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Revolve Group Inc (NYSE:RVLV)
Q4 2020 Earnings Call
Feb 24, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I would like to welcome everyone to Revolve's Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions]

At this time, I'd like to turn the conference over to Erik Randerson, Vice President of Investor Relations at Revolve. Thank you. You may begin.

Erik Randerson -- Vice President of Investor Relations

Good afternoon, everyone, and thanks for joining us to discuss Revolve's fourth quarter and full year 2020 results. Before we begin, I'd like to mention that we have posted a presentation containing Q4 and full year financial highlights to our Investor Relations website located at investors.revolve.com. I would also like to remind you that this conference call will include forward-looking statements. These statements include our current expectations regarding the continued impact of the COVID-19 pandemic on our business, operations and financial results and our outlook for operating expenses and capital expenditures for the first quarter of 2021.

These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially from these statements, including the rises mentioned in this afternoon's press release as well as other risks and uncertainties disclosed under the caption Risk Factors and elsewhere in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2019, and our subsequent quarterly reports on Form 10-Q, all of which can be found on our website at investors.revolve.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin and free cash flow.

We will use non-GAAP measures for some of our financial discussions as we believe they more closely represent the true operational performance and underlying results of the business. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. And our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to GAAP measures as well as the definitions of each measure, their limitations and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our Co-Founders and co-CEOs, Mike Karanikolas and Michael Mente; as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions.

With that, I'll turn the call over to Mike.

Mike Karanikolas -- Co-Chief Executive Officer and Director

Good afternoon, everyone, and thanks for joining us today. We delivered another quarter of outstanding results in what remains a challenging and volatile environment. Our results are highlighted by three points of gross margin expansion that helps drive a more than doubling of earnings per share and a 37% increase in adjusted EBITDA year-over-year. The strong fourth quarter capped off a year unlike any in our 18-year history. I'm proud of our team for operating with agility, discipline and strength to deliver record profitability for both the fourth quarter and the full year. There are three key themes I want to focus your attention on. First, we are primed and ready for the reopening of the economy. As millions of people are getting vaccinated against COVID every day across our markets, trends are already slightly better than the first quarter year-over-year.

We see an exciting opportunity for REVOLVE in the months ahead as more people are finally able to get back to enjoying all the social occasions they've been missing out on for the past year. Second, in 2020, we delivered record profitability and free cash flow that significantly strengthened our balance sheet, positioning us well to invest in future growth opportunities. Such strong performance during a downturn gives me even more confidence in our long-term potential when the wind is at our backs once again. Third, we accelerated plans to expand into adjacent product categories, enabling us to serve more of our customers' needs and touch more aspects of her life. In 2020, we significantly increased our sales penetration in emerging product categories like Beauty, Activewear and Intimates. Our expanded marketing playbook enabled us to stay connected with our customer and helped drive our early success in the emerging product categories outside of our traditional offerings, which now allows us to target an expanded share of her wallet.

Given our focus on value creation over the long term, I'll take just a few minutes to review our performance for the full year 2020 before shifting the focus to our 2021 initiatives. We began 2020 with strong momentum, delivering better than 20% year-over-year net sales growth in January and February before our top line was negatively impacted by the escalation of the COVID-19 outbreak in the U.S. I'm most proud of how well our teams responded to the crisis. As the brands known for the discovery of on-trend merchandise centered around aspirational experiences and social interactions, the onset of COVID introduced extraordinary headwinds impacting both consumer demand and our impactful marketing events. Nonetheless, the team delivered impressive outcomes against what became new priorities brought on by the pandemic. Amidst all the uncertainty, we delivered strong results on our priority of protecting our financial position and optimizing our cash flow.

We leveraged our technology platform, our experienced team and our leadership expertise to quickly and aggressively adjust our merchandise buying plans and focused our teams on driving operational efficiencies throughout the organization. These efforts enabled us to generate $71 million in free cash flow during 2020, an increase of 113%, while more than doubling our net cash position to $146 million at year-end. Significantly improved inventory health in 2020 was a key driver of our cash flow generation and balance sheet efficiency. Inventory turns increased more than 25% year-over-year in our core REVOLVE segment. Our healthy inventory position helped us achieve a high percentage of net sales at full price in 2020. 77% of net sales came at full price, well ahead of retail industry benchmarks. Our full-price selling was particularly strong in the third and fourth quarters, serving as a key contributor to our gross margin expansion in the second half of 2020. We realized significant operating efficiencies in fulfillment during 2020 even with COVID-19 headwinds and our incremental investment to ensure employee safety.

Fulfillment cost per order decreased 11% year-over-year, illustrating that the warehouse investments we made in technology automation in the past two years are driving long-term sustainable efficiencies. These operating efficiencies, combined with lower return rate, were a key driver of our record profitability. Net income increased to $57 million, an increase of 59%; and adjusted EBITDA grew to $69 million, an increase of 25% year-over-year despite the modest decrease in net sales. We accelerated plans to expand into adjacent product categories, enabling us to serve more of our customers' needs and touch more aspects of her life. These efforts accelerated our growth in at-home categories like Beauty that offer exciting longer-term opportunities and position us to expand our share of wallet over the longer term, particularly when demand recovers for our traditional categories like dresses. We continued to raise the bar for customer experience by staying laser-focused on operations and exceeding our customers' expectations.

In fact, we achieved record performance in our Net Promoter Scores in 2020 and exceeded our very high target for customer satisfaction rankings. From day one, we have been hyper-focused on the customer experience. So it is gratifying to hear such positive feedback from our customers during what was the most challenging time in our history to deliver on our high standards. And finally, we accelerated our international expansion and further elevated service levels to support our customers in key regions. International net sales increased 15% year-over-year, and international growth accelerated to 24% in the fourth quarter as we realize the benefits of investments we have made to strengthen our value proposition. All in all, I am very proud of how well we executed, and I'm excited about the path forward. Turning now to our priorities for 2021. Our key focus is to ensure we are well positioned to capitalize on the reopening.

We believe the world is on an exciting path to reopening, and our customer can't wait to get back out again and enjoy the active social lifestyle that she loves and has come to associate with REVOLVE. As a brand built and centered around this social lifestyle, REVOLVE is ideally positioned to benefit as the world reopens. Our leadership team is aligned on five key priorities to capitalize on the reopening opportunity and the much larger opportunity that we believe lies ahead. First, we will accelerate our brand-building investments to take full advantage of the pent-up demand we expect to see when people can socialize and celebrate in person again. We are optimistic and excited for what we believe could be a robust recovery in 2021. When mobility returns, our customers are going to want to look and feel amazing with our latest fashion. So our stepped-up marketing investments should help us capitalize on the increased demand we expect.

We will further pursue expansion of our product categories into adjacent areas like Beauty and Activewear to enable us to develop deeper relationships with our customers. Continued success of newer categories will provide us the opportunity to serve more of their needs, potentially capturing a greater share of their discretionary spending over the longer term. We will invest in further strengthening our own brands portfolio through the launch of exciting new brands, collaborations and styles within our existing portfolio of brands. We will build on our momentum in international markets. We see great opportunities to further elevate the customer experience in international markets across both REVOLVE and FORWARD.

We will continue to optimize the customer experience in Western markets where we have already made investments, and we will further invest in newer regions such as China and the Middle East that have been performing very well for us and hold great potential. Finally, we will continue to raise the bar on the user experience across all regions. We will leverage technology to provide additional website personalization, introduce new payment methods, provide major feature upgrades to our mobile applications and drive faster refunds for customer returns, among other things.

Before I turn it over to Michael, I will reiterate how grateful I am for all our dedicated employees who collectively made our 2020 achievements possible.

Michael Mente -- Co-Chief Executive Officer and Director

Thanks, Mike. I'm very excited to be here today to share our thoughts on the business and the opportunities ahead. The competitive advantages that drove our success during the first 17 years of building Revolve carried through 2020 and enabled us to not just manage through the most challenging year in our history, but also put us in a position of strength as we enter 2021. With this strong positioning, we are excited to play offense and start investing again as we look forward to reopening. It starts with great merchandise, an area where we've started to reinvest already in the back half of 2020. Our strong team centered around our data-driven approach and read and react strategy enabled us to react fast to align with the shift in consumer preferences induced by COVID. Our ability to adapt so quickly helped drive the strong financial results in 2020 and accelerated the diversification of our assortment to address more aspects of our customers' life.

Early success of new product categories opens up exciting opportunities to further expand our collection of styles across both third party and owned brands, capturing more share of her wallet over the long term. Owned brands continue to be core to our long-term strategy. Our owned brands are true brands in the eyes of the consumer. They drive traffic, attract new customers, generally have higher gross margins than comparative third-party products and add to the uniqueness of our merchandise offering. The combination of our owned brands and emerging third-party brands establishes an assortment with very low overlap with other retailers. As we shared previously, we temporarily dialed back owned brands in 2020 after the onset of COVID-19, largely to allow us to make shallower inventory buys across a wider range of styles.

We are encouraged by the performance of our owned brands in the fourth quarter across the narrower range of styles. We are excited to build upon the success in coming quarters as we invest to drive further category expansion through a combination of new styles, brands and collections, including brands focused on sustainable fashion and collaborations with well-known personalities. The owned brand team and I have never been more excited about our future plans than we are right now. Shifting to marketing. I'm excited about the power and expanded marketing playbook that combines our unparalleled in-person events with the acceleration into content, live streaming and emerging social channels.

Over the last year, we have stayed relevant to her lifestyle through meaningful content and live streaming, while, at the same time, accelerating our expansion to emerging social media platforms such as IGTV, TikTok and Instagram Reels, where we generated a combined 58 million views in the second half of 2020. A significant headwind during the past year has been that we have not been able to host our marquee in-person events that are a powerful marketing lever, particularly for generating social media impact and building the brand long term. We are very excited to get back out there to do in-person events again in 2021. Starting this week, actually, where we are hosting foreign person events in Australia, in Sydney, Brisbane and on the Gold Coast. The events are attended by Australia-based influencers. Australia has had a very effective COVID response. So it is further ahead on the reopening path than other parts of the world.

Many Australians are making up for lost time, enjoying their current summer season like never before. Our net sales in Australia increased more than 30% year-over-year in the fourth quarter, a helpful indicator into how consumer behavior may evolve in other regions as the virus becomes more controlled. Lastly, we are excited about the momentum and growth opportunities in our international business and the FORWARD segment, which generates a significant percentage of its sales outside of the U.S. International continues to represent a meaningful opportunity over the long term as we optimize our service levels and offerings in these regions. We also see opportunity to invest more aggressively into FORWARD than we have in years past. The luxury customer has been very resilient through the pandemic.

And with the global market for luxury fashion rapidly shifting to digital, we see a great opportunity to increase the awareness of FORWARD's highly curated selection of iconic and emerging luxury brands. With the merchandise assortment that is very complementary to that of REVOLVE and with REVOLVE's large and powerful customer base, we are excited to expand our cost promotion efforts between the two segments. The introduction of an integrated loyalty program that includes both REVOLVE and FORWARD on the same platform will further solidify our meaningful opportunity to cross-pollinate the brands. I am very proud about what we have been able to accomplish to date, but truly believe the best is yet to come.

With that, Jesse will close out with some additional detail on the financial results and trends.

Jesse Timmermans -- Chief Financial Officer

Thanks, Michael. I'm truly encouraged by how well our teams executed throughout 2020, putting us in a position of strength as we look ahead to the post-COVID era. Our fourth quarter results capped off record performance in 2020 for net income, adjusted EBITDA and free cash flow, significantly strengthening our balance sheet. We started to tap into our strong balance sheet in the fourth quarter to reinvest in inventory and marketing, shifting back into a mode of playing offense with the vaccine distribution moving forward, and we will continue to make investments in 2021. Now starting with the fourth quarter results. Note that all of the comparisons I will discuss will be on a year-over-year basis, unless otherwise stated. Net sales decreased 5%, an improvement from the October net sales results we shared on our Q3 investor conference call.

By territory, international net sales increased 24%, meaningfully outperforming the 10% decline in net sales in the U.S. The international strength was broad-based, with Australia, Canada, Greater China and the Middle East as key contributors. Looking at consumer demand. Very strong growth in at-home categories like Beauty, Intimates and Activewear continue to be offset by headwinds in occasion wear categories like dresses and skirts. We are optimistic about the opportunity for recovery in occasion wear trends as we anniversary the COVID outbreak in March and even more so as consumers around the world are vaccinated in the coming months and start socializing in person again. By segment, REVOLVE segment net sales decreased 5% and FORWARD segment net sales decreased 2% in the fourth quarter. Active customers were 1.5 million, a decrease of 1%, consistent with our commentary last quarter to expect further deceleration in active customers in the near term.

Keep in mind that since this is a trailing 12-month measure, the Q4 active customer metric captures a larger number of quarterly periods impacted by COVID. We had one million orders placed in the quarter, a decrease of 6%. Average order value was $256, an increase from $232 in the third quarter of 2020 but remained 9% lower year-on-year. The year-over-year decline in AOV was primarily driven by a shift in net sales mix to at-home product categories, such as Beauty and Intimates, with lower average price points and a reduction in average units per order. These AOV headwinds were partially offset by a higher mix of full-price sales, our highest full-price sales for a fourth quarter in over 10 years. Partially offsetting the lower number of orders and the lower average order value was a meaningful decrease in merchandise returned for the third consecutive quarter.

We attribute the lower return rate to a combination of more deliberate purchasing behavior by consumers during the COVID-19 pandemic as well as a COVID-19-driven shift in mix to product categories with lower price points. The lower return rate also reflects a higher mix of international sales where return rates have historically been lower than in the U.S. Moving to gross profit. Consolidated gross margin was 56%, the highest-ever gross margin reported for any quarter, an increase of 305 basis points. This performance was stronger than we anticipated and is reflective of our healthy inventory across both segments. Within the REVOLVE segment, we delivered gross margin of 57.8%, up approximately 270 basis points. The REVOLVE segment gross margin benefited from meaningfully improved inventory dynamics that contributed to a healthy inventory balance, leading to an increase in the percentage of REVOLVE segment net sales at full price and the decrease in the depth of markdowns.

These positive contributors to gross margin were partially offset by a decrease in the mix of owned brands as a percentage of REVOLVE segment net sales, consistent with the outlook we shared on recent investor calls. Within the FORWARD segment, we delivered gross margin of 46.2%, an increase of approximately 520 basis points. The increase is reflective of the health of our inventory and a significantly higher mix of full-price sales, resulting from a temporary inventory dynamic that resulted in a limited amount of markdown inventory available for sale in the fourth quarter. While we are very pleased with this gross margin performance, we caution investors not to model this level of forward gross margin into the future. And now moving to the cost structure, starting with fulfillment. Fulfillment costs were 2.9% of net sales, an improvement of approximately 20 basis points. We continue to realize benefits from a lower return rate as well as lower labor costs as a result of automation and efficiencies coming out of the investments we have made in our fulfillment processes over the last two years.

Selling and distribution costs were 13.4% of net sales, an improvement of approximately 80 basis points and lower than we had budgeted. I'll call out two factors that helped the comparison relative to expectations. First, our operations team did great work in optimizing our logistics, strategically directing packages to our shipping partners to avoid the shipping surcharges and shipping delays that impacted many other companies this holiday season. Second, our return rate in Q4 came in lower than we had anticipated. As a result, our cost structure benefited more than expected from reduced shipping, packaging and other costs associated with significantly lower merchandise returns year-over-year. Marketing costs were 14.8% of net sales, an increase of approximately 20 basis points. This is consistent with our commentary shared last quarter regarding increased marketing investment in the competitive market for digital advertising. General and administrative costs were lower year-on-year, as expected, declining approximately 70 basis points.

With our strong gross margin and well-managed cost structure, we achieved net income of $19 million or $0.26 per diluted share for the quarter, more than doubling the $0.12 of diluted EPS in the prior year. In addition to our strong operating results, our EPS comparison included tax benefits realized as a result of stock option exercises. Even when excluding these discrete tax benefits, our net income and diluted EPS would have each increased approximately 50%. We also reported adjusted EBITDA of $18.7 million, an increase of 37% and a margin of 13.3%, higher than the prior year by 407 basis points, in large part due to gross margin expansion. Moving to the balance sheet and cash flow statement. During the fourth quarter, we started to invest back into inventory to position our assortment to support the anticipated recovery and increase in demand in 2021. This investment resulted in a $22 million sequential increase in inventory or 29% compared to the third quarter. We ended 2020 with $95 million in inventory, a decrease of 9% year-over-year.

This compares favorably to the 3% decrease in net sales for 2020, illustrating our higher inventory turns year-on-year and improved inventory health. Our investment in inventory weighed on free cash flow for the fourth quarter. Nonetheless, for the full year 2020, free cash flow was $71 million, an increase of 113%. Cash and cash equivalents at year-end were $146 million, an increase of $81 million or 123% from $65 million as of December 31, 2019. During the fourth quarter, we repaid the remaining $15 million on our credit line, ending the year debt-free. Now let me update you on some trends in the business since the fourth quarter ended on December 31. Given the continued uncertainty in the macro environment, we'll again defer on offering any traditional guidance. Instead, we will share some recent trends and assumptions to help in your modeling of the business for 2021.

Starting from the top, the improved trends we experienced as we exited 2020 continued through to 2021, with net sales returning to positive territory with low single-digit percentage increase year-over-year through the first seven weeks of the quarter, an improvement from the year-over-year decline in net sales reported for our fourth quarter 2020. Growth in regions that are much further along in the COVID recovery, like Australia, China and the Middle East, have been much stronger than regions like the U.S. and the U.K. that are still in a stage of reduced mobility. We believe the recovery in these regions is an early indicator, speaking to the broader recovery opportunity that lies ahead of us. Shifting to gross margin. From a seasonality standpoint, bear in mind that our first quarter has historically been the lowest quarter of the year for gross margin.

In recent years, our first quarter gross margin has declined by an average of more than three points on a sequential basis compared to the fourth quarter gross margin. We expect this sequential trend to continue for Q1 2021, while remaining higher than the gross margin of 49% reported in the first quarter of 2020. Puts and takes driving the first quarter gross margin outlook compared to the prior year first quarter include continued strength in full-price sales and shallower markdowns year-over-year, partially offset by a much lower mix of owned brand sales. To give you a frame of reference, owned brand mix of REVOLVE segment net sales was down 15 points year-over-year in the fourth quarter. As we discussed on prior calls, we expect the mix of owned brands to continue to compress through at least the first half of the year before starting to rebuild in the back half of 2021.

For fulfillment costs, we expect the first quarter to be in the same range as the 2.8% of net sales we achieved for the full year of 2020. We should continue to benefit from the increased productivity supported by our automation technology and a lower return rate, partially offset by increased wages and benefit costs in 2021. Keep in mind that with the anticipated recovery, we do expect mix to shift back to our historically strong product categories related to going out. Dresses, for example, generally come with a higher return rate, which will add sequential pressure to our fulfillment costs. For our selling and distribution costs, we expect the first quarter to be in the same range as the 13.9% of net sales we achieved for the full year of 2020. Importantly, looking further out, as we anniversary the COVID-19 outbreak in the second quarter of 2020, we would expect selling and distribution costs to increase more meaningfully as a percentage of net sales in the second quarter and for the remainder of 2021.

This assumes that we will see a higher return rate year-on-year beginning in the second quarter, which results in increased cost for shipping, handling, packaging and payment processing for returned items. Shipping and handling costs represent the lion's share of this line item. And as a result, we expect selling and distribution as a percentage of net sales for the full year 2021 to return to the 2019 levels of 14.6%, if not trend higher. Marketing. As Michael mentioned, we are back to investment mode, and we will keep the pedal down on marketing investments to capture the pent-up consumer demand upon reopening and beyond. We expect marketing to have the highest dollar increase of any of the expense line items, potentially exceeding historical levels at certain points during the year as we remain nimble, optimizing the timing of our investments with the anticipated timing of recovery in consumer demand and increase in social activities.

General and administrative. On a year-over-year basis, we are planning for G&A expense in dollar terms to increase in the first quarter and full year as we reinvest in our owned brand platform and other functions to support future growth. To recap, we believe we have executed well during what has been and is a very challenging environment. With a strong balance sheet, a healthy base of inventory featuring an expanded assortment and increased marketing investments, we believe we are primed and ready for what lies ahead.

Now we'll open it up for your questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question is from Michael Binetti with Credit Suisse. Your line is open.

Michael Binetti -- Credit Suisse -- Analyst

Hi, guys. Thanks for taking our questions here. First off, Jesse, could you help us think about how much marketing you could be investing ahead of the reacceleration first in the quarter?

Jesse Timmermans -- Chief Financial Officer

Yes. Thanks, Michael. As we commented on in the script, we want to be primed and ready for the reopening. So if you look at the Q4 marketing investment of that 14.8%, that's a good indicator of where we're going. In the first quarter, we'll continue to invest. And then we're just trying to highlight for everybody that we do want to invest ahead and during this reopening. So it could exceed historical levels during 2021. And specifically, on a quarter-by-quarter basis, it's likely going to be volatile in a good way.

Michael Binetti -- Credit Suisse -- Analyst

Okay. And then Mike, I know you talked about investing in FORWARD. I'm curious if -- how are you internally evaluating that business? With the strength of the luxury category being very, very strong, I know you guys pulled back on some inventory. But I'm curious, you reset that business a bit a few years ago, great growth in 2019. This year, very hard to judge what we're seeing from it. But I'd like to know what you think are the -- some of the internal metrics that you'd like to see as you reinvest in that business forward. It seems like a good opportunity, but it's also getting, I think, a little bit competitive in that category as well.

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes, definitely. So as you mentioned, FORWARD does have kind of more crowding from competitors than the REVOLVE segment, which we feel has a lot of white space around it. With FORWARD, we think there's a great opportunity to drive substantial growth this year and some big opportunities we're focused on. Number one, I'd say, is the overlap with the REVOLVE business and the REVOLVE customer. We're really looking to bring those businesses much more closely together. We know the REVOLVE customers spend a significant portion of her handbag and accessory and budget on and foreign carriers. So that's going to be a big initiative for us.

China is a second thing that's a big opportunity for us. We've had a lot of success in China in recent periods that's continuing to trend well, and we think that's something that we can really build. We've got some exciting marketing initiatives there. And then the third thing is from a brand marketing perspective and kind of a brand-building perspective, we historically have not focused as much on building the FORWARD brand as the REVOLVE brand. Yet, as you know, that's one of our core competencies is brand strength and brand building. And so that's something that we're excited about potential opportunities to invest there in a bigger way this year.

Michael Binetti -- Credit Suisse -- Analyst

Thanks a lot.

Operator

Our next question is from Aaron Kessler with Raymond James. Your line is open.

Aaron Kessler -- Raymond James -- Analyst

A couple of questions. Maybe first, you mentioned kind of the gross margins that we shouldn't assume that, that rate is not a sustainable here. Any maybe headwinds you would call out for 2021 that would take gross margins back down? And then maybe on the owned brand strategy, you talked about that a little bit. Maybe just where are you most optimistic on the owned brands for 2021 or '22 outside of the dresses category? Thank you.

Jesse Timmermans -- Chief Financial Officer

Yes. Aaron, this is Jesse. I'll start with the first part of that and then kick it over. On gross margin, we feel really good about the gross margin as we exited the year with a strong full-price sell-through and then even on the markdown component, having really strong markdown margin. So we didn't have to go as deep on the markdowns as we historically have. And that's a reflection of the healthy inventory balance. We expect that to continue through, especially in the first part of the year. We'll start to comp the -- some really strong gross margin we had this year as we get into the back half of '21. But again, with the healthy inventory balance and strong full price, really good tailwinds there.

Now to your question, we do anticipate headwinds on the owned brand front. So owned brands typically carry meaningfully higher margin than a third party. And that mix of owned brands has meaningfully compressed in the fourth quarter and that will continue through the first half of 2021 before we start to reaccelerate on the owned brands. So there will be some headwinds from that owned brand, but we feel really good about the underlying metrics there on that component of the sales. And then, again, the strong full price and the health of the inventory as we head into the year.

Aaron Kessler -- Raymond James -- Analyst

Got it.

Michael Mente -- Co-Chief Executive Officer and Director

Yes. And with regarding the owned brand expansion, I think it's -- quietly, there's a lot of exciting things going on. Of course, penetration is down with our pullback, but we're making a lot of investments, I mean, not on the capex side, but just time and energy. So as we exit out of this kind of social distance world, we'll be seeing a lot of expansion into owned brands across a lot more categories than times past.

Our historic strength has been dresses and tops, most notably the woven category or the woven kind of manufacturing technique. And as we look at the back half of this year into -- and definitely, early 2022, there's going to be a lot of expansion into other categories with continued expansion in denim, activewear, there'd be investments in shoes, jewelry, sustainable across the board. So I think you'll see a lot more robust owned brand offering incrementally quarter-after-quarter over the long term. So feeling really excited about that.

Operator

Our next question is from Erinn Murphy with Piper Sandler. Your line is open.

Erinn Murphy -- Piper Sandler -- Analyst

Great. Thanks. Good afternoon. I guess I wanted to expound first on your marketing tool chest. I'm curious if you think it looks a little bit different in a post-COVID world versus pre-COVID. Just trying to think if there's any kind of virtual events or learnings that you'll continue to execute on or is it just going to go back to kind of full physical in a post-COVID world. And then I have a follow-up.

Michael Mente -- Co-Chief Executive Officer and Director

Yes. I think there's like a parallel there with kind of our merchandise as well as our marketing. We're going to be able to go back to our core of dresses and going-out clothes, things for travel as well as events that naturally fit with there, kind of like REVOLVE Festival and kind of REVOLVE Around the World and a couple of things that we have in the works, which we're excited to share in the upcoming quarters. But also, we're definitely going to be able to expand to new zones. I think activewear is an incredible example where we're expanding into owned brands. We think there's a huge potential there.

And of course, as we talked about in the previous two calls, our active social media engagement, our live stream ended up being like a big hit. So we're going to see even more balanced portfolio. We're deeper in kind of broader arsenal in terms of marketing activation and tactics. So this will allow us to really touch all of her points of lifestyle even more so than kind of what we were historically known for. So even though it's been a period of awesome profitability over the past few quarters, it's also been a period of a lot of development and investment internally. So coming out of this pandemic, we're going to be more balanced and stronger across the board. So very excited.

Erinn Murphy -- Piper Sandler -- Analyst

Great. Thank you. And then my follow-up is on the Beauty business. I'd love if you could help dimensionalize that for us. And then is it helping bring in a new customer? Is it building the basket when the customer is on your website? And then how has the response been from the vendor community? Thank you.

Michael Mente -- Co-Chief Executive Officer and Director

Yes. Overall, Beauty has been super awesome. We know that our customer, of course, spends a lot on beauty, spends a lot of her budget on beauty. And we touch across the whole entire segment. Obviously, makeup, a little bit less in times when you're not going out as much. But in a time of kind of self-care, skin care, hair care, a lot of that category has been awesome for us. So long-term-wise, we'll continue to invest. It's a natural fit and also leverages our strength in brand marketing. So the social media kind of engagement has been strong there as well. So we see the introduction of a lot of new customers, but -- whether they come in at a lower AOV but then develop into core REVOLVE customers.

And we're also seeing the core REVOLVE customers really expand into the zone. So it's really kind of the best of both worlds: attracting new customers that weren't necessarily connected with us on our kind of fashion kind of marketing and like fashion brand but discovering us that way as well as working with our existing customers and expanding and broadening her lifestyle. I think that's a big theme that seems to be coming up a lot for us as we're able to touch our customer in a lot of different areas than we were in times past. And it's been important for us, and COVID has really accelerated that.

Operator

Our next question is from Rick Patel with Needham. Your line is open.

Rick Patel -- Needham -- Analyst

Thank you. Good afternoon. What are your expectations for AOV this year? With the core business doing potentially better as the year goes on, I'm assuming that this goes back up, but you've also made good progress on emerging categories like Beauty. So what does this mean for AOV as we think about the year? And just, holistically, does it settle below the pre-pandemic level? I'm curious if there's anything we should keep in mind as we think about the REVOLVE segment versus FORWARD.

Jesse Timmermans -- Chief Financial Officer

Yes. So there's a few things to unpack there. Number one, you can see the sequential improvement from the -- where we bottomed out in Q2 at that just over $200 and then exiting at $256. We see that continuing through 2021 as full price remains strong. To your point, we do see some pressure from the lower price point units. And also there's a component of lower units per order. And the other thing to keep in mind on this AOV is that it is a gross metric. So even though the AOV is declining, if you look at that on a net basis, it's actually up year-on-year. And that's due in part to the meaningfully reduced return rate.

So as mix has shifted from our largest category historically of dresses into those lower price points, those lower price points have much lower return rates. So net-net, at the end of the day, we're at a higher net AOV. So as we exit into the post-pandemic world, we do expect mix to shift back into those historically strong categories like dresses, which will likely come with a higher return rate and a higher AOV.

Rick Patel -- Needham -- Analyst

And a question on international markets where the recovery is a little bit further ahead, like Australia. Are consumers gravitating to the same categories that were strong pre-pandemic? And as that happens, how has the performance been for COVID categories like Beauty? Are you still seeing outsized growth there on the smaller base? And what does that inform you about how to approach the U.S.?

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes, definitely. So we're watching those key markets very closely. And what's great to see is that we're seeing continued strength in the categories that we really accelerated during COVID, but then we are seeing, particularly in Q1 -- the Q1 trends to date, some strong recovery in those historical categories. In Australia, in particular Q1 to date trends, we're seeing growth overall in excess of 50%. Other key potentially indicating countries like Israel, we're also seeing growth in excess of 50%. So international regions can be volatile individually, but both of those are our top five international countries for us on the REVOLVE side. And it's really nice to see really nice growth in those regions and certainly gives us hope for the months to come.

Operator

Our next question is from Oliver Chen with Cowen. Your line is open.

Oliver Chen -- Cowen -- Analyst

Hi. Great quarter. Regarding new customers and what you're seeing overall, what's some of the data telling you about retention of new customers and how your assortment may or may not change with retention and acquisition of new customers? And as we think about the recovery ahead, how are you thinking about inventory plans with the going-out/dresses category? And what you should do there in terms of managing in a dynamic environment that's getting better as well?

Mike Karanikolas -- Co-Chief Executive Officer and Director

Sure, definitely. So in terms of the retention trends, COVID has been a headwind to our business from a revenue standpoint, although we certainly really delivered nicely on the lean and efficiency side. But it has been a headwind, and that's both on the new customer acquisition side with our marketing being really crimped in terms of what we can do and as well on the existing customer side where they can't -- they don't have the need for those dresses and tops where they're going out and socializing, looking and feeling good about.

So it's been a bit of a headwind there, but what we're really excited about is we think that's a really strong opportunity that we believe should bounce back as the world gets back to normal, as our customers can socialize again, as they can live their best life, look and feel great. And we believe the inroads that we've made in these other categories, hopefully, those inroads should be sticky, and we have optimism that we'll expand there.

So as the year unfolds, we feel really good about how our retention trends should progress and unpack. From an inventory standpoint, we definitely want to invest and get ahead of the reopening and make sure we're there for our customer when she needs us. At the same time, there's going to be a balance to it as there's always a balance to everything that we do where we don't want to overcommit ourselves, but we want to make sure we're ready to take advantage of what we think can be a tremendous opportunity for our brand. Customers have been pent up for onwards of a year now, not being able to go out and be free and socialize and have fun and party and all the things they love to do. And we think when that moment unfolds and unpacks, it's going to be a perfect moment for our brands.

Operator

Our next question is from Mark Altschwager with Baird. Your line is open.

Mark Altschwager -- Baird -- Analyst

Hi. Thanks. Good afternoon and congrats on the solid performance through a really tough year. Following up on the inventory topic there. I'm just curious if you could expand on that a little further. I'm wondering what the makeup of the inventory looks like compared to a typical spring season given some of the continued uncertainties here. And also just if you could talk about your ability to chase should we see a big acceleration in the coming months. The inventory is up nicely sequentially but still down year-over-year, so just trying to think through that.

Michael Mente -- Co-Chief Executive Officer and Director

Yes. Our inventory position is definitely swung from one end of the pendulum right when the crisis started, gearing up for the warm weather season, gearing up for REVOLVE Festival and really gearing up for the old world and the old lifestyle. And then we've swung to the complete stay-at-home lifestyle, cold weather, lounge wear and such. And we're swinging back. Kind of, as Mike just mentioned, we'll be incrementally going back to more of the categories that we have quickly responded to get away from, kind of going out and dresses, but definitely not all the way back there.

I think we'll be seeing -- our current kind of plan, expectation is that the recovery will be steady. So sequentially quarter-over-quarter, we'll be ramping up. So right now, we're currently more dress, going-out-oriented than we were in the depths, but nowhere near where we would have been a year ago. And I think that's kind of -- will be reflective as things improve.

Operator

Our next question is from Camilo Lyon with BTIG. Your line is open.

Camilo Lyon -- BTIG -- Analyst

Thanks. Good afternoon. I wanted to get your thoughts on how you're thinking about return rates and where they should settle out as buying habits normalize. Can you maintain some of the gains you made? Or should we expect you return to that low 50s rate pre-pandemic?

Jesse Timmermans -- Chief Financial Officer

Yes. Thanks. Great question. That's one thing we really want to highlight among a lot of other things. But we have received a meaningful benefit from the return rates during COVID. Part of that is the mix shift, but there is also a part of that, that we believe is due to just a change in consumer buying habits. So we're optimistic, and it's hard to forecast what it will look like. But we're optimistic that with a more diversified inventory assortment,and we're optimistic that some of these consumer buying habits will continue on in a post-COVID world, that we won't necessarily return to that 55% at the peak of 2019, but it will go up from where we're at now. But again, it has yet to be seen, but we're optimistic that we'll pocket some of these return rates.

And then the things in our control, we continue to optimize for the customer experience and really make it easy for her to return. The home is the dressing room that's been there since day one. There's also an element of international. As we make it easier and easier for international customers to return, there will be an increase in return rate there. But at the end of the day, a more meaningful increase in net sales due to the convenience and the experience for that international customer.

Camilo Lyon -- BTIG -- Analyst

Great. And then my follow-up is related to logistics. It sounded like your team, during the quarter, did a very good job of managing some headwinds -- many headwinds that a lot of brands have been facing from the supply chain and logistics side. Is there anything that we should contemplate in the first half as a lot of these logjams continue to exist throughout the supply chain that may hinder some of the inventory deliveries or receipts that you're planning?

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes. So we think our internal team did a really great job of managing the challenges in the fourth quarter, and there were many. So I think it's a credit to how nimble and agile the team was. They're able to shift volume from carrier to carrier depending on where we can get the right rates without the -- kind of the over-surcharges while optimizing experience for the customer. So I think it's a real credit to the execution of the team in the fourth quarter.

And then in the first quarter, there's certainly still headwinds, and the team need to continue to execute and be nimble. But I'd like to think we're past the worst of things on the logistics side. And so we feel good about our ability to deliver efficiencies on the outside in terms of not having to do surcharges in the first half of the year as well as meeting our historical commitments to the customers as far as getting to them on time.

Operator

Our next question is from Ed Yruma with KeyBanc Capital Markets. Your line is open.

Ed Yruma -- KeyBanc Capital Markets -- Analyst

Hi. Good afternoon. Thanks for taking the question. I guess first a housekeeping question. Could you just give us a little bit of insight into the intra-quarter trend back in the first quarter of '20, just so we can kind of understand how the March compare versus kind of what you've seen quarter-to-date? And then second, kind of a bigger picture question. With some of these markets that have reopened and are seeing higher activity, are you seeing signs of an incremental fashion shift that maybe gives you confidence that you could have kind of a sustained period of strong demand for apparel? Thank you.

Jesse Timmermans -- Chief Financial Officer

Yes. Maybe I'll take the first one, thanks for the question, and then I'll pass it over to Mike and Michael. The intra-quarter dynamics, last year, we started out really strong, 20% across the board for January and February. We were featured -- partnered with The Bachelor in January. We had tremendous inbound traffic to the site. So started off the year really strong. And then kind of in that mid to late March is when the restrictions really started to hit, and that's when we saw sales decline almost overnight. So there is definitely an intra-quarter dynamic to be aware of in 2021. And then year-to-date, this quarter -- just to hit on that just really quick.

Coming out of the high single-digit decline that we had communicated for October back in Q4 and then closing out the quarter at minus 5%, you can see that sequential improvement. And then that continued into the first seven weeks of this quarter with that low single digit in positive territory and exciting positive territory across the board, domestic, international REVOLVE, FORWARD. So feel good so far, but still very cautious on what the future holds with all the uncertainty.

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes. And then in terms of kind of dissecting trends on the international side, it's definitely an area where we're looking to closely. As I mentioned, we feel good about the trends that we're seeing there, and those trends make us very optimistic for how things could unfold in the U.S. as things continue to recover from COVID. If we look at -- it's our top markets where there's been a lot more recovery in areas like Australia and Israel, which are growing incredibly quickly. And also China and the Greater China region, we're seeing some nice growth in that region as well on the REVOLVE side.

In China, we're seeing quarter-to-date some of the best growth that we've seen in several years now. So it definitely gives us optimism. But at the same time, we want to caution that the environment remains uncertain. We think when the world will reopen, we think it's going to be a great time for REVOLVE. But the timing of how that unfolds and the exact impact to our business are still to be determined.

Operator

Our next question is from Kimberly Greenberger with Morgan Stanley. Your line is open.

Kimberly Greenberger -- Morgan Stanley -- Analyst

I'm on mute. Sorry about that. I just wanted to ask about the marketing spend in the fourth quarter and looking out to 2021. Are you seeing higher rates for purchasing the same sort of composition and type of marketing? And is that driving the higher marketing? Or are you actually able to hit more eyeballs with higher marketing spend? In other words, the -- it's a question, I guess, on marketing spend productivity. And if you can share any KPIs or how would you measure that. Is marketing just simply more expensive because there's greater demand for digital marketing, and therefore, the price goes up? Or is it that you're actually hitting more people?

And then if you could just sort of step back and look at the competitive environment and just help us understand what you're seeing in competitive -- in the competitive landscape? And in particular, if you've noticed a company called Shein, I'd be interested in hearing your perspective on that and just how you try to stay differentiated relative to the competition? Thanks so much.

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes. Definitely. So on the marketing side, in digital marketing, in particular, we touched on some of the trends that we were seeing in the middle of last quarter. One thing I'd caution on digital marketing is it can shift and fluctuate a lot from quarter-to-quarter. Certainly, there's longer-term trends influenced by a number of factors. So kind of what we saw specifically on the digital marketing side is in the middle of last quarter, rates had gotten quite expensive, which was putting pressure on us from our ability to kind of market in the way that we'd like to. We did start to see a reversal of those trends toward the back half of the quarter. And things are heading in a much more positive direction on that side from what we can see.

So again, things will fluctuate quarter-to-quarter. There may be some longer-term trends going on. But what we're seeing right now is kind of much better rates on the digital marketing side than we're seeing back in the fourth quarter.

I think in terms of the broader question, why do we expect marketing to go up? It's not about that those rates that we're seeing on the digital marketing side whether they are cheap or expensive. And in general, when they're expensive, we tend to actually back off. It's more about that we think the reopening is going to be really good for the REVOLVE brand, and the REVOLVE brand is perfect for the reopening. And we know that we need to invest ahead of that, particularly on the brand marketing side, where those -- the impact of the brand marketing can pay off over a long-term period.

And so we pulled back a little bit in the pandemic. It wasn't quite the right time for the REVOLVE brand to be top of consumers' minds. We think the time is coming up where we can have a real impact and get real efficiencies from our message as consumers look to get back to socializing and having fun. And so that's where the commentary on the marketing side goes that we're building for the long term. We like to be efficient and disciplined, but we think part of the long-term build is the right time for our brand to be out there in top of consumers' minds. And then finally, to the last part of your question with regards to Shein. You're talking about the Chinese company, right? I'm not sure how to pronounce it, S-H-E-I-N.

Okay. So assuming you're talking about that company, we think we're very differentiated. Certainly, they've had a lot of success in the marketplace. They operate in a much different price point. And we view the type of product they produce is much different from the type of product that we produce. And we're ultimately going after, we think, very different consumers.

Operator

Our next question is from Susan Anderson with B. Riley. Your line is open.

Susan Anderson -- B. Riley -- Analyst

Hi. Good evening. Nice job managing through the year. I guess I'm curious as we look to the back half and you start to ramp your owned brands again, what do you think you're looking at differently this time with the owned brands versus -- I think there was a little bit of issue at the end of -- or in 2019 with the inventory growth maybe growing too fast there.

Michael Mente -- Co-Chief Executive Officer and Director

Yes. I think the primary thing that we're seeing -- we're thinking differently is diversity. I think there's multi-dimensions of diversity, both from a traditional category, expanding, diversifying out of dresses and tops into all of the other categories, also diversifying in type of manufacturing techniques. We were heavily weighted in wovens. And I think there's a lot of other zones, jersey, fleece, knits and beyond that, I think, will be very, very important. I think also diversity on price point. I think we went after a very, very focused price point that is really core to our customer. And exiting out of the pandemic, we'll have diversity across price point as well. So that's been quietly one of the big themes that we've been investing into in this year. And we're very excited to show you the results in the upcoming quarters and upcoming years.

Susan Anderson -- B. Riley -- Analyst

Great. Thanks. And then if I could just add one follow-up on REVOLVE warehouse automation. I think you mentioned it as a positive for fulfillment, selling and distribution. I'm curious if you could quantify how much that helps that line item. And then also, do you expect that to continue into 2021?

Jesse Timmermans -- Chief Financial Officer

Yes. And that automation, just back up and give some context, just as a reminder, too. We started to invest there in 2019. That was the biggest investment. And then we made some additional investments in the first half of 2020 and really started to see those efficiencies come through in 2020. We expect those to continue. I'll call out, however, that there is also a positive impact from return rate on that fulfillment line item. So we're getting kind of a double benefit on fulfillment. If I had to break it out, it's probably 1/3 automation and 2/3 return rate. But that one, they're definitely continuing on into the future.

The other thing to call out as well is that we moved into this warehouse in 2019 with capacity, call it, for plus or minus five years. So as we grow into that capacity, there's also a natural efficiency to be gained over time. And then you mentioned selling and distribution. The automation is really isolated to that fulfillment line item. Selling and distribution is -- the lion's share of that is the shipping and freight. So on that line item, the efficiencies we get, some operational efficiencies and just optimizing carriers, but also return rate benefit there but not related to automation.

Operator

Our next question is from Simeon Siegel with BMO Capital Markets. Your line is open.

Simeon Siegel -- BMO Capital Markets -- Analyst

Thanks, guys. Nice way to end the year. Just recognizing the 12-month basis -- the trailing 12-month basis, any way to offer context or just isolate fourth quarter's impact to the active customer drop and, I guess, thoughts on trajectory there? And then Jesse, and I don't know if this is a better offline question. But the net AOV comment you made was interesting. Could you elaborate at all there? If the product mix impacts the return rates, I guess, would you think that net AOV after returns would be more consistent? So I don't know if there's any color you can help there. Thanks.

Jesse Timmermans -- Chief Financial Officer

Yes. Sure. On the first one on active customers, to your point, that is a trailing 12-month number. And you could see the sequential decline. We were -- started off the year there at a plus 20-ish percent and then plus 13% in Q2, plus 5% in Q3, and then closed the year out at a minus one. So you can kind of back into the impact -- the quarterly impact there of just what COVID is doing on that metric. So on a quarterly basis, we're definitely seeing pressure there. And that will continue as we roll in more quarters of COVID, and it takes a little while to roll out of those COVID quarters. So not expecting growth in that number for another several quarters as we cycle out of the COVID era.

And then the gross versus net AOV, there's puts and takes there. We're definitely seeing an impact from the shift in mix from the higher price point dresses to the lower price point, for example, Beauty. Partially offset there, if you look at it on a combined basis, FORWARD has been strong relative to REVOLVE. So there's a slight offset. And then units per order. Units per order and return rate kind of go hand-in-hand. So fewer units per order on that gross basis because she's not going in and buying two or three dresses for that occasion knowing that she's only going to keep one. So those maybe don't 100% awash, but there's a kind of an offsetting impact between the units per order and the lower return rate.

Operator

Our next question is from Matt Koranda with Roth Capital. Your line is open.

Matt Koranda -- Roth Capital -- Analyst

Hi, guys. Just following up on some of the active customer discussion here. Any updates on customer acquisition costs and just thoughts around how that trends as you lean into marketing a bit more as we reopen?

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes. So in the fourth quarter, we did see an increase in customer acquisition costs. As we mentioned, there were some headwinds there in terms of competition within the digital marketing front. And then I think, as you see the year unfold, my expectation would be, initially, you may see those costs go up because a lot of the marketing that we do, particularly on the brand side, is more longer-term marketing. And so you take the expense immediately, but the benefits pay out over time. So we would expect to see some increases on that front. And then I hope to see those increases moderate and go in a positive direction for us as things unfold and as consumers really embrace a back-to-normal lifestyle and the reopening and the remodel.

Operator

We have time for one more question. Our last question is from Ross Sandler with Barclays. Your line is open.

Ross Sandler -- Barclays -- Analyst

Hi, guys. Great job this quarter. Just going back to the international topic. So now that's over 20% of revenue. It's coming from a lot of different countries, spread widely across the globe. So I guess the first question is, I think your running all the operations still out of California. Is that the case? And as that international number gets bigger, what happens to the back end of your business? Are you going to have to use 3PLs? Or are you already doing that in some places?

And then, Mike, I guess, for these events that you're going to be doing in Australia, how does the influencer marketing travel across border? Do you do an event there with a global influencer? Do people in the U.S. see that and respond and start buying? Do people in China do the same? How does the -- these events that you're going to start rolling out travel across borders? Thanks a lot.

Mike Karanikolas -- Co-Chief Executive Officer and Director

Yes. So starting with the first part of your question on the international side. We feel really good about our ability to deliver great service levels in the international market operating out of Los Angeles in California. More than 80% of our markets, we're able to hit with two to three day shipping at fairly reasonable cost out of Los Angeles. At the same time, it is an area of longer-term opportunity as those markets grow. So it's something that we're certainly starting to think about, but I think we're ways off from any substantial on-the-ground international presence. But we could start to explore some plans for portions of our inventory or kind of certain -- kind of sub-opportunities as a way to kind of test out further expansion now. And then with regard to...

Michael Mente -- Co-Chief Executive Officer and Director

And as far as the -- yes, as far as the international events, it's -- fortunately -- well, I guess it works in different ways. But Australia has been very close. So we're working with a large network of Australian influencers. We were in Australia, I believe, two years ago. And it's a very important region, so it's been one of our top regions for many years. So we kind of have deep relationships there. So there's definitely a big plan toward Australia. But for sure, that social media knows no borders, except potentially sometimes in China. So we definitely will see a lot of the eyeballs, impressions with a lot of on-brand REVOLVE growth that touch customers around the world. So there's definitely a plan to Australia, but we'll definitely see impact within eyeballs and impressions to all of our core customers across the globe.

Operator

This does conclude the Q&A. I will now turn the call back over to management for closing remarks.

Michael Mente -- Co-Chief Executive Officer and Director

So I think Mike is actually on mute. So he's -- but I'll just jump in right here. But thank you guys for joining us today. It's been a challenging year for all of us, and we're extremely proud of the results. It was definitely not what we were expecting for the year. But all things considered, we really have to thank our team for all the incredible work and everything they had to do to achieve these numbers. This is really just not a little positive interim year for us. We really think that we've done a lot to build for the future. And I think we're definitely excited to demonstrate all of the investments, all the work and all the incredible things that the teams have done.

Stay safe, everybody. We send our regards to Texas. We know that's been a quite challenging situation. And when you can, get your vaccines and come party with us.

Operator

[Operator Closing Remarks]

Duration: 63 minutes

Call participants:

Erik Randerson -- Vice President of Investor Relations

Mike Karanikolas -- Co-Chief Executive Officer and Director

Michael Mente -- Co-Chief Executive Officer and Director

Jesse Timmermans -- Chief Financial Officer

Michael Binetti -- Credit Suisse -- Analyst

Aaron Kessler -- Raymond James -- Analyst

Erinn Murphy -- Piper Sandler -- Analyst

Rick Patel -- Needham -- Analyst

Oliver Chen -- Cowen -- Analyst

Mark Altschwager -- Baird -- Analyst

Camilo Lyon -- BTIG -- Analyst

Ed Yruma -- KeyBanc Capital Markets -- Analyst

Kimberly Greenberger -- Morgan Stanley -- Analyst

Susan Anderson -- B. Riley -- Analyst

Simeon Siegel -- BMO Capital Markets -- Analyst

Matt Koranda -- Roth Capital -- Analyst

Ross Sandler -- Barclays -- Analyst

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