Good morning, and my name is Maria, and I’ll be your conference operator for today. At this time, I would like to welcome everyone to Revolve’s First Quarter 2021 Earnings Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Erik Randerson, Vice President of Investor Relations at Revolve. Thank you. You may begin your conference.

Good afternoon, everyone, and thanks for joining us to discuss Revolve’s first quarter results. Before we begin, I’d like to mention that we have posted a presentation containing Q1 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 2021. These statements are subject to various risks, uncertainties and assumptions that could cause our actual results to differ materially from these forward-looking statements, including the risk 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, 2020, 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 provide valuable insights on our operational performance and underlying operating results. 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.

Good afternoon everybody. We’re excited to update you today on the momentum in our business and our record Q1 financial results. As we successfully managed through one of the most challenging times in our history, we’ve been eagerly preparing for the reopening of the economy, which we believe will be extremely positive for Revolve as a brand associated with an active social lifestyle. I am pleased to announce that if the economy began to reopen in the first quarter, we experienced a significant surge in demand, which drove the outstanding results for the first quarter. Our top-line trends saw substantial acceleration as we entered March increasing from the low single-digit growth we experienced in January and February. Then as vaccines started to roll out restrictions, eased in additional stimulus payments were made by the federal government demand increased significantly. The strong close to the quarter continued into April with growth of over 100% compared to April, 2020 and over 30% compared to April, 2019. Even more exciting was that the accelerated net sales growth in March and April came from both the REVOLVE and FORWARD segments, as well as the domestic and international businesses. With that, as an introduction, I’ll go into more detail on the first quarter results in recent developments. Net sales for the first quarter of 2021, we’re a record $179 million in increase of 22% from the first quarter of 2020, substantially ahead of the low single-digit growth we experienced for the months of January and February when we spoke during our last conference call. Particularly exciting is that the strong recovery and growth during March came from a return to growth installs associated with social outings, such as dresses, as well as continued strong growth in at-home related product categories, including beauty, intimates, inactive wear…

Thanks Mike. It’s incredible to see the certain traffic and demand of the customers get back out and starting to join the social life they love and going to associate with the Revolve. After such a challenging past year this return to robust gratifying, particularly considering that we are now just joining up for some of that very exciting and impactful marketing events. We have prime for the opportunity to capture demand during this unique moment in time and our events are critical part of demand creation. I am thrilled to share that we have continued to scale up our in-person marketing event, but are such a powerful marketing lever for building the brand long-term. Remember that in-person events have unfortunately been on hold for most of the 2020 creating a headwind to traffic, and new cut some acquisition last year. In March of this year, we hosted an in-person marketing event Los Angeles attended by more than a 100 influencers over three days. To protect a community we adhere to nifty protocols that included COVID testing for all participants. One of the takeaways from this event was that the influencer community can’t wait to get back to doing in-person event. The desire to participate in this event was incredible amounting to way more interest than we could accompany, forcing us to unfortunately turn away a number of influencers. This is just the beginning for restarting our events calendar. We plan to meaningfully increase the frequency and scale of events to capitalize on this moment in time, expand our market reach and drive long-term returns. We are excited to get out there again in a more meaningful way as economies continue to open up. We have several activations, 10 of the top influencers and aspirational lifestyle location that will help…

Thanks, Michael, and hello everyone. As you can tell, we are very pleased with the first quarter results and even more excited about the recent top-line trends. With that let’s start with the results for the quarter. Note that all of the comparisons I will discuss will be on a year-over-year basis, unless otherwise stated in certain cases I’ll speak to our growth compared to 2019 since the comparison to 2020 is skewed by the impacts of COVID. Net sales were $179 million, an increase of 22% compared to the first quarter of 2020, which is a significant improvement from the low single-digit net sales growth trend we had been experiencing for the first seven weeks of the quarter that we disclosed during our last earnings call. Compared to the first quarter of 2019 net sales grew 30% for the first quarter and that an even higher rate for the month of March when our net sales growth meaningfully accelerated. During January and February growth is primarily coming from categories and products like beauty, intimates and active wear, which more than offset the headwinds and products that are more focused on going out like dresses. We shifted in March when we experienced a meaningful increase in demand for products related to going out. This increase in demand combined with the continued strength in at-home products helped drive the strong overall top line results as we exited the quarter. By territory, both the U.S. and international markets contributed to the strong top-line results for the quarter with domestic and international growth of 19% and 38% respectively, both regions also contributed to the growth acceleration in March. The international strength was broad-based with Australia, Canada, greater China, and the Middle East as key contributors. By segment REVOLVE segment net sales increased 22%…

[Operator Instructions] And your first question comes from the line of Erinn Murphy from Piper Sandler. Your line is open.

Great. Thank you and good afternoon. I guess my first question for the team is on the quarter to date trend, super encouraging what you’re seeing here in April. Can you talk a little bit more about the customer cohorts that you’re seeing is it more new customers, existing customers? Are you starting to see some lapse consumers back in the fold and then I have to follow-up?

It’s really a mix of all of those. April represents a continuation of the trends that we saw in March. And we’re continuing to move more volume on a daily basis than ever before. And it’s coming from all cohorts, it’s coming from, existing customers or bring more frequently. It’s coming from last customers coming back into the fold and it’s coming from some really nice acceleration on the new investment side.

Great. And then just on the return rates is Jesse, as you were speaking about kind of expecting that to normalize. Are you already seeing that in March and April as dresses and some of the other going out categories have accelerated and then I have just a follow-up bigger picture on the fashion cycle. You guys talked a little bit about the denim silhouette change. I’m curious if you’re seeing with the denim orders, are you seeing a higher attach rate on other items in the wardrobe as consumers kind of think about that silhouette change from skinny to maybe more of a looser, a straight leg. Thank you.

Yes, I’ll take the first one here. This is Jesse and then kick it over to Michael for the more fashion-forward question. On the return rate, we have seen that start to take up, and if you go back through the quarters, we saw that drop down to the low, very low 40s at the depths of COVID given the mixed in the shift in mix. And then that started to tick up even through the back half of last year. And we’re in the mid 40s in Q4 and it hung out in that same mid 40 range for Q1. And then in the most recent periods of March and April, we have seen that tick up as dresses did return to grow. And that’s some of the commentary we’re getting for the forward-looking information as well as that we do expect dresses to come back in a meaningful way, and that will increase return rate sequentially that said, the other categories are holding and we do expect, and optimistically hope that return rate will be lower than it’s been in the past, in the past it’s been in that 50% to 55% zone. So, I think with the assortment, we can balance that going forward.

Yes. Michael here, how’s it going. The performance across the board, really improving, we’re seeing, strong performance in a number of categories from going out the type of clothes, dresses that would up, well, of course not as popular, event dresses, we’re seeing a lot of strength in terms of like all those the pent up demand for our kind of occasions, weddings and graduation type things and whatnot. Specifically with regards to denim, we’re really anticipating this to be a nice cycle and a long-term trend. We see that these type of trends, particularly denim things that years upon years. So we’re positioning ourselves right now for the beginning of something new. I think of course, we’ve seen no skinny jeans were important for our customer, for our, many, many years. So we are excited about the beginning of a new cycle with kind of looser with denim,

And your next question comes from the line of Oliver Chen from Cowen. Your line is open.

Thank you very much. Your inventory position looks really clean. What are your thoughts on balancing inventory versus sales going forward? And as you invest in more inventory, I mean, your full-price selling level is very high right now, but which category might be the driver for taking that lower, as you balance those investments. And then the second question Tmall is a huge deal. Do you have parameters or thoughts for how you will approach that on a, multi-year basis and also any statistics around your Chinese audience on social media and what you see happening? Thank you.

Yes, definitely. So from an inventory position standpoint we’re later on the inventory side, but with our model, we’re able to react very quickly to consumer trends. So as I think the, we see more stability in the trends we should expect to see the inventory levels climb a bit just because that’ll be a more optimal position for us to maximize the economics. But we came into the quarter later on the inventory side compared to where growth means, and we were able to react quickly. And I think, leverage inbound demand that we saw in a really healthy way. In terms of the categories that we’re looking at, growth for this year is definitely going to be in those growing out categories. That everyone’s been missing out on and that we’re seeing a lot of pent up demand, but I think what’s really exciting for us is that we’re seeing continued really strong sales in the categories that we need a huge hedge within last year during the pandemic. Beauty continues to be strong through the month of April active continues to be strong. So those categories that we gain strengthen, we’re seeing those sales hold up with the one exception, maybe being that on the wound side, we’re seeing mounds where sales tip her off a little bit. And then turning to the Tmall question. It’s still very early on Tmall, but we’ve been really encouraged by the trends that we see there. And we think long-term in China, it’s going to be a very important part of our strategy just because it has such a huge mind share among consumers. And what’s really exciting for us is, we’ve seen actually that new customers that have come in on Tmall have been later converted off of the REVOLVE website itself. So it serves not only to kind of expose us initially, and it is really a very low cost channel for us. But it also converts people through REVOLVE platform over the long term. So, we’re just getting started there, but we’re optimistic about a game that we can drive.

And your next question comes from the line of Lorraine Hutchinson from Bank of America. Your line is open.

Thanks, good afternoon. Encouraging to hear that the meaningful sales acceleration. I just wanted to follow-up on the inventory commentary and get your view on the availability of product in both third party, branded product and own brand to meet this demand. If it continues to accelerate?

Yes, so we feel really good about our ability to meet the increased demand. It’s not to say there aren’t some hiccups and challenges under the covers, but if you’re talking to a whole broad base, we feel really good about our ability to react to the shifts in demand that we saw is get the right products for consumers and continue to do that.

Thank you.

And your next question comes from the line of Michael Binetti from Credit Suisse. Your line is open.

Hey guys, congrats on a nice quarter. Thanks for taking all our questions here. I guess, as you Jesse, do you think about where the post-COVID mix of businesses going and then the legacy categories come back? Can you point to any numerical evidence that you’re looking at to inform you where gross margins go and also, I guess return rates is since they’re so influential on the P&L I’d be curious there, how much you mentioned, I know you mentioned a few takes there with some of the inflation in shipping rates lately, but I didn’t hear much on the east coast facility that you guys have been contemplating. Is there any help that on a per order basis that could help the economics of return as we kind of returned to that? We kind of normalize here?

Yes, for sure. So there’s a lot in there in terms of both margin and return rate, but maybe if we start with gross margin, as we stated in on the prepared remarks, margins been really strong. We had full price sales in excess of 80% for three quarters in a row, which is phenomenal. And we’re very pleased with that, but we do expect as we build an inventory and things normalize over time that, that full price sales mix will come down slightly back towards, the historical norms of, in that mid 70s range. Also mark down margins have been extremely strong with the lighter markdown inventory. So we’ve been able to really deliver on the markdown margin side again, as we build the new inventory things will normalize over time. So those are two kind of pressure points. As we look ahead on gross margin also the own brands, as we’ve talked about over the last couple of calls, owned brands have been compressed as a percentage of the REVOLVE segment net sales that will continue through the, the next couple of quarters before it starts to reaccelerate. So we’ll see some near term pressure there before it starts to reaccelerate and add some gross margin, in late 2021 into 2022. So, a number of things going on there, but structurally over the long-term still feel really good about our gross margin target of that 55% plus, and then on return rate, that’s largely a product mix story where, as dresses, fell off a cliff last year, around this time in the depths of COVID, and we saw a mix shift towards beauty, which has a low single digit return rate. Now we’re seeing that dresses come back with that higher return rate. So seeing some pressure, which will add to the cost structure, especially on a year-over-year basis, as we comp those COVID time periods. But we are doing things in the background to help manage that one. You know, the mix will be more diversified, so that will have some positive impact on the overall return rate and then to just, making it a great experience for the customer and making it easy. But also, trying to manage that return rate to a certain extent and on the cost front, doing things like you mentioned that east coast returned facility and full shipping over from the east coast, which would give us, some benefit in the future. So a lot going on there, but again, we feel good about balancing return rate to a rate that’s not at that peak 55% that we were at in the, in the pre-COVID days.

Got it. And then can I just.

Nope, I got cut off.

And your next question comes from the line of Edward Yruma from KeyBanc Capital Markets. Your line is open.

Hey guys, thanks for taking the question and thanks for all the color on this, on the P&L, especially relates to marketing expense, I guess two questions on that front. One, I know that you historically do a lot of these events during the summertime. It should be assumed that the cadence, the marketing spend shifts from the historical pattern, given that kind of the ongoing reopening and two I know you guys are expecting that the iOS changes may have an impact again, any early learning’s that you’re staying in terms of marketing efficacy, I given the changes took place a couple of weeks ago. Thanks.

Yes. So in terms of the timing of the marketing spend yes, you’re going to see a different cadence than in historical. Historically April is a very big spend month for us on the brand marketing side. And in this year we weren’t able to do anything comparable to certainly what we did in 2019. But if all goes well and according to plan, because it is an uncertain environment out there you’re going to start to see significant brand marketing investments in the coming months, through the summer and through the fall. And so there’s a little bit different cadence there. And then with regards to the iOS changes we haven’t really seen anything yet, but it’s, it’s very early. So, we’ll just have to see how that all plays out. I think that’s a potential headwind that all our money commerce shops. Yes.

And your next question comes from the line of Bob Drbul from Guggenheim Securities. Your line is open.

Hey guys. Good afternoon. Congratulations on a great quarter. I guess my question is on the categories, when you think about dresses or, I think that there was a vaccine ready category. When you look sort of pricing around where you were historically, is the customer willing to go to higher price points? Are you seeing, is it a steady price point? I’m just trying to understand how you guys are positioned and I guess sort of lean that into on the FORWARD side, in terms of the brand offering there, as you skew more towards luxury, are you getting, there was a story around getting better brands and newer brands. Has that been the case in anything that you’re pretty excited about as you look for the rest of the year, from that perspective? Thanks.

Yes. Hey Bob, thanks for the questions. I’ll take the first one. And then pass it off. I think, you’re seeing AOV call it stable with Q4 and there’s a lot of going into that. AOV and that’s a gross number on a net AOV basis. We’re seeing that increase pretty meaningfully year-over-year and sequentially. So, I think that’s one point, the second point in more to your question is, the customer is willing to spend, call it the same amount as she was before. We’re not seeing any significant shifts in, that initial price. And then to your point, seeing FORWARD performer really well, especially when you look at that two year stack in Q1 where we grew 47% last year, and then 24% on top of that this year. So luxurious performing wells, we see a lot of opportunity and cross-marketing forward to that REVOLVE customer. And we see that already in the numbers that, she is willing to spend up and she’s willing to compliment her wardrobe and some of those more statement pieces.

Yes. And when it comes to new brands, I think it’s exciting to see that, it’s slower change in the luxury world, but I think everyone’s understanding that, historic players and the historic points of distribution, aren’t as strong and aren’t what they, once in a while, and ultimately, forward as a preferred partner moving forward. So, brands, like for the mention, like the, and [indiscernible] these are brands that when we found it forward, we’re kind of at the pinnacle of our wishlist things that we really respected from a design perspective, from a luxury perspective. So very proud that we have that, as part of kind of our state without grants, and I’m super optimistic that more will be coming. I think that, ultimately there’s only a handful of bands that we don’t carry, and I think, optimistic that to be coming our way.

And your next question comes from the line of Kimberly Greenberger from Morgan Stanley. Your line is open.

Great. Thank you so much. I wanted to ask about the in-person marketing events and if I’m remembering correctly back in 2019 Michael, I think you held over 100 events that year, if I’m not mistaken. And Obviously it’s early days for the in-person events, but as you think about the rest of this year, would you expect to get back to the same kind of in-person events, by the time we get to the third quarter this year or the fourth quarter this year, I’m just trying to, understand how long is the past, back to normal when it comes doing some of these really impactful marketing things?

Yeah, I think it’ll be A steady ramp up. We’ll definitely, get a lot more active, starting next week with our first REVOLVE around the world ship and well over a year, almost about a year and a half, I guess, so that’s super exciting. We’ll definitely see more and we’ll definitely see more and it’ll be the same kind, but I think there’ll be more exciting and better than ever. I think that team has had a lot of time to really think and plan and improve on what we had done. And there was a period where what we were doing was working incredibly well. So, with this long pause, I think the teams have the opportunity to really iterate and improve so exciting things coming similar to times past improved and better, and some things that we’ve never done before which can we to – for you guys to see coming up.

Fantasic. And Jesse, just a follow up for you on the higher shipping costs. I think you talked about the constraints in last mile delivery and just capacity overall that that we’re raising shipping costs. Do you view these higher costs as a permanent part of the cost structure, or is it more sort of short-term surge pricing that when the world is back to normal and the level of in-store shopping returns these extra costs are likely to come out of the P&L?

Yes, we don’t fully know yet. We have seen these costs increase year-over-year pretty consistently, but we are seeing a surge just given everything that’s going on out there. So, I think a piece of it will be temporary, but a large portion will just be cost increases overtime. That said we do have some things in the works and with the AOV increasing as well, that helps alleviate some of that pressure, but not counting on a significant release there at least for the balance of the year.

And your next question comes from the line of Mark Altschwager from Baird. Your line is open.

Good afternoon. Thanks for taking my question. Maybe Jesse is another follow-up on the margin, but kind of a bigger picture one, is the guidance implied some more significant reinvestment this year, which obviously makes sense. But if we were to assume a more normalized kind of low-20s top-line I mean, do you expect a business to leverage or would you plan leverage moving beyond 2021, I guess any big picture thoughts on how you’re thinking about the normalized EBITDA margin after all the learnings over the past year?

Yes, over time, we expect to increase EBITDA margin. We’re seeing some – we saw some under investment last year, which meaningfully added to the EBITDA margin. We’re going to reinvest it this year. So, you’re going to see some pressure there and really on that marketing line item. So, if you look longer term, we expect to continue to increase gross margin, which gives us a lot of headroom and then as the other line item balance out and we get leveraged, especially on the more fixed line items like G&A will we expect to see EBITDA margin expand overtime, and still targeting those long-term targets of a 55% gross margin and 14% EBITDA margin. But this year will be a year of reinvestment and again, especially, really just doubling down on that marketing and capturing this kind of return to normal and post-COVID world.

And your next question comes from the line of Camilo Lyon from BTIG. Your line is open.

Thank you. Good afternoon. It’s one of the take a little deeper into the [indiscernible] around where the demand for occasion where it’s coming from? If there’s any regional differences that you’ve never seen, that a particular call-outs for example our justice doing better in Texas and Florida than in the Northeast or is there just this pent up demand across the state it’s pretty similar that people are feeling more comfortable in buying that type of that sort of product.

Yes. So from a timing perspective, we certainly saw some states that reopened earlier ahead of others in terms of trends in demand both overall and kind of by category. But as we moved into April, we started to see those trends being largely broad based across all states with obviously small sample size you’re going to have differences up and down, but kind of broadly speaking the strength is across the U.S. versus just certain states.

And your next question comes from the line of Roxanne Meyer from MKM Partners. Your line is open.

Congrats on a strong quarter, and thanks for taking my questions. My first question is on marketing, you mentioned that in March, you had the second highest month in the company’s history for new customer acquisition, and that occurred without fully stepping your foot on the gap from a marketing spend perspective. So, I’m just curious if you can provide a breakdown of was that for REVOLVE and for FORWARD, and what do you attribute to the strength of new customer acquisition?

So, the new customer acquisition was again, fairly broad based really across all our business segments. We started seeing a very broad based strength, particularly as we entered in April. And we attributed by and large to the reopening and consumers wanting to get out again and get back to their previous lifestyles. And our hope is that often we continue in a big way throughout the year. And our hope is that as we to layer on really impactful marketing investments that we’ll see that accelerate even further. So we feel good about the trends.

Great. And then I just want to follow-up at a previous question on events. Obviously you’re not doing events yet like perhaps you have historically, but are you able to share the lift that you’ve seen from some of the recent events you’ve done in the prior quarter, or maybe quarter-to-date and give us aside from the Revolve around the world, any other, a preview of some of the events you may have planned in the next quarter or two?

Without events we think it’s no super crucial for our strategy. So super excited about what’s the common, of course that’d be mentioned many times I’ve answered, but there’ll be more to come. Our marketing team would kill me if I started to blab my mouth about all the exciting things they have working on, but there’s going to be a lot of exciting things coming on, things that you’ve never seen before. And Revolve around the world coming up going to trusted kind of tried and true approach next week will be great, but looking at past events and such the real – the real impact is really in that brand equity in that brand awareness over the long-term. We do see sales, bumps and increases in a very, very short term for sure, but the real meaningful impact that’s really gaining that awareness, and the increased frequency of events and upcoming cadence, I think is really what we see the value in the investments compound when we’re doing things now, not once in a while, but one where they’re unavoidable, but we’re really just a part of entertainment and a part of your life. So we’ll be full swing very, very soon.

Great, thanks a lot. And best of luck.

Thank you.

And your next question comes from the nine of Ross Sandler from Barclays. Your line is open.

Hi guys, just the question on the marketing. So the 200 bps of deleverage this year you told us revenue growth. Is that mostly the idea facing how big of an impact is that going to have, and does this change in kind of how marketing works in the internet? Does it change how you think about potentially moving transactions inside of other apps like Instagram or wherever or is it more strategic to just keep everything in your own app and you can have your marketing be less efficient. And then one more on the marketing is the mix of re-engagement marketing versus new customer acquisition changing in that 200 bps of deleverage. That’s it. Thanks guys.

Yes. So I guess certainly answer your question about the iOS components. We’ve simply highlighted that as a potential risk factor and we’ll have to see how that plays out. I think if you look at the marketing budget as a whole, the driver there is our strategy that we can get time to reinvest. We think the reopen wall is going to be perfect for the Revolve brands, and we think those investments pay strong dividends overtime. But the full impact is over the long-term, not the short-term. So we see there just being a great opportunity to invest large amounts of marketing dollars this year. And so that’s what we would like to do if things continue to play out of the way currently seen them. And it’s consistent with comments that we made in the past where we expected the marketing to be at least at historical levels and as we’ve seen things unfold we see the opportunity to invest even more.

And our next question comes from the line of Matt Koranda from Roth Capital. Your line is open.

Hey guys, thanks. Lot of had been asked, but just wanted to ask about the interlinking between Revolve the loyalty program and forward if you could provide a little bit more color on some of the steps you’re taking to kind of convert some of the folks from Revolve over to the Ford platform would be helpful.

Yes definitely. So, we recently launched that Ford loyalty program and we cross promoted it to our revolve softwares. And so we’re really excited about the potential of a long-term to continue to move more and more revolve shoppers to the Ford platform. Somewhat quiet over the course of the past year or so has been a really strong thing that we’ve seen in the Ford platform where on a two-year basis, it’s grown 82%. And so there’s a lot of reasons for that. We think it has a lot of momentum internationally and a lot of momentum from a brand standpoint, but also a really big reason for that is our ability to move those Revolve customers over to Ford for their luxury purchases. So, we feel great about it over the long-term. We heard more and more of those customers and the loyalty program will be a very helpful.

Great. And just one more on cast upon that if I could it just seems like, even though you’re signaling, there’s this uptick in marketing expense on a go-forward basis and maybe a little bit of uptick in terms of fulfillment, it seems like you’ve more than cover those cash deployment requirements with the existing business. And so you’re going to continue to kind of stack cash for the foreseeable future. Are there any capital investments that you can going to highlight that would require additional cash on the balance sheet going forward? Or should we start thinking about sort of cash deployment and department dividends or other M&A just wanting to get your latest thoughts on how you think that’s playing cash here?

Yes, no, we’ve been really happy with the cash flow dynamics over the past year. Now, some of that is due to the inventory shift and being able to really successfully aggressively cut inventory in the early days of COVID. So, there is a cash draws we invest in inventory, now and into the next few months, also a cash draw those marketing investment that to your point, it’s still really healthy cash flow dynamics. So, we’re going to continue to see a really healthy cash balance. No significant internal tech projects, we remain very capital-efficient in terms of our CapEx is very low single digit as a percentage of net sales, and we expect it to remain there for the foreseeable future. So then kind of to the point of your question, I think it’s too early to start talking about dividends and buybacks, probably the next logical place that we’ll look is opportunistic M&A, but, you know, emphasizing the opportunistic. We want to make sure it’s right long-term move for. So, we’ll continue to review opportunities and but until then we’ll just maintain that strong balance sheet

And we will take our final question from Susan Anderson from B. Riley Securities. Your line is open.

Hi Alec Legg on for Susan. Thanks for taking my question. So kind of piggybacking off of Ross’s question on Instagram, in your own mobile app, are you able to provide any details on the sales penetration through those alternative channels? And then also just what are the metrics on those platform relative to your own websites such as AOV conversion rate a new customer acquisition? Any details would be helpful. Thanks.

Yes, so, starting with it with our own app, our own app is a very significant portion of our sales represents, call it roughly a quarter-over-quarter sales. And then with regards to customer shopping through the Instagram app, we have seen some increased momentum there in weeks and periods. It’s still a very small portion of the business. In terms of economics there there’s, they’re very favorable, but you’re generally not going to see the same level of order size on their website. But the long term it’s a part of the overall suite of options that we have from customers.

Thank you. And there are no further questions at this time. I will now turn it back to the management for the closing remarks.

Thank you everyone for joining us today. And we’d also like to thank all of our investors for your continued support over this past year. We look forward to meeting again on our conference call next quarter

And this concludes today’s conference call. Thank you for participating. You may now disconnect your lines.