Chinese e-retailer LightInTheBox reduces its loss as sales fall
June 14, 2016 10:33 AM
LightInTheBox Holding Co. Ltd., a China-based web-only retailer that mainly sells to consumers in Europe and North America, reported a sharply lower net loss of $2.1 million in the first quarter of 2016 compared with $21.6 million in the same quarter of 2015. Sales decreased 23.2% to $67.3 million from $87.6 million a year ago.
“Q1 revenue came in at $67.3 million, which exceeded our guidance of $65 million to $67 million,” Alan Guo, LightInTheBox's chairman and CEO told analysts Monday on a conference call transcribed by SeekingAlpha.com. “We also recorded our fourth consecutive quarter of non-GAAP profitability. I believe this result comes from the effective and consistent execution of our strategy over the past few quarters to improve our customer satisfaction, improve operating efficiency and foster greater innovation.”
Light in the Box is No. 43 in the Internet Retailer 2016 China 500.
Non-GAAP reporting allows companies, especially those operating in global markets, to calculate revenue or profit by excluding the short-term impact of currency exchange rate fluctuations, stock-based compensation and other unusual items. For example, LightInTheBox says its GAAP revenue doesn’t reflect its business accurately in Brazil because Brazil's currency, the real, fell 7.5% against the U.S. dollar in the first quarter of 2016, reducing the value of its sales in Brazil in dollar terms.
North America was the best-performing market for the retailer in Q1. Revenues from North America decreased 4.6% to $21.3 million, representing 31.6% of revenues during the quarter. Revenue from Europe decreased 26.9% to $39.7 million, accounting for 59.0% of revenue, and sales in other countries decreased 42.7% to $6.3 million, representing 9.4% of revenue.
Guo said his company has focused on profitability and increased its profit margin to 36.8% this quarter from 34.0% a year ago, while marketing expenses as a percentage of revenue dropped to a historic low of 21.1% compared with 36.0% during the same period last year and 23.4% in Q4.
LightInTheBox is seeking growth in areas beyond its best-selling category of wedding apparel. “We need to have a balanced focus on small number of selected categories which will provide us long-term defensible supply chain advantages, like our traditional focus on wedding,” Guo said. “We recently developed a number of new categories, such as home decor.”
For the quarter ended March 31, LightInTheBox reported:
- Net revenue of $67.3 million, down 23.2% from $87.6 million a year ago. Non-GAAP net revenue, which excludes the influence of currency rate fluctuation, was $69.8 million.
- Net loss of $2.1 million compared with $21.6 million in the same quarter of 2015. Non-GAAP net income was $900,000.
For more Chinese e-commerce data, please click here for the Internet Retailer 2016 China 500.