Christian Arnell - Investor Relations Alan Guo - Chairman and Chief Executive Officer Robin Lu - Chief Financial Officer

Ladies and gentlemen, thank you all for standing by and welcome to the LightInTheBox Holdings Company Q3 2015 Earnings Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] I must advise you that this conference is being recorded today, December 21, 2015. I would now like to hand over the conference over to your first speaker for today, Mr. Christian Arnell. Thank you. Please go ahead, sir.

Thank you, operator. Hello, everyone and welcome to LightInTheBox’s third quarter 2015 earnings conference call. The company’s results were released earlier today and are available on the company’s IR website as well as through PRNewswire. Today, you will hear from LightInTheBox’s Chairman and CEO, Mr. Alan Guo, who will give you an overview of the company’s strategies and recent developments, followed by Mr. Robin Lu, the company’s Chief Financial Officer who will address financial results in more detail. Before we proceed, I would like to remind you of the company’s Safe Harbor statement. Please note that the discussion today may contain certain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. To understand the factors that could cause results to materially differ from those in the forward-looking statements, please refer to our Form 20-F filed with the Securities and Exchange Commission on April 17, 2015. We do not assume any obligation to update any forward-looking statements except as required under applicable law. At this point, I would like to turn the call over to the LightInTheBox’s Chairman and CEO, Mr. Alan Guo. Alan, please go ahead.

Thanks, Christian and thank you everyone for joining us today. We are pleased to report that Q3 2015, we exceeded our guidance as net revenue came in at $70.2 million on a GAAP basis. On a non-GAAP basis, excluding the impact of unfavorable foreign exchange rates, net revenues reached $80.2 million. At the macro level, during Q3, we continued to experience the weakness of the euro and many other currencies against the U.S. dollar. However, in the second half of Q3, we started to see moderate improvements in exchange rates between the Chinese yen and U.S. dollar and this trend continued into Q4. While the depreciation of the Chinese yen was still too modest to offset the euro impact, we certainly welcome to this new development at the macro level. During Q3, we continue to work hard on reducing costs and improving our supply chain and operational efficiency. This allowed us to maintain a relatively high and stable gross margin of 37.5% on a GAAP basis, 45% on a non-GAAP basis and deliver a second consecutive profitable quarter on a non-GAAP basis. Excluding the unfavorable impact of year-over-year change in foreign exchange rates, we achieved a non-GAAP net income of $3.3 million, a significant increase from a non-GAAP net loss of $4.8 million during the same quarter of 2014. GAAP net loss was $8.6 million, which includes a $2.0 million in share-based compensation expenses. We further streamlined our relationship with our supplier base. We continue to source more factory direct and branded products from suppliers and continued to eliminate middlemen in our supply chain. We started to charge our suppliers’ quarterly service fee so that we can focus more on working with suppliers who have strongly motivated to be part of our ecosystem. At the same time, we also improved…

Thank you, Alan. For our currency, volatility remained a challenge. We are happy to have you stated the high end of the revenue guidance. A combination of ongoing cost-cutting and supply chain efficiency improvements, the increase in traction of our global cross-border logistics platform and our higher sequential growth from Q3 to Q4 compared to last year led us to believe that we can reasonably expect better performance in Q4 in our top and the bottom lines. Looking at our P&L, for the quarter, we achieved a second consecutive non-GAAP profitable quarter with net profit of $3.3 million from a non-GAAP net loss of $4.8 million. As I review our financial results, let me remind you about a few things. All numbers quoted are in U.S. dollars. All percentage changes refer to year-over-year, unless otherwise noted. Net revenues decreased 29% to $70.2 million. Backing out the $10 million unfavorable foreign exchange impact, net revenues actually were $80.2 million. Repeat customer purchase accounted for 45.6% of total net revenues, up from 41.1%, while mobile revenues as a percentage of total net revenues increased to 34.6% from 26.5%. Total orders fell 28.5% to $1.8 million and total number of customers who made a purchase in the quarter decreased by 24.7% to $1.5 million. Revenues in the apparel category, was down 21% to $29.2 million. As a percentage of total net revenues, apparel revenues were 41.6% compared with 35.4% a year ago. Revenues generated from other general merchandise were down to $41 million. Looking at our business geographically revenues from North America was down 1.6% to $20.1 million and accounted for 28.6% of total net revenues. Revenues from Europe, was down by 31.5% to $40.5 million, representing 57.6% of total net revenues, where revenues from other countries decreased by 50.2% to $9.6 million…

Alright. Thank you, operator. This concludes our third quarter 2015 earnings conference call. Thank you for your participation and ongoing support of LightInTheBox. We look forward to providing you with updates of our business in the coming weeks and months ahead. Have good holidays. Thank you everyone. This concludes the call.

Ladies and gentlemen, thank you all for participating. That does conclude the conference for today. You may all disconnect now. Thank you.