Good afternoon. My name is Julie Anne, and I will be your conference operator today. At this time, I would like to welcome everyone to Revolve's Q3 2024 results conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. At this time, I would like to turn the conference over to Erik Randerson, Vice President of Investor Relations at Revolve. Thank you. You may begin. Good afternoon, everyone, and thanks for joining us to discuss Revolve's Q3 2024 results. Before we begin, I'd like to mention that we have posted a presentation containing Q3 financial highlights to our Investor Relations website located at investors.revolve.com. I would also like to remind you that this conference call will include forward-looking statements, including statements related to our future growth, our inventory balance, our key priorities in operating and innovation initiatives, industry trends, our marketing events and impact, our partnerships and strategic acquisitions, our physical retail stores, and our outlook for net sales, gross margin, operating expenses, and effective tax rate. These statements are subject to various risks, uncertainties, and assumptions that could cause our actual results to differ materially from these statements, including the risks mentioned in this afternoon's press release, as well as other risks and uncertainties disclosed under the caption "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission, including without limitation our annual report on Form 10-K for the year ended 31 December 2023, and our subsequent quarterly reports on Form 10-Q, all of which can be found on our website at investors.revolve.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we'll also reference certain non-GAAP financial information, including Adjusted EBITDA and Free Cash Flow. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures, as well as the definitions of each measure, their limitations, and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our Co-Founders and Co-CEOs, Mike Karanikolas and Michael Mente, as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mike. Hello, everyone, and thanks for joining us today. We delivered an exceptional Q3 highlighted by double-digit top-line growth, a significant increase in net income year-over-year, and a 250 basis points increase in our Adjusted EBITDA margin year-over-year. Contributing to the significant growth in profitability was better-than-expected logistics cost efficiencies, helped by a meaningful decrease in our return rate, as well as impressive marketing efficiency that also outperformed our guidance, which more than offset a slight decrease in our gross margin year-over-year. The Q4 is also off to an encouraging start, with total net sales in October increasing in the low double-digits year-over-year, supported by year-over-year growth in both segments of the business and across both domestic and international. Most importantly, we achieved these very strong financial results while continuing to invest in a wide range of initiatives that we believe set us up well for profitable growth and market share gains over the long term. With that introduction, let me step back and provide a brief recap of the Q3. Net sales were $283 million, an increase of 10% year-over-year, driven by improved year-over-year trends across both segments and geographies relative to our comparisons in the Q2 of 2024. Net sales in the Revolve segment increased 12% year-over-year, our best performance in more than two years. Net sales in the FWRD segment also improved to nearly flat year-over-year, helped by a solid exit rate that has continued in the month of October. Net sales in the fashion apparel and dresses categories rebounded strongly to 13% and 10% year-over-year growth, respectively, serving as key contributors to our growth reacceleration. These results benefited from outstanding wins in product merchandising in these core categories that Michael will speak to in his remarks. The growth in net sales was further supported by our underlying key operating metrics highlighted by growth in active customers. Trailing 12-month active customers increased by 51,000 during the Q3, almost double the increase in active customers achieved in the Q2 of 2024. Net income for the Q3 of $11 million, or $0.15 per diluted share, was meaningfully higher than the $3 million in the prior year quarter. Adjusted EBITDA was $18 million, an increase of 85% year-over-year, with a 250 basis points expansion of our Adjusted EBITDA margin. Beyond the numbers, I'm excited by our team's execution that has led to continued great progress on the strategic priorities we have outlined on prior calls. Here are some of the key highlights since our update last quarter. First, I'm thrilled that we delivered significantly greater efficiencies in our logistics costs year-over-year than last quarter, contributing to our strong growth and profitability in the Q3. Expressed as a percentage of net sales, selling and distribution expense decreased by more than 200 basis points year-over-year, and fulfillment expense decreased approximately 30 basis points year-over-year. These impressive results are being driven by successful execution on two important priorities. We continue to make outstanding progress across many initiatives designed to drive efficiencies within our global shipping and logistics operations. Even more exciting, during the Q3, we achieved incredible further progress on our efforts to reduce our return rate. In fact, our return rate decreased year-over-year during each month of the Q3 and by a larger magnitude than the slight year-over-year decrease achieved in the Q2. As an illustration of our success, total freight costs for customer shipments and returns decreased by a high single-digit percentage in the Q3, despite a 3% increase in the number of orders placed and a 10% year-over-year increase in net sales. These metrics provide an indication of the compelling financial benefits we hope to realize from reducing our return rate further over time. Importantly, we achieved a lower return rate in the Q3 through many efforts that further elevate the customer experience. For instance, a size and fit initiative we are testing has resulted in a noticeably lower return rate while also driving a meaningful lift to the conversion rate. It is a great example of a win-win scenario in that for Revolve, the initiative helps us to generate increased revenue at lower costs, and for our valued customers, the improved size and fit information enables us to even further elevate the overall shopping experience. Second, we remain committed to efficiently investing to expand our brand awareness and further strengthening our connection with next-generation consumers. We delivered another very strong and efficient quarter with increased customer acquisition and reduced acquisition cost, driven by year-over-year efficiency gains across performance and brand marketing channels. In fact, it was our most efficient Q3 for marketing investments in four years, based on our marketing investment calculated as a percentage of net sales. Of note, one contributor to our marketing efficiency in the Q3 also provides a dual benefit of contributing to our reduced return rate. In recent months, we've begun to leverage our extensive internal data to optimize our marketing efficiency by including within our algorithms an understanding of our customer purchase and return behavior. This initiative provides a powerful illustration of the competitive advantages of our data-driven approach to nearly all aspects of our business. Third, we successfully expanded our international presence in the Q3, with net sales from international markets increasing 20% year-over-year. Net sales increased across all major regions and benefited from recent marketing innovations that have exceeded our expectations and further elevation of service levels overseas. The great progress we have made to improve the international customer experience in recent years now allows us to confidently invest marketing dollars to drive profitable growth in key international markets. And lastly, we continue to leverage AI technology to drive growth and efficiency initiatives across the company, including e-commerce operations, marketing, and customer experience. Last quarter, I talked about how our internal team of data scientists developed and launched into production on our FWRD website an internally developed AI search algorithm that meaningfully outperformed the incumbent retail search platform developed by a large third-party technology company. I'm excited to share that our internally developed AI search algorithm also tested exceptionally well on our flagship Revolve site and was recently launched into full production on Revolve. We estimate that our AI innovation will deliver incremental revenue in the seven figures on an annualized basis at a much lower operating cost than using third-party technology solutions. Another recent AI development that we are excited about is our internal development of AI algorithms that are able to better evaluate our products for marketing purposes and expand our marketing reach. Our team developed the AI innovation from concept to A/B testing in just a few weeks during the Q3. Most exciting is that early results show that our AI algorithms can deliver a meaningful boost in both revenue and efficiency for one of our largest performance marketing channels, all at a very low operating cost. To summarize, we believe that our improved results on the top and bottom lines are a direct outcome of our team's strong execution on our strategic initiatives. I'd like to thank all of my Revolve colleagues for their incredible contributions that have driven the business forward this year and strengthened our foundation for future growth. We are firmly on offense, and as always, we are focused on testing, learning, and iterating our way towards continued improvement in all aspects of our business. We still have a lot of work to do, yet I feel great about our progress and current momentum in the business. Michael will now talk in his remarks about investments in our brands and many growth opportunities that we are very excited about. Thanks, Mike, and hello, everyone. I am very proud of our top-line and bottom-line results for the Q3, highlighted by a seven-point improvement in net sales growth relative to our year-over-year net sales comparison in the Q2 of 2024. The clear takeaway is that our strong Q3 results are a result of our execution on key growth and efficiency initiatives, in spite of the many challenges in our operating environment today. Our hard work has enabled us to drive revenue and reduce costs through a wide range of notable wins, including the in-house AI innovations Mike mentioned, reducing our return rate in ways that actually elevate the customer experience, and expanding sales internationally through continued investment and focus. I would also like to speak about incredible broad-based gains in our merchandising site experience that have been key contributors to our growth. Notably, site merchandising innovations relating to the showcasing of our merchandise assortments performed very well and contributed to the much-improved growth in fashion apparel and dresses in the Q3. By leveraging AI technology across e-commerce applications, we have made it easier and more intuitive than ever before for our customers to search our site and navigate through broader categories such as dresses, improving product discovery for the customer. More than ever, we are also driving increased conversion by leveraging data to optimize the products we merchandise on specific channels to maximize revenue across mobile, desktop, and social, and by servicing more relevant products to our customers when and where they are most likely to engage, we have created an even better shopping experience. We also recently delivered an impactful upgrade to our global site navigation, meaningfully improving engagement metrics by servicing the most relevant products of the greatest interest to our customers. I'd like to thank the merchandising product teams for their great work this quarter, and I'm excited to see what they can deliver going forward. The merchandising gains are not just limited to the site. In the Q3, we also achieved improved consumer engagement and revenue from the email channel, also by leveraging technology and data in innovative ways. It was our best Q3 performance for email metrics since 2021, and the consumer spending backdrop was in a much better place. We believe these gains illustrate the strength of our brand connections with the next generation of consumers, particularly in the current economic environment. I'm also pleased with our recent progress in Own Brands, a key differentiator of our assortment. In the Q3, Own Brands net sales increased year-over-year for the first time in almost two years, helped by the outstanding results from our recent launches. Our GRLFRND Own Brands generated headlines when Taylor Swift was spotted looking stylish while wearing GRLFRND denim in front of an audience of tens of millions of television viewers at a recent Kansas City Chiefs game. Most importantly, the success of our recent launches and strengthened key underlying Own Brands metrics gives us confidence as we invest into several exciting launches planned for 2025, including collaborations with incredible talent and the planned launch of Alexandre Vauthier brand and FWRD site that we acquired and talked about on our earnings call last quarter. Speaking of investing, I'm thrilled that we have another efficient quarter for marketing and investment, even while we continue to push the boundaries and exciting new ways to build our brands and drive deeper connections with next-generation consumers. I'll now provide a recap of marketing and brand-building investments that I'm excited about. We hosted a New York Fashion Week activation to celebrate our launch of style icon and media personality Morgan Stewart's Renggli brand on FWRD. Renggli is one of the hottest fashion brands around right now, and FWRD is the first and only retail distribution partner where the Renggli brand is available for sale. The brand has sold incredibly well on FWRD in the early going. We had a highly successful retail activation in Dallas in partnership with Cotton in September. This was our first-ever pop-up shop in Texas and a great way to engage in real life with our growing customer base in the Southwest region. Retail sales of our merchandise were outstanding, reinforcing the exciting growth potential in physical retail. We announced our first-ever global brand ambassador for Revolve, international sensation Jeon Somi, one of the most popular female K-pop artists. We have launched our first-ever global campaign that showcases our iconic styles of fashion trendsetter. We will also introduce a merchandise collaboration to align with her new music in 2025 that we expect will resonate with her expansive and passionate Gen Z audience that includes more than 20 million social followers on Instagram, TikTok and YouTube. Lastly, we executed an impactful marketing activation with NBA legend Dwyane Wade that generated excitement and favorable awareness for our FWRD Man and Revolve Man brands. We co-hosted the Miami event to celebrate the unveiling of a bronze statue for the Hall of Famer's illustrious career with the Miami Heat. You can see that we've been active engaging with our customers through our dynamic marketing playbook. We intend to keep the pedal down and invest in the large runway ahead of us for years to come. Now, I will conclude with an update of our exploration of physical retail as a future growth opportunity. As announced last week, we are opening an exclusive and limited-time Revolve Holiday Shop at The Grove, Los Angeles, a high-end retail and entertainment destination that is the second most productive shopping center in the United States. Our holiday shop will remain open through the holiday season until 5 January 2025. On the heels of our incredible holiday season success in Aspen last year, we are thrilled to showcase our Revolve and FWRD brand within the most visited holiday shopping destination in Los Angeles. Our prime location in the center of the action positions us to maximize consumer awareness for our brand, acquire new customers, and generate sales, and in true Revolve fashion, we have an exciting slate of marketing events planned for the holiday shop, involving our expansive community of brands, influencers, and celebrities. We believe the activations will create an even further excitement for the Revolve and FWRD brands while driving increasing consumer engagement. We are confident the Revolve Holiday Shop will strongly resonate with our loyal community and even further strengthen our connection with next-generation consumers. Equally exciting, we have also entered into a long-term lease to open a flagship retail store in Los Angeles within a very desirable location. We expect to open our doors by mid-2025. The learnings we will gain from operating our Revolve Holiday Shop at The Grove will undoubtedly help us prepare for a successful opening of our permanent retail location in Los Angeles next year. We have built an incredible brand that we continue to believe can translate to physical retail, and the opening of our flagship store in Los Angeles next year will be an important proof point in our physical retail journey. The proximity of our home base of Los Angeles provides compelling benefits. Virtually, our entire leadership team is based here in Los Angeles, along with our primary fulfillment center, creating meaningful operations and logistics efficiencies. For instance, we plan to drive foot traffic and provide elevated service to our customers by encouraging them to return items purchased online to the store and to pre-select items for our websites to try and for free in the store. We will provide more details on our next earnings call as we get closer to the launch date. To wrap up, we are very pleased with the momentum in our business and excited about the many initiatives underway that we believe will continue to drive growth in the months and years ahead. Rest assured, we will continue to invest, innovate, and aggressively pursue significant market opportunities that lie ahead. Now I'll turn it over to Jesse for a discussion on the financials. Thanks, Michael, and hello, everyone. I am very pleased with our Q3, highlighted by a return to double-digit net sales growth, significant expansion of our profitability year-over-year, and great progress on operational initiatives that lay the foundation for profitable growth in the future. I will start by recapping our Q3 results and then close with updates on recent trends in the business and our outlook for gross margin and cost structure for the balance of the year. Starting with the Q3 results, net sales were $283 million, a year-over-year increase of 10%. We delivered meaningfully improved top-line results across both segments and geographies. Revolve segment net sales increased 12%, and FWRD segment net sales were essentially flat year-over-year. Domestic net sales increased 7% year-over-year, and international net sales increased 20% year-over-year. Active customers, which is a trailing 12-month measure, grew to 2.6 million, an increase of 5% year-over-year. Total orders placed were 2.2 million, an increase of 3% year-over-year. Average Order Value or AOV, was $303, an increase of 1% year-over-year. Consolidated gross margin was 51.2%, a decrease of 56 basis points year-over-year. In an otherwise exceptional Q3, gross margin is the one key metric that underperformed our prior expectations, primarily due to deeper markdowns than we had modeled. We understand the underlying dynamics and, of course, corrected, setting us up for a return to gross margin expansion in 2025. Let's shift to operating expenses, a source of meaningful operating leverage in the Q3. We delivered better-than-expected operating expense efficiency across each of the four line items that we guided to each quarter. Fulfillment costs were 3.3% of net sales, a decrease of 29 basis points year-over-year. Selling and distribution costs were 16.9% of net sales, a decrease of 206 basis points year-over-year, and outperforming our guidance by approximately 140 basis points. This impressive result reflects outstanding execution by our teams to drive efficiency in our logistics costs and a decrease in our return rate year-over-year for the second consecutive quarter. Our marketing investments were 14% of net sales, a decrease of 141 basis points year-over-year, driven by efficiencies in both performance marketing and brand marketing. General and administrative costs were $33.9 million, approximately $1.6 million lower than our outlook, as the timing for certain investments shifted into the Q4 of 2024. We continue to invest in a variety of exciting initiatives, such as exploration of physical retail, AI technology, and Own Brands expansion, all of which support our long-term growth opportunity. Our T ax Rate was 26% in the Q3, consistent with the prior year and within our expected range. The increased net sales and gross profit year-over-year, the improved marketing efficiency, and the outstanding progress driving efficiencies in our logistics costs resulted in impressive growth on the bottom line. Net income grew significantly to $11 million, or $0.15 per diluted share, from $3 million, or $0.04 per diluted share in the Q3 of 2023. Note that the prior year comparison included non-routine costs of $5 million net of tax for a settled legal matter. Adjusted EBITDA was $18 million, an increase of 85% year-over-year. For the first nine months of 2024, Adjusted EBITDA increased 47% year-over-year. Nine months into 2024, we have already surpassed our net income and Adjusted EBITDA results for the full year of 2023. Moving on to the balance sheet and cash flow statement, net cash generated by operating activities was $9 million and Free Cash Flow was $6 million in the Q3, which further strengthened our balance sheet, although these metrics were lower year-over-year. Inventory at 30 September 2 024, was $240 million, an increase of 18% year-over-year that outpaced our 10% net sales growth. In the coming quarters, we expect growth in our inventory balance year-over-year to converge more closely with net sales growth, which should have a favorable impact on our cash flow generated from operations. As of 30 September 2024, cash and cash equivalents on our balance sheet were $253 million, an increase of $8 million from the Q2 of 2024, and we have no debt. Our strong financial position gives us the capacity to continue to invest in the business while opportunistically evaluating strategic M&A and repurchasing Class A common shares to enhance shareholder value. During the Q3, we repurchased approximately 118,000 Class A common shares at an average price of $15.67. Approximately $58 million remained under our $100 million stock repurchase program as of 30 September 2024. Now, let me update you on some recent trends in the business since the Q3 ended and provide some direction on our cost structure to help in your modeling of the business for the Q4 and full year 2024. Starting from the top, our strong top-line performance has continued into the Q4, with net sales in October 2024 increasing by a low double-digit percentage year-over-year, with year-over-year growth across both segments and geographies. Shifting to gross margin, we expect gross margin in the Q4 of 2024 of between 51.2% and 51.5%, which implies a decrease of 65 basis points year-over-year at the midpoint of the range. For the full year 2024, we now expect gross margin to be approximately 52.2%, an increase of around 30 basis points from our gross margin of 51.9% for the full year 2023. The decrease from our prior full-year guidance range primarily reflects deeper markdowns within our markdown inventory that we expect to continue in the Q4, as well as continued pressure on inbound freight costs for receiving merchandise from vendors. Fulfillment, we expect fulfillment as a percentage of net sales of approximately 3.4% for the Q4 of 2024, a decrease of approximately 10 basis points from the fulfillment efficiency ratio in the Q4 of 2023. After delivering better-than-expected fulfillment efficiency in the Q3, we now expect fulfillment costs for the full year 2024 to be approximately 3.3% of net sales, which is at the low end of our prior guidance range. Selling and distribution, we expect selling and distribution costs as a percentage of net sales of approximately 17.3% for the Q4 of 2024, which implies a year-over-year improvement of approximately 50 basis points. On the heels of our strong Q3 results for the full year 2024, we now expect selling and distribution costs to improve to approximately 17.5% of net sales, nearly a full point lower than the full year of 2023. Marketing, we expect our marketing investment in the Q4 of 2024 to be approximately 15.9% of net sales, a decrease of around 50 basis points year-over-year. For the full year 2024, we now expect our marketing investment to represent approximately 15.1% of net sales. Looking ahead, we will continue to invest in building our brands to support the attractive long-term growth opportunity ahead of us. So, on a preliminary basis, I would expect marketing costs in the 15%-16% of net sales range for 2025. General and administrative, as I mentioned earlier, the timing of some of our G&A investments shifted from the Q3 to the Q4. With that, we expect G&A expense of approximately $35.6 million in the Q4. For modeling purposes, remember that our G&A expense in the Q4 of 2023 a year ago included a non-routine accrual of $3.4 million for a then-pending legal matter. For the full year 2024, we now expect G&A expense of approximately $136 million, towards the lower end of our prior guidance range. And lastly, we expect our effective tax rate to be around 25% - 26% in the Q4 and 26% for the full year 2024. To recap, I am very encouraged by our Q3 results, highlighted by an inflection in our top-line growth and operating discipline that drove a substantial increase in profitability year-over-year. Now, we'll open it up for your questions. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Our first question comes from Oliver Chen from TD Cowen. Please go ahead. Your line is open. Hi, Mike, Mike and Jesse. The revenue growth is impressive, and the momentum sounds like it continues. How do you reconcile that relative to what you said on deeper markdowns and any category callouts in terms of stronger relative to weaker? Also, as you continue to innovate physically, should we think about your strategy longer term as flagships and that being an opportunity in different places? Or any context on how you're thinking more broadly about physical? And finally, Jesse, the longer-term algorithm calls for double-digit net sales growth in the, as much as in the 20s. So what are you thinking as we look towards longer term? How can you get closer to that over time? Thank you. Sure. So I'll start by addressing the revenue growth in the quarter. So we feel great with the acceleration in revenue growth. And actually, as far as it relates to the markdowns, our full-price sales was actually up year-over-year. So it was just steeper markdowns on some of our inventory that led to the decreased margin. Revenue gains, we think, are a result of some really great marketing activities and marketing efficiency, site merchandising gains that we've done that Michael talked about, including kind of both the curated product assortments and then also some of the AI improvements that we made on the site. So again, we feel great about the momentum there. The inventory levels in certain categories were a little bit elevated coming in, and that's what led to the increase in markdowns. Yeah, and then maybe I'll jump in there, Oliver. Okay. Go ahead, Jesse. Oh, sorry. I was going to jump in on that last one with the longer-term algorithm. Of course, we feel great about returning to double-digit sales growth for the Q3, and that continued into October. So it feels good to be back in that double-digit zone. As we look ahead, there's a lot of macro factors out there and uncertainty, but given everything that the team's been working on this past year, we feel good about the things we can control and getting back up into that closer to 20% zone over time. Regarding physical, our strategy is definitely ever-evolving. We have the one store in Aspen, which is going great with continuing from. A larger store in Los Angeles. I would hesitate to call it a flagship at this point. We think it's going to be a really strong effort. On the big scale of things, it's smaller than stores of competition locally and such. There's a lot of opportunity for Revolve kind of balanced playbook. We'll learn very, very quickly, iterate, and expand, and the strategy will get better and better after every store that we open. Thank you very much. Best regards. Our next question comes from Anna Andreeva from Piper Sandler. Please go ahead. Your line is open. Great. Thanks so much. And let me add my congrats. Great results. A couple of questions from us. Really good to see that double-digit strength at Revolve. And you guys have talked about expanding into new categories there, like work and athletic, to capture more of the wallet share. I'm just curious, is that starting to kick in now in a bigger way? Are you picking up new customers at the brand from the luxury shake-up, or is that still ahead? And I think you mentioned both brands are positive in October. Would be great to hear what's driving improvement at FWRD. And then we had an inventory follow-up as well. Thanks. I think regarding the expansion and penetration, we're starting to see wins now, but it's still very early innings. I don't think it's going to be the surge of immediate impact, but it's going to be compounded gains for many, many years to come. So internally, we see great progress in some of the newer zones, but also still see tons of wide open white space in some of the other zones. So it should be a lot of ongoing journey. I do think that with the disruption in the luxury space, I think that there is not direct, but kind of like anecdotal evidence that this is benefiting us and also will be something that we'll be seeing for many years to come. We can't say that this particular thing caused this particular effect, but we have to think that with the challenges in the space and us operating well, that we will be winning new customers over and winning in the marketplace. Great. And just the strength in October and specifically at FWRD? And thank you. Yeah. We did see that strength continue into October. And encouragingly, it was across both segments and geographies as well. So really good to see that growth coming there. And in particular, as you mentioned, to see growth coming out of the FWRD business. Nothing really further to comment there. Okay. Terrific. And just on the inventories, I think still a little elevated at up high teens. Can you just talk about your comfort level by division, especially at FWRD? And should we be thinking ending 4Q inventories will be more in line with sales? And thanks again. Yeah. Yeah. Thanks, Anna. Inventory is still a little bit higher than we would like. Now, that said, we did reduce the spread between net sales and inventory growth from Q2 to Q3, so we're at that eight-point differential now. If you break it up by segment, FWRD, that differential is actually much better on FWRD, so we feel like we're in a good place on FWRD. More work to do on Revolve, but Revolve, as you know, is much easier and quicker to correct than the FWRD side of the business. So we think it's a shorter-term dynamic and encouraged by exiting the year in a good place and setting us up well for 2025. So if you think about year-end inventory balance, we expect that to decrease from Q3 to Q4 in absolute dollars. And then also the year-over-year growth rate also coming down and converging closer with net sales. And of course, all of this depends on the net sales growth in Q4, but we feel like we're on a good path. We just have a little bit more work to do there. Our next question comes from Nathan Feather from Morgan Stanley. Please go ahead. Your line is open. Hey, everyone. Thanks for taking the question and really encouraging results. I guess just first on return rate, great to see the progress there. I guess high level, can you talk to how much of that was due to policy changes versus tech improvements? And do you expect to continue a similar pace of improvement as we think about 4Q and kind of heading into 2025? And any opportunity to potentially improve that a bit? Thanks. Yeah, definitely. So we didn't run a controlled A/B test with the return rate policy change just because it would be too confusing for customers. That said, the data that we have suggests it had, call it an important contribution or a meaningful contribution, but certainly not the dominant kind of factor at play with the return rate reduction. As we stated on previous calls, it's really a whole host of things across the board focused on really improving the customer experience, better optimizing product assortments for customers to find things that they're going to like, better communicating information to customers, but regarding size and fit and things of that nature. And so it's really just a combined effort across the board. In terms of the pace of improvements, I do think the pace of improvements will slow down. It's been a big focus for us, and we've rolled out a number of really important projects for us relating there. But it is going to be a continued effort over the medium term over the long term, and we're hopeful that we're going to continue to get gains there in the coming quarters. I think you'll see the level of sharp acceleration that you did in this particular, call it in Q4 or kind of any particular quarter coming up. Yeah. And maybe, Nathan, I'll just jump in there really quick and highlight some comp differences for Q4 of last year. Historically, we do see a reduction in return rate sequentially from Q3 to Q4 in the zone of, call it 70 basis points. Last year, there was a significant decrease from Q3 to Q4, close to two points. So just keep that in mind as you model the return rate for Q4. Internally, we're modeling closer to that more natural seasonal differential versus that significant difference we had last year. Great. That's helpful. And then can you just talk about the pacing of revenue acceleration as you kind of went through Q3, given it was not as strong, but still a good start to the quarter? Yeah. Yeah. As we had commented last quarter, we had said that July was up mid-single-digits, and then we closed at +10. So there was acceleration in the quarter and across, again, both segment and geography. And again, just to reiterate that October, we saw growth across all cuts of the business, both domestic, international, and Revolve and FWRD. So on a good path thus far. Helpful. Thank you. Our next question comes from Michael Binetti from Evercore. Please go ahead. Your line is open. Hey, guys. Thanks for taking our question. Congrats on a great quarter. Just as you look out to 2025 a little bit on a few of your comments, could you walk us through any early thoughts on what the leverage points are in the P&L for 2025 on distribution, marketing, G&A? Do those leverage on the mid-single-digit sales growth like we've seen in a few quarters this year? And I just use that as an example for where consensus is next year. I know you'd aspire to do better. Maybe just help us early think about the leverage points in the model. And then I'm curious if there's anything in that October low double-digit number that was unusual to think about either this October or in the comparison that would roll off as we think about the rest of the quarter. It looks like the comparisons get a little easier from here, actually, which could lead us to believe there's potential for an acceleration. I just want to make sure we're not missing anything. Yeah. Yes. Absolutely. So for 2025, maybe if we start, and I know you didn't mention it, but starting with gross margin, we do think there is opportunity in gross margin. Exiting in the year, the plan is to be in a good inventory position. Full-price sales have been really strong, so we expect that to continue into 2025. Now, the expansion will be lower or less in the first half of the year versus the second half of the year, in part due to comps and then in part as we start to roll on the own brand launches that Michael mentioned in his prepared remarks. So we do see opportunity in gross margin, first of all, and that's regardless of net sales or any leverage points. If we go down the line, fulfillment, some opportunity there. Much of this is dependent on return rate and if we can continue that return rate reduction and less dependent on the sales growth on that one. Similar with selling and distribution, we, again, do see opportunity there. Now, there are challenges on fuel and then also somewhat dependent on the return rate. But the team's done a great job absent those things and really managing those costs down and getting more efficient there. Marketing, we had mentioned in our prepared remarks that we expect marketing to be in the 15%-16% zone. I think the key there is we want to communicate that we're going to continue to invest. We have a lot of exciting things coming up in 2025, so not to model in the 14% that we've been seeing, but modeling some investment. And then general and administrative, that's the one that is really dependent on sales growth. And there's some moderate leverage in the mid-single-digit net sales growth, but ideally, we continue the double-digit sales growth, and that's where we start to get meaningful leverage if we can exceed that. And then just really quick on the Q4 and the comps there. I think if you look at October to date, we said we're low double-digits. Last year, we had commented that October was down, low single-digits, and we closed at minus one. Also, although I hate to do it, if you look on a multi-year basis, the comps do get tougher for November and December. And there's just still a lot of uncertainty out there in the macro environment. Pick your cause, but I think there's just still uncertainty there. Internally, if it helps, we are modeling in some moderation in November and December. Our next question comes from Mark Altschwager from Baird. Please go ahead. Your line is open. Thank you. Good afternoon. Great quarter. The sales acceleration you're seeing does seem to run counter to some of the broader industry and macro environment. Just can you give us a little bit more context on what you think is driving the improvement? I guess what changed on the merchandising side that really seemed to click this quarter? I guess similar question regarding the email channel. You mentioned some efficiencies there. I guess what's happening now that seems to be contributing to this pretty significant acceleration in the business? Just really looking to double-click on that. And then separately, Jesse, just wanted to clarify. You said you feel confident you can continue to progress towards the 20% growth algo versus the double-digit you're running right now. Street consensus has the company growing revenue mid-single-digits next year. So is the takeaway here that you're comfortable sustaining low double-digit growth in 2025, potentially even accelerating? I just want to be clear we're all taking away the right thing there. Thank you. Yeah. Maybe I'll start with that one, and then we can go to the first one. I was going to say, yeah, I think kind of dovetailing off my previous comments that we are modeling in some moderation for Q4. Now, we're optimistic that we can continue the double-digit growth as we look ahead. But the 20% target is longer term than 2025. So I think exercising some caution until we get a couple of quarters under our belt. But optimistic with everything the team's been doing that we can continue to grow at a greater pace than the overall environment. Yeah, and with regards to the revenue acceleration, we have an incredibly strong brand, huge market opportunity. We've underperformed for a number of quarters against that opportunity and against that brand. But we think we've been making really great improvements quarter-over-quarter to really attack that opportunity in the right way. And I think this quarter, you're starting to see a lot of things come together as far as us kind of more fully capitalizing on the really big opportunity in front of us. Our next question comes from Matt Koranda from Roth Capital. Please go ahead. Your line is open. Hey, guys. Thanks for taking the question. Just getting back to return rates, do you guys see any structural impediments to getting back to the pre-pandemic return rates that you had? I'm just curious how long it could take to get there and any reason we can't get back to kind of that low to mid-50s run rate that you were on pre-pandemic? Yeah. I mean, I think the question is how we get back there. We've talked many times how we want to do so in a way that's beneficial to the business across the board, not just to hit a certain number. And so that's certainly a number that we would aspire to, but our focus is just coming up with meaningful improvements that can improve the business, improve the customer experience, and hopefully improve the return rate quarter after quarter. And we'll see where that takes us in the coming quarters. Yeah. The one thing I would add, [crosstalk] that physical retail being in its early days, this will be several years to get there. But I think physical retail and having that a bigger part of our mix has tremendous opportunities to reduce return risk with a more omnichannel approach, as well as do it in a margin-accretive way, both from a margin perspective and a cost perspective. So that is something that we won't see necessarily quarter to quarter. But if you have the seat that we have sitting here in a decades-long look, I think we're very opportunistic for reduced return rates through physical retail over the long term. Our next question comes from Rick Patel from Raymond James. Please go ahead. Your line is open. Hey, guys. Congrats on the strong execution. Can you talk about trends by month? Curious if there's anything to call out in terms of consumer behavior as 3Q progressed. It'd be great to get additional color around both Revolve and FWRD banners. Yeah. Nothing really additional to call out. We did see acceleration through the quarter. It was across both segments. Categories performed really well. Dresses were up 10%. Fashion apparel was up 13%. So those core categories really performing. International had a great quarter at 20% growth with growth across all regions, which was really impressive, even in China, which has been struggling more broadly. So I think just an overall great quarter with some acceleration as we progress through the quarter, but nothing really additional to call out there outside of the execution from the team that we've been talking about. Can you double-click on Own Brands? Good to see the growth there. How big do you see that business at the end of the year? And given the investments you're making, where do you see this segment going to in 2025? And also, if I can add, can you update us on the margin delta between Own Brand and third party right now? Yeah. We feel great about own brands. The underlying metrics have been performing really well, which was the goal, to get those underlying metrics in a really good place before we start pushing the pedal down on expansion. So we're there. Now is the time when we're going to start expanding. We've got some exciting things coming up in 2025. That said, it does take some time for these things to spin up. So I think towards the back end of 2025, in 2H 2025, is when we start to see some expansion in the own brand mix. It was great to see this quarter. Own brand sales were positive for the first time in a while. That said, the mix was lower, slightly lower year-on-year, given that third-party grew in excess of that own brand, but feel really good there. And over time, it can be much bigger than it is today, not commenting or committing to a percentage. As you recall, it was 36% back in 2019. And great that Revolve margin is loosely in the same zone today as it was in 2019 with a much lower mix of own brands. And then on the margin differential, we're not getting specific there other than to say it is significantly better than the third party margin. So over time, of course, as own brand expansion increases, then that's a big margin driver. Our next question comes from Jay Sole from UBS. Please go ahead. Your line is open. Great. Thank you so much. You talked about investing in AI, and you mentioned how some of the newer investments are in AI innovations helping with product and helping sounds like boost some sales. Could you just maybe elaborate a little bit on what you're talking about, like what exactly you're doing with AI to help the product assortment and help drive sales at a lower cost? Yeah, definitely. It's all about showing the right product to the right customer at the right time. And AI has huge long-term potential in terms of doing that well. And we've already found a number of areas that we can deploy it to have what is shown to us by A/B tests that we run to make significant improvements in the site experience and conversion rate. So we talked about the search improvements and the search algorithm on kind of the broader site in terms of when customers are just browsing other pages. There's some things that we've deployed within the past quarter in particular, and then even several quarters before that are AI-based that have helped improve conversion rates significantly. So without getting into the very specific details of exactly what we do and how, it's been very impactful, and we think the future is potentially huge there as far as the further impact that it can make over time. And then the other thing that we mentioned, which is off-site, is just deploying improvements to our marketing approach. And we did some great things this quarter, some of which had nothing to do with AI and some of which were AI-based. And so, yeah, it's been very impactful to the business. Okay. Thank you so much. Our next question comes from Lorraine Hutchinson from Bank of America. Please go ahead. Your line is open. Thank you. Good afternoon. Can you provide more context around the gross margin and what was different than your plan? Was it a fashion miss or pockets of excess inventory? And then what gives you the confidence in the return to growth in gross margin in 2025? Yeah. Yeah. Maybe I'll start with what it wasn't. It wasn't the breadth or kind of magnitude of markdowns. Our full-price sales actually exceeded. Full-price sales growth exceeded markdown sales growth, which led to an increase in the full-price mix. Also, full-price margin was strong. So it really comes down to deeper markdowns within our markdown inventory. And that's the case across both segments. On the Revolve side, we are a little heavy on inventory, as we communicated last quarter, and still a little bit heavier than we would like, even though the differential between sales growth and inventory growth came down, but still a little heavier there on Revolve. So algorithms kick in and mark down that inventory. And then on the FWRD side, we're just at the tail end of that kind of, call it older markdown inventory that led to deeper markdowns. But the FWRD inventory is actually in a really good place in terms of the sales growth versus inventory growth differential. And again, Revolve, much easier and quicker to work through than the FWRD side. That's what gives us the confidence that we'll be in a good position as we enter 2025. And then the margin expansion in 2025 coming from continued full-price strength. FWRD has a lot of room to go. It's, call it, five points lower today than it was back in 2019. So that gives some context around the potential there. And then, as we mentioned, Own Brands. Own Brands expansion starting to kick in kind of around the mid-year of 2025. Thank you. Our next question comes from Jim Duffy from Stifel. Please go ahead. Your line is open. Thank you. Impressive execution. Two lines of questioning for me. First on marketing, then on the deeper markdowns. Key lever for the improvement has been the improved marketing efficiency. You guys listed off a number of factors contributing to this, though did so in fairly rapid-fire fashion. Can you speak in more detail about some of the three Q specific bigger movers in marketing efficiency, maybe isolating on top of funnel strategy shifts and marketing drivers, and then also speak in more detail on the use of AI to improve performance marketing and conversion? Thanks. Yeah. So high level, it was a mix of some top-of-funnel brand marketing improvements in terms of marketing spend that Michael can potentially add some more color to, and then changes on the digital marketing side where we saw efficiency gains as well. And there's always a number of things that we're working on, but two of the things that we called out earlier were we optimized our marketing to better take into account return behavior of customers, which helped with some efficiency gains there. And then we also deployed AI technology to, call it, kind of better target our products to various marketing opportunities out there. And that led to some gains, too. So on the performance side, those were probably some of the more important improvements that we made. And then Michael can maybe talk a little bit about the brand marketing strategy and how that's evolved. Yeah. We're seeing that the brand marketing strategy, all the channel differences, work with influencers, work with celebrities, continually, continually evolving and looking back to a year ago, we've made outside looking at maybe subtle, but from the brand marketing lens internally, quite dramatic shifts in the various levers that we have pulled, accelerated on, as well as divested and such. So the shift in allocation has been very helpful, and I think we'll transition extremely well into this coming quarter, next year ahead, where there's a lot of potential in some of these channels that are still a little bit newer and a little bit less historic investment for us. So, feeling really good about things. Okay. Thank you. And Jesse, can you comment on the extent to which the deeper markdowns may have influenced revenue or active customer figures? I think you mentioned still a healthy mix of full-price sales. As you look at the active customers, is there any evidence that that was flattered by engagement with more price-sensitive customers? Yeah. No, thanks, Jim. And no, it was really isolated to margin. We saw full-price sales increase in excess, significantly in excess of the markdown sales, and then on a new customer basis as well. Full-price customers grew far in excess of the markdown customer growth as well. So I think it is isolated to margin and really good underlying customer growth from full-price customers, which, as you know, tend to perform better over time. Great to hear. Thank you. Our next question comes from Dylan Carden from William Blair. Please go ahead. Your line is open. Thank you. Curious on the international side of the business. It's getting to a relatively decent scale, accelerating nicely in the quarter. It sounded like you're prepared to march. You're putting some marketing dollars behind it and the experience is improving. From here, do you expect kind of this level of accelerated growth? And can you maybe speak to regions or initiatives underway as far as sort of how that might roll out? Thanks. Yeah, definitely. So one of the things we're really pleased about within the quarter is that pretty much every region internationally grew in the quarter, which is pretty rare to happen because there's always something going on in some region of the world, and so it's pretty rare to see that. And I think it's certainly a combination of things. Certainly rebound in some markets from more difficult economic conditions in the previous year. Also, we continue to invest in improving service levels worldwide and being able to get the benefit of some of those service enhancements that we've been doing, and then increased market investments. We're able to leverage that level of increased experience and invest a bit more in marketing, and we saw some nice gains from that, too. The other thing I'd mention kind of specifically from a regional standpoint is China, particularly for Revolve. We saw some really nice growth and long term, we continue to think that's a humongous opportunity for us. It's one of our top markets, but it's certainly nowhere near what it could be if we execute really well there and if you recall, around a year ago, we brought in a new director of that region to focus just on that region and it's still very early stages, but we think we're starting to get some benefit of those investments of increased focus we've had in the region and hopefully some nice growth drivers in there for the quarters and years to come. How do you control, I guess, the margin dilution from that? I know you've put some measures in place from an efficiency distribution standpoint, but if there's a sort of disconnect between domestic and international growth that you're seeing now, you are making some nice improvement on fulfillment in particular. But how do you kind of think about that or control that looking into? Yeah. It's always a balance. At the end of the day, in general, and this is true for our international regions, we invest in areas that have positive incremental margin, so even if in some regions that margin differential might be a bit lower than, say, domestic, it's still a positive opportunity, and we want to gain share in brand-enhancing ways and ways that build our business up wherever we can, and net-net, the international business is very similar and profitable to domestic. There are some differences. There's some benefits as well. The return rate is a bit lower in a number of international regions, and long-term, as we grow the international business, it gives us the opportunity to gain efficiencies within that business because we can more smartly distribute and optimize our inventory. Right now, with the current scale of the international business, we're able to put very little inventory on the ground in key international regions like the European region or kind of the Asia-Pacific region. We've recently started putting a bit of inventory on the ground in the European region. It's still quite small. We think there's opportunities to start doing similar, quite small things in the Asia-Pacific region. If we can scale those businesses in a much bigger way over time, there's opportunity for really big efficiency gains. Our next question comes from Trevor Young from Barclays. Please go ahead. Your line is open. Great. Thanks. Just first one from me just to clarify on the acceleration throughout the quarter. Would that imply that October at that upper low double- digits is a deceleration from September? And then second question, just any comments on appetite from M&A here and what you're seeing in terms of opportunities on that front? Yeah. I'll start with the first one. I would call it closer to the same zone as exit rate. Not necessarily a deceleration, but keep in mind that low double-digit for October is low double-digit, closer to 10%, and exercising some caution as we get into November and December. And then the second part of the question, M&A. As we've talked about on previous calls, we're always actively considering possibilities if there's opportunities that make strategic sense, financial sense, et cetera. And so it's the kind of thing where we're investing resources actively looking. And if something interesting comes our way, we'll certainly consider acting on it. Great. Thank you. Our next question comes from Janine Stichter from BTIG. Please go ahead. Your line is open. Hi. Thanks for taking my question, and I'll add my congratulations. I want to ask about the long-term EBITDA margins. I think in the past, you've talked about getting to about 15% or mid-teens, and you've been close to that in the past, so anything structurally changing that would prohibit you from getting there? And then, as a follow-up, just want to get more color around some of the smaller opportunities: beauty, men's. I think you've also talked about home and more basics, just where we are in that and how you see the opportunity. Thank you. Yeah. On the long-term EBITDA margin, the, call it, 14% is still our long-term target. Now, that's going to take a little bit more time than we initially anticipated, given all of the macro challenges that we've experienced over the last couple of years. But we do still think that's achievable over the long term. But more near to midterm, the goal is to get into that mid to high single-digits consistently. And we think we can bridge to that. I wouldn't say easily, but it's a fairly easy bridge to build, especially with some of the efficiencies we gained this past quarter. So number one is margin. We talked about that earlier on the call. A lot of opportunity there with Own Brands over time. Fulfillment, selling and distribution with return rate reduction initiatives and the efficiency gains that the team has achieved there. Marketing, not communicating any leverage on that point because we do want to keep investing. There's still a massive opportunity out there, and then G&A. G&A is a significant leverage point if we can maintain that double-digit sales growth. Right now, we're investing in the business in excess of kind of a normal G&A run rate. So really investing ahead of that growth. That That will normalize over time, and then, again, with sales in the double-digit, again, over time, that provides a significant leverage point. And with regards to the developing categories, kind of like work, active, home, Men's, kind of beauty and such, continued progress. Super early innings. Growth rates in all of those segments is higher than our core growth rates. And the intention and the plan, the journey that we've had, is steady compounding year after year, quarter after quarter. It really begins to add up. I think it's at the scale now where it's still smaller as a percentage of overall sales. But as things continue to accelerate, those will be even more stronger, meaningful drivers of top-end growth in the years to come. So very excited there. A lot of learnings, a lot of progress, and a lot of learnings that interplay between the onboarding of each of the segments that accelerate growth in the less developed segments and such. Feeling really good about that multi-year journey, but long-term, well on our way. Great. Thanks so much. Our last question will come from Janet Kloppenburg from JJK Research Associates. Please go ahead. Your line is open. Hi everybody. Congrats on a good quarter. Just two questions for me. Did you see any demographic trend change, like maybe the younger aspirational customer started to resurface? And did you do anything in terms of pricing architecture to drive the new customer acquisition? And then just lastly, on the inventory, I think the spread is wider than it was in the Q2 sales inventory. And I'm just wondering at Revolve if there's some inventory balancing going on that's pushing the markdown levels up, and you need to work through that. And where should we expect to see inventories be better aligned with sales growth? Thank you. Yeah. So I'll start by talking about the demographic change question. We didn't make any changes to pricing architecture to try to go after a different demographic. That said, we think we have a nice assortment of merchandise that appeals to both Millennials and Gen Z and, of course, other demographics as well. I do think some of the site merchandising improvements that we've made over the past couple of quarters and the most recent quarter in particular have helped our merchandise resonate better overall, including with Gen Z. So we're very happy about the risks that we've made there. And then in terms of inventory, kind of inventory levels and inventory markdowns, we would expect to see inventory growth or decrease in Q4, exiting the year. And as Jesse mentioned, we expect to see margins grow in 2025. So certainly, we have a little bit more inventory than we would like at this point. But I think overall, the problem is fairly moderate in nature, and the impact should be muted over just a couple of quarters here. Okay. Great. Yeah. And just to add to that, the differential did get better. It was about nine points in Q1, and then it was up to 11 points in Q2, and then down to eight points in Q3. So some progress made there. Okay. Good. I'm sorry about that mistake. Oh, no. All good. That's all the time we have for questions today. I will turn the call back over to management for closing remarks. Hey, guys. Thanks for joining us. It's been a solid quarter. A lot of great progress all across the board on efforts that have been taken many, many quarters, and we still have a lot of, lot of exciting things in the works, which we're excited to share next quarter and the year beyond, so we'll see you guys soon. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.