Beyond(US:BYON)2022-10-27 16:44Financial Data and Key Metrics Changes - Revenue declined by 33% year-over-year in Q3 2022, totaling $460 million, impacted by weak consumer sentiment and high inflation [31][35] - Adjusted EBITDA was $15 million with a margin of 3.2%, a decrease of $21 million compared to the previous year [41] - Reported EPS loss was $0.81, primarily due to noncash, non-operating expenses related to equity securities [31][32] - Gross profit was $107 million, down $49 million year-over-year, with a gross margin of 23.3%, reflecting a 60 basis point improvement [37] Business Line Data and Key Metrics Changes - Home-only revenue grew by 53% compared to 2019, although it declined nearly 30% year-over-year in Q3 2022, showing signs of stabilization [19][20] - Average order value increased by 13% year-over-year to $243, driven by a shift in product assortment [46] - Active customer base decreased to 5.8 million, influenced by weak consumer sentiment and the exit from non-home products [43] Market Data and Key Metrics Changes - The U.S. economy remains unsettled, with high interest rates affecting consumer purchasing behavior, particularly in the housing market [11] - The competitive landscape is characterized by aggressive promotional activities, with competitors like Target and Walmart engaging in early holiday promotions [94] Company Strategy and Development Direction - The company is focused on profitability and market share growth, emphasizing an asset-light model and strategic partnerships [10][18] - A new brand campaign, "C'mon, Get Comfy," was launched to enhance brand recognition and attract new customers [27][30] - The company aims to leverage its strong balance sheet to navigate economic uncertainties and pursue strategic M&A opportunities [50][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current challenges and return to growth, despite a highly promotional environment [9][18] - The focus remains on controlling business elements within their control, with an emphasis on profitability over growth [12][14] - Management acknowledged the ongoing headwinds from inflation and shifting consumer preferences but remains optimistic about long-term positioning [16][90] Other Important Information - The company has a strong net cash position of $392 million with minimal debt, providing flexibility in a volatile market [50] - The Medici Ventures Fund portfolio includes blockchain-focused startups, which are expected to add value to the company [15][80] Q&A Session Summary Question: Comments on pricing environment and competition - Management noted that promotional activity remains fierce, with competitors engaging in early holiday promotions [94] Question: Impact of supply chain improvements on gross margin - Supply chain costs have decreased, but some domestic costs remain high; gross margin improvements are attributed to operational efficiencies [96][97] Question: Expectations for EBITDA margins in 2023 - Management is still in the planning phase for 2023 and aims for mid-single-digit adjusted EBITDA margins, though this may be challenging [100][103] Question: Customer demographic trends and engagement - There is an increase in higher-income customers, with the mobile app attracting a younger demographic [105][107] Question: Initial impact of the brand ambassador campaign - Early results from the "C'mon, Get Comfy" campaign are encouraging, particularly in online channels [115]