LightInTheBox Holding Co., Ltd. Sponsored ADR Stock

Hello, ladies and gentlemen. Thank you for standing by for LightInTheBox's Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

Today's conference call is being recorded. I will now turn the call over to your host, Ms. Serena Huang. Please go ahead, Serena.

Thank you, operator. Hello, everyone, and welcome to LightInTheBox's Second Quarter 2026 Earnings Conference Call. The company's earnings results were released by Newswire services earlier today and are available on the company's IR website at ir.ador.com.

On the call from LightInTheBox today are Mr. Jian He, CEO; and Ms. Wenyu Liu, CFO. Mr. He will provide an overview ofthe company's Q2 highlights, followed by Mr. Liu, who will go over its financial results. Following our prepared remarks, we will open the call to questions.

Before we proceed, please note that today's discussion may contain 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 the company's current expectations.

To understand the factors that could cause results to materially differ from those in forward-looking statements, please refer to the company's Form 20-F filed with the SEC -- the company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please also note that LightInTheBox's earnings press release and this conference call includes discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. Please refer to the company's earnings press release, which contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures.

Now I'd like to turn the call over to LightInTheBox CEO, Mr. He. Please go ahead.

Good morning, and good evening, everyone. Thank you for joining LightInTheBox's Second Quarter 2026 Earnings Call. We are pleased to report excellent results for the first half and the second quarter of 2026.

Our first half results provide a clear view of the progress we are making. Revenue increased 3% year-over-year to $108.8 million. Net income grew by approximately 28% to $2.7 million. Adjusted EBITDA also improved to $3.3 million. In the second quarter, revenue declined marginally as we phase out the long tail products despite a challenging external environment, gross margin remained resilient at 66%. Through its disciplined expense management we remain profitable, delivering net income of $1.6 million and adjusted EBITDA of $1.9 million.

Over the past several years, we have steadily reshaped LightInTheBox and laid the foundation for sustainable profitable growth. From 2023 to 2024, we invested in our property apparel brands and strengthened our in-house product development and the production capabilities. These investments gave us greater control over product differentiation, quality and speed to market.

In 2025, we made meaningful progress in evolving the LightInTheBox online platform into a consumer lifestyle company by developing a deeper understanding of consumer preference and sentiment. We delivered a differentiated products. The force engagement and build a stronger emotional connection with consumers.

This year, we are seeing another important shift. AI is rapidly becoming embedded in how people work, communicate, create and make the decisions. We believe it will transform to owning core consumers discover, evaluate and purchase products, but also what the value and seeking the daily list.

As technology becomes more deeply integrated into everyday life, we believe the design for emotional connection, self-expression, individuality, a better quality of life and memorable experiences will become even more important. As a lifestyle company, we are well positioned to address these evolving needs. Our transformation from the AI goes beyond adopting technology tools. It requires a deeper understanding of consumer intent.

Through our AI strategy, we are focused on using technologies to anticipate evolving consumer needs and connect them more effectively with product discovery, personalization and curation. At the same time, we will continue to evolve our product strategy around growing human aspiration for self-expression, emotional value, and memorable experience.

With that, I will now hand the call over to Wenyu to go through our financial results.

Thank you, Mr. He. Good morning and good evening, everyone. Before we go over our financials, please note that unless otherwise stated, all figures are presented in U.S. dollars. In the second quarter, our total revenues were $57 million, a modest 4% decrease year-over-year as we deliberately phased out long-tail products. This quarter was affected by a challenging external environment. Geopolitical disruptions increased pressure on cross-border logistics and related costs, while the weaker U.S. dollar created additional foreign exchange headwinds for our global operations.

Despite these factors, gross margin remained very stable at 66.1% compared with 65.9% a year ago, reflecting our continued efforts on higher-margin lifestyle products. Total operating expenses in the second quarter decreased by 4% year-over-year to $35 million, of which fulfillment expenses decreased by 3% to $4 million.

Selling and marketing expenses decreased by 4% to $27 million, and G&A expenses decreased by 5% to $5 million. Total operating expenses as a percentage of revenue decreased from 63% to 62%. Our net income in the second quarter reached $1.6 million compared to $2 million in the same quarter last year.

This concludes my remarks. We are now open to your questions. Operator, please continue.

[Operator Instructions] Your question comes from [indiscernible], a private investor.

I have questions relating to 2 topics and 2 topics are insider ownership and your brand matrix strategy, and I'll start with the first topic. I would appreciate if you could provide an update on how many shares are in the public float, and how much do insiders own of the company.

Thank you for your question. Related to insider share percentage, you may refer to our IR website for more details.

My second question was concerning the brand matrix strategy. At an investor conference earlier this year, the company stated that its 3 brands are Ador, Msglamor and Skol. And I was wondering if you could provide any details about any of the brands. And also, you mentioned potentially adding maybe 1 to 2 brands a year if you find the right market? And just would appreciate any thoughts about plans for new brands in this year or the next.

Thank you for your question. For these 3 brands, we do see good progress in terms of top line as well as bottom line, and we do see repeat purchase rates are increasing. So these brands are progressing really good. At the same time, we are preparing other brands as well to enhance the brand matrix.

Thank you. There are no further phone questions at this time, and that does conclude our conference for today. Thank you for participating. You may now disconnect.

Hello, ladies and gentlemen. Thank you for standing by for LightInTheBox's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Ms. Serena Huang. Please go ahead, Serena.

Thank you, operator. Hello, everyone, and welcome to LightInTheBox First Quarter 2026 Earnings Conference Call. The company's earnings results were released via Newswire Services earlier today and are available on the company's IR website at ir.ador.com.

On the call from LightInTheBox today are Mr. Jian He, CEO; and Mr. Suhai Ji, CFO. Mr. He will provide an overview of the company's Q1 highlights, followed by Mr. Ji, who will go over its financial results. Following our prepared remarks, we will open the call to questions.

Before we proceed, please note that today's discussion may contain 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 the company's current expectations. To understand the factors that could cause results to materially differ from those in forward-looking statements, please refer to the company's Form 20-F filed with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please also note that LightInTheBox's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. Please refer to the company's earnings press release, which contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. Now I'd like to turn the call over to LightInTheBox's CEO, Mr. He. Please go ahead.

Good morning, and good evening, everyone. Thank you for joining LightInTheBox's First Quarter 2026 Earnings Call. We are pleased to report an exciting first quarter results.

Continuing the turnaround from last year, we achieved our eighth consecutive profitable quarter and a record first quarter profit of $1.2 million since 2022. This compared with just a growth of $0.1 million in the first quarter of last year. Please note that Q1 is typically our weakest period due to the seasonality of our business. Q2 picks up significantly as the season goes into spring and summer. Q3 may come down a little and Q4 picks up again to be ahead of Christmas.

We are also proud of the fact that Q1 marked our second consecutive quarter of year-over-year revenue growth with revenues returning to double-digit growth, increasing by 11% to $52 million. Our branded apparel business continued to gain strong momentum, growing over 81% year-over-year and already accounting for 24% of total revenue, up from 15% in the first quarter of 2025.

These results reflect the continued successful execution of our strategy of evolving the LightInTheBox online platform into a consumer lifestyle company. By offering highly customized products that create the emotional resonance for festivals, holidays and special occasions, combined with our brand matrix strategy across women's fashion, golf apparel and light party dresses. We are driving stronger engagement and customer loyalty.

In summary, we had a very good head start for 2026. With sustained profitability, disciplined cost control and our ongoing share repurchase program, we believe we are well positioned to pursue continued revenue and profit growth as well as greater shareholder value through the rest of 2026. With that, I will now hand the call over to Suhai to go through our financial results.

Thank you, Mr. He. Good morning, and good evening, everyone. Before we go over our financials, please note that unless otherwise stated, all figures are presented in U.S. dollars. As our CEO mentioned in his remarks, we delivered excellent first quarter results in 2026. In the first quarter, our total revenues were $52 million, up 11% year-over-year. Compared to the year-over-year decrease in the first 3 quarters of last year, this marked our second consecutive top line growth. We have successfully engineered a sustained business turnaround, not only on profit, but also on revenues.

The first quarter gross profit was $34 million, up 10% year-over-year. Gross margin remained relatively stable at 65%. Total operating expenses in the first quarter increased 7% year-over-year to $33 million, of which fulfillment expenses increased by 5%, to $4 million, reflecting the growth in top line revenues; selling and marketing expenses increased by 13%, to $25 million; while general and administrative expenses decreased by 15%, to $4 million.

Total operating expenses as a percentage of revenue decreased from 65% to 63%. Our net income in the first quarter reached $1.2 million compared to just $0.1 million in the same quarter last year, marking a record first quarter profit since 2022. So overall, we had a remarkable turnaround year in 2025 and are continuing the progress and momentum going into 2026 as reflected in our Q1 results. We remain confident that 2026 will be another successful record-setting year.

This concludes my remarks, and we are now open to your questions. So operator, please continue.

[Operator Instructions]

There are no questions at this time. I'll now hand back to Ms. Huang for closing remarks.

Thank you once again for joining us today. If you have further questions, please feel free to contact LightInTheBox's Investor Relations through the contact information provided on our website. Have a great day.

Hello, ladies and gentlemen. Thank you for standing by for LightInTheBox's Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Ms. Serena Huang. Please go ahead, Serena.

Thank you, operator. Hello, everyone, and welcome to LightInTheBox Fourth Quarter and Full Year 2025 Earnings Conference Call. The company's earnings results were released via Newswire services earlier today and are available on the company's IR website at ir.ador.com. On the call from LightInTheBox today are the CEO, Mr. Jian He; and the CFO, Mr. Suhai Ji. Mr. He will provide an overview of the company's strategies and highlights, followed by Mr. Ji, who will go over its financial results. Following our prepared remarks, we will open the call to questions.

Before we proceed, please note that today's discussion may contain 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 the company's current expectations. To understand the factors that could cause results to materially differ from those in forward-looking statements, please refer to the company's Form 20-F filed with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please also note that LightInTheBox earnings press release and this conference call include the discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. Please refer to the company's earnings press release, which contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures.

Now I'd like to turn the call over to LightInTheBox CEO, Mr. He. Please go ahead.

Good morning, and good evening, everyone. Thank you for joining LightInTheBox's Fourth Quarter and Full Year 2025 Earnings Call.

We are pleased to report excellent results for the fourth quarter and full year 2025, marking a key milestone in our transformation into a global consumer lifestyle company. In 2025, we delivered consecutive profitable quarters with record quarterly profit in Q4 and a remarkable full year turnaround.

Despite a challenging e-commerce environment, we regained positive year-over-year revenue growth in fourth quarter, up 9%, while achieving a record net income of $3.3 million for the quarter and $8.3 million for the year. Our strategy of evolving the LightInTheBox online platform into a consumer lifestyle company is clearly working. By capturing consumer preferences and sentiment, we offer differentiated products that drive consumer engagement through deep emotional resonance.

The LightInTheBox online platform now focuses on festivals, holidays, and special occasions, offering highly customized, non-standard products that address consumers' sentimental and lifestyle requirements rather than purely functional needs, thus allowing us to command premium pricing. To further complement and strengthen our positioning as a consumer lifestyle company, we also adopted a brand matrix strategy by launching three proprietary apparel brands successively since 2024 in women's fashion, golf apparel and light party dress. These brands build around the social attributes of women aged 30 and above, delivering emotional value and a more relaxed, enjoyable lifestyle experience across scenarios such as vacations, social golf, and parties.

Together, the LightInTheBox online business and the new brands create powerful synergies, tugging on heartstrings and forging emotional connections with our core customers. Such two-pronged unified approach towards consumer lifestyle positioning has yielded great results. In 2025, our branded apparel business grew over 143% and already accounted for 17% of total revenue, up from just 6% in 2024 helped by higher pricing power and the growth of our branded apparel business. We achieved a full-year gross margin of 65% in 2025, the highest level since becoming a public company in 2013, along with positive operating cash flow of $6.2 million.

In addition, we have fully embraced AI to capture the real-time marketing trends and drive operational efficiency across all aspects of our business, such as product design, photographic style, marketing channels and customer service. End to end AI automation has contributed to a workforce optimization of 58% since 2023, thus further improving our profit margin and financial results.

2025 was indeed a milestone in our history as a public company, as we navigated through challenging and intense competitive e-commerce environment, executed a business turnaround and return to profitability. Looking ahead to 2026, we remain committed in our continued transformation to becoming a global consumer lifestyle company and are confident in our ability to deliver overall revenue and profit growth.

With that, I will now hand the call over to Suhai to go through our financial results.

Thank you, Mr. He. Good morning and good evening, everyone. Before we go over our financials, please note that unless otherwise stated, all figures are presented in U.S. dollars. As our CEO mentioned in his remarks, indeed, we delivered excellent financial results last year. In the fourth quarter, our total revenues were $63 million, up 9% year-over-year. Compared to the year-over-year decrease in previous quarters, this marked our renewed top line growth as we have successfully engineered a business turnaround, not only on profit, but also on revenue.

The fourth quarter gross profit was $39 million, up 16% year-over-year. Gross margin improved to 63% this quarter from 59% year-over-year. This is largely driven by our higher-margin proprietary product lines and bespoke offerings like French on-demand apparel.

Total operating expenses in the fourth quarter increased 8% year-over-year to $36 million, of which fulfillment expenses increased by 7% to $4 million, reflecting the growth in top line revenues. Selling and Marketing expenses increased by 15% to $26 million, while General and Administrative expenses decreased by 15% to $5 million. Total operating expenses as a percentage of revenue remained roughly unchanged at 57%. Largely due to the top line revenue increase and gross margin expansion, our net income in the fourth quarter reached $3.3 million compared to just $0.5 million in the same quarter last year, marking a record quarterly profit since 2022.

Moving on to full year 2025 results. Total revenues decreased 12% year-over-year to $224 million, mainly due to our pivot to focus on profitability with declines moderating significantly from the first quarter of 2025 to the third quarter and the fourth quarter regaining positive growth. The full year gross profit was $146 million, down 5% year-over-year. However, gross margin increased to 65% from 60% year-over-year, which was at the highest level since we became a public company in 2013. This is mainly driven by the successful introduction of higher-margin proprietary product lines.

Total operating expenses in 2025 decreased by 11% year-over-year to $138 million, of which fulfillment expenses decreased by 12% to $17 million. Selling and Marketing expenses decreased by 8% to $103 million and General and Administrative expenses decreased by 24% to $20 million. Total operating expenses as a percentage of revenue remained roughly unchanged at 61%.

Largely due to gross margin expansion and enhanced operation efficiency, we achieved a net income of $8.3 million in 2025 compared with a loss of $2.5 million in 2024, showcasing a remarkable profitability turnaround. In addition, we generated a positive operating cash flow of $6.2 million in 2025. The details of cash flow statements can be found in our 20-F, which will be filed in the next week or so.

Overall, we had a remarkable turnaround year in 2025, and the financial results last year provide us with tremendous momentum and confidence going into 2026, which we believe will be another successful record-setting year.

So this concludes my remarks. We are now open for questions. Operator, please continue.

[Operator Instructions] Your first question comes from Joe Ramelli with Ramelli Asset Management.

A couple of questions. One is, do you expect this next year to be a growth year? And then I'll ask a second question.

Joe, thanks for the question. Yes, next year, we remain quite confident that we will deliver another year of growth, not only on profit, but also on revenue. We have not officially given the guidance yet, but we are deliberate that until probably the first quarter.

Great. And then my second question is, can you describe your shareholder base? What percentage do insiders hold? And are there any other large investors?

Yes. I think together, insiders and the directors hold roughly 70%. So only 30% roughly is in the public float. And the total share base is roughly 18 million ADS. Each ADS is about 12 common shares.

Great turnaround story. Pretty amazing job.

[Operator Instructions] There are no further questions at this time. I'll now hand back for closing remarks.

Okay. Thank you once again for joining us today. If you have further questions, please feel free to contact LightInTheBox Investor Relations through the contact information provided on our website. Have a great day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.