Christian Arnell - Investor Relations Alan Guo - Chairman and Chief Executive Officer Robin Lu - Chief Financial Officer.

Ladies and gentlemen, thank you all for standing by and welcome to the LightInTheBox Holdings Company Q3 2015 Earnings Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] I must advise you that this conference is being recorded today, December 21, 2015.

I would now like to hand over the conference over to your first speaker for today, Mr. Christian Arnell. Thank you. Please go ahead, sir..

Thank you, operator. Hello, everyone and welcome to LightInTheBox’s third quarter 2015 earnings conference call. The company’s results were released earlier today and are available on the company’s IR website as well as through PRNewswire. Today, you will hear from LightInTheBox’s Chairman and CEO, Mr.

Alan Guo, who will give you an overview of the company’s strategies and recent developments, followed by Mr. Robin Lu, the company’s Chief Financial Officer who will address financial results in more detail. Before we proceed, I would like to remind you of the company’s Safe Harbor statement.

Please note that the discussion today may contain certain 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 our current expectations.

To understand the factors that could cause results to materially differ from those in the forward-looking statements, please refer to our Form 20-F filed with the Securities and Exchange Commission on April 17, 2015. We do not assume any obligation to update any forward-looking statements except as required under applicable law.

At this point, I would like to turn the call over to the LightInTheBox’s Chairman and CEO, Mr. Alan Guo. Alan, please go ahead..

Thanks, Christian and thank you everyone for joining us today. We are pleased to report that Q3 2015, we exceeded our guidance as net revenue came in at $70.2 million on a GAAP basis. On a non-GAAP basis, excluding the impact of unfavorable foreign exchange rates, net revenues reached $80.2 million.

At the macro level, during Q3, we continued to experience the weakness of the euro and many other currencies against the U.S. dollar. However, in the second half of Q3, we started to see moderate improvements in exchange rates between the Chinese yen and U.S. dollar and this trend continued into Q4.

While the depreciation of the Chinese yen was still too modest to offset the euro impact, we certainly welcome to this new development at the macro level. During Q3, we continue to work hard on reducing costs and improving our supply chain and operational efficiency.

This allowed us to maintain a relatively high and stable gross margin of 37.5% on a GAAP basis, 45% on a non-GAAP basis and deliver a second consecutive profitable quarter on a non-GAAP basis.

Excluding the unfavorable impact of year-over-year change in foreign exchange rates, we achieved a non-GAAP net income of $3.3 million, a significant increase from a non-GAAP net loss of $4.8 million during the same quarter of 2014. GAAP net loss was $8.6 million, which includes a $2.0 million in share-based compensation expenses.

We further streamlined our relationship with our supplier base. We continue to source more factory direct and branded products from suppliers and continued to eliminate middlemen in our supply chain.

We started to charge our suppliers’ quarterly service fee so that we can focus more on working with suppliers who have strongly motivated to be part of our ecosystem.

At the same time, we also improved our own service level to our suppliers, includes the launch of 400 free calling numbers for suppliers, improved return and refund practices as well as several major improvements in our supplier portal.

In addition, we further improved our lender acquisition practice and changed the KPIs towards a bigger focus on new supplier quality and revenue generation capability, which led to higher revenue per new suppliers. We believe that our strategy of improving supply chain is creating a sustainable platform with long-term consumer value.

While we are working hard in further improving our core categories, we have also made major progress in developing new categories such as sports and auto, hair and wigs as well as toys and hobbies.

We believe our capability to discover emerging categories through big data analysis and our ability to incubate such new categories are crucial for us to capture new market opportunities. Innovation is the key for our future growth.

We are pleased to see our open cross-border logistic platform business getting good traction both in customer base and total number of packages shipped. As a result, revenue from the logistic platform grows 25.6% sequentially.

We continue to invest in innovating our mobile experience with revenue from mobile users increasing from 32.9% last quarter to 34.6% this quarter. I would also like to announce that we just launched a new tailor-made app for Chinese tourists shopping abroad named as daishu, which stands for kangaroo in Chinese.

As a leader in cross-border e-commerce, we identified Chinese tourists shopping abroad as the new megatrend for global shopping and we believe that our app will become an e-applied ultimate shopping guide for Chinese tourists while they shop abroad. We continue to further develop our strategic business relationship with Aokang.

Together, we aim to help Chinese branded manufacturers to clear out inventory using our flash sale model for overseas markets, particularly in fashion and shoes category. We believe we have used Aokang product as the pilot to prove the concept and initial results have been encouraging.

Therefore, we have enlisted an increased number of domestic brands in our flash sale channel in Q4. We believe such a model has huge potential as we develop a high-quality domestic brand network and present it to overseas consumers at deeply discounted prices.

To conclude, we believe our continued focus on improving supply chain and operational efficiency started to payoff in Q3 and Q4. We developed a number of new categories that have the potential to become future growth engines. We gained early traction on our cross-border logistic platforms.

We continue to invest and innovate in mobile, launch the new app for Chinese tourists shopping abroad and leveraged our Aokang relationship to build the cross-border flash sale business for Chinese domestic brands. And finally, we saw the Chinese yen depreciate moderately which is in our favor.

Now, I will turn to Robin who will walk you through our Q3 financials..

Thank you, Alan. For our currency, volatility remained a challenge. We are happy to have you stated the high end of the revenue guidance.

A combination of ongoing cost-cutting and supply chain efficiency improvements, the increase in traction of our global cross-border logistics platform and our higher sequential growth from Q3 to Q4 compared to last year led us to believe that we can reasonably expect better performance in Q4 in our top and the bottom lines.

Looking at our P&L, for the quarter, we achieved a second consecutive non-GAAP profitable quarter with net profit of $3.3 million from a non-GAAP net loss of $4.8 million. As I review our financial results, let me remind you about a few things. All numbers quoted are in U.S. dollars.

All percentage changes refer to year-over-year, unless otherwise noted. Net revenues decreased 29% to $70.2 million. Backing out the $10 million unfavorable foreign exchange impact, net revenues actually were $80.2 million.

Repeat customer purchase accounted for 45.6% of total net revenues, up from 41.1%, while mobile revenues as a percentage of total net revenues increased to 34.6% from 26.5%. Total orders fell 28.5% to $1.8 million and total number of customers who made a purchase in the quarter decreased by 24.7% to $1.5 million.

Revenues in the apparel category, was down 21% to $29.2 million. As a percentage of total net revenues, apparel revenues were 41.6% compared with 35.4% a year ago. Revenues generated from other general merchandise were down to $41 million.

Looking at our business geographically revenues from North America was down 1.6% to $20.1 million and accounted for 28.6% of total net revenues.

Revenues from Europe, was down by 31.5% to $40.5 million, representing 57.6% of total net revenues, where revenues from other countries decreased by 50.2% to $9.6 million representing 13.8% of total net revenues. Gross profit was $26.4 million and the gross margin was 37.5%, up from last year’s gross margin of 30% and is stable sequentially.

Excluding the unfavorable changes in foreign exchange rates, non-GAAP gross margin would have been 45.3%. Fulfillment expenses, which includes payment processing fees decreased to $4.9 million from $5.9 million. Selling and marketing expenses were $19.5 million lower than $25.6 million last year.

G&A expenses were $10.3 million or 14.7% of total net revenues, down from $12.3 million or 12.4% of total net revenues. G&A expenses include $3.6 million in technology investments compared with $4.1 million during the same period last year.

Non-GAAP net income was $3.3 million compared with non-GAAP net loss of $4.8 million that we recorded in the third quarter of 2014. With this, we have delivered two consecutive quarters of non-GAAP profitability. Non-GAAP net income per ADS was $0.07 compared with non-GAAP net loss per ADS of $0.10 in the same quarter of last year.

As of September 30, 2015, we had cash and cash equivalents and term deposits and restricted cash of $36 million and we have completed our $20 million share repurchase program. Based on our current and the preliminary reviews, we expect a better cash flow in Q4.

For the first quarter of 2015, based on our estimates on the foreign exchange depreciation against the U.S. dollar, we expect our net revenues to be in the range of $81 million to $83 million. This forecast reflects the company’s current and the preliminary views on the market and operational conditions, all of which are subject to change.

This concludes our prepared remarks. At this point, we are ready to take some questions.

Operator?.

Operator:.

Alright. Thank you, operator. This concludes our third quarter 2015 earnings conference call. Thank you for your participation and ongoing support of LightInTheBox. We look forward to providing you with updates of our business in the coming weeks and months ahead. Have good holidays. Thank you everyone. This concludes the call..

Ladies and gentlemen, thank you all for participating. That does conclude the conference for today. You may all disconnect now. Thank you..