Financial Data and Key Metrics Changes - For fiscal year 2025, net revenue was $1.27 billion, with an adjusted revenue decline of 3.7% year over year, but revenue for the second half of the year grew by 2.5% [20][21] - Q4 net revenue was $311.2 million, representing a 4.4% year-over-year increase on an adjusted basis, although it was down 4.2% quarter over quarter [21][22] - Adjusted EBITDA for the year was $49.1 million, or a 3.9% margin, up 170 basis points compared to fiscal year 2024 [21][26] - Gross margin for Q4 was 43.6%, down 100 basis points year over year, primarily due to higher transportation costs [23][26] Business Line Data and Key Metrics Changes - Both women's and men's business lines accelerated revenue growth in Q4, with men's business achieving double-digit growth [7][32] - Average order value (AOV) grew by 12% year over year, marking the eighth consecutive quarter of AOV growth [6][21] - Revenue per active client increased by 3% year over year to $549, demonstrating high engagement from retained clients [23] Market Data and Key Metrics Changes - The company gained market share in the U.S. apparel market during Q4, outperforming the overall market growth [5][37] - Active clients totaled 2.3 million, down 7.9% year over year, but the year-over-year comparison improved for the fifth consecutive quarter [22][23] Company Strategy and Development Direction - The company is focused on enhancing client experience through investments in generative AI and new features like AI style assistant and Stylist Connect [9][10][12] - Plans for fiscal year 2026 include a return to full-year revenue growth and continued improvement in active client growth rates [15][25] - The company aims to deepen client-stylist relationships and strengthen its assortment by adding new styles and brands [9][13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current macro environment while seizing strategic opportunities for growth [27][45] - The company is optimistic about the upcoming holiday season, leveraging new features and improved assortment to drive sales [40][41] - Management highlighted the importance of maintaining a disciplined approach to growth investments amidst a dynamic environment [15][25] Other Important Information - The company achieved its highest contribution margin in the last decade and completed the year with positive free cash flow and no debt [9][21] - The company has removed nearly $500 million in SG&A expenses over the last three years, improving operational efficiency [19][21] Q&A Session Summary Question: Where is the most growth coming from, and how are tariffs impacting AOV? - Management noted that growth is driven by both women's and men's business lines, particularly in non-apparel categories and established brands, with no impact from tariffs on AOV [30][32][33] Question: Where do you see you're taking share from, and how do you plan for the holiday? - Management indicated that they are gaining market share from retailers that fail to deliver personalized experiences, and they are well-positioned for the holiday season with new features and improved assortment [36][37][40] Question: Additional context on active clients and revenue growth? - Management highlighted the methodical approach to rebuilding the client base, with expectations for quarter-over-quarter increases in active clients [42][43]

Financial Data and Key Metrics Changes - For fiscal year 2025, net revenue was $1.27 billion, down 3.7% year over year, but revenue for the second half of the year grew 2.5% [20][21] - Q4 net revenue was $311.2 million, representing a 4.4% year-over-year increase on an adjusted basis [21] - Adjusted EBITDA for the year was $49.1 million, or a 3.9% margin, up 170 basis points compared to fiscal year 2024 [21] - Gross margin for fiscal year 2025 was 44.4%, the highest since fiscal year 2021, driven by transportation leverage and operational efficiencies [20][21] Business Line Data and Key Metrics Changes - Both women's and men's business lines accelerated revenue growth in Q4, with men's business achieving double-digit growth [7][31] - Average order value (AOV) grew 12% year over year, marking the eighth consecutive quarter of AOV growth [6][21] - Revenue per active client increased by 3% year over year to $549, demonstrating high engagement from retained clients [23] Market Data and Key Metrics Changes - The company gained market share in the U.S. apparel market during Q4, outperforming the overall market growth [5][37] - Active clients totaled 2.3 million, down 7.9% year over year, but the year-over-year comp improved for the fifth consecutive quarter [22][23] Company Strategy and Development Direction - The company is focused on enhancing client experience through investments in generative AI and new features like AI style assistant and Stylist Connect [10][12] - Plans for fiscal year 2026 include creating more dynamic client engagement, deepening client-stylist relationships, and strengthening the product assortment [9][15] - The company aims to return to full-year revenue growth and improve active client growth rates while maintaining disciplined growth investments [15][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current macro environment and seize strategic opportunities for growth [27][48] - The company anticipates total revenue for fiscal year 2026 to be between $1.28 billion and $1.33 billion, with adjusted EBITDA expected between $30 million and $45 million [25][26] - Management highlighted the importance of personalized service in gaining market share from competitors who fail to meet consumer expectations [37][47] Other Important Information - The company achieved its highest contribution margin in the last decade and completed the year with positive free cash flow and no debt [9][21] - The company has added over 50 new brands since the start of fiscal year 2025, enhancing its product assortment [15] Q&A Session Summary Question: Where is the most growth coming from, and how are tariffs impacting AOV? - Management noted that growth is driven by both women's and men's business lines, particularly in non-apparel categories and established brands, with no impact from tariffs on AOV [31][33] Question: How is the company planning for the holiday season? - Management emphasized a focus on flexibility and improved assortment to drive promotions and gifting opportunities during the holiday season [39][40]