So overall feel good. REVOLVE strong, still some work to do on FWRD. On return rate, we are optimistic about all the work going into that and the changes we’ve made some green shoots. We’re not baking in any of those improvements into the guidance or into our modeling. We’re still modeling that kind of flat to last year and then hope for better than that, but not counting on it yet. And did you have one third one? Yeah. The math selling a distribution.
Anna Andreeva: Yeah. 1%.
Jesse Timmermans: Yeah. It’s a little north of that. It’s kind of in the 30 to 50. If you include both fulfillment and selling and distribution combined. So on those two line items.
Anna Andreeva: Okay, great. Very helpful. Thank you, guys.
Operator: Your next question comes from the line of Janine Stichter of BTIG. Your line is open.
Janine Stichter: Hi, good afternoon. Thanks for taking my question. So I wanted to ask about FWRD. Understanding, we’re going through some challenges right now in the luxury or the aspirational luxury market, but how do you think about taking advantage of some of that dislocation that you mentioned with some of the other online e-commerce players and just leveraging your strong balance sheet here to take advantage of that.
Michael Mente: Yeah. I think there’s a couple different ways. Certainly, with all the disruption in businesses in turmoil, we’re on the lookout for strong people from those companies. We’re on the lookout for opportunities to potentially take market share and revenue share. And then in some cases, we’re looking at some of those asset opportunities themselves. So, there’s really a lot of opportunities. I think offset, obviously by the short term, weakness that’s continuing in terms of that aspirational luxury consumer. And so, we’ll have to see how it all plays out. Again, things are tough, but we think over the long-term that kind of disruption and the damaged brands that come out of that that are likely losing sniff and share, leaves an opportunity for others to take advantage of. So, we’re hopeful that we can start to take advantage of that in a bigger way and hopeful that we can exit the year with some momentum there.
Janine Stichter: Great. And then just on physical retail, it sounds like the few experiences that you’ve launched this year have gone really well. Is any update to how you’re thinking about potential further physical retail pop up?
Mike Karanikolas: Yeah. The International is like an early eye opening, really encouraging, sales strong, obviously, the property very strong obviously return rates many skills compared to online. New customer acquisition was incredible. So we thought that wow, this is like a huge, huge lane for us. We’ve, of course, been focused on the online market for the past two decades, but looking at, the ultimate potential where the business can be, we really see opportunity with physical retail. We do recognize that it is an adjacent business, but it is a different business and our early wins are very, very encouraging. So we’re definitely putting a lot of — at this point, I would say more and more energy and focus, but not dollars toward just yet. We’re really trying to build the muscle really trying to get smarter, but ultimately over the long-term, we think it’s a massive opportunity for us.
Janine Stichter: Great. Thanks so much.
Operator: Your next question comes from line of Simeon Siegel of BMO Capital Markets. Your line is open.
Simeon Siegel: Thanks. Hey, guys. Good afternoon. Hope you’re all doing well. Just to follow up briefly on the quarter date again. So just with the positive inflection and that sales function of just now having lapsed through the prior year markdown selling or do you see improvement in full price selling as well? Sorry if I missed that. And then, I know that trailing 12 months dynamic is something we always like it trips up on, but could you elaborate on your thoughts on the gap between the ongoing customer growth versus the order count and revenue trajectory. Just trying to think like, are you seeing fewer orders per customer? And if so, any thought as to why and when that should more closely converge? Thanks guys.
Jesse Timmermans: Yeah. Sure. On the full price dynamic, in addition to the shift in full price sales, we are seeing an increase just like for like in in full price sales offset, of course, by just the significantly lower markdown sales. And that continued into April, not to the extent of Q1, but still healthy and the majority of the customers are full price, even in those heavy markdown periods. So optimistic there and those are really strong customers for us, which leads into your customer question. Again, Q1 of last year was a really heavy customer ad quarter with the heavy markdowns. So until we lap out of that, the active customers will be challenged. Orders per customer are down year-on-year, kind of from those peaks that we saw in ’21 and ’22 and then also just again, the heavy order activity in Q1 of last year, but still higher than 2019. So we’re seeing overall just good healthy active customer behavior is just working through these volatile comps.
Simeon Siegel: Okay. So just any for when the active customer growth will more closely align with order growth or revenue growth, whichever way we want to look at it.
Jesse Timmermans: Yeah. I think it’s really kind of Q4 this year Q1 of next year.
Simeon Siegel: Perfect. Thanks guys. Best luck for the rest of the year.
Jesse Timmermans: Yeah. Thanks.
Operator: Your next question comes from a line of Rick Patel of Raymond James. Your line is open.
Rick Patel: Hey, good afternoon and great progress, guys. Can you provide color on what percent of your returns happen outside of that 30-day window right now and what that looked like before the policy changed during COVID. I know your assumptions are for this to not be that much of a needle mover this year, but just curious where you see this mix settling.
Michael Mente: Yeah. It’s a fairly significant portion of the returns that occur outside 30 days. It’s a minority, but it’s a substantial portion in it and that portion has increased over time. So, love to see what kind of impact the return policy has. We’re certainly hopeful there could be some level of impact, but I think it’s one of those things where you know you certainly can’t do with any confidence whether there’ll be a positive impact or not until you roll it out. So we’ll have to see what kind of impact it has on the overall return rate.
Rick Patel: And it sounds like you’re making good progress on own brands. I know national brands have been more of a focus over the last couple of years, but just curious how we should think about a potential acceleration for own brands and whether that’s something that could be a needle mover this year.
Mike Karanikolas: Yes. As the business has been stable as over the past year or so, or I’ll call it 18 months, as we have taken down own brand style delivery, we’re starting to be a little bit more opportunistic. We haven’t really planned for the acceleration at this point. We think now we’re not really, really healthy position to really start to think about expansion once again. The inventory has been cleaned up, the new brands are performing extremely well. So I think we’re hopefully at a near a tipping point for us to advance that saturation.
Rick Patel: Thanks very much.
Operator: Our last question comes from the line of Janet Joseph [ph] of JJK Research Associates. You line is open.
Unidentified Analyst: Hi, everybody and congrats on the progress. I just wanted to ask about FWRD. You’re saying that the handbag and accessories business continues to be weak. So, I was wondering if you could discuss any strategies in place. Two, I mean, in terms of assortment architecture where you think that these comp climbs can moderate and if there’s a possibility that they could flatten out or even turn positive as the year goes along. And I was wondering about opening price points there. We’re seeing some of the luxury brands tweaked down their opening price points. And I was just wondering how you’re thinking about your assortments in terms of categories and about your pricing. Thank you.
Mike Karanikolas: Yeah, definitely. Yeah. So handbags, as we noted have been particularly challenged. I think you’re spot on that a lot of the price increases that the luxury brands put in over the past couple years have put a crimp on demand. And so is consumers continue to adjust to the new normal and hopefully is luxury brands start to rationalize price in kind of more accessible way. We’re still in hopeful. We’ll start to see that turn and then obviously comps are a big deal also. So even without those changes, just hopeful is comps get a bit easier. Then we’ll start to see some better momentum in the FWRD business as we exit the back after the year, especially with all that disruption and opportunity and revenue share loss from those disrupted brands.
