Hims & Hers Health, Inc. (NYSE:HIMS) Q2 2023 Earnings Call Transcript

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Yemi Okupe: Yes. I think it varies. Like I don’t think we’re going to go SKU by SKU. And we did it in a very precise way. So the overall package is relatively complex particularly as you get into sexual health. But at the general genesis given what we did, number one we wanted to remove the concept of having a pill-based offering and [indiscernible] to your treatment-based offering or many of the SKUs we started to remove premiums on things like stronger dosages and things to start truly just to ensure that customers are able to get to the solution that they need. Additionally, what we also did is we started to just make the price point for the personalized SKUs more attractive. And so in some of the instances for a longer duration SKU the price cuts can be north of 25% to 30%.

George Hill: Very helpful. Thank you, very much.

Operator: Your next question comes from Korinne Wolfmeyer with Piper Sandler. Your line is open.

Korinne Wolfmeyer: Hey good afternoon guys. Thanks for taking the question and congrats on a quarter on the good quarter. I’ll just stick it to one question. I’d like to kind of break down the outlook for the gross margin going forward. And I know you guys have talked a little bit about kind of that 75% plus range longer term and I think the slide deck had that as well. At what point, are we going to start seeing more gross margin degradation. I know you’re taking pricing down a bit. You’ve talked about adding more innovation. That’s going to pressure margins, but we’re still not seeing that yet. So, just how should we be thinking about that gross margin going forward over the next couple of quarters and into 2024? Thank you.

Yemi Okupe: Yes. I think, we continue to unlock additional efficiencies across the board. And so I think that — from our vantage point, we still see that there’s meaningful efficiency gains in front of us, whether that’s in the form of lower product costs, opportunities on shipping. We’ll hold us of things that as we get bigger, I think we’ll continue to optimize. I think we’re going to be very thoughtful. Like, we’re not going to give up gross margin points just to do it. We’re going to run experiments and be very precise. And really the investments can come into a multitude of things as we look for that can be pricing, bundled offerings, loyalty programs, how we think around the category assortment. I think we’ll start to weigh all those different factors.

That’s going to take at least a couple of quarters to really identify those things. And so, it’s not going to necessarily be just a linear line down to the midpoint. As we’re testing things and as we’re gaining efficiency there might be periods of time somewhere this quarter where it actually goes up, remain steady. But I do think that the way to think around it is there are definitely efficiency gains in front of us. But at the same time, we also are very thoughtful in a precise way we’ll look to continue to get value back to the customer.

Korinne Wolfmeyer: Thank you.

Operator: Your next question comes from Ivan Feinseth with Tigress Financial Partners. Your line is open.

Ivan Feinseth: Thanks for taking my questions and congratulations on another great quarter and ongoing success and the birth of our second son too, that’s great news. Can you go into a little more detail on some of the platforms you’re going to have for the weight loss management and also for heart health. Like for example, it looks like it would be a great opportunity to partner with more traditional providers because a lot of heart health diagnostics, things like EKGs are very pricey and you would need your insurance to cover that as part of the diagnostic, but also do you envision like a subscription platform to track your way track out food logs and things like that, so you can kind of learn your eating habits and help to get modification.

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