.

雖然 2H 深度將比 1H 有了巨大的進步，但第二季的客戶行為表明我們應該在深度策略上走得更遠。為此，我們進一步擴大了 24 年的深度計畫。我們預計，2024 年上半年庫存將持續改善。

The nature of our business model dictates that any significant transition in inventory strategy must be done in multiple phases, given that we monetize inventory over multiple years, and it stays in our rental ecosystem for multiple seasons. To be clear, while we have made significant improvements already, we expect the lion's share of the positive impact of our debt strategy and therefore, the positive impact to revenue and subscriber growth to be in 2024, one significantly more of our inventory tranches have appropriate depth. Our data thus far indicates that we should see loyalty gains from all customers with the greatest gains coming from early term customers.

我們的業務模式的性質決定了庫存策略的任何重大轉變都必須分多個階段完成，因為我們多年來一直在透過庫存貨幣化，並且它會在我們的租賃生態系統中保留多個季節。需要明確的是，雖然我們已經取得了顯著的進步，但我們預期債務策略的正面影響最大，因此，對收入和訂戶成長的正面影響將在2024 年發生，我們的庫存批次中的一個顯著增加有適當的深度。到目前為止，我們的數據表明，我們應該看到所有客戶的忠誠度都得到了提高，其中最大的收益來自早期客戶。

For reserve, we believe we have great opportunity here. Our onetime rental business is what we launched this business with 15 years ago. It's the easiest value proposition for customers to understand as every woman finds herself having to buy outfits every year for event she rarely wears again. We've made three exciting changes to our reserve business over the past quarter. Last month, we debuted a distinct product experience for reserve, which separates the reserve funnel from the subscription funnel. This is intended to make it easier for customers to understand the reserve value proposition of locking in a look in advance and getting the second size for free. It also clarifies how the pricing compares to subscription.

對於儲備，我們相信我們在這裡有很好的機會。我們的一次性租賃業務是我們 15 年前推出的。這是顧客最容易理解的價值主張，因為每個女人都發現自己每年都必須為自己很少再穿的活動購買服裝。過去一個季度，我們對儲備業務做出了三項令人興奮的改變。上個月，我們推出了獨特的儲備產品體驗，它將儲備管道與訂閱管道分開。這樣做的目的是讓顧客更容易理解提前鎖定試鏡並免費獲得第二個尺寸的保留價值主張。它還闡明了定價與訂閱的比較。

Second, we started acquiring distinct inventory for the reserve business, mostly on consignment, focused on premier designers that elevate our reserve assortment. Finally, we've shifted our org design to add new leadership focus on reserve, intended to ensure we can grow both this business and subscription side by side. We believe that the appetite for rental at large is big enough that both of these offerings can grow, and we expect this change to the funnel to benefit both reserve and subscription from a conversion standpoint over time.

其次，我們開始為儲備業務取得不同的庫存，主要是寄售，並專注於提升我們儲備品種的頂級設計師。最後，我們改變了組織設計，將新的領導重點放在儲備上，旨在確保我們能夠同時發展這項業務和訂閱。我們相信，整個租賃市場的需求足夠大，這兩種產品都可以成長，而且我們預計，隨著時間的推移，從轉換的角度來看，通路的這種變化將使預訂和訂閱都受益。

Beyond our inventory depth strategies and focus on improving reserves, the teams have continued their work across our other strategic pillars, the efficient and easy-to-use experience and best-in-class product discovery and have been successful in the first half of 2023 at markedly improving our overall customer experience. We believe we'll see more of the full retentive impact of these changes to customer experience and discovery when the in-stock rates are higher.

除了我們的庫存深度策略和專注於提高儲備之外，團隊還繼續在我們的其他策略支柱、高效易用的體驗以及一流的產品發現方面開展工作，並在 2023 年上半年取得了成功顯著改善我們的整體客戶體驗。我們相信，當庫存率更高時，我們將看到這些變化對客戶體驗和發現的更多全面保留影響。

Let me share a fewer -- those initiatives here. Related to our pillar on efficient and easy-to-use experience, we've seen early success with our SMS-based concierge program that is leading to improvements in loyalty amongst those who sign up. Concierge has already accelerated our learnings from early term customers and priority areas to improve their experience. Given its success, we plan to continue to invest in concierge in full year '23 through expanding this program to more customers across more terms.

讓我在這裡分享一些倡議。與我們的高效和易於使用的體驗支柱相關，我們已經看到基於簡訊的禮賓計劃取得了早期成功，該計劃提高了註冊者的忠誠度。禮賓部已經加快了我們對早期客戶和優先領域的學習，以改善他們的體驗。鑑於其成功，我們計劃在 23 年全年繼續投資禮賓服務，將該計劃擴展到更多期限的更多客戶。

Yesterday, we launched a new subscriber onboarding experience based on our learnings from concierge to help lead them to inventory they love quickly and pick their first shipment. This also includes the creation of an interactive customer filing profile and encourage sign-up into our concierge program to aid with live one-on-one assistance.

昨天，我們根據禮賓部的經驗推出了新的訂戶入職體驗，以幫助引導他們快速找到他們喜歡的庫存並挑選他們的第一批貨物。這還包括建立互動式客戶檔案資料並鼓勵註冊我們的禮賓計劃以提供現場一對一協助。

Finally, we continue to drive major improvements in site performance and reliability. Improving lighthouse scores of key acquisition pages by 50% year-over-year. a Lighthouse score is the rating Google gives to websites based on a combination of criteria, including performance, accessibility, SEO and other best practices. Related to best-in-class product discovery, we introduced multiple improvements during the quarter, which have driven reductions in time to select shipments for our customers. We achieved this by one, launching a fully redesigned app product detail page experience that features more detailed larger product images, clearly displayed Fitted Vice and makes the availability of that item more obvious to the customer.

最後，我們持續推動網站效能和可靠性的重大改進。關鍵獲取頁面的燈塔分數年增 50%。 Lighthouse 分數是 Google 根據綜合標準（包括效能、可近性、SEO 和其他最佳實踐）對網站進行的評分。與一流的產品發現相關，我們在本季度推出了多項改進，從而縮短了為客戶選擇發貨的時間。我們透過一個方法實現了這一目標，推出了完全重新設計的應用程式產品詳細資訊頁面體驗，該體驗具有更詳細的更大產品圖像、清晰顯示的Fitted Vice 並使該商品的可用性對客戶來說更加明顯。

Two, we're elevating the look and feel of our brand in sight across all touch points from photography to design and creative, which is intended to ensure that our premium positioning is clear to our customers and brand partners.

第二，我們在從攝影到設計和創意的所有接觸點上提升我們品牌的外觀和感覺，旨在確保我們的客戶和品牌合作夥伴清楚我們的高端定位。

Three, we created more visibility for editorial durations throughout our site and accelerated our schedules for refreshing them. We've seen high engagement with our editorial suggestions.

第三，我們在整個網站上提高了編輯持續時間的可見性，並加快了刷新它們的時間表。我們看到我們的編輯建議得到了很高的參與。

Four, we improved filters, making it easier for customers to search with specificity. And finally, we rolled out our AI search beta to 20% of our customer base. We are using this data to get user feedback and iterate on the best and quickest way to search our catalog. I firmly believe that we are making the right decisions for customers and that our customers will reward our product improvements, additional items and improved experience with inventory.

第四，我們改進了過濾器，使客戶更容易進行針對性搜尋。最後，我們向 20% 的客戶群推出了人工智慧搜尋測試版。我們使用這些數據來獲取用戶回饋，並迭代搜尋我們目錄的最佳、最快的方法。我堅信，我們正在為客戶做出正確的決定，我們的客戶將獎勵我們的產品改進、附加產品和改進的庫存體驗。

I'm excited about our plans for the remainder of full year '23 and into full year '24. Most importantly, we are excited to drive this business to free cash flow profitability, excluding cash interest. With that, I'll hand it over to Sid.

我對我們 23 全年剩餘時間和 24 全年的計劃感到很興奮。最重要的是，我們很高興能夠推動這項業務實現自由現金流獲利（不包括現金利息）。這樣，我就把它交給席德了。

Thanks, Jen, and thanks again, everyone, for joining us. Prior to reviewing second quarter results, I would like to provide some perspectives on the significant acceleration in our time lines of free cash flow breakeven before cash interest expense.

謝謝 Jen，再次感謝大家加入我們。在回顧第二季業績之前，我想就現金利息支出前自由現金流損益平衡時間線的顯著加速提供一些觀點。

While the inventory debt issue that Jen just described, is expected to affect revenue growth negatively this year, we continue on our steady path to providing more value and a better experience for our customers. We're confident that with a favorable market backdrop, these improvements will translate to stronger revenue growth.

雖然 Jen 剛剛描述的庫存債務問題預計會對今年的收入成長產生負面影響，但我們將繼續穩步前進，為客戶提供更多價值和更好的體驗。我們相信，在有利的市場背景下，這些改善將轉化為更強勁的收入成長。

Importantly, slower revenue growth will not mean slower progress on profitability for Rent the Runway. In fact, as Jen outlined earlier, one reason for our reduction in revenue guidance for fiscal '23 is our decision to prioritize more rapid progress on profitability by reducing promotions and therefore, subscriber acquisition.

重要的是，營收成長放緩並不意味著 Rent the Runway 的獲利進展放緩。事實上，正如 Jen 之前概述的那樣，我們減少 23 財年收入指導的原因之一是我們決定透過減少促銷活動以及用戶獲取來優先考慮更快地提高盈利能力。

Over the past few quarters, we have made significant changes to our fixed cost structure, improved our variable cost structure by finding efficiencies across fulfillment and product costs and fundamentally changed how we approach promotions and customer acquisitions. On account of these changes, we now expect to be free cash flow breakeven before cash interest expense for fiscal year 2024. This relies on only modest levels of subscriber growth in fiscal '24. We plan to provide more details later this fiscal year, but we expect these results at subscriber levels that are much lower than our previously communicated level of 185,000 subscribers.

在過去的幾個季度中，我們對固定成本結構進行了重大改變，透過提高履行和產品成本的效率來改善我們的可變成本結構，並從根本上改變了我們進行促銷和獲取客戶的方式。考慮到這些變化，我們現在預計 2024 財年在現金利息支出之前的自由現金流將實現盈虧平衡。這僅依賴 24 財年用戶成長的適度水準。我們計劃在本財年晚些時候提供更多詳細信息，但我們預計這些結果的訂閱者水平遠低於我們之前公佈的 185,000 名訂閱者水平。

Free cash flow breakeven before cash interest expense is an important milestone for Rent the Runway and one that we think will demonstrate the attractive underlying economics of the business our focus on profitability and the progress our teams have made on improving efficiency throughout our business.

現金利息支出之前的自由現金流盈虧平衡是Rent the Runway 的一個重要里程碑，我們認為這將證明該業務具有吸引力的潛在經濟性，我們對盈利能力的關注以及我們的團隊在提高整個業務效率方面所取得的進展。

Let me now provide commentary on second quarter results and guidance for 2023. We ended Q2 with 137,566 ending active subscribers, up 10.8% year-over-year. Average active subscribers during the quarter were 141,393 versus 129,565 subscribers in the prior year, an increase of 9.1%. Ending active subscribers declined from 145,220 subscribers at the end of Q1 2023, which we believe is primarily due to inventory depth. Active subscriber levels were also affected by promotional experiments during the quarter.

現在讓我對第二季業績和 2023 年指引進行評論。第二季結束時，我們的活躍訂閱者數量為 137,566 名，年成長 10.8%。本季平均活躍訂閱者數量為 141,393 人，去年同期為 129,565 人，成長 9.1%。截至 2023 年第一季末，最終活躍訂閱用戶數量為 145,220 名，我們認為這主要是由於庫存深度所致。活躍訂閱者水準也受到本季促銷實驗的影響。

Total revenue for the quarter was $75.7 million, down 1% year-over-year. The shortfall versus guidance was primarily driven by lower-than-expected subscriber growth. Subscription and reserve rental revenue was $68 million versus $70 million last year, a decrease of 2.9%. The Subscription and reserve rental revenue was negatively impacted by a decline in our reserve business versus last year. Revenue per average subscriber for the quarter was negatively impacted by lower add-on rates, changes in subscriber program mix and promotional testing.

該季度總收入為 7,570 萬美元，年減 1%。與指引相比的差距主要是由於使用者成長低於預期所造成的。訂閱和儲備租金收入為 6,800 萬美元，而去年為 7,000 萬美元，下降了 2.9%。與去年相比，我們的儲備業務下降對認購和儲備租金收入產生了負面影響。本季平均訂戶收入受到附加費率降低、訂戶節目組合變化和促銷測試的負面影響。

During the quarter, we tested the effects of both increasing and reducing promotions. Our learnings from these tests have informed our go-forward promotional strategy and revenue guidance for the remainder of the year. Other revenue was $7.7 million, an increase of 18.5% versus $6.5 million last year. Other revenue represented 10.2% of revenue during the quarter versus 8.5% of revenue last year.

在本季度，我們測試了增加和減少促銷活動的效果。我們從這些測試中獲得的經驗教訓為我們今年剩餘時間的未來促銷策略和收入指導提供了資訊。其他收入為 770 萬美元，比去年的 650 萬美元增長 18.5%。其他收入佔本季營收的 10.2%，而去年則為 8.5%。

Fulfillment costs were $22.5 million in Q2 '23 versus $23.4 million in Q2 '22. Fulfillment costs as a percentage of revenue improved to 29.7% of revenue in Q2 '23 from 30.6% of revenue in Q2 '22. Fulfillment costs as a percentage of sales benefited from continued processing and transportation cost efficiencies.

23 年第二季的履行成本為 2,250 萬美元，而 22 年第二季為 2,340 萬美元。履行成本佔收入的百分比從 22 年第二季的 30.6% 提高到 23 年第二季的 29.7%。履行成本佔銷售額的百分比得益於持續的加工和運輸成本效率。

In August, we entered into a new transportation agreement with UPS to lock in competitive rates and consolidate the vast majority of our shipping needs while continuing to serve our customers with premium delivery and return service. Gross margins were 43.9% in Q2 '23 versus 42.4% in Q2 '22. Q2 '23 gross margins reflect both the aforementioned fulfillment cost improvements as well as lower rental product depreciation due to our ongoing progress in procuring more consignments and exclusive design inventory. As expected, gross margin improved sequentially due to seasonally lower product acquisition costs compared to Q1 '23.

8 月，我們與 UPS 簽訂了新的運輸協議，以鎖定具有競爭力的價格並鞏固我們絕大多數的運輸需求，同時繼續為客戶提供優質的送貨和退貨服務。 23 年第二季的毛利率為 43.9%，而 22 年第二季的毛利率為 42.4%。 23 年第二季的毛利率既反映了上述履行成本的改善，也反映了由於我們在採購更多寄售和獨家設計庫存方面的持續進展而導致的租賃產品折舊降低。正如預期的那樣，由於產品採購成本與 23 年第一季相比季節性降低，毛利率較上季有所改善。

Operating expenses were about 12% lower year-over-year, primarily due to the favorable impact of our 2022 restructuring plan. Total operating expenses, including technology, marketing, G&A and stock-based compensation were about 62% of revenue versus approximately 70% of revenue last year.

營運費用年減約 12%，主要是由於我們 2022 年重組計畫的有利影響。總營運費用（包括技術、行銷、一般管理費用和股票薪酬）約佔收入的 62%，而去年約為收入的 70%。

Adjusted EBITDA for the quarter was $7.7 million or 10.2% of revenue versus $1.8 million and 2.4% of revenue in the prior year. Adjusted EBITDA margins reflect improved operating and fixed cost efficiencies along with lower promotions. Free cash flow for the 6 months ended July 31, 2023, was negative $30 million versus negative $54 million for the same period in fiscal '22.

本季調整後 EBITDA 為 770 萬美元，佔營收的 10.2%，而上年同期為 180 萬美元，佔營收的 2.4%。調整後的 EBITDA 利潤率反映了營運和固定成本效率的提高以及促銷活動的減少。截至 2023 年 7 月 31 日的 6 個月自由現金流為負 3,000 萬美元，而 22 財年同期為負 5,400 萬美元。

Let me now turn to Q3 and 2023 guidance. We are reducing revenue guidance for 2023 and now expect that 2023 revenue will be at least $296.4 million for our fiscal 2022 revenue. We expect Q3 revenue to be between $72 million and $74 million. We are not providing specific active subscriber guidance for Q3 or fiscal year '23 as our general expectations are reflected within our revenue guidance. We no longer expect ending active subscriber growth of more than 25% for fiscal '23.

現在讓我談談第三季和 2023 年的指引。我們正在降低 2023 年的收入指導，現在預計 2023 年的收入將至少達到 2022 財年收入的 2.964 億美元。我們預計第三季營收將在 7,200 萬美元至 7,400 萬美元之間。我們不會提供第三季或 23 財年的具體活躍用戶指導，因為我們的整體預期反映在我們的收入指導中。我們預計 23 財年最終活躍用戶成長不會超過 25%。

Let me outline the rationale and underlying assumptions behind our lower fiscal '23 revenue guidance. First, after our experimentation with promotions in Q2, we expect to be significantly less promotional for the remainder of the year. While we believe a lower level of promotions will improve customer experience, retention, profitability over time, we expect lower subscriber acquisitions in the near term.

讓我概述一下我們較低的 23 財年收入指引背後的理由和基本假設。首先，在我們在第二季嘗試促銷之後，我們預計今年剩餘時間的促銷活動將大幅減少。雖然我們相信較低的促銷活動將隨著時間的推移改善客戶體驗、保留率和獲利能力，但我們預計短期內的訂戶獲取量將會減少。

Second, revenue guidance reflects the timing of inventory in-stock improvements that we believe will impact customer experience towards the end of Q3 and into fiscal '24.

其次，收入指引反映了庫存改善的時間，我們認為這將影響第三季末和 24 財年的客戶體驗。

Third, we are not reflecting all potential improvements from our strategic pillar initiative to improve customer experience or from an increased focus new leadership and more optimal inventory for our reserve business. As we saw in Q2, inventory in-stock rates have to improve before we see the positive impact from these initiatives.

第三，我們並沒有反映出我們旨在改善客戶體驗的策略支柱計畫或更專注於新領導層和更優化儲備業務庫存的所有潛在改進。正如我們在第二季度所看到的，庫存率必須提高才能看到這些措施的正面影響。

Finally, we ended Q2 with lower-than-expected active subscribers. We believe our second half plan, despite the expected negative impact on short-term subscriber growth are a key pillar to our path to positive free cash flow and strengthen the health of the business. Our guidance also provides business leaders with the flexibility needed to make the right decisions for the long-term health of our business. Despite lower revenue, we expect to maintain our adjusted EBITDA margin guidance of between 7% to 8% of revenue for fiscal 2023. The Note that due to significantly higher seasonal inventory acquisition cost in Q3, we expect higher adjusted EBITDA margins in Q4 versus Q3. We expect Q3 adjusted EBITDA margins to be between 3% and 4%, and primarily as a result of approximately 300 basis points of sales in higher revenue share payments in Q3 versus Q4. We expect continued operational and fixed cost efficiencies along with lower promotions in the back half of 2023.

最後，我們第二季的活躍訂閱者數量低於預期。我們相信，儘管預計會對短期用戶成長產生負面影響，但我們的下半年計畫仍然是我們實現正自由現金流和加強業務健康發展之路的關鍵支柱。我們的指南也為企業領導者提供了為企業長期健康發展做出正確決策所需的靈活性。儘管收入較低，我們預計2023 財年調整後EBITDA 利潤率指引將維持在營收的7% 至8% 之間。請注意，由於第三季季節性庫存採購成本顯著較高，我們預期第四季度調整後EBITDA 利潤率將高於第三季。我們預計第三季調整後的 EBITDA 利潤率將在 3% 至 4% 之間，這主要是由於第三季的營收分成支付額較第四季增加了約 300 個基點。我們預計 2023 年下半年營運和固定成本效率將持續提高，促銷活動也會減少。

Note that our expectations for adjusted EBITDA margins reflect lower gross margins in the second half of 2023 compared to fiscal 2022 on account of higher rental product depreciation and revenue share costs as a percentage of sales. We now expect fiscal year '23 rental product purchases to be between $74 million and $77 million as we expect to shift dollars between marketing and rental product acquisition to further improve in-stock levels. As a result, we expect cash consumption for the year to be approximately $2 million to $3 million higher or in the range of $50 million to $53 million.

請注意，我們對調整後 EBITDA 利潤率的預期反映出，與 2022 財年相比，2023 年下半年的毛利率較低，原因是租賃產品折舊和收入分成成本佔銷售額的百分比較高。我們現在預計 23 財年的租賃產品採購量將在 7,400 萬美元至 7,700 萬美元之間，因為我們預計將在行銷和租賃產品採購之間轉移資金，以進一步提高庫存水準。因此，我們預計今年的現金消耗將增加約 200 萬至 300 萬美元，或在 5,000 萬至 5,300 萬美元之間。

While Q2 was challenging, we have transformed -- we are confident, we continue to make the right decisions for our customers. Financially, we have transformed a business that consumes almost $100 million in cash in fiscal '22 to a business that we expect will be free cash flow breakeven before cash interest expense in fiscal year '24.

雖然第二季充滿挑戰，但我們已經轉型—我們有信心，我們將繼續為客戶做出正確的決定。在財務上，我們已經將一家在 22 財年消耗近 1 億美元現金的企業轉變為一家我們預計在 24 財年在現金利息支出前自由現金流將實現盈虧平衡的企業。

We will now take your questions.

我們現在將回答您的問題。

(Operator Instructions) Our first question today is coming from Rick Patel from Raymond James.

（操作員說明）今天我們的第一個問題來自 Raymond James 的 Rick Patel。

Can you talk about the assumptions underpinning the third quarter revenue guidance as you reduce promotions and marketing, what's the right way to think about the subscriber count in the quarter? I know you're planning for it to be lower, but just any guardrails there as we think about modeling? And if you can [characterize] trends, that would be great.

您能否談談在減少促銷和行銷活動時支撐第三季收入指引的假設，考慮本季訂戶數量的正確方法是什麼？我知道您計劃將其降低，但是當我們考慮建模時是否有任何護欄？如果你能夠[描述]趨勢，那就太好了。

Sure. So if you look at our subscriber -- if you look at our revenue guidance, we're obviously not providing subscriber guidance for Q3 specifically. But if you look at our $72 million to $74 million revenue guidance, that is obviously down from Q2 level and that would -- you can run your math, but that will imply a subscriber count that you can determine.

當然。因此，如果您查看我們的訂閱者 - 如果您查看我們的收入指導，我們顯然不會專門提供第三季度的訂閱者指導。但如果你看一下我們 7,200 萬至 7,400 萬美元的收入指導，這顯然低於第二季度的水平，你可以計算一下，但這意味著你可以確定訂閱者數量。

Now what I want to do is try and give you a sense of the changes we're making and why we're issuing the guidance that we are. So we're making a lot of changes to promotions for the year. And just to give you a sense of the magnitude of what we have decided to do. Historically, our promotions have been 2 months long, the current level of promotions that we're running essentially only 1 month. So we have made very significant changes in promotions. And importantly, these promotional changes form a very key part of our progress to profitability in fiscal '24.

現在我想做的是嘗試讓您了解我們正在做出的改變以及我們為什麼要發布這樣的指導。因此，我們對今年的促銷活動做出了許多改變。只是為了讓您了解我們決定要做的事情的重要性。從歷史上看，我們的促銷活動持續了 2 個月，而目前我們的促銷活動基本上只有 1 個月。因此，我們在促銷方面做出了非常重大的改變。重要的是，這些促銷變化是我們在 24 財年獲利的關鍵部分。

We're changing a significant amount as it has to do with the reserve funnel and so our guidance encompasses a whole range of scenarios. And we want to be prudent and not really factor in all of the benefits of improved in-stock, the reserve funnel. And so that's the underlying premise behind the guidance, which is we want to be prudent. We want to make sure that we factor in all possible scenarios. And we also want to be mindful that it's going to take a little while for in-stock levels to improve and to be felt by our customers. And some of the initiatives that we have may not be quite felt until in-stock improves.

我們正在進行大量更改，因為它與儲備管道有關，因此我們的指導涵蓋了一系列場景。我們希望保持謹慎，不要真正考慮改善庫存和儲備管道的所有好處。這就是該指導背後的基本前提，即我們要保持謹慎。我們希望確保考慮到所有可能的情況。我們還想注意的是，庫存水準需要一段時間才能改善並被我們的客戶感受到。在庫存改善之前，我們所採取的一些措施可能不會被充分感受到。

So -- it's just a matter of encompassing all possible scenarios and being prudent.

所以——這只是涵蓋所有可能的情況並保持謹慎的問題。

Can you also touch on marketing. I believe you talked about pulling back a little bit on the near term, but then you also talked about shifting some of that focus to reserve revenue. Just some additional color there would be great.

您還可以談談行銷嗎？我相信您談到了短期內稍微縮減規模，但隨後您也談到了將部分重點轉移到儲備收入上。只要再加點顏色就太好了。

Yes. We really learned in Q2 just this criticality of inventory depth to the customer experience, especially amongst early term customers. So because we learned that while depth is up in second half, 1.7x, what the depth was in first half, we should have gone even further than 1.7x. So we thought that it was a smart decision to take some dollars away from marketing, put it towards reorders in the back half of this year that could further accelerate in-stock rate.

是的。我們在第二季真正了解到庫存深度對客戶體驗的重要性，尤其是對於早期客戶而言。因為我們了解到，雖然下半年的深度增加了 1.7 倍，但與上半年的深度相比，我們應該進一步提高到 1.7 倍以上。因此，我們認為從行銷中抽出一些資金用於今年下半年的重新訂購是一個明智的決定，這可能會進一步加快庫存率。

Another way to think about this is we don't want to market or promotionalize into an experience with inappropriate levels of in-stock rates, because early term subscribers are the ones who are affected the most by not seeing the inventory that they wanted when they were a prospect.

另一種思考方式是，我們不想透過不適當的庫存率水準來行銷或促銷體驗，因為早期訂閱者是那些因在購買時看不到他們想要的庫存而受到影響最大的人。是一個前景。

So this is really in favor of the top priority, which is getting the in-stock rates higher, which we know really positively affect retention of early terms up.

因此，這確實有利於首要任務，即提高庫存率，我們知道這確實會對保留早期條款產生正面影響。

Next question is coming from Ike Boruchow from Wells Fargo.

下一個問題來自富國銀行的 Ike Boruchow。

A couple of questions around the longer-term commentary you provided. So the free cash flow breakeven before interest expense in fiscal '24, can you just give just a reminder, what is the expectation for cash interest expense? What is that going to be in fiscal '20? And then is there any help you can give us around what is the revenue number that is associated with that assumption that you guys have next year?

關於您提供的長期評論的幾個問題。那麼，24 財年利息支出前的自由現金流損益平衡，您能否提醒一下，現金利息支出的預期是多少？ 20 財年會發生什麼事？那麼，你們可以給我們任何幫助嗎？與你們明年的假設相關的收入數字是多少？

Sure. So let me -- let me answer the first part of your question, which is about $12 million in -- we expect about $12 million in cash interest expense in fiscal '24. But the next part of your question, let me just address what gives us confidence that we'll get the free cash flow breakeven in fiscal '24, right? So there are a few key pillars here.

當然。因此，讓我——讓我回答你問題的第一部分，大約 1200 萬美元——我們預計 24 財年的現金利息支出約為 1200 萬美元。但你問題的下一部分，讓我來談談是什麼讓我們有信心在 24 財年實現自由現金流盈虧平衡，對嗎？所以這裡有幾個關鍵支柱。

The first is we -- and let me just bridge effectively, where we will end up in fiscal '23 to where we expect to end up in fiscal '24. So the first thing we expect is -- and we'll provide a lot more detail later this year on all of this. But first, we expect to realize both in efficiencies versus fiscal '23.

首先是我們——讓我有效地銜接一下我們在 23 財年的最終目標和我們預計在 24 財年的最終目標。因此，我們首先期望的是——我們將在今年晚些時候提供有關所有這些的更多詳細資訊。但首先，我們預計將實現與 23 財年相比的效率提高。

Secondly, we expect lower fixed costs versus fiscal '23 and fiscal '24. Third, and this is where the promotions and all of the customer acquisition work we're doing plays in that we expect rental product spending in fiscal '24 to benefit both from provisioning for much more modest levels of revenue growth as well as continued increases in mix towards more non-wholesale channel. So I think it's important to realize that when we promote and we get customers, not only do we acquire a bunch of customers that stay with us for a shorter period of time because they're less qualified, but we also go out and buy inventory and provision inventory for those customers.

其次，我們預期與 23 財年和 24 財年相比固定成本會降低。第三，這就是我們正在進行的促銷和所有客戶獲取工作發揮作用的地方，我們預計 24 財年的租賃產品支出將受益於更溫和的收入增長水平以及持續增長的準備金。混合更多的非批發通路。因此，我認為重要的是要認識到，當我們進行促銷並獲得客戶時，我們不僅獲得了一群在我們這裡停留較短時間的客戶，因為他們的資格較低，而且我們還出去購買庫存並為這些客戶提供庫存。

So in some ways, as we attract and really focus on higher qualified customers, we really do accelerate our progress towards free cash flow, and that's going to be reflected in rental product spending in fiscal '24 versus '23.

因此，在某些方面，當我們吸引並真正關注更高品質的客戶時，我們確實加速了自由現金流的進展，這將反映在 24 財年與 23 財年的租賃產品支出中。

Fourth, obviously, the promotional changes do result in improved profitability per subscriber. And then finally, we expect the modest subscriber and revenue growth we have in fiscal '24 or we expect in fiscal '24 to contribute to profitability and cash flow. I think the last thing I would point out is that a substantial portion of the improvement, so if you think about lower fixed cost, the fulfillment cost efficiencies, the plans we have on rental products, the promotional changes we've made, we've already made those decisions and those improvements, we have a lot of confidence in. And as the last part of it is that we're relying only on relatively modest levels of growth in fiscal '24.

第四，顯然，促銷變化確實提高了每位訂戶的獲利能力。最後，我們預計 24 財年的訂戶和收入會適度成長，或我們預期 24 財年將有助於獲利和現金流。我想我要指出的最後一件事是改進的很大一部分，所以如果你考慮較低的固定成本、履行成本效率、我們對租賃產品的計劃、我們所做的促銷改變，我們'我們已經做出了這些決定和改進，我們對此充滿信心。最後一點是，我們只依賴24 財年相對溫和的成長水準。

So we have high confidence that we can get to these numbers in fiscal '24.

因此，我們對能夠在 24 財年達到這些數字充滿信心。

The next question is coming from Andrew Boone from JMP Securities.

下一個問題來自 JMP 證券公司的安德魯‧布恩 (Andrew Boone)。

Jen, you guys made a number of improvements to products. Can you just talk about getting customers past that 90-day threshold? Are you seeing any improvement there? How do we think about just new customers, your ability to turn them into long-term customers?

Jen，你們對產品做了許多改進。能談談如何讓客戶超過 90 天的期限嗎？您看到那裡有什麼改進嗎？我們如何看待新客戶以及您將他們轉變為長期客戶的能力？

Yes. So we saw in Q2 that fundamentally, the other improvements that we were making to the customer experience were not going to be felt deeply until the in-stock rates were higher. So for early term subscribers, they come in, they expect to see the inventory that they signed up for. If they don't see that inventory, they have a much higher probability of churn. And these were the lowest -- you can ask, well, why didn't we know this before?

是的。因此，我們在第二季度看到，從根本上來說，除非庫存率更高，否則我們對客戶體驗所做的其他改進不會被深刻感受到。因此，對於早期訂閱者來說，他們進來後希望看到他們註冊的庫存。如果他們看不到該庫存，他們流失的可能性就會高得多。這些是最低的——你可能會問，為什麼我們以前不知道這一點？

I think the confluence of the highest subscriber count we had ever had coming into Q1, I mean, coming at the end of Q1, coupled with the launch of our extra item plan and the fact that we already knew the depth would be a problem. We just didn't realize how big of a problem it was. We saw that in-stock rates were 17% lower year-over-year. And so while the retention of the longer-term customers continue to remain strong, they responded very well to the customer experience improvements we were making we essentially saw like in stock has to go up and has to be at a better level before these improvements will start to impact those early term customers.

我認為我們在第一季的訂閱人數達到了歷史最高水平，我的意思是，在第一季末，再加上我們額外專案計劃的推出以及我們已經知道深度將是一個問題的事實。我們只是沒有意識到這是多麼嚴重的問題。我們發現庫存率比去年同期下降了 17%。因此，雖然長期客戶的保留率繼續保持強勁，但他們對我們所做的客戶體驗改進反應非常好，我們基本上看到，庫存必須上升，並且必須達到更好的水平，然後這些改進才會生效.開始影響那些早期客戶。

So we still have a lot of confidence that we're making the right changes for early term customers. As an example, we mentioned that amongst those people who sign up for our concierge program, they have higher loyalty rates than those that don't sign up, and those are T-0 customers. But the in-stock rates now were really those improvements are in-flight. Depths are going to be up 1.7x in the second half where they were in the first half. We're going even deeper for 2024. And we think that the full extent of all of the changes we're making on customer experience will be felt by those early term subs once the in-stock rate is higher and they're getting the inventory that they really signed up to get.

因此，我們仍然充滿信心，相信我們正在為早期客戶做出正確的改變。舉個例子，我們提到，在那些註冊我們禮賓計畫的人中，他們比那些沒有註冊的人有更高的忠誠度，而這些人都是 T-0 客戶。但現在的庫存率確實是那些改進正在進行中。下半場的深度將是上半場的 1.7 倍。我們將在 2024 年進行更深入的研究。我們認為，一旦庫存率更高並且他們獲得他們真正簽約獲得的庫存。

And then as we get further away from the launch of the Era of Extra, can you talk about just top of funnel trends, what are you guys seeing now versus, say, last year? How does top of funnel relate?And then how are you thinking about top funnel now that you're pulling that marketing for the back half of this year and potentially into '24?

然後，當我們距離 Extra 時代的推出越來越遠時，您能談談漏斗頂部的趨勢嗎？與去年相比，您現在看到了什麼？漏斗頂部有何關聯？既然您要在今年下半年並可能進入 24 年進行行銷活動，那麼您如何看待頂部漏斗？

Yes. I mean, top of funnel continues to be strong. We continue to see very high interest for subscription for our reserve offering, we feel that the market is growing. And that's why it's so critical for us to have and offer an experience that continues to improve. Now of course, over 80% of our acquisitions come in be a word of mouth. And so it's even more important for us to have that positive flywheel coming out of those early term customers.

是的。我的意思是，漏斗頂部仍然強勁。我們繼續看到人們對我們的儲備產品的認購興趣非常高，我們認為市場正在成長。這就是為什麼擁有並提供持續改進的體驗對我們如此重要。當然，現在我們 80% 以上的收購都是透過口碑進行的。因此，對我們來說，從那些早期客戶那裡獲得積極的飛輪就更重要了。

So the focus on improving in-stock rate, which improves the experience of early term customers, we think, will help to accelerate the organic growth of the business. taking away some marketing dollars, marketing dollars traditionally have been kind of a small percentage of how we acquire customers. We also feel that right now is not the time to promote people into an experience where the in-stock rate really isn't there yet. So we feel good about top of funnel. We think that the market continues to be there. It continues to grow and that we're making the right changes for the medium and long-term health of this business to drive it to profitability.

因此，我們認為，專注於提高庫存率，改善早期客戶的體驗，將有助於加速業務的自然成長。除去一些行銷費用，傳統上，行銷費用只占我們獲取客戶的一小部分。我們也認為，現在還不是向人們推銷一種尚未具備庫存率的體驗的時候。所以我們對漏斗頂部感覺良好。我們認為市場仍然存在。它持續成長，我們正在為該業務的中長期健康狀況做出正確的改變，以推動其獲利。

Yes. I think it's useful to just some context, right? Obviously, we're changing our promotional strategy. We talked about the marketing changes we're making. And it's -- I want to -- it's helpful to reiterate how we're thinking about this business. One way to grow this business and get this business to free cash flow would be acquire lots and lots of customers, yes, you'd have, we'd report very high subscriber growth, we report high revenue growth, but we also have to provision significant amounts of inventory and a portion of those customers that we acquire are less qualified and we're provisioning all this inventory it's just a less efficient way to grow.

是的。我認為它僅對某些上下文有用，對吧？顯然，我們正在改變我們的促銷策略。我們討論了我們正在做出的營銷變革。我想重申我們對這項業務的看法是有幫助的。發展這項業務並使這項業務獲得自由現金流的一種方法是獲得大量客戶，是的，我們會報告非常高的用戶成長，我們報告高收入成長，但我們也必須提供大量庫存，而我們獲得的部分客戶資質較差，我們提供所有這些庫存，這只是一種效率較低的成長方式。

And in some ways, what we have now is we recognize that we have limited resources. We recognize that we want to get to free cash flow breakeven as quickly as possible. And for us, that means in fiscal '24, and so we're taking the actions that we need to fundamentally not only improve the quality of acquisitions coming in, being more efficient about product acquisition for those qualified customers and then making sure that we can actually deliver the best experience possible for both customers.

在某些方面，我們現在所擁有的是我們認識到我們的資源有限。我們認識到，我們希望盡快實現自由現金流損益平衡。對我們來說，這意味著在 24 財年，我們正在採取我們需要的行動，不僅從根本上提高採購質量，更有效地為那些合格的客戶採購產品，然後確保我們實際上可以為雙方客戶提供最佳體驗。

If we do all of those things right, that feedback loop, given that 80% of our customers come to us organically, will end up driving additional organic acquisitions in a more efficient way. I mean I spent many years in investment business, and I saw lots of situations where companies ranging from McDonald's to others that were very focused on growth at points in time that actually went and thought about their business critically, thought about what really mattered and actually fundamentally stopped growth or slowed growth down to improve the quality of the business and those businesses came out significantly stronger. And for us, this is an opportunity to breakeven before cash interest in '24, create a very solid foundation and create the best experience for our customers. And if you do that well, we're pretty confident given the market opportunity that we have that we can grow significantly well into the future.

如果我們把所有這些事情都做對，考慮到我們 80% 的客戶是有機地來找我們的，反饋循環最終將以更有效的方式推動更多的有機收購。我的意思是，我在投資業務上工作了很多年，我看到了很多情況，從麥當勞到其他公司，這些公司都非常專注於成長，實際上批判性地思考了他們的業務，思考了真正重要的事情，並且實際上從根本上停止增長或減緩增長以提高業務質量，這些業務的表現明顯更強。對我們來說，這是一個在 24 年兌現利息之前實現收支平衡的機會，為我們的客戶奠定了非常堅實的基礎並創造了最佳體驗。如果你做得好，鑑於我們擁有的市場機會，我們非常有信心我們可以在未來取得顯著的成長。

I just want to add one thing to what Sid has said, which is that the nature of our business model is we have one pool of inventory, right? So if we promotionalize the lower margin customer to come in to Rent the Runway, not only are we provisioning extra inventory for them, but they may very well take the best inventory. And then they may take the best inventory away from some of our more loyal higher-margin customers. So it's really about thinking that we are prioritizing the higher-margin customers, we're prioritizing the overall customer experience and we don't want to kind of either market into or promotionalize into lower-margin customers coming in and grabbing the very inventory that is critical for the customer experience of the better customers.

我只想在 Sid 所說的基礎上補充一件事，那就是我們商業模式的本質是我們擁有一個庫存池，對嗎？因此，如果我們促銷利潤較低的客戶來租賃跑道，我們不僅可以為他們提供額外的庫存，而且他們很可能會獲得最好的庫存。然後他們可能會從我們一些更忠誠的高利潤客戶那裡奪走最好的庫存。因此，這實際上是關於考慮我們優先考慮高利潤客戶，我們優先考慮整體客戶體驗，我們不想對進入或搶佔低利潤客戶的庫存進行行銷或促銷。對於更好的客戶的客戶體驗至關重要。

Next question today is coming from Ross Sandler from Barclays.

今天的下一個問題來自巴克萊銀行的羅斯桑德勒。

Just one for Jen and one for Sid. Jen, so on this new customer retention, is there like a precedent looking back at different times in the past when you had better depth of inventory for in-season around like how far off is the retention rate today versus back then? And then subsequently, like how quickly you expect that to kind of pick back up to a normal level? Is that a matter of a couple of quarters? Or is it going to take longer than that? And then, Sid, you talked about reducing fixed costs and also some variable costs in fulfillment. Can you just elaborate on both of those? Like is it the UPS deal that's allowing better fulfillment leverage or walk us through those assumptions for '24?

一份給珍，一份給席德。 Jen，那麼關於新的客戶保留率，是否有類似的先例，回顧過去的不同時期，當您在旺季有更好的庫存深度時，例如今天的保留率與當時相比有多大差距？然後，您預計這種情況要多快才能恢復到正常水平？這是幾季的問題嗎？還是需要比這更長的時間？然後，Sid，您談到了減少固定成本以及履行中的一些可變成本。能詳細說明一下這兩個面向嗎？就像 UPS 的交易可以提供更好的履約槓桿，還是引導我們了解 24 小時的這些假設？

So let's start with focus and expenses. So it's twofold, right? The first, there is an impact from the UPS contract that will be solved into the back half of this year and into next year. That's one. The second thing is if you look at what we have done historically, and this is not just true for fiscal '23, but it's true for a number of years now, which is we have fundamentally improved our ability to process units with the same labor pool continually, right? So I think we can -- we have continued to make progress on efficiencies then we expect to continue on that path in -- and we have some specific initiatives that we're working on now that we think will impact fiscal '24. So that's fulfillment.

那麼讓我們從重點和費用開始。所以它是雙重的，對嗎？首先，UPS 合約的影響將在今年下半年和明年解決。這是一個。第二件事是，如果你看看我們過去所做的事情，這不僅適用於 23 財年，而且多年來也是如此，我們從根本上提高了以相同勞動力處理單位的能力不斷地池，對嗎？因此，我認為我們可以——我們在效率方面繼續取得進展，然後我們預計將繼續沿著這條道路前進——我們現在正在製定一些具體舉措，我們認為這些舉措將影響 24 財年。所以這就是滿足。

The -- on the fixed cost side, our teams have reviewed -- we're reviewing our cost structure. We want to make sure that -- we get the free cash flow breakeven in fiscal '24 under a variety of sales scenarios, and we're going to take the right actions to make sure that, that happens.

在固定成本方面，我們的團隊已經審查了我們正在審查我們的成本結構。我們希望確保——在各種銷售情況下，我們在 24 財年實現自由現金流盈虧平衡，並且我們將採取正確的行動來確保實現這一點。

So on the in-stock rate, first of all, the in-stock rate already is going up between 700 and 1,000 basis points in the second half of the year. In terms of tactically when that's going to be felt by customers. We think it's going to be felt towards the end of Q3 and into Q4 when all of that inventory is really in our warehouse and kind of circulating amongst the customer base.

因此，就庫存率而言，首先，下半年庫存率已經上漲了 700 至 1,000 個基點。就戰術而言，客戶何時會感受到這一點。我們認為，在第三季末和第四季度，當所有庫存實際上都在我們的倉庫中並在客戶群中流通時，就會感受到這種情況。

We're making even more improvements in this first half by we're making for '24 to get in stock rate up even further than that 700 to 1,000 basis points. We think that the combination of the changes that we're making for second half and first half of 2024, will have marked improvements on customer experience year-over-year and that these are fundamentally the right levels of in-stock.

我們在上半年做出了更多改進，我們計劃在 24 年將庫存率進一步提高 700 至 1,000 個基點。我們認為，我們在 2024 年下半年和上半年所做的改變將顯著改善客戶體驗，而這些庫存基本上處於正確的水平。

Now when we look historically, the reason I kind of brought up in the earnings script kind of this transition away from unlimited plans is because the unlimited plan business actually had pretty equivalent to lower in-stock rates than we had in the first half of this year. But it wasn't something that was negatively impacting customer experience. Now why? If you're in a program where you can swap an unlimited times per month, and you're an early term customer, you come in, you might not see the inventory you want today, but you feel like, well, I can swap again tomorrow, I could swap the next day. I can swap the day after that. So you're less precious about each individual shipments that you're making.

現在，當我們回顧歷史時，我在收益腳本中提到這種從無限計劃轉變的原因是因為無限計劃業務實際上相當於比我們上半年更低的庫存率年。但這並沒有對客戶體驗產生負面影響。現在為什麼？如果您參與的計劃每月可以無限次交換，並且您是早期客戶，那麼當您進來時，您今天可能看不到您想要的庫存，但您感覺，好吧，我可以交換明天再來一次，我可以第二天換。後天可以換。因此，您對每一次出貨的重視度都降低了。

In-stock is something that is essentially a new metric that we started to study in 2022. We knew the importance of in-stock and therefore, we made plans at the end of 2022 to increase our depth coming in the second half of this year by 1.7x. But it's critical to a fixed swap program. So we have now done an enormous amount of data analysis on essentially the relationship between churn and in-stock rates, we have a plan to significantly reduce churn by in-stock rate alone.

庫存本質上是我們從 2022 年開始研究的新指標。我們知道庫存的重要性，因此，我們在 2022 年底制定了計劃，在今年下半年增加我們的深度1.7 倍。但這對於固定交換計畫至關重要。因此，我們現在已經對流失率和庫存率之間的關係進行了大量的數據分析，我們有一個計劃僅通過庫存率來顯著減少流失率。

And I want to mention that buying inventory and deeper depths. So switching from a breadth strategy to a depth strategy is not the only lever that we are deploying. There's a lot of levers that we're deploying to increase the in-stock rate. So other things that we're doing right now, we're consolidating styles into single warehouses. So there's more units of those styles and single warehouses. What inventory we merchandise on the site to what customer makes a huge difference to in stock rate. So there's a lot that we're doing that is boosting up this in-stock rate and really, Q2 was tremendous learnings for us on the criticality of this metric, especially for those first 90 days subs.

我想提一下購買庫存和更深的深度。因此，從廣度策略轉向深度策略並不是我們正在部署的唯一槓桿。我們正在部署很多手段來提高庫存率。因此，我們現在正在做的其他事情是將樣式整合到單一倉庫中。所以這些款式的單位和單一倉庫更多。我們在網站上向哪些客戶銷售哪些庫存，對庫存率有很大影響。因此，我們正在做很多事情來提高庫存率，實際上，第二季度對我們來說是關於這個指標重要性的巨大教訓，特別是對於前 90 天的訂閱者。

Your next question today is coming from Lauren Schenk from Morgan Stanley.

今天你們的下一個問題來自摩根士丹利的勞倫·申克。

This is Nathan Feather on for Laurent. So first off, just thinking about increasing depth in the platform, to what extent does that impact your ability to shift away from wholesale there, either faster or slower?

我是勞倫特 (Laurent) 的內森費瑟 (Nathan Feather)。因此，首先，考慮增加平台的深度，這會在多大程度上影響您從批發轉移的能力，無論是更快還是更慢？

Sorry, I didn't hear the second half of the question, Nathan?

抱歉，我沒有聽到問題的後半部分，內森？

Yes, just (inaudible) increasing depth in the platform and your ability to shift away from wholesale or whether those are connected?

是的，只是（聽不清楚）增加平台的深度以及您擺脫批發的能力，或者這些是否有聯繫？

I mean Increasing depth is something that is fantastic for us from an inventory acquisition standpoint, whether it's via wholesale via consignment or the Exclusive Design. So when you buy things in higher depth, you get higher discounts, whether you're manufacturing those items, whether you're buying them from a brand whether you're getting them on consignment because there's essentially, it's easier for the designer to produce those items. So a depth strategy actually is way more financially beneficial for us than a breadth strategy. So we see no difficulties in getting there.

我的意思是，從庫存採購的角度來看，增加深度對我們來說是非常棒的事情，無論是透過寄售批發還是獨家設計。因此，當你購買更深入的東西時，你會得到更高的折扣，無論你是製造這些物品，無論你是從某個品牌購買它們，還是寄售它們，因為本質上，設計師更容易生產那些物品。因此，深度策略實際上比廣度策略對我們來說在經濟上更有利。因此，我們認為實現這一目標沒有困難。

The challenge is, of course, that our inventory is one that we monetize over multiple years. So making a change over 1/2 is only one tranche of inventory, which is why we're saying that more impact is going to be felt in 2024 when more of our tranches of inventory have really transitioned over to a higher depth strategy. And I also want to note that we're not changing the total dollar amount spend on inventory. We're just spending those dollars differently. So we're buying fewer styles at higher depth.

當然，挑戰在於我們的庫存需要多年才能貨幣化。因此，進行超過 1/2 的更改只是庫存的一部分，這就是為什麼我們說到 2024 年，當我們的更多庫存真正過渡到更高深度的策略時，將會感受到更大的影響。我還想指出的是，我們不會改變庫存支出總額。我們只是用不同的方式花這些錢。因此，我們購買的款式較少，深度較高。

Okay. Great. That's helpful. And then for the changes in marketing, is that just a temporary pullback until in-stock rates improve? Or should we expect lower marketing over the medium term? And just how to think about those updates to the long-term strategy on the marketing side?

好的。偉大的。這很有幫助。那麼行銷方面的變化是否只是暫時的回調，直到庫存率改善？或者我們應該預期中期內的行銷活動會減少？那麼如何考慮行銷方面長期策略的更新呢？

Yes. At this moment, the only decisions we expect to make are the decisions we've announced for the back half of fiscal '23. We have not made specific plans or not sharing specific plans on fiscal '24. But I think I'll point you back to the underlying philosophy of what we're trying to do. And hopefully, that will provide some context in terms of how we think about growth and promotions and marketing in '24.

是的。目前，我們唯一期望做出的決定是我們已宣布的 23 財年後半段的決定。我們尚未制定或未分享 24 財年的具體計劃。但我想我會引導你回到我們正在努力做的事情的基本理念。希望這將為我們如何思考 24 世紀的成長、促銷和行銷提供一些背景。

I mean I think the one thing that I'll add to this is we haven't really seen any changes in terms of the effectiveness of our marketing or the efficiency of our marketing. We believe our marketing is strong. We have high LTV to CAC. I mean there is no issue in terms of marketing itself, but there are two ways to grow our business.

我的意思是，我認為我要補充的一件事是，我們在行銷效果或行銷效率方面並沒有真正看到任何變化。我們相信我們的行銷是強大的。我們對 CAC 的 LTV 很高。我的意思是行銷本身沒有問題，但有兩種方法可以發展我們的業務。

One is we can certainly acquire more customers and bring them in. The other way is we can improve the experience of our customers and actually affect retention more positively, and we want to test and see how that works out.

一是我們當然可以獲得更多客戶並吸引他們。另一種方法是我們可以改善客戶的體驗並實際上更積極地影響保留，我們希望測試並看看效果如何。

Next question is coming from Edward Yruma from Piper Sandler.

下一個問題來自 Piper Sandler 的 Edward Yruma。

I guess, first, just given the materiality of the shortfall, just maybe get a little more comfortable on why exactly you think it was inventory depth that was the primary culprit and why this isn't just a macro issue? And then maybe more of a follow-up on Ross's question. So like -- and maybe this is not a great analog, but when someone churns off because of inventory availability, like what do you have to do to get them to turn back on again or kind of what's your experience been there? And kind of when would we expect you to run that play as those inventory levels normalize?

我想，首先，考慮到短缺的重要性，也許您會更清楚為什麼您認為庫存深度是罪魁禍首，以及為什麼這不僅僅是一個宏觀問題？然後也許是羅斯問題的更多後續行動。就像——也許這不是一個很好的類比，但是當有人因為庫存可用性而流失時，例如你必須做什麼才能讓他們重新開啟，或者你在那裡的經歷是什麼？隨著庫存水準正常化，我們預計您什麼時候會進行該操作？

So one of the things that was really important when we analyze what happened in Q2 was that we saw very different outcomes amongst early term subscribers and amongst subscribers who had been with us post 90 days. So the impact of in-stock rate was fundamentally different. As I mentioned, we continue to see a strong retention amongst those more loyal customers. We saw that the in-stock rate decline really affected the churn rates of the early term subs and that those churn rates had increased year-over-year.

因此，當我們分析第二季發生的情況時，真正重要的事情之一是，我們在早期訂閱者和已經加入我們 90 天的訂閱者中看到了非常不同的結果。所以庫存率的影響根本不同。正如我所提到的，我們繼續看到那些更忠誠的客戶有很強的保留率。我們看到庫存率下降確實影響了早期潛艇的流失率，而這些流失率逐年增加。

So had it been a full macro issue, all customer cohorts would be experiencing decline. Had it been a macro issue. We've been experiencing more -- we would be experiencing top line issues, which is not the issue that we are facing. Our issue that we isolated in Q2 was really about early term churn. Do you want to answer the second half for this question?

因此，如果這是一個全面的宏觀問題，所有客戶群都將經歷衰退。如果這是一個宏觀問題。我們已經經歷了更多——我們會遇到頂線問題，但這不是我們面臨的問題。我們在第二季隔離的問題實際上與早期流失有關。您想回答這個問題的後半部嗎？

Sorry, what was it? Can you just repeat your second question, please?

抱歉，那是什麼？您能重複一下您的第二個問題嗎？

Yes. Just trying to understand. So I think there was a moment in time where like reserve had low inventory maybe when everyone was doing special events and you saw a high churn because there wasn't availability, there wasn't enough inventory depth. I guess when you think about the forward situation, kind of what do you have to do? Like what does it take to reactivate somebody that churned off because of lower inventory depth? And kind of what would the timing of that be?

是的。只是想了解一下。所以我認為，在某個時刻，儲備庫存可能很低，也許當每個人都在做特殊活動時，你會看到由於沒有可用性、沒有足夠的庫存深度而造成的高流失率。我想當你考慮未來的情況時，你必須做什麼？例如，如何才能重新啟動因庫存深度較低而流失的員工？那麼具體的時間安排是怎麼樣的呢？

Yes. Look, I think the -- we're obviously acquiring customers every single month, right? And those customers are going to choose to stay with us based on whether they had a great experience or not, whether they're able to find the inventory they love and whether that inventory is in stock. And so the way we can start affecting this positively is actually providing the customers who stay with us who come to us with a much more positive experience. And that is then going to funnel into word-of-mouth and the organic kind of flywheel that we always expect.

是的。聽著，我認為——我們顯然每個月都在獲得客戶，對吧？這些客戶將根據他們是否有良好的體驗、是否能夠找到他們喜歡的庫存以及該庫存是否有庫存來選擇留在我們這裡。因此，我們能夠開始積極影響這一點的方法實際上是為那些來到我們這裡的客戶提供更積極的體驗。然後，這將轉化為口碑和我們一直期望的有機飛輪。

Now it's important to realize that we actually do get a relative -- we have a relatively strong track record of reactivating customers and customers come back to us, who are former customers and so on. So that's an ongoing process. I think customers have recognized that we provide a really valuable service. There are moments in times when they can be disappointed because we don't quite have the in-stock that is right for them, and we're making those fundamental changes to make sure that they have a much better experience.

現在重要的是要認識到，我們實際上確實得到了一個親戚——我們在重新激活客戶方面擁有相對良好的記錄，並且客戶又回到了我們身邊，他們是以前的客戶等等。所以這是一個持續的過程。我認為客戶已經認識到我們提供了真正有價值的服務。有時他們可能會感到失望，因為我們沒有適合他們的庫存，而我們正在做出這些根本性的改變，以確保他們有更好的體驗。

I mean one of the strongest parts of our experience for years has been the strong reactivation of former customers. Now why is that? Number one is that customers see that our experience is continuously improving. Number two, this is a business that benefits from word of mouth. So you start to make a positive change and that word-of-mouth benefits your rejoin rate, even more than it benefits your necessarily your new acquisition rate because people are saying, "Hey, they brought in new inventory. They have a better experience. They're doing home pickup now", and so those people come back. And we feel very confident that this issue of in-stock was one that was temporary. It's one that we are already in flight on a lot of the improvements that we're making those improvements are significant. A 700 to 1000 basis point change in-stock rate between one half of the year and the second half of the year is highly significant, and we think that it will have a huge benefit to rejoin rates.

我的意思是，我們多年來的經驗中最重要的部分之一就是前客戶的大力重新激活。這是為什麼呢？第一是客戶看到我們的體驗不斷在改進。第二，這是一項受益於口碑的業務。所以你開始做出積極的改變，口碑有利於你的重新加入率，甚至比它對你新的獲取率的好處還要多，因為人們會說，「嘿，他們帶來了新的庫存。他們有更好的體驗.他們現在正在上門取貨”，所以那些人就回來了。我們非常有信心，這種庫存問題只是暫時的。我們已經在進行許多改進，這些改進非常重要。上半年和下半年之間庫存利率變化700至1000個基點是非常顯著的，我們認為重新加入利率將帶來巨大的好處。

So we certainly do not exist in a business where if someone churns they don't come back. We exist in a business where when you improve your experience, you have a high probability of people coming back and giving this another try. The other thing I'll say is that we are the only one to do what we do. in terms of offering the level of premiumness of the experience, this subscription to the type of Closet in the Cloud that we have, which are the top brands and the top designers in the world, the premiumness of the actual experience, how quickly you receive the inventory, how easy it is for you to return the inventory. So it's a very high-end experience that our customers crave. And we feel that making these in-stock changes will then have payable effects on this rejoin rate that we should expect to benefit from.

因此，我們當然不存在一個如果有人流失就不會再回來的企業。我們所處的行業是，當您改善體驗時，人們很有可能會回來再次嘗試。我要說的另一件事是，我們是唯一做我們所做事情的人。在提供體驗的優質程度方面，我們訂閱的雲端衣櫃類型是世界頂級品牌和頂級設計師，實際體驗的優質程度，您收到的速度有多快庫存，您退回庫存有多容易。因此，這是我們的客戶渴望的非常高端的體驗。我們認為，進行這些庫存變化將對重新加入率產生可觀的影響，我們應該從中受益。

Next question is coming from Ashley Helgans from Jefferies.

下一個問題來自 Jefferies 的 Ashley Helgans。

It's Blake on for Ashley. Several questions have been answered. I wanted to ask on -- just a couple of clarifying questions. On the lower stubs expectation this year versus prior, it seems like the two big buckets there are the lower promos you discussed? And then lower inventory availability. Just wanted to make sure those are kind of the two big items. We're not missing any others. And then could you rank or just discuss the magnitude of each of those impacts?

布萊克替補阿什利。幾個問題已經得到解答。我想問幾個需要澄清的問題。與之前相比，今年的存根預期較低，似乎兩大桶中有您討論過的較低促銷活動？然後降低庫存可用性。只是想確保這些是兩個大項目。我們不遺漏任何其他人。然後您能否對這些影響進行排名或僅討論其嚴重程度？

Yes, you have the two big items here. We're not disclosing the exact magnitude of these impacts. I mean some of them are -- we think both are really important. And we expect to make significant progress, obviously, on the inventory and stock rate into Q3 and Q4 and into 2024. We're just -- our guidance and subscriber expectations are just reflecting the possibility that those take a while to build, and we're going to be prudent about that.

是的，這裡有兩個大東西。我們沒有透露這些影響的確切程度。我的意思是其中一些——我們認為兩者都非常重要。顯然，我們預計第三季、第四季以及 2024 年的庫存和庫存率將取得重大進展。我們的指導和訂戶期望只是反映了這些需要一段時間才能建立的可能性，我們我們會對此持謹慎態度。

Got it. And then in terms of the impact to subs from lower promotions, I would guess that's mainly impacting the acquisition of new customers. Wondering about that impact to the acquisition of new customers versus churn from existing?

知道了。然後，就較低促銷活動對訂閱者的影響而言，我認為這主要影響了新客戶的獲取。想知道新客戶獲取與現有客戶流失的影響嗎？

I mean promotions don't really have an impact at all on churn from existing because promotions are given to new customers to join.

我的意思是，促銷活動實際上對現有客戶的流失沒有任何影響，因為促銷活動是為新客戶加入而提供的。

I mean we do think that there is a benefit as we acquire more qualified customers, obviously, those customers are likely to stay with us longer, so we should see improvements in churn as we attract those customers. So yes, I think ongoing, there will be a benefit on retention too.

我的意思是，我們確實認為，當我們獲得更多合格客戶時，這是有好處的，顯然，這些客戶可能會在我們這裡停留更長時間，因此，當我們吸引這些客戶時，我們應該會看到客戶流失率有所改善。所以，是的，我認為持續下去，對保留也會有好處。

Okay. So maybe when a customer renews, you're not seeing them, I guess, the impact from a renewal isn't as big right now if they're renewing at a lower promotion rate, would that impact like a renewal customer?

好的。因此，也許當客戶續訂時，您看不到他們，我想，如果他們以較低的促銷率續訂，那麼現在續訂的影響不會那麼大，這會像續訂客戶一樣產生影響嗎？

Are you talking about a rejoiner essentially? I mean we're acquiring all of our customers, whether it's a new customer, rejoining customer, essentially on a very similar set of promotions. So it's affecting the entirety of the subscriber acquisition that we have.

您本質上是在談論重新加入嗎？我的意思是，我們正在獲取所有客戶，無論是新客戶還是重新加入的客戶，本質上都是透過一系列非常相似的促銷活動。所以它影響了我們的整個用戶獲取。

Next question today is coming from Dana Telsey from Telsey Advisory Group.

今天的下一個問題來自 Telsey Advisory Group 的 Dana Telsey。

Given the in-stock position and the improvement that's expected in the back half of the year, particularly in the fourth quarter, what are you seeing from your existing customers, the cohort of your best customers? And how are they impacted by this? And have you seen any update on churn? And lastly, as you think about the categories, what categories are performing? And is the in-stock shortage across all categories?

考慮到庫存狀況以及預計下半年（尤其是第四季度）的改善，您對現有客戶（即最佳客戶群）有何看法？他們受到什麼影響？您是否看到任何有關客戶流失的更新？最後，當您考慮類別時，哪些類別表現出色？所有品類都缺貨嗎？

Yes. So we continue to see strong loyalty rates amongst our more tenured subscribers. We -- across the board, don't think the depths were high enough in any category. And we're being really, I think, smart about how we increase our depth strategy where it's not a one-size-fits-all strategy. We do think across the board, we should have less breadth and more depth, but we're also taking into account the most important brands that provide the most value to our customers, the most important categories that provide the most value to our customers and we're going even deeper there.

是的。因此，我們繼續看到長期訂閱者的忠誠度很高。總的來說，我們認為任何類別的深度都不夠高。我認為，我們在如何增加深度策略方面非常聰明，這不是一刀切的策略。我們確實全面考慮，我們應該減少廣度和增加深度，但我們也考慮到為客戶提供最大價值的最重要品牌、為客戶提供最大價值的最重要類別以及我們將進一步深入。

So in terms of something that we are excited about in terms of the category, we're seeing an increase in return to work. Work wear was -- is now currently as strong as it was in 2019, which is a great thing for our business because it's obviously something that people do 5 days a week.

因此，就我們對該類別感到興奮的事情而言，我們看到重返工作崗位的人數有所增加。工作服過去——現在現在和 2019 年一樣強勁，這對我們的業務來說是一件好事，因為這顯然是人們每週 5 天都會做的事情。

And then just following up with the in-stock position, why -- was it more a macro situation with the brand? Was it more your planning? What led to the shortage of the in-stock position?

然後只是跟進庫存狀況，為什麼——這更多的是品牌的宏觀情況？這更多的是你的計劃嗎？是什麼原因導致庫存不足呢？

I think that 2022 was the full year -- was the first year that we had these fixed swap programs in a "more normalized environment", where people were leaving their homes, right? And that's when we started to kind of really have a new set of inventory metrics that we were using to evaluate our business and in stock became very important. That's why we set inventory availability as one of our most important strategic pillars for this year.

我認為 2022 年是全年，是我們在「更正常化的環境」中實施這些固定互換計劃的第一年，人們正在離開家園，對嗎？就在那時，我們開始真正擁有一套新的庫存指標，我們用它們來評估我們的業務，庫存變得非常重要。這就是為什麼我們將庫存可用性設為今年最重要的策略支柱之一。

So we had already implemented an in-stock strategy at the end of '22. But given the 6-month fashion buying cycle, it wasn't going to take effect until the buys that we're now receiving in Q3 and Q4. So we knew that in stock was critically important. We increased depth 1.7x in the second half of the year versus the first half. We made those decisions in 2022 to do that. So we knew that it was going to be really important to get that in-stock rate out based on all of the work and all the analysis that we had done in 2022.

所以我們在 22 年底就已經實施了庫存策略。但考慮到 6 個月的時尚購買週期，直到我們現在在第三季和第四季收到的購買量才會生效。所以我們知道庫存至關重要。與上半年相比，我們下半年的深度增加了 1.7 倍。我們在 2022 年做出了這些決定來做到這一點。因此，我們知道，根據我們在 2022 年所做的所有工作和分析，得出庫存率非常重要。

What we learned in Q2 was that we should have gone even further. And we could go even further. And that's what we're doing for 2024. So we think that we're going to see even more, we're going to start to see positive impact as it relates to the end of Q3 and Q4, but we're going to see the lion's share of that positive impact into 2024.

我們在第二季度了解到，我們應該走得更遠。我們還可以走得更遠。這就是我們在 2024 年所做的事情。所以我們認為我們會看到更多，我們將開始看到與第三季末和第四季末相關的正面影響，但我們將預計到2024 年，這種正面影響將發揮最大作用。

Next question is coming from Eric Sheridan from Goldman Sachs.

下一個問題來自高盛的艾瑞克·謝裡丹。

Maybe just one. As you move from this inventory strategy from breadth to depth, how should we think about product segmentation or product messaging to make sure that the idea of inventory depth results in the subscriber acquisition, you're looking for the other side of the inventory issue. So sort of incoming users understand that maybe the inventory level is lined up with expectations coming in. Could that result in new product iteration, product segmentation? Or is it really just an element of executing on the inventory depth and then turning on the subscriber acquisition dynamic again and then getting back to more normalized levels of growth?

也許只有一個。當您從這個庫存策略從廣度轉向深度時，我們應該如何考慮產品細分或產品訊息傳遞，以確保庫存深度的想法導致訂閱者獲取，您正在尋找庫存問題的另一面。因此，新來的用戶明白，庫存水準可能與進來的預期相符。這會導致新產品迭代、產品細分嗎？或者它真的只是執行庫存深度的一個要素，然後再次開啟訂戶獲取動態，然後回到更正常的增長水平？

So the -- having styles that are more in-depth really the biggest impact is on whether customers in early terms stay with you as opposed to whether they come in the first place. So why? When you're a prospect to rent around, when you're signing up the subscription, you're looking at the full catalog of everything that we have in inventory. Then you sign up for a subscription and you're seeing what is available today. And you don't understand that, that availability is changing on a day-to-day basis. So the higher our depths are the more likely you're going to be to see those styles that you fell in love with when you were a prospect to see that they're available today after you've signed up.

因此，擁有更深入的風格確實最大的影響在於早期客戶是否會留在你身邊，而不是他們是否首先出現。所以為什麼？當您打算租房時，當您註冊訂閱時，您會看到我們庫存中所有物品的完整目錄。然後您註冊訂閱，然後您將看到今天可用的內容。而且您不明白，可用性每天都在變化。因此，我們的深度越高，您就越有可能看到那些您在註冊後今天就有貨的潛在客戶時愛上的款式。

So we have data that shows that it's going to have a quite positive impact on our early term subscribers, and that's what we believe. And we're being, I think, prudent around when it's going to start to take effect based on when we're receiving the inventory and when it's going to be more felt in our inventory base. So it's not related to acquisition, it's something that is related to retention.

因此，我們有數據表明，這將對我們的早期訂閱者產生非常積極的影響，這就是我們所相信的。我認為，根據我們何時收到庫存以及何時在我們的庫存基礎上更能感受到它，我們正在謹慎對待它何時開始生效。所以這與獲取無關，而是與保留有關。

And I think ultimately, what we've always said and what we always know about our business is that 80% of customers come organically, 60% of customers come because somebody else that is a current customer tells them about us. So I think the single most important thing we can do to improve and turn on effectively the acquisition side is to focus very clearly on providing those customers with a great experience because then they will go out and become our best advocates and bring new customers in. So I think improving the experience has just always been very fundamental to how we grow.

我認為歸根結底，我們一直在說的以及我們對我們業務的了解是，80% 的客戶是自然而來的，60% 的客戶是因為其他現有客戶向他們介紹了我們。因此，我認為，為了改善和有效啟動收購方面，我們可以做的最重要的事情就是非常明確地專注於為這些客戶提供良好的體驗，因為這樣他們就會走出去，成為我們最好的擁護者並引進新客戶。因此，我認為改善體驗始終是我們成長的基礎。

And yes, I mean, of course, we also are doing in addition to buying additional deaths and so on between consolidating low debt items between reorders, merchandising package. There a lot of other things that we're doing to improve in stock. But I think clearly, the results of that in stock will itself drive what we think will be significant awareness of the better experience that we're providing on the acquisition side.

是的，我的意思是，當然，除了購買額外的死亡人數之外，我們還在整合重新訂購和商品包裝之間的低債務項目之間做其他事情。我們正在做很多其他事情來改善庫存。但我清楚地認為，庫存的結果本身將推動我們認為我們在收購方面提供的更好體驗的顯著意識。

We reach the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

我們的問答環節即將結束。我想重新發言以徵求進一步的意見或結束意見。

Thanks for joining us today and looking forward to chatting more in the weeks to come.

感謝您今天加入我們，並期待在未來幾週內與我們進行更多交談。

Thank you.

謝謝。

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議到此結束。此時您可以斷開線路，度過美好的一天。我們感謝您今天的參與。