(RENT) 2023 Q3 法說會逐字稿

Welcome to the two rental runways Third Quarter 2023 earnings results conference call. At this time, all participants are in a listen only mode question and answer session will follow the formal presentation. Anyone should require operator assistance during the conference, please press star zero on your telephone. As a reminder, this conference is being recorded. I would now like to turn the call over to rent. The runway is General Counsel, Cara Schembri.

歡迎參加兩條租賃跑道 2023 年第三季財報電話會議。此時，所有參與者都處於僅聽模式，問答環節將在正式演示之後進行。會議期間任何人如果需要接線員協助，請按電話上的星號零。提醒一下，本次會議正在錄製中。我現在想把電話轉過去出租。主持嘉賓是總法律顧問 Cara Schembri。

You may begin the afternoon, everyone, and thanks for joining us for the inventory. The runways Third Quarter 2023 results.

大家可以從下午開始，感謝您加入我們的盤點。跑道 2023 年第三季結果。

Joining me today to discuss our results for the quarter ended October 31st, 2023, our CEO and Co-Founder, Jennifer Hyman, and CFO, Siddharth Thacker. During this call, we will make references to our Q3 23 earnings presentation, which can be found in the Events and Presentations section of our Investor Relations website.

今天，我們的執行長兼聯合創辦人 Jennifer Hyman 和財務長 Siddharth Thacker 與我一起討論截至 2023 年 10 月 31 日的季度業績。在本次電話會議中，我們將參考 23 年第 3 季的收益簡報，該簡報可以在我們投資者關係網站的「活動和簡報」部分找到。

Before we begin, we'd 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 this afternoon's press release as well as our filings with the SEC, including our Form 10 Q that with that will be filed within the next few days. We undertake no obligation to revise or update any forward-looking statements or information except as required by law.

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表現、指導和目標、市場機會和成長的未來預期。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下午的新聞稿以及我們向 SEC 提交的文件中進行了詳細說明，其中包括我們將在未來幾天內提交的 10 Q 表格。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 reconciliations of GAAP to non-GAAP measures can be found in our press release.

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考慮，也不能取代根據 GAAP 與非 GAAP 指標的調整表呈現的財務資訊（可在我們的新聞稿中找到）。

Slide presentation posted to our investor website and in our SEC filings.

幻燈片簡報已發佈到我們的投資者網站和 SEC 文件中。

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

有了這個，我會把它交給簡。

Hi, everyone, and thanks for joining with a solid dollar stock price and very little support from the public markets. My goal this evening is to address the elephant in the room when it comes to Rent the Runway with transparency and convey that we believe that we have reached a positive important turning point where our business can hopefully start to be evaluated on its strong business model and the vast opportunity ahead of us as opposed to our challenged balance sheet as of the end of Q3 '2023 rent, the runway has $312 million about out of outstanding debt, which obviously is a large amount, especially compared to our current equity value before COVID rent, the runway held significantly less with a sizable portion of it at low rates via an asset-backed loan, which used our inventory as collateral after COVID hit in mid-March 2020, we needed to move very quickly to refinance to secure the business and address the fact that our inventory was now being appraised at a small fraction of its pre-COVID value and we face serious consequences under the term of our ABL. This pressure alongside or precipitously declining revenue due to COVID lockdowns meant that we had to take on a higher quantum of debt at high picks to save the company and repay our ABL. While the debt amount was always in our view high, it was essential to stabilize the business for the duration of the pandemic and support our post-COVID recovery. And it felt manageable at a $1.7 billion IPO valuations. I believe it's clear based on many conversations with public investors that a key reason why our stock price has declined into sub territory is because of this debt because of our balance sheet. We believe that the market lacks confidence in our viability. Today, we are announcing significant modifications to our debt terms that we believe provide meaningful flexibility and will allow the company the opportunity to generate significant free cash flow before the debt maturity date. First, both pick and cash interest have been eliminated for six quarters beginning with Q4 '2023, reducing total interest expense by$66 million over this period, $18 million of which is cash interest. This means that the debt will remain flat at $312 million during this period, which is intended to allow equity value to accrue as we grow and to reduce drain on company cash while we are driving the business to free cash flow breakeven.

大家好，感謝您在美元股價堅挺且公開市場支持很少的情況下加入。我今晚的目標是以透明的方式解決租賃跑道問題上的問題，並傳達我們相信我們已經達到了一個積極的重要轉折點，我們的業務有望開始以其強大的商業模式進行評估，並與截至2023年第三季末我們面臨的資產負債表挑戰相比，我們面臨著巨大的機遇，未償還債務約為3.12 億美元，這顯然是一個很大的數字，特別是與我們在新冠疫情之前的當前股權價值相比租金大幅減少，其中很大一部分是透過資產支持貸款以低利率持有的，在2020 年3 月中旬新冠疫情爆發後，該貸款使用我們的庫存作為抵押品，我們需要非常迅速地進行再融資以確保業務並解決這樣一個事實：我們的庫存現在的評估價格僅為新冠疫情前價值的一小部分，根據我們的 ABL 條款，我們面臨著嚴重的後果。這種壓力以及由於新冠疫情封鎖導致的收入急劇下降意味著我們必須在高選擇中承擔更高數額的債務，以拯救公司並償還我們的 ABL。雖然我們認為債務金額一直很高，但在疫情期間穩定業務並支持我們的疫情後復甦至關重要。 IPO 估值為 17 億美元，感覺還算可控。我相信，根據與公共投資者的多次對話，我們可以清楚地看出，我們的股價下跌的一個關鍵原因是我們的資產負債表產生的債務。我們認為市場對我們的生存能力缺乏信心。今天，我們宣布對債務條款進行重大修改，我們相信這提供了有意義的靈活性，並使公司有機會在債務到期日之前產生大量自由現金流。首先，從 2023 年第四季開始的六個季度中，精選利息和現金利息都已取消，在此期間總利息支出減少了 6,600 萬美元，其中 1,800 萬美元是現金利息。這意味著在此期間債務將保持在 3.12 億美元不變，目的是讓股權價值隨著我們的發展而增加，並在我們推動業務實現自由現金流盈虧平衡的同時減少公司現金的消耗。

In addition, the minimum liquidity covenant has been reduced from $50 million to $30 million, which provides additional cushion even in significant downside scenarios. We have also mutually agreed on spend tax in fiscal year 2024 for inventory CapEx, marketing and fixed operating expenses, which align with our profitability goals. I encourage you to read the full details of the amendment that has been filed in a Form eight K prior to this call. While the quantum of debt still needs to be addressed, we believe that these modifications provide significant breathing room. While we are laser focused on significant free cash flow generation and proving the strength of our business model to the market. Simply put, I don't believe everything you read in the press Rent the Runway is here to stay, and I am confident that 2024 is going to be a big year for us. The other significant elephant in the room has been a question, Mark. As to whether Rent the Runway can grow. The market has lacked confidence in our growth opportunity because the business is expected to be more or less flat this year. At around $300 million in revenue. I want to be clear that we believe our lack of growth in 2023 is a temporary problem, primarily driven by the inventory depth issue that we explained in detail last quarter, lack of depth in the style customers wanted to rent led to elevated rates of churn. And as a result, reenacted strategies to pull back acquisition. While we solve this problem in great news, the actions we have already taken to fix our assortment and greatly improve inventory depth in the second half of 2023 have already made market improvement on our customer experience. We are seeing positive green shoots and momentum in the most important input and output metrics of the Company, including subscription net promoter scores that are both the highest we've seen since pre-COVID and that continue to climb. Weekly global churn is down since last quarter and the churn of our post 90 day subscribers is amongst the lowest levels we've seen since Q4 2021 with higher NPS and higher loyalty. We believe that our positive customer growth flywheel can be reengaged as a result, we're highly confident that we're on the right track. We believe we're focused on the right priorities in 2023 to fix the foundations of our customer experience and we want to update our commitment to being a fully cash flow breakeven business in 2024. I want to be clear, we are laser focused on driving this business to free cash flow breakeven next year. That's why we are setting up a cost structure that is designed to enable us to do so even in a zero growth scenario, zero growth is clearly not our goal, but we think best to plan conservatively when it comes to costs, I firmly believe that creating a sustainable business will enable us to control our own destiny and capture as much of the large rental market as possible over the upcoming year, the rental market continues to grow at a clip far faster than the overall fashion market in the US and around the world as demand for subscription to fashion and normalization of rental has never been higher. While we while we believe there will be many winners we have generated the highest revenue of any fashion rental platforms, and we believe this is due to our positioning as the premium service for the more premium professional customer with the premium brand relationship.

此外，最低流動性契約已從 5,000 萬美元降至 3,000 萬美元，即使在嚴重下行的情況下也能提供額外的緩衝。我們也對 2024 財年的庫存資本支出、行銷和固定營運費用徵收支出稅達成一致，這與我們的獲利目標一致。我鼓勵您閱讀本次電話會議之前以 8 K 表格提交的修正案的完整詳細資訊。儘管債務金額仍需解決，但我們相信這些修改提供了重要的喘息空間。同時，我們專注於產生大量的自由現金流並向市場證明我們商業模式的實力。簡而言之，我不相信您在媒體《Rent the Runway》中讀到的所有內容都會一直存在，我相信 2024 年對我們來說將是重要的一年。房間裡另一頭重要的大像是一個問題，馬克。至於Rent the Runway能否成長。市場對我們的成長機會缺乏信心，因為預計今年的業務或多或少會持平。收入約為 3 億美元。我想澄清的是，我們認為 2023 年成長不足是一個暫時的問題，主要是由我們上季度詳細解釋的庫存深度問題造成的，客戶想要租賃的款式缺乏深度導致客戶流失率上升。結果，重新制定了撤回收購的策略。雖然我們以好消息解決了這個問題，但我們已經採取的行動來修復我們的品種並在 2023 年下半年大幅提高庫存深度，這已經使我們的客戶體驗得到了市場改善。我們在公司最重要的投入和產出指標中看到了積極的萌芽和勢頭，包括認購淨推薦值，這是自新冠疫情爆發以來我們所看到的最高水平，並且還在繼續攀升。自上季以來，每週全球用戶流失率有所下降，90 天後訂閱者的流失率是自 2021 年第四季以來最低水準之一，NPS 更高，忠誠度更高。我們相信，我們積極的客戶成長飛輪可以因此重新啟動，我們非常有信心我們走在正確的軌道上。我們相信，我們將在2023 年專注於正確的優先事項，以奠定我們客戶體驗的基礎，並且我們希望更新我們的承諾，在2024 年成為一家完全現金流盈虧平衡的企業。我想明確的是，我們專注於推動該業務明年將實現自由現金流損益平衡。這就是為什麼我們正在建立一個成本結構，旨在使我們即使在零增長的情況下也能做到這一點，零增長顯然不是我們的目標，但我們認為在成本方面最好採取保守的計劃，我堅信創建永續發展的業務將使我們能夠控制自己的命運，並在來年盡可能多地佔領大型租賃市場，租賃市場的持續增長速度遠遠快於美國及週邊地區的整體時尚市場世界對時尚訂閱和租賃標準化的需求從未如此高。雖然我們相信會有很多贏家，但我們在所有時尚租賃平台中創造了最高的收入，我們相信這是由於我們的定位是為具有優質品牌關係的更優質專業客戶提供優質服務。

Regarding this quarter, specifically, we met expectations on the top and bottom line. We ended the quarter with an active subscriber count of 131,725. We shared with you last quarter that we plan to make deliberate choices that we anticipated would negatively impact short term revenue and subscriber count to drive profitability. We believe that the sub count is a result of our strategic decisions to hold the line on lower promotions and lower marketing spend to prioritize inventory in-stock rates in other words, we acquired fewer customers by design, but the customers we have acquired are more profitable as we shared last quarter for rent, the runway, our customer experience is all about her ability to access the fashion she wants when she wants it, which is where our focus on inventory depth and in-stock rate comes into play fashion and forms for satisfaction with and loyalty to our offerings thus far in the second half of 23, we've improved the fashion on our platform in terms of depth selection that is significantly more aspirational and versatile and importantly, in line with what our core professional female customer is looking for.

具體而言，就本季而言，我們在營收和利潤方面均達到了預期。本季結束時，我們的活躍訂閱者數量為 131,725 人。我們上個季度與您分享，我們計劃做出深思熟慮的選擇，我們預計這些選擇會對短期收入和訂戶數量產生負面影響，以提高獲利能力。我們認為，子計數是我們策略決策的結果，即堅持減少促銷和降低行銷支出，優先考慮庫存率，換句話說，我們設計時獲得的客戶較少，但我們獲得的客戶更多正如我們上個季度分享的租金、T台一樣，我們的客戶體驗是盈利的，我們的客戶體驗就是她在需要時獲得她想要的時尚的能力，這就是我們對庫存深度和庫存率的關注在時尚和形式中發揮作用的地方為了提高對我們產品的滿意度和忠誠度，在23 下半年，我們在深度選擇方面改進了我們平台上的時尚，這些選擇明顯更具吸引力和多功能性，重要的是，符合我們的核心職業女性客戶的需求正在尋找。

The green shoots we are seeing in the data are as follows. First, as we've shared the most important component of our inventory strategy is greater investment of depth of styles and brands. We know she wants. So we are in-stock for the time we told you the depth of our second half 23 buy were expected to be approximately 1.7 times the depth of our first half bias, which would increase our in-stock rate by 700 to 1,000 that we have over delivered against our plans as of two three in-stock rate was 1,400 basis points higher than Q2 and 1,200 basis points higher than Q3 last year, contributing to increased customer satisfaction and retention rates beyond buying at greater depth, there have been several additional important strategies we have deployed to improve the customer experience with fashion on our platform, including consolidating key sales by warehouse, better site and app merchandising and creating a unique onboarding experience for early term subscribers. Loyalty is highly correlated to in-stock rates and we have early data to show that the focus on depth is working as of October inventory as a reason for churn has gone down by 40% over the past six months. Additionally, per rental satisfaction rate has increased year over year. Not only is it easier for her to rent. The item she wants. The assortment is resonating with her even more Hearts on our new inventory are over 30% higher this year over last year. Workwear is a key driver of dissatisfaction. Utilization of workwear is 1,000 basis points higher than last year, which is great for our business. As there's less seasonality, seasonality involved and people who use our service to dress for work, we're also seeing that paid add-on rates have gone up as in-stock rates have improved and are at the highest level since before we launched our extra item plans. It's great that when our inventory availability is higher, she will pay more to get more of it and RPU increases.

我們在數據中看到的萌芽如下。首先，正如我們所分享的，我們庫存策略中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。因此，當我們告訴您下半年 23 購買深度時，我們的庫存預計約為上半年偏差深度的 1.7 倍，這將使我們的庫存率增加 700 至 1,000截至二季度，庫存率比第二季度高出1,400 個基點，比去年第三季度高出1,200 個基點，超出了我們的計劃，除了更深入地購買之外，還有助於提高客戶滿意度和保留率，還有一些其他重要的因素我們採取了一些策略來改善我們平台上的時尚客戶體驗，包括透過倉庫整合關鍵銷售、更好的網站和應用程式行銷以及為早期訂閱者創造獨特的入職體驗。忠誠度與庫存率高度相關，我們的早期數據顯示，截至 10 月庫存的關注深度正在發揮作用，因為在過去六個月中，客戶流失率下降了 40%。此外，租金滿意度逐年上升。對她來說，租房子不僅更容易。她想要的物品。這個品種引起了她的共鳴，今年我們新庫存的心形數量比去年增加了 30% 以上。工作服是引起不滿的關鍵因素。工作服的使用率比去年高 1,000 個基點，對我們的業務非常有利。由於季節性較少，涉及的季節性以及使用我們的服務來上班的人們，我們還發現，隨著庫存價格的改善，付費附加費率也有所上升，並且處於自我們推出我們的服務之前以來的最高等級。額外項目計劃。令人高興的是，當我們的庫存可用性更高時，她會支付更多費用來獲得更多庫存，並且 RPU 也會增加。

We're also pleased with our purchase rate this past quarter. We think that one of the most compelling elements of our business model for customers and for us financially is when customers use their subscription to Tri pieces and then purchase them from us when they already have them at home in Q3, purchase rate is up 50% in units sold versus last year, indicating that the pricing and assortment is resonating and we are getting better at positioning tried before you buy as a key value proposition of having a subscription with us. We think about the trade before you buy channel as a Retail 2.0 experience where we are bringing the store directly into the customer's home in a dressing room. She tries out the product and gets a brief sense of fit in the aesthetic. But with Rent the Runway, she experiences how the product fits into her life received validation from people. She knows and determines whether she wants to make it a permanent part of her closet. The vast majority of these at-home sales have recovery rates far above what we paid for the item. And we see higher loyalty rates and subscribers who purchased from us expect us to continue to push on this developing channel in a much bigger way in 2020 for NEXT exclusive designs continue to be beloved by our customers as evidenced by utilization where rate and love rate all up year over year. As a reminder, we create these designs in close collaboration with brand partners and leverage our own unique data today, just in time for holiday rent, the runway introduced the ball for a new category of luxury evening wear styles from 20 of the top brands in fashion, including many new to site designers like Metro, Oscar de la Renta branded Maxwell at our October, John Batista Valley, Rachel Gilbert, Paris, Georgia, and more available exclusively for 48 day rental. We view this launch of luxury as a key step in reinvigorating our special events rental business, which was always based on renting aspirational brands that you couldn't afford or didn't make sense to buy and solidifying our premium positioning in the market. Overall, our brand relationships continue to be one of the resounding strengths of our business model. Even in this complex macro environment, brands see us as a powerful marketing partner for new site designers I just mentioned are testaments to that. Over the past few years, we have managed to continue reducing the input cost per unit while increasing the MSRPs of fashion on our sites. Simply, our costs are decreasing. While the aspiration and premium nature of the assortment is increasing, our pay-for-performance revenue share model continues to scale in terms of the number of partners and in the percentage of the overall buy based on our buys to date, we currently expect in the first half of 24 that almost 50% of our inventory acquisition will be acquired via pay-for-performance.

我們對上個季度的購買率也感到滿意。我們認為，對於客戶和我們的財務而言，我們的商業模式中最引人注目的元素之一是，當客戶使用Tripiece 的訂閱，然後在第三季度家裡已經有Tripiece 時從我們這裡購買，購買率上升了50%與去年相比，銷售量表明定價和品種產生了共鳴，並且我們在購買前的定位方面做得越來越好，將其作為訂閱我們的關鍵價值主張。我們將購買前的交易管道視為零售 2.0 體驗，我們將商店直接帶入客戶家中的更衣室。她試用了該產品，並在美學上獲得了短暫的契合感。但透過 Rent the Runway，她體驗了該產品如何融入她的生活，並得到了人們的認可。她知道並決定是否想讓它成為她衣櫃裡的永久一部分。這些家庭銷售中的絕大多數的回收率遠高於我們購買該商品的價格。我們看到更高的忠誠度，從我們這裡購買的訂戶期望我們在2020 年繼續以更大的方式推動這個發展管道，因為NEXT 獨家設計繼續受到我們客戶的喜愛，這一點從利用率和喜愛率都可以看出逐年上升。提醒一下，我們與品牌合作夥伴密切合作，並利用我們自己的獨特數據來創造這些設計，今天，正好趕上假期租金，T台推出了來自 20 個頂級品牌的全新奢華晚裝款式。時尚，包括許多新來的網站設計師，如Metro、Oscar de la Renta 品牌的Maxwell（我們的October）、John Batista Valley、Rachel Gilbert（喬治亞州巴黎）以及更多專供48 天租賃的產品。我們認為推出豪華產品是重振我們的特殊活動租賃業務的關鍵一步，該業務始終基於租賃您買不起或沒有意義購買的理想品牌，並鞏固我們在市場上的高端定位。整體而言，我們的品牌關係仍然是我們業務模式的顯著優勢之一。即使在這個複雜的宏觀環境中，品牌也將我們視為新網站設計師的強大行銷合作夥伴，我剛才提到的就是證明。在過去的幾年裡，我們成功地持續降低了單位投入成本，同時提高了我們網站上時尚產品的建議零售價。簡而言之，我們的成本正在下降。雖然產品種類的願望和溢價性質不斷增加，但我們的按績效付費的收入分成模式在合作夥伴數量和基於我們迄今為止的購買的總體購買百分比方面繼續擴大，我們目前預計24 上半年，我們近50 % 的庫存採購將透過績效付費的方式進行。

Beyond our success in our inventory pillar, the teams have continued their work across our other strategic pillars efficient and easy to use experience and best in class product discovery. We are pleased with the strides we have made across the Rent the Runway ecosystem and are offering a high-touch luxury style experience that we believe our customers are noticing related to an easy-to-use experience. Our SMS-based styling and support service rental runway concierge has reached an all-time high adoption rate with over 30% of new subscribers opting in and as of the end of Q3, we have seen sustained retention improvements, not only for customers who use concierge in their first 30 days, but also in their second and third months with us early term. Customers who opt into compares has 15% lower churn rates than those who do not. So our plans are to continue to scale this program. Our in-product onboarding is also seeing encouraging results. 95% of new subscribers completed leading to a 33% drop in the time it takes to place their first order that may shift more of the month to enjoy for Rent the Runway items. We've come a long way in 2023 and feel excited about the path.

除了我們在庫存支柱方面的成功之外，團隊還繼續在我們的其他戰略支柱上開展工作，提供高效、易於使用的體驗和一流的產品發現。我們對 Rent the Runway 生態系統所取得的進步感到高興，並提供高觸感的奢華風格體驗，我們相信我們的客戶注意到了與易於使用的體驗相關的體驗。我們基於簡訊的造型和支援服務租賃跑道禮賓服務的採用率達到了歷史最高水平，超過 30% 的新訂戶選擇加入，截至第三季末，我們看到保留率持續提高，不僅針對使用的客戶禮賓服務不僅適用於他們的前30 天，而且還適用於他們與我們合作早期的第二個月和第三個月。選擇進行比較的客戶的流失率比不進行比較的客戶低 15%。因此，我們的計劃是繼續擴大該計劃的規模。我們的產品內引導也取得了令人鼓舞的成果。 95% 的新訂閱者完成了購買，這使得下第一筆訂單所需的時間減少了 33%，這可能會導致本月更多時間享受 Rent the Runway 商品。 2023 年我們已經走了很長一段路，並對這條道路感到興奮。

Thanks, Jen, and thanks again, everyone, for joining us while we met our third quarter guidance, as Jan mentioned, we're disappointed with revenue that will essentially be flat this year in a growing fashion rental market. Despite this we have continued to make underlying improvements to our financial model that may not be as apparent in the context of our rental product issues this year. It's easy to overlook that most of our rental product today is procured using cost-advantaged non wholesale channel due to the near term gross margin impact of rightsizing our inventory depth. It's easy to overlook that our year-to-date gross margins of approximately 40%, including both product and fulfillment costs point to strong underlying unit economics. It's also understandable that both our $27 million reduction in the fixed cost base from the Q3 '22 restructuring program as well as the incremental $5 million in annualized fixed cost reduction this quarter might go unnoticed. The building blocks in combination with our current plan give us confidence that Rent the Runway is on track to reach free cash flow breakeven in fiscal year 24, we expect to bring our business to breakeven sooner at a far lower level of subscribers than we had initially announced. And we plan to outline next quarter. Many of the actions that allow us to reach this milestone has already been taken. Our rental product spend is known and is expected to be considerably lower than fiscal year 23 level that were impacted by the need to make inventory depth adjustments. We have reduced our fixed cost base in the third quarter and expect to continue to find ways to optimize this further. Transportation expenditures have good visibility that balance sheet actions we announced today result in no interest expense for fiscal year 24. We do not assume that significant growth is required to reach our free cash flow goals.

謝謝 Jen，再次感謝大家在我們達到第三季度指導的同時加入我們，正如 Jan 提到的，我們對今年在不斷增長的時裝租賃市場中基本持平的收入感到失望。儘管如此，我們仍在繼續對我們的財務模型進行根本性的改進，這在今年我們的租賃產品問題的背景下可能並不那麼明顯。人們很容易忽視，由於調整我們的庫存深度對短期毛利率的影響，我們今天的大部分租賃產品都是透過具有成本優勢的非批發管道採購的。人們很容易忽視，我們今年迄今約 40% 的毛利率（包括產品和履行成本）表明了強勁的潛在單位經濟效益。同樣可以理解的是，我們從 22 年第三季重組計劃中削減的 2700 萬美元固定成本以及本季度年化固定成本削減增量 500 萬美元可能不會被注意到。這些建造模組與我們目前的計劃相結合，讓我們相信Rent the Runway 預計在第24 財年實現自由現金流盈虧平衡，我們預計我們的業務將在訂戶水平遠低於最初水平的情況下更快實現損益平衡宣布。我們計劃在下個季度概述。我們已經採取了許多行動來實現這一里程碑。我們的租賃產品支出是已知的，預計將大大低於 23 財年的水平，該水平受到庫存深度調整的需要的影響。我們在第三季減少了固定成本基礎，並期望繼續尋找進一步優化這一點的方法。運輸支出具有良好的可見性，我們今天宣布的資產負債表行動不會導致第 24 財年的利息支出。我們不認為實現自由現金流目標需要顯著成長。

Let me now turn to our Q3 results. We ended at 131,725 ending active subscribers, down 1.9% year over year. Average active subscribers during the quarter were 134,646 versus 129,186 subscribers in the prior year, an increase of 4.2%. Ending active subscribers declined from 137,566 subscribers at the end of Q2 2023. As previously disclosed, we tested varying levels of promotions during Q2 and decided to be much less promotional in Q3. Lower Q3 ending subscribers primarily reflected these promotional tests ending in Q2 ,Q2 and lower ongoing new customer promotions during the third quarter. Total revenue for the quarter was $72.5 million, down $4.9 million or 6.3% year over year. Revenue in Q3 '22 benefited by approximately $1.6 million from our exclusive design pilot program. Amazon subscription and reserve revenue was $64.7 million versus $68.8 million last year, a decrease of 6%, driven by continued weakness in our reserve business and lower average revenue per subscriber the lower average revenue per subscriber was primarily driven by fewer full-price subscribers from the promotional testing previously discussed, along with expected declines in add-on revenues year-over-year. These declines were partially offset by higher average revenue per subscriber due to lower new customer promotions. Fulfillment costs were $21.5 million in Q3 '23 versus $23.2 million in Q3 '22. Fulfillment costs as a percentage of revenue was slightly lower year over year at 29.7% of revenue in Q3 '23 compared to 30% of revenue in Q3 '22. Fulfillment costs as a percentage of revenue were flat to Q2 '23, despite higher new receipt processing costs. Fulfillment costs benefited from a new transportation contract with UPS, which locked in competitive rate and consolidated. The vast majority of our shipping gross margins were 34.8% in Q3 23 versus 41.1% in Q3 22. Q3 23. Gross margins reflect higher rental product costs due to increased investment in inventory year over year. The increased investment year over year is largely a one-time correction of inventory depth to increase inventory in-stock rates, which are essential for fueling customer satisfaction and growth. Gross margins were negatively affected by approximately 400 basis points versus Q2 23 due to seasonally higher revenue share expenses attributable to new receipts.

現在讓我談談第三季的結果。最終活躍訂閱者數量為 131,725 名，較去年同期下降 1.9%。本季平均活躍訂閱者數量為 134,646 人，去年同期為 129,186 人，成長 4.2%。最終活躍訂閱者數量較 2023 年第二季末的 137,566 名訂閱者有所下降。如前所述，我們在第二季度測試了不同級別的促銷活動，並決定在第三季度大幅減少促銷活動。第三季最終訂戶數量下降主要反映了第二季結束的促銷測試以及第三季正在進行的新客戶促銷活動的減少。該季度總收入為 7,250 萬美元，年減 490 萬美元，即 6.3%。我們的獨家設計試點計畫使 22 年第 3 季的收入受益於約 160 萬美元。亞馬遜訂閱和預訂收入為 6,470 萬美元，而去年為 6,880 萬美元，下降了 6%，這是由於我們的預訂業務持續疲軟以及每位訂閱者的平均收入較低所致。之前討論過的促銷測試，以及附加收入預計將年減。由於新客戶促銷活動減少，每位訂戶平均收入增加，部分抵消了這些下降。 23 年第 3 季的履行成本為 2,150 萬美元，而 22 年第 3 季的履行成本為 2,320 萬美元。履行成本佔收入的百分比略有下降，23 年第 3 季佔營收的 29.7%，而 22 年第 3 季佔營收的 30%。儘管新收據處理成本較高，但履行成本佔收入的百分比與 23 年第二季持平。履行成本受益於與 UPS 簽訂的新運輸合同，該合同鎖定了具有競爭力的價格並進行了整合。我們絕大多數的航運毛利率在23 年第三季為34.8%，而在22 年第三季為41.1%。23 年第三季。毛利率反映了由於庫存投資同比增加而導致的租賃產品成本上升。逐年增加的投資主要是對庫存深度的一次性修正，以提高庫存庫存率，這對於提高客戶滿意度和成長至關重要。由於新收入帶來的收入分成費用季節性增加，與 2023 年第二季相比，毛利率受到約 400 個基點的負面影響。

Operating expenses were about 11% lower year-over-year, primarily due to the favorable impact of our 2022 restructuring plan, further fixed cost actions we have taken this year and lower marketing spending. Total operating expenses, which include technology, marketing, G&A and stock-based compensation, were about 60% of revenue versus approximately 63% of revenue last year. Adjusted EBITDA for the quarter was $3.5 million or 4.8% of revenue versus $6.6 million and 8.5% of revenue in the prior year. In Q3 2022, Adjusted EBITDA benefited by $4.6 million from the launch of the exclusive design pilot with Amazon and significantly higher inventory liquidation to third parties. Adjusted EBITDA was $4.2 million lower in Q3 2023 versus Q2 2023, largely due to seasonally higher revenue share receipts, which peak in Q1 and Q3. Free cash flow for the nine months ending October 31st, 2023, was negative $47.3 million versus negative $69.9 million for the same period in fiscal year 22. We continue to expect significant improvement in cash consumption in fiscal year 23 versus last year.

營運費用年減約 11%，主要是由於我們 2022 年重組計畫的有利影響、我們今年採取的進一步固定成本行動以及行銷支出的降低。總營運費用（包括技術、行銷、一般行政費用和股票薪酬）約佔收入的 60%，而去年約為收入的 63%。本季調整後 EBITDA 為 350 萬美元，佔營收的 4.8%，而前一年為 660 萬美元，佔營收的 8.5%。 2022 年第三季度，由於與亞馬遜推出獨家設計試點以及對第三方的庫存清算顯著增加，調整後 EBITDA 受益於 460 萬美元。 2023 年第三季調整後 EBITDA 比 2023 年第二季低 420 萬美元，主要是由於季節性收入分成收入增加（第一季和第三季達到高峰）。截至2023 年10 月31 日的九個月的自由現金流為負4,730 萬美元，而第22 財年同期為負6,990 萬美元。我們仍預期第23 財年的現金消耗與去年相比將顯現著改善。

Let me now turn to guidance. We are maintaining revenue guidance for fiscal year 23 and expect that FY 23 revenue will be at or above fiscal year 22 revenue of $296.4 million, with Q4 '23 revenue at or above $74 million. We are also maintaining our fiscal year '23 adjusted EBITDA margin guidance of 7% to 8% of revenue. We expect Q4 23 adjusted non-GAAP EBITDA margin to be at or above 7% of revenue, we are no longer providing fiscal year 23 free cash flow guidance. While we still expect significant improvement in cash consumption versus fiscal 22, as evidenced by year-to-date results, we are focused on ensuring that fiscal year 24, it's free cash flow breakeven. We anticipate incurring cash expenditure in Q4 in preparation towards meeting those goals. As an example, we expect to incur capital and operating costs during Q4 to improve warehouse operations that we expect will drive savings in fiscal year 24. We think these are rational business decisions and a part of our fiscal year 24 free cash flow breakeven roadmap. While this year has had its challenges, we believe we are making meaningful progress. Our balance sheet actions have been designed to provide us with greater financial flexibility. Our inventory strategy has yielded results and customer retention has improved. We are also making further improvements to our fixed cost structure during the third quarter. Finally, we are working to bring Rent the Runway to free cash flow breakeven for fiscal year 24. We will now take your questions.

現在讓我談談指引。我們維持第 23 財年的營收指引，預期 23 財年的營收將等於或高於第 22 財年的營收 2.964 億美元，23 年第 4 季的營收將等於或高於 7,400 萬美元。我們也維持 23 財年調整後 EBITDA 利潤率指引，佔營收的 7% 至 8%。我們預期 23 年第 4 季調整後的非 GAAP EBITDA 利潤率將達到或高於營收的 7%，我們不再提供 23 財年自由現金流指引。雖然我們仍然預期現金消耗與 22 財年相比將出現顯著改善，正如年初至今的業績所證明的那樣，但我們的重點是確保 24 財年實現自由現金流盈虧平衡。我們預計第四季會產生現金支出，為實現這些目標做準備。例如，我們預計第四季度將產生資本和營運成本，以改善倉庫運營，我們預計這將在第24 財年實現節省。我們認為這些是合理的業務決策，也是我們第24 財年自由現金流盈虧平衡路線圖的一部分。儘管今年面臨挑戰，但我們相信我們正在取得有意義的進展。我們的資產負債表行動旨在為我們提供更大的財務彈性。我們的庫存策略已取得成果，客戶保留率也有所提高。第三季我們也將進一步改善固定成本結構。最後，我們正在努力使 Rent the Runway 在第 24 財年實現自由現金流盈虧平衡。我們現在將回答您的問題。

Yes, thank you.

是的，謝謝。

We will now be conducting a question and answers. If you would like to ask a question, please press star one. Confirmation tone will indicate that your line is in the question queue in the interest of time, we ask that you limit to one question and one follow-up. You may press star two, if you'd like to move your question from For participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. One moment, please while we poll for questions.

我們現在將進行問答。如果您想提問，請按星號一。確認音將表明出於時間考慮，您的線路已在問題佇列中，我們要求您限制為一個問題和一個後續問題。如果您想將問題從「對於使用揚聲器裝置的參與者」移出，您可以按星號二。按星號鍵之前可能需要拿起聽筒。請稍等一下，我們進行投票提問。

Our first question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question.

我們的第一個問題來自 Telsey Advisory Group 的 Dana Telsey。請繼續你的問題。

Hi, good afternoon, everyone. On the debt restructuring that you announced in the amended facility and the amended facility as you think about the go forward? I mean, obviously you have six full quarters of beginning with the fourth quarter of 23. How do you see the continuation of the debt. How do you think that he's positioned as we go through the next four quarters? And given the expense structure of the business, which you've we are managing and looking to reduce the costs, what should we be seeing, whether it's for from fulfillment expense and the cost structure that you mentioned that it sounds like still has opportunity to address in the face of the enhancements that you're making to the model, like with the luxury board and looking to improve active subscribers.

嗨，大家下午好。關於您在修訂後的融資中宣布的債務重組以及您對未來的考慮？我的意思是，很明顯，從 23 年第四季開始，你有整整六個季度。你如何看待債務的延續。您認為在接下來的四個季度中他的位置如何？考慮到我們正在管理並尋求降低成本的業務費用結構，我們應該看到什麼，無論是履行費用還是您提到的成本結構，聽起來仍然有機會面對您對該模型所做的增強，例如豪華版並希望提高活躍訂閱者，請解決此問題。

Thank you.

謝謝。

Dana. Thanks so much for the question. So first, of all, we think that focus on the business model in general has been tremendously clouded by the fact that we did have when we do have this debt now by essentially reducing all interest or eliminating all interest for the next six quarters by reducing the minimum liquidity covenant. What it does is it allows the business to drive to breakeven next year it allows us to be in a position where we can generate significant free cash flow profitability before the debt is due, which is around three years from now and in. So doing really show the market, the strength of this business model. We have high margins. We continue to improve those margins. We have high flow-through margins and we are excited to deliver a breakeven business in 2024 and are really encouraged by the fact that the growth, you know, flatness that we've experienced this year that we were able to identify the problem that we were able to start to make significant corrections to that problem in terms of our depth strategy in the second half and that we're really seeing green shoots in the data that give us confidence going into next year?

達納。非常感謝您的提問。因此，首先，我們認為，對整體商業模式的關注已經被這樣一個事實所蒙蔽：當我們現在確實有這筆債務時，我們實際上會透過減少所有利息或透過減少未來六個季度的所有利息來消除所有利息。最低流動性契約。它的作用是讓業務在明年實現盈虧平衡，讓我們能夠在債務到期前（即從現在起大約三年後）產生可觀的自由現金流盈利能力。向市場展示這種商業模式的實力。我們的利潤率很高。我們繼續提高這些利潤。我們擁有很高的流通利潤率，我們很高興能夠在 2024 年實現盈虧平衡業務，並且我們今年經歷的增長平穩性讓我們感到非常鼓舞，我們能夠識別我們需要解決的問題。我們能夠在下半年根據我們的深度策略開始對這個問題做出重大修正，而我們確實在數據中看到了萌芽，這讓我們對明年充滿信心？

Yes, Dana, I would say that the only things I would add here are number one, what's your takeaway from the debt modifications we've announced. The first thing is that we actually have a very supportive lending partner who understands the business and is willing to work with us. That's important.

是的，達納，我想說的是，我在這裡唯一要補充的是第一件事，即您從我們宣布的債務修改中得到的收穫是什麼。首先，我們實際上有一個非常支持我們的貸款合作夥伴，他們了解業務並願意與我們合作。這很重要。

The second thing is the debt doesn't mature until October of 2026. And what we're focused on what's in our control is to deliver the best business results possible and to prove the strength of the business of the market. And I think we've taken, as Jen outlined, very important steps along this path this year.

第二件事是債務要到 2026 年 10 月才會到期。我們所關注的是我們控制範圍內的事情，即交付盡可能最佳的業務成果，並證明市場業務的實力。我認為，正如 Jen 所概述的那樣，今年我們已經沿著這條道路採取了非常重要的步驟。

Got it.

知道了。

And just gen health of the consumer what are you what are you seeing as we go into this holiday season, that's the same or different than that?

就消費者的基因健康而言，當我們進入這個假期時，您看到了什麼，與此相同還是不同？

Yes.

是的。

Well, one of the most encouraging things that we're seeing in our business is this significant increase year over year in workwear, and we started to see that last quarter. We mentioned it, but it has continued to accelerate, which to us is really just what the pre-COVID Rent the Runway behavior was, where women utilized our service throughout the year to get dressed for work in addition to her everyday life and special occasions. So for us, we feel encouraged by the fact that behaviors that our customers are using now feel more normalized to a pre-COVID kind of set of behaviors. We're also seeing that we've continued to the nice impact to improved retention. We continue to see, you know, good at acquisition despite the macro environment and the fact that we've significantly decreased both our marketing spend and our promotions over the last few quarters because we didn't want to intentionally bring people into an experience where the inventory depth was not there. And we feel that we feel very encouraged by the results that we're seeing thus far.

嗯，我們在業務中看到的最令人鼓舞的事情之一是工作服的同比大幅增長，我們從上個季度開始看到這一點。我們提到過這一點，但它還在繼續加速，對我們來說，這實際上就是新冠疫情之前的“租用跑道”行為，除了日常生活和特殊場合外，女性全年都利用我們的服務為工作著裝。因此，對我們來說，我們感到鼓舞的是，我們的客戶現在使用的行為已經更加規範化為新冠疫情之前的一系列行為。我們也看到，我們繼續對提高保留率產生良好影響。儘管宏觀環境不佳，而且我們在過去幾季大幅減少了行銷支出和促銷活動，但我們仍然擅長收購，因為我們不想故意讓人們體驗到庫存深度不存在。我們對迄今為止所看到的結果感到非常鼓舞。

I think a couple of other encouraging signs that we've seen that give us some confidence that the health of our customer is strong. Number one, as we've improved the inventory assortment, we've actually seen them engage with the inventory more. So as Jen pointed out, we've started to see improvements in our add-on rate, people are willing to pay more for inventory. The like The second thing that Jen mentioned in her remarks is we've actually improved them. I've seen encouraging signs in terms of our ability to sell inventory to our customers in a profitable way. So I think these are just indications that the customer remains healthy. Retention is improving, very easy with the inventory in a way that benefits us and recognizing the value that we provide food.

我認為我們看到的其他一些令人鼓舞的跡象讓我們對客戶的健康狀況充滿信心。第一，隨著我們改進庫存分類，我們實際上看到他們更多地參與庫存。因此，正如 Jen 指出的那樣，我們已經開始看到附加率有所提高，人們願意為庫存支付更多費用。 Jen 在她的演講中提到的第二件事是我們實際上已經改進了它們。在我們以盈利的方式向客戶銷售庫存的能力方面，我看到了令人鼓舞的跡象。所以我認為這些只是客戶保持健康的跡象。保留率正在提高，這很容易以一種對我們有利並認識到我們提供食物的價值的方式管理庫存。

Thank you.

謝謝。

Yes.

是的。

Thank you.

謝謝。

Our next question comes from the line of Eric Sheridan with Goldman Sachs. Please proceed with your question.

我們的下一個問題來自高盛的埃里克·謝裡登（Eric Sheridan）。請繼續你的問題。

Thanks so much for taking the questions. Two, if I could. Just coming back to the inventory issue, is there a way that you could put a quantification or maybe a duration around what's left in terms of getting the inventory issue to where you want it to be to invest back in the flywheel for the business as we get into 2024, that be number one. And as you have this period over the next six quarters with savings on the capital structure, what are the priorities to invest those savings back in the business to, again capitalize on this 2024 and beyond our potential for momentum.

非常感謝您提出問題。兩個，如果可以的話。回到庫存問題，有沒有一種方法可以對剩餘的庫存進行量化或持續時間，以使庫存問題達到您想要的水平，以便投資回業務飛輪，因為我們進入2024年，那就是第一。由於在接下來的六個季度中您將在資本結構上節省資金，因此將這些節省的資金重新投入到業務中的優先事項是什麼，以再次利用 2024 年並超越我們的發展潛力。

Thank you.

謝謝。

So one of the things that we shared last quarter that we're reiterating is that the improvements that we made in the back half of this year where we increased jobs by 1.7 times versus the first half of this year was really our first step towards a much broader depth strategy in 2024. So as a reminder, the first half of 2020 for those orders have already been placed. So that's why we had insight into the almost 50% that's coming from pay-for-performance. That's why we can tell you that the depth strategy in the first half of next year is already more robust than it was in the back half of this year. So we've seen that across all cohorts. Loyalty rates have improved markedly and in particular, they've improved and significantly amongst folks that have been with us for 90 days plus. And we showed that as of the end of Q3 and those that loyalty rate is kind of 15% better than last year, which is really a significant increase for the segment. That's the majority of our customer base of our subscriber base kind of thus far. So our strategy is to continue to push on data to continue to bias selection that resonates more with who our core customer is, who is the more aspirational woman in her 30s and 40s, who is professionals who is educated. And we see that it's not just about the depth of the fact that the selection is resonating more than before hearts are up 30%. She's buying more inventory issues, adding more inventory into her card, which is obviously increasing our RPUs again and our margins. So we feel really good about the continuation of this strategy leading to even higher rates of loyalty, but even more so we feel that the business is poised to really step on the gas pedal as it relates to marketing and growth. And acquisition of this is the customer experience based on improved net promoter scores that are some of the highest net promoter scores we've seen since pre-COVID.

因此，我們在上個季度分享並重申的一件事是，我們在今年下半年所做的改進，即與今年上半年相比，我們增加了 1.7 倍的工作崗位，這實際上是我們邁向2024 年更廣泛的深度策略。提醒一下，2020 年上半年這些訂單已經下達。這就是為什麼我們深入了解了近 50% 的薪酬來自績效薪酬。所以我們可以告訴大家，明年上半年的深度策略已經比今年下半年更穩健了。所以我們在所有群體中都看到了這一點。忠誠度顯著提高，特別是在與我們合作 90 天以上的人中，忠誠度顯著提高。我們發現，截至第三季末，忠誠度比去年提高了 15%，這對該細分市場來說確實是一個顯著的成長。到目前為止，這是我們訂戶群中的大部分客戶群。因此，我們的策略是繼續推動數據，繼續偏向選擇，使其與我們的核心客戶產生更多共鳴，他們是 30 多歲和 40 多歲的更有抱負的女性，他們是受過教育的專業人士。我們發現，這不僅僅與選擇的深度有關，因為該選擇比以前產生了更多的共鳴，人心上升了 30%。她購買了更多庫存，在她的卡中添加了更多庫存，這顯然再次增加了我們的 RPU 和利潤。因此，我們對繼續實施這項策略會帶來更高的忠誠度感到非常滿意，但更重要的是，我們認為該業務準備好真正踩下油門，因為它涉及行銷和成長。獲得這一點是基於改進的淨推薦值的客戶體驗，這是自新冠疫情爆發以來我們所見過的最高的淨推薦值。

But we feel excited about bringing new customers into what was your second question just generally over the next six quarters, how do you think about the priorities to reinvest the savings from the capital structure changes, how to think about the priorities there?

但我們很高興能在接下來的六個季度讓新客戶了解您的第二個問題，您如何考慮將資本結構變化帶來的節省進行再投資的優先事項，如何考慮那裡的優先事項？

What I would say were very clear about our priorities for fiscal 24 and the priorities of fiscal 24 and number one to ensure that we bring this business to free cash flow breakeven by that is it non-negotiable really important initiative for us next year?

我想說的是，我們對24 財年的優先事項以及24 財年的優先事項和第一要務非常清楚，以確保我們使這項業務實現自由現金流盈虧平衡，這對我們明年來說是不可談判的真正重要措施嗎？

So that's the first thing the second thing I would say is that if you actually look at fiscal 23, we had done for them given the results and so on some of these things perhaps on the get lost sometimes. But we have done a huge amount to invest in the customer experience this year, all the way from rolling out a program that is tailor-made for individual prescribers and styling one-on-one interaction. I mean, these are things we never had before, but now are available to everyone who joined the program. We have invested $75 million in inventory capital this year are now our customers have access to amongst the newest inventory they've had in a long time, the freshest inventory inventory they love and at high in-stock rates. I think if you if you think about our mindset and think about investment in the customer, yes, it's true that the modifications and the debt will free up some resources but really we have never stopped investing in the customer experience. And I think that is going to continue where we will see additional focus next year in addition to obviously getting the cost structure, right? And making sure we breakeven on a free cash flow basis is on the growth side, really turning our attention to making sure more people and more customers experience that program and we drive excitement amongst the potential customers that have yet to drive rental rates.

所以，這是我要說的第一件事，第二件事是，如果你真正看一下23 財年，我們已經為他們做了一些事情，考慮到結果等等，其中一些事情有時可能會迷失。但今年我們在客戶體驗方面投入了大量資金，從推出為個人處方者量身定制的計劃到設計一對一的互動。我的意思是，這些是我們以前從未有過的東西，但現在加入該計劃的每個人都可以獲得。今年我們已投資 7500 萬美元的庫存資本，現在我們的客戶可以以高庫存率獲得他們長期以來擁有的最新庫存、他們喜歡的最新鮮的庫存。我想如果你考慮我們的心態並考慮對客戶的投資，是的，修改和債務確實會釋放一些資源，但實際上我們從未停止對客戶體驗的投資。我認為除了明顯的成本結構之外，明年我們還會看到更多的關注點，這將繼續下去，對嗎？確保我們在自由現金流的基礎上實現盈虧平衡是在成長方面，真正將我們的注意力轉向確保更多的人和更多的客戶體驗該計劃，並且我們在尚未提高租金率的潛在客戶中激發興奮。

I think the strength of our brand relationships as well as helping us to deliver incrementally more value to the customer month over month. I mean, one example of that is the launch that we did today of luxury evening wear on our platform, which not only is the first launch of luxury evening wear for us, but it's the first time that many of these brands have ever participated in rental before we're starting to rent. You know, gowns and dresses on our site that retail for up to CAD8,000 MSRP.s at Reed at rental price points that are it's quite accessible and affordable and so this is really continuing to offer our customers even more and doing it oftentimes on a pay-for-performance model with the vendors that we're working with so that everyone really benefits

我認為我們品牌關係的實力以及幫助我們逐月為客戶提供更多價值。我的意思是，一個例子是我們今天在我們的平台上推出了奢華晚裝，這不僅是我們第一次推出奢華晚裝，而且也是許多這些品牌第一次參與在我們開始出租之前先出租。您知道，我們網站上的禮服和連身裙在 Reed 的建議零售價高達 CAD8,000 加元，租賃價格非常方便且實惠，因此這確實會繼續為我們的客戶提供更多服務，並且經常這樣做與我們合作的供應商採用績效付費的模式，以便每個人都能真正受益

Thanks for the detail.

謝謝你的詳細資料。

Thank you. Our next question comes from the line of Ike Boruchow with Wells Fargo. Please proceed with your call.

謝謝。我們的下一個問題來自艾克·博魯喬 (Ike Boruchow) 與富國銀行 (Wells Fargo) 的對話。請繼續您的通話。

Hi, everyone. Thank you for taking my question. This is Julianna on for Ike. And just one question. First on how you're thinking of G&A marketing and tech spending efficiencies moving forward. And I mentioned about 200 basis points and efficiencies there this quarter. So can you give us more color on that?

大家好。感謝您回答我的問題。這是艾克的朱莉安娜。只有一個問題。首先是關於您如何看待未來的一般行政費用行銷和技術支出效率。我提到了本季大約 200 個基點和效率。那你能給我們更多的資訊嗎？

So I think the you obviously called out two numbers on the in the prepared remarks, the first is we saved $27 million in fixed costs as a result of the Q2 22 restructuring. So far in the third quarter, we enacted further changes primarily affecting the technology line that will ignite we expect will save another $5 million on an annualized basis starting the fourth quarter. And I think the message that we're sending to you is it's not we're continuing to focus on the cost structure. We continue to look at every spend no matter how small it is and making sure that we bring that fixed cost structure to a level where if we don't rely, we don't want to rely on any sales growth. Can we get this business to breakeven in fiscal 24? So that is our aim and we'll make sure that the cost structure reflects those ambitious goals.

因此，我認為您在準備好的發言中顯然提到了兩個數字，第一個是我們透過 22 年第二季的重組節省了 2700 萬美元的固定成本。到目前為止，在第三季度，我們實施了進一步的變革，主要影響將點燃的技術線，我們預計從第四季度開始，按年化計算將再節省 500 萬美元。我認為我們向您傳達的訊息是我們不會繼續關注成本結構。我們繼續關注每一筆支出，無論其金額有多大，並確保我們將固定成本結構提高到一個水平，如果我們不依賴，我們就不想依賴任何銷售成長。我們能讓這項業務在 24 財年達到損益兩平嗎？這就是我們的目標，我們將確保成本結構反映這些雄心勃勃的目標。

Great. Thank you. And then just one follow-up.

偉大的。謝謝。然後只有一個後續行動。

Are there any thoughts on subscription pricing taking place there or maybe tying that into if there's any updates on market share, how you're feeling about your position in the French market?

對於那裡的訂閱定價有什麼想法嗎？或者可能將其與市場份額的任何更新聯繫起來，您對自己在法國市場的地位有何看法？

Overall, we think our subscription pricing is in a really good place. Of course, as Sid mentioned, our goal is to continuously be offering our customers more and more value quarter over quarter. We started this year with that philosophy in mind by launching an extra item for all of our customers, really giving them 25% more value for the same price. We've followed that up by now, giving them free concierge and free styling. The attack now expanding the MSRPs of our selections or selection has continued to become more high end over time, even as they're getting more items. So for us right now, it is about delivering a better experience and more aspirational and premium experience to our user base. It is not going to be about increasing price.

總的來說，我們認為我們的訂閱定價非常好。當然，正如 Sid 所提到的，我們的目標是逐季持續為客戶提供越來越多的價值。今年開始，我們秉承這一理念，為所有客戶推出了額外產品，真正以相同的價格為他們提供了 25% 的額外價值。我們現在已經跟進了，為他們提供免費禮賓服務和免費造型服務。現在，隨著時間的推移，擴大我們的選擇或選擇的建議零售價的攻擊繼續變得更加高端，即使他們獲得了更多的物品。所以對我們來說，現在的重點是為我們的用戶群提供更好的體驗、更令人嚮往的優質體驗。這不會是為了提高價格。

And I think the one important clarification from my the answer to the earlier question is that on marketing, we do not at this point expect to have any changes in marketing spend for fiscal 24. So we do not expect to reduce our fixed cost reduction plans do not involve reductions in marketing spend. In fact, as we pointed out earlier, we want to expose more people to a significantly improved experience in fiscal 24.

我認為我對前一問題的回答中的一個重要澄清是，在行銷方面，我們目前預計 24 財年的行銷支出不會有任何變化。因此，我們預計不會減少固定成本削減計劃不涉及行銷支出的減少。事實上，正如我們之前指出的，我們希望讓更多人在 24 財年獲得顯著改善的體驗。

Got it. Thank you so much.

知道了。太感謝了。

Thank you. Our next question comes from the line of Lauren Schenk, Morgan Stanley. Please proceed. With your question.

謝謝。我們的下一個問題來自摩根士丹利的勞倫·申克（Lauren Schenk）。請繼續。帶著你的問題。

Hey, thanks for taking my question. This is Nathan feather on for Lauren. On the purchase rate for resale being up 50% year over year, what has really been the key drivers moving that up? And then any plans or how you're thinking about driving that up further in fiscal 24? And then as you transition to greater depth across the inventory base, how are you using resale as a method, if at all to kind of trim that existing lower dept inventory? Thank you.

嘿，謝謝你回答我的問題。這是內森為勞倫辯護的。轉售購買率年增 50%，推動這一成長的真正關鍵因素是什麼？那麼您有什麼計劃或如何考慮在 24 財年進一步推動這一目標？然後，當您過渡到更深入的庫存基礎時，您如何使用轉售作為一種方法（如果有的話）來削減現有的較低部門庫存？謝謝。

And so number one, we've seen a lot of success. But as the selection has become more attractive to the user demand to purchase, the inventory has gone up. Number two, we've gotten even more sophisticated with our pricing algorithm. So we know exactly how to price the inventory so that we're still selling it profitably, but doing it in a way that is compelling to our user base.

第一，我們已經看到了很多成功。但隨著選擇對用戶購買需求的吸引力越來越大，庫存也隨之上升。第二，我們的定價演算法變得更加複雜。因此，我們確切地知道如何對庫存定價，以便我們仍然可以有利可圖地銷售它，但以對我們的用戶群有吸引力的方式進行。

I would say that both of those two improvements are within it, a strategic channel that is really unique to a subscription or rental model. You think about other companies that are selling items that have been worn before. They don't have the advantage of the fact that our customers always have at least five things at home in their closets already. They've already worn them. They've already experienced them. They've already fallen in love with them. So if we're able to price it at the right price point, both for them and for us, there's a much higher likelihood that they will convert on that inventory.

我想說，這兩項改進都在其中，這是訂閱或租賃模式真正獨特的策略管道。您想想其他銷售以前穿過的商品的公司。他們沒有這樣的優勢，就是在我們的顧客的衣櫃裡家裡總是至少有五件東西。他們已經穿過了。他們已經經歷過了。他們已經愛上他們了。因此，如果我們能夠為他們和我們以正確的價格點定價，那麼他們轉換該庫存的可能性就會更高。

The other thing that we started to do, quite honestly, I started to tell customers that this was a benefit of their program. So one of the reasons why for some of our customers and might sign up for a subscription is that they're busy. They're professional women, they have kids. They have other things going on. And this is an easier way for them to kind of shop because they can trial things before they buy it. So just by nature of positioning this as a value that of the program is also another benefit.

老實說，我們開始做的另一件事是，我開始告訴客戶這是他們計劃的一個好處。因此，對於我們的一些客戶來說，他們可能註冊訂閱的原因之一是他們很忙。她們都是職業女性，都有孩子。他們還有其他事情在發生。這對他們來說是一種更簡單的購物方式，因為他們可以在購買之前先試用一下。因此，從本質上講，將其定位為該計劃的價值也是另一個好處。

The last thing I'll say is that in the past, we used our prior to buy channel primarily around much older inventory so inventory that was in our base for two or three or four years and kind of when they had it at home, we have started to really build the muscle around using current season inventory as part of our tried to buy and building replenishment businesses around that inventory. So really understanding that our customers might want to buy, for example, denim from us and as opposed to just selling it to them and depleting the amount of denim we have on our platform instead of just replenishing that denim with our partners. So that we're both providing a customer value, making money off of the inventory and not depleting the supply of important categories.

我要說的最後一件事是，在過去，我們主要使用我們的預購管道，主要圍繞著更舊的庫存，因此庫存在我們的基地中已經存在了兩三年或四年，當他們在家裡擁有當它時，我們作為我們嘗試圍繞該庫存購買和建立補貨業務的一部分，我們已經開始真正圍繞使用當季庫存建立實力。因此，真正理解我們的客戶可能想從我們這裡購買牛仔布，而不是僅僅將其出售給他們並耗盡我們平台上的牛仔布數量，而不是僅僅與我們的合作夥伴補充牛仔布。這樣我們既可以提供客戶價值，從庫存中賺錢，又不會耗盡重要類別的供應。

And I would say that three things that we think about when we think about retail. First is we have now this quarter the past quarter actually become quite surgical at looking at category by category brand by brand fine to understand age of inventory, what we can sell that inventory for how much that matters to our customers and thought through and utilizing some of those lessons to actually drive some good decisions in terms of what we can sell to. Second thing is we have actually made product enhancements and to the customer experience and to the technology backbone here where we can target specific items that customers have at home and convinced them to tie that item and perhaps buy it if they like it.

我想說的是，當我們考慮零售業時，我們會考慮三件事。首先，我們現在這個季度和上個季度實際上變得非常外科手術，逐個類別、逐個品牌地仔細查看庫存的年齡，我們可以以多少價格出售該庫存，這對我們的客戶來說很重要，並思考和利用一些這些經驗教訓實際上可以推動我們在銷售目標方面做出一些明智的決定。第二件事是，我們實際上已經對產品、客戶體驗和技術支柱進行了改進，我們可以針對客戶在家中擁有的特定物品，並說服他們捆綁該物品，如果他們喜歡的話，也許可以購買。

And then the third thing is you got to remember all of it this year has been about making sure that the inventory expense for customers and the in-stock rate is in good shape. So what we want to also make sure is we protect that. So all of this increase in resale, it's been essentially dovetails at the same time with a real protection of the in-stock rates that our customers are experiencing. And so we are working on a replenishment type system that ensures that we can not only sell items that customers want improved loyalty for them, but also, of course, maintain the inventory experience that they are now becoming accustomed.

第三件事是你必須記住今年所有的事情都是為了確保客戶的庫存費用和庫存率處於良好狀態。因此，我們也想確保保護這一點。因此，所有這些轉售的增加基本上同時與我們的客戶所經歷的庫存率的真正保護相吻合。因此，我們正在開發一種補貨類型的系統，確保我們不僅可以銷售客戶希望提高忠誠度的商品，當然還可以維持他們現在已經習慣的庫存體驗。

Thank you.

謝謝。

Our next question comes from the line of Andrew Boone with JMP Securities. Please proceed with your question.

我們的下一個問題來自 JMP 證券的安德魯·布恩 (Andrew Boone)。請繼續你的問題。

And just a second question. I wanted to ask about promotions, what is the kind of us and really the question you're asking, are you seeing, Andrew, we can hear you.

還有第二個問題。我想問有關促銷的問題，我們是什麼樣的人，您真正要問的問題是，您看到了嗎，安德魯，我們能聽到您的聲音。

Can you can you repeat what you were saying I wanted to ask about learnings for the promotions over the last quarter and how we should think about that affiliate growth.

您能重複一下您所說的嗎？我想詢問有關上個季度促銷活動的經驗教訓以及我們應該如何考慮聯盟行銷成長。

Yes, we couldn't quite hear you. But if I understand your question correctly. It's to do with how we thinking about promotions going forward. Is that right and learnings from the last quarter?

是的，我們聽不太清楚。但如果我正確理解你的問題。這與我們如何思考未來的促銷活動有關。這是正確的嗎？上個季度的經驗教訓是否正確？

Earnings from 20?

20歲起的收入？

Yes. I think what we have seen is. So if you look at the big changes we've made, right, we used to have promotions that span several months, and we have shown those last quarter to essentially a one month promotion. We've changed some of the promotional pricing for new customers that enter into the program. And and what we have found is, you know, a fairly encouraging response in terms of our ability to attract customers at price points that don't involve giving away three or four months' worth of, as you know, pricing for new customers. Obviously, these are all subject to change. We may decide to to bring more people into the program as the experience improves and so on.

是的。我想我們所看到的是。因此，如果你看看我們所做的重大改變，對吧，我們曾經有跨越幾個月的促銷活動，而我們在上個季度展示的促銷活動基本上是一個月的促銷活動。我們針對加入該計劃的新客戶更改了一些促銷價格。您知道，我們發現，就我們以價格點吸引客戶的能力而言，這是一個相當令人鼓舞的反應，而無需為新客戶提供三或四個月的定價。顯然，這些都可能會改變。隨著體驗的改善等等，我們可能會決定讓更多的人加入該計劃。

But I think that what we have learned is that it isn't essential to be as promotional as we once were, as an example, in this Black Friday, Cyber Monday, we were far less promotional than Black Friday, Cyber Monday. You know in previous years. So as an example, like our promotion this year ran for 15 fewer days than last year. We spent 40% less promo dollars than last year, and we are acquiring customers in a more profitable way. Now the fact that loyalty rates are up across all of our cohorts, meaning that LTV is up and our margins are improving it means that we have also more room to play around with promotions at different points during the year. So we're going to continue to experiment. But to Sid's point, we do not believe that we have to be as promotional as we won four.

但我認為我們學到的是，沒有必要像以前那樣進行促銷，例如，在這個黑色星期五、網絡星期一，我們的促銷活動遠不如黑色星期五、網絡星期一。前幾年你就知道了。舉個例子，我們今年的促銷活動比去年少了 15 天。我們的促銷費用比去年減少了 40%，我們正在以更有利可圖的方式獲取客戶。現在，我們所有群體的忠誠度都在上升，這意味著生命週期價值正在上升，我們的利潤率正在提高，這意味著我們在一年中的不同時間點有更多的促銷空間。所以我們將繼續進行實驗。但就席德的觀點而言，我們並不認為我們必須像贏得四場比賽那樣宣傳。

Thank you.

謝謝。

Thank you.

謝謝。

Our next question comes from the line of Ross Sandler with Barclays.

我們的下一個問題來自羅斯桑德勒與巴克萊銀行的對話。

Please proceed with your question or third question on the gross margin. So your pro forma margin decline, the gross margin was down a little bit from the rental depreciation upticks. So that just from the overall aggregate on rental product purchases being higher last couple of quarters on the inventory replenishment or was there some mix shift back to wholesale or some kind of channel mix thing we should be aware about? And I guess what's the outlook for gross margin for next year?

請繼續回答您的問題或關於毛利率的第三個問題。因此，預計利潤率下降，毛利率因租金折舊上升而略有下降。因此，僅從過去幾季的庫存補充來看，租賃產品採購的總體總量較高，或者我們是否應該注意一些混合轉向批發或某種通路混合的情況？我猜明年的毛利率前景如何？

And then the second question for Jan picked up kind of anecdotally in some of the surveys that you guys are looking for experimenting a little bit little lower price points. Could you just talk about what you're seeing there on? Is that part of the strategy.

然後，Jan 的第二個問題在一些調查中出現了一些軼事，你們正在尋找嘗試稍微低一點的價格點。您能談談您在那裡看到的情況嗎？這是戰略的一部分嗎？

Thank you.

謝謝。

On the first question. So yes, you're absolutely right. The gross margin decline this quarter really reflects a much higher level of inventory spend over the last couple of quarters. And certainly relative to last year, we're not giving specific gross margin guidance for fiscal 24, but I will say and as you as we pointed out several times in this call, we do expect to be free cash flow breakeven in fiscal year 24, and we'll obviously one part of that is our inventory spend is expected to be considerably lower than it is in fiscal 23 as we really adjusted all of the debt issues and fix the debt issues that we needed to address graph, I'm not sure what you mean about lower price points because the MSRPs of our rental products are actually going up, meaning we're renting more aspirational, higher end product, even though the cost of those products are going down because of the fan, either discounts we get with our vendors or the pay-for-performance deals that we have with them.

關於第一個問題。所以是的，你是完全正確的。本季毛利率的下降實際上反映了過去幾個季度庫存支出的要高得多。當然，相對於去年，我們沒有給出24 財年的具體毛利率指導，但我要說的是，正如我們在本次電話會議中多次指出的那樣，我們確實預計24 財年的自由現金流將實現盈虧平衡顯然，其中一部分是我們的庫存支出預計將大大低於 23 財年的水平，因為我們確實調整了所有債務問題並解決了我們需要解決的債務問題圖表，我是不確定您所說的較低價格點是什麼意思，因為我們租賃產品的建議零售價實際上正在上漲，這意味著我們正在租賃更多理想的高端產品，儘管這些產品的成本由於風扇或折扣而下降我們與供應商達成或與他們達成按績效付費的協議。

So were you talking about price points of inventory or something else here that inventory on it might just be anecdotal but on are there is there any new strategy around lower priced inventory? It sounds like now, but that's right.

那麼，您是在談論庫存的價格點還是其他東西，庫存可能只是軼事，但圍繞低價庫存是否有任何新策略？聽起來就像現在，但確實如此。

Now like if you track our inventory over the last four or five years, the MSRPs have gone up every year, meaning the inventory across all of our categories is actually getting more aspirational. Our brands are better, they're more premium. And while there are some growing competitors in the space, there's very little brand overlap between rent, the runway and fashion rental competitors we really hold the kind of premium space in the market with the hundreds of designer brands that we have. And we kind of further buttress that today with the launch of luxury.

現在，如果你追蹤我們過去四到五年的庫存，建議零售價每年都在上漲，這意味著我們所有類別的庫存實際上變得更加理想。我們的品牌更好，更優質。儘管該領域的競爭對手不斷增多，但租賃、跑道和時裝租賃競爭對手之間的品牌重疊很少，我們擁有數百個設計師品牌，確實在市場上佔據著優質空間。今天，我們推出了奢侈品牌，進一步鞏固了這一點。

And I think the last thing that clarify that, I think I didn't mention it to your to your plane to answer your question around is the mix changing at all the mix is not changing towards wholesale. In fact, it's going the other way. As Jen mentioned in our remarks, in the first half of fiscal 24, we expect actually almost 50% of our total inventory buy to come on consignment or paper.

我想最後要澄清的是，我想我沒有向你的飛機提到這一點來回答你的問題，混合的變化根本沒有改變為批發。事實上，情況恰恰相反。正如 Jen 在我們的演講中提到的，在 24 財年上半年，我們預計實際上幾乎 50% 的總庫存採購將透過寄售或紙本形式進行。

And then I'll just kind of remind everyone that when we IPO'd the business and two years ago, we stated that over the medium to long term that we would expect a third of inventory to come in via paper performance. And we're already announcing that close to 50% of the inventory in the first half of 24 is coming in via pay-for-performance, meaning we do not pay for it upfront, and we only revenue share on the performance. This is no risk inventory for us. So we are really beating the goal that we set out in basically the most important category in the most important and bucket of the business.

然後我想提醒大家，兩年前我們首次公開募股時，我們表示，從中長期來看，我們預計三分之一的庫存將透過帳面業績獲得。我們已經宣布，24 月上半年接近 50% 的庫存是透過績效付費的方式進來的，這意味著我們不預付費用，我們只按績效分享收入。這對我們來說不是風險庫存。因此，我們確實正在實現我們在最重要和業務領域中最重要的類別中設定的目標。

Thank you.

謝謝。

Thank you. There are no further questions at this time, and I would like to turn the call back over to management any closing comments.

謝謝。目前沒有其他問題，我想將通話轉回給管理層任何結束意見。

So thanks for joining us today. we were really happy to have the opportunity to really transparently address what we think are the real elephant in the room as it relates to our business, and we are excited about this constructive relationship we have with our with our lender about our debt restructuring, we think that it gives the business opportunity to breakeven to become a profitable business to prove out this model to the market. We are very excited about the path ahead and the data that we're seeing in the business and looking forward to talking to you more about it concludes today's teleconference.

感謝您今天加入我們。我們真的很高興有機會真正透明地解決我們認為與我們業務相關的真正的問題，我們對我們與貸方在債務重組方面建立的建設性關係感到興奮，我們認為這為企業提供了實現盈虧平衡、成為獲利企業的機會，以向市場證明這種模式。我們對未來的道路和我們在業務中看到的數據感到非常興奮，並期待與您更多地討論今天的電話會議。

You may now disconnect your lines at this time. Thank you for your participation.

此時您可以斷開線路。感謝您的參與。