Q2 2020 RealReal Inc Earnings Call
Ladies and gentlemen take rate standby and welcome to do build wheels second quarter 2020 financial results Conference call. At this time all participants are in listen only mode. Later, we'll conduct a question and answer session and instructions will follow at that time.
Anyone in chicken car assistance during the conference. Please press the star didn't zero on such to told so as a reminder, these companies go is being recorded I wouldn't like to turn call over to your host Mr., Paul Bieber head of Investor Relations. Thank you. Sir Please go ahead.
Thank you good afternoon, and welcome to the real real earnings call the quarter After June 30 or 45.
Oh lever head of investor relation, but the real world.
Joining me today to discuss our results are founder and CEO, Joe we weren't right and Chief Financial Officer Gusky.
We have a chance to read our press release and stockholder, whether that we distributed earlier today.
Are available on our Investor Relations website.
We began I'd like to remind you that will make forward looking statements are important. This call. These forward looking statements involve known and unknown risks and uncertainties and our actual results could differ materially.
More information about these risks uncertainties and other factors that could affect our offerings. All our most recent periodic report on form 10-K subsequent quarterly reports on form 10-Q and in our earnings release earlier today. In addition, our presentation one.
Non-GAAP financial measures.
Once we have provided we can four years since the most troubled young bastard no earnings personally.
With that I'll hand, the polar Jewish for introductory remarks, as an extra space here in a.
Thank you Paul and thank you all for joining US today on this call since we reported our Q1 results in early may can be trends have improved significantly.
With me down approximately 19% year on year June down 8% year on year and importantly, we have continued the positive trend into July with GMP decreasing by only 2%.
Revenue for the month.
Our GMT GMB recovery prompted us to began reinvesting in growth in Q2 earlier this than we previously anticipated.
Q2 was challenging <unk>.
Pandemic has been a catalyst for reinvention and innovation at the real real with the normalization of our processing capacity and the evolution of our supply acquisition strategy. We are now laser focused on returning to sustained growth.
It's like with that I'd like to turn it back to the operator for questions. Thank you.
Ladies and gentlemen, if you had the question at this time. Please press Star then did number one key on your Touchtone telephone. If your question has been answered all you wish to the movie yourself from the Q.
Okay.
Your first question comes from the lined up Michael Binetti with credit Suisse. Your line is smelting.
Hey, guys it Mike Thanks for.
All the detail in the presentation today.
I want to focus on July for a minute it sounds like Jim be down to can you speak to some of the other underlying metrics that you gave us some help with what's what's driven the de acceleration here and it looks like your I think last time, we talk to you you would anticipate costs back into positive territory at some point or the end of year. It it looks.
I think there's a chance to do that this quarter is there any reason be tougher comps in July or anything like that you think there's some headwinds.
That we should think about that would make that I'm not possible.
I'm Gonna start and then I'll kick it over to Matt and we're really I'm excited about July really what's happened is and July I mean previously in Q2 I business a suppressed both by operating capacity at social unrest.
And also business you know not returning to normal we're seeing that all change in July I stores opened in July later than we thought but now we have Oliver showers open.
New York returned to growth in the month of July I, I still like lagging lightly due to increased Calvin, but we expect that to continue.
Regardless of comps last year, what we see in front of US is growth on GMB and product coming in which will and then internally Jonathan GMB sublet turned over to Matt Yeah. I think it's Michael for the question. So just to point out a couple of things that we're in a shareholder letter you. So you're right on GMB growth and improved to negative.
Two in.
In the month of July that was on supply growth. It was plus 3% year over year. So we've returned back to net growth in incoming supply.
That is both of them I mean, there obviously highly correlated but the in essence, the the recovery is a bit steeper than we anticipated a quarter ago and that's obviously a good thing in terms of how we see it playing out over the next couple of months in through the fourth quarter, obviously things are quite fluid so take everything with diagrams Saul.
When the immediate term, we see July basically staying right around Q3, staying right around the July level because to your point, we are lapping a very strong Q3 of 19, where our GMB growth rate up about 10%. So notwithstanding the comping difficulties underlying that is just sort of study underlying improvements.
Starting with supply, we do see a path to a positive year over year growth in Q4 at this point.
Let me ask let me follow that.
You know you guys you have a lot of your business in New York and El <unk> you mentioned this in the Powerpoint.
Yes, it but just apply returning to positive is that I mean did you get back to positive without much contribution thing. So New York I know I know a lot of your.
Signer basis is outside the city and perhaps not you know doesn't have access to their full club at this point and then I guess the last one is.
Within the demand growth on a GMB as you get that negative two number in July are you seeing some of the.
The components of that but it didn't headwinds like you peachy. It seems like to me in April we just didn't heavy inventory center for buyers to add units to the basket. When they came to you and supply improving or you are you seeing you peachy improvement that part of the health and getting to the magnitude in July.
So again I'll start and then I'll kick it aren't Matt actually New York had a positive comp on the year for the month of delight. Despite many of the can add new yorkers out of that and the people of the Manhattan specific Dell not returning to the city.
So we feel really good given the fact that we get go in New York. Despite that we are well positioned for growth when they do return so supply was strong and how rapid growth and some cities a again the only market that's lagging in the month of Joel as of July was L.A., which we do expect.
To return as co, but I actually subsides and people get more normalized snow day to day activity on the U.P.T. I'll, let Matt acts and answer that specifically, but we do have an interesting phenomena going.
On right now on the product coming in the average selling price for US is roughly the same as if we would have gone to people's homes. The curbside pickup in the virtual appointments are working in that way.
But in general what people are purchasing are actually a higher about our higher value things, so handbags and jewelry in particular, along with home an art are selling and better than we would have anticipated and the lower value things like apparel, especially contemporary apparel I lagging.
And so consequently with out.
Strong U.P.T. because it have ticked up a little but isn't at where it was before it to our ASV actually it gave US one of the best month in July that we've ever had and that again as a shift in the buying mix.
So you don't need to pure write this down some is going to reiterate a couple of the numbers there in the shareholder letter for clarity. The overall supply was up 3% New York for them for the month was down 1%, So basically flat.
Oh, it was down 11% versus the being down 25% in the prior month, so improving as well not left everything else.
Positive, 8% for the month some of that that benefit does come from continuing strength in the vendor channel, but broad based across all the other regions. We are seeing a return to positive year over year comps. Okay. Thanks, not I missed it. Thanks.
That's okay. So then adding to a giulia, saying on unpacking Lv innocence.
So if he has been very strong throughout.
And is really recovered from where we were in April every month as increased in July was actually up 12% year over year.
You peachy or units per transaction.
Has begun a recovery, but is still still substantially below.
Pre cobot levels are we'd expect that to continue until our overall available supply balance is back to positive your year over year at some point in the hopefully not too distant future. So it'll be as a result is the recoveries Ben as a result of SP stabilizing and improved pricing.
Thanks, a lot.
Your next question comes from blinded Oliver Chen with Cowen Your line is still open.
Thank you Hi, Julie Hi, Matt on the supply details really helpful. It looks like New York bounced back a little more strongly sequentially than L.A.
Do you what do you expect for Q3 Q4 in terms of supply units do you think New York will stay will turn positive.
Is that underlying your views on Q4, and then we'll L.A. I turned positive and negative 11 in July.
And then bigger picture.
Those two markets always be a large percentage of your supply dynamic overtime would love your thoughts there.
Sure. So of course, we don't know with high levels of precision, but here's what we're seeing at a micro level for both of those markets.
So New York at the recovery has been quite substantial and I think I can we can attribute some of it to you know what we're seeing and you're living and in New York that Europe is done quite a comparatively good job at managing coal bed in the city is slowly coming back to life in Arkansas miners are slowly coming back home. So.
So we see that nuts assisted by the opening of our stores little over a month ago that helps on the margin. So unless we see a change in those trends have covered worsens.
I think it's reasonable to expect that New York, we'll be back to positive year over year growth now for this quarter and strengthening into Q4.
OLED has sort of a foot the flip side of that where the areas done less well at managing the spread of carbon in fact, it's kind of gets getting progressively worse in California, particularly in southern California.
So no doubt, we're seeing that impact, though even within that we are seeing recovery again, our stores opened there. So on the margin that's helping I think it'd be too soon to say that whether l. acreage around her two positive comps in Q3 unlikely, but I think a recovery broadly I think we're comfortable with.
And in terms of where they those markets go long term.
Weve really you know even in those markets, which are most penetrated we're still barely scratching the surface in consigner penetration and buyer penetration.
So they will always be I think our largest markets and they can continue to grow for many many years to come but certainly there will be our largest markets, but the rest of them have even more growth potential and they do yeah and you made a proactive strategic decision to reinvest in marketing starting in mid May.
Why was that the right time, and what kind of marketing comparisons are you up against how are you thinking about managing marketing as we model that in the next quarter and look at the interplay between marketing relative to demand.
Sure I'll I'll take take that one so it was cleared by the time, we've got frankly by time, we got through April that we felt like the worst was sort of behind us and we started our planning around what would it take to make us confident to us start reinvesting in grow.
The reopening are not reopening the loosening of restrictions on our Brisbane facility in or very early may.
We talked on last call that was the that was the big thing that gave us the the confidence that we could processing units. If we brought them in and marketing ultimately is driving supply as well as demand. So once all those things lined up we felt that it was we're comfortable to start leaning in a little bit but in a.
Relatively moderate way and as we started to see the results in terms of traffic in terms of supply rebuilding than we just leans more and more into it such that by the time, we got through June we were almost back to pre cobot levels of span, which is about $4 million to $5 million per month.
Going forward unless things change that's what you should expect $45 million of marketing per month for that for the balance of the year.
Thank you best regards.
Yes. Thank you thanks, Oliver Thanks Oliver.
Your next question comes from the line at Eric Sheridan, We do this your line is now open.
Thank you very much this is actually Alexandra on for Eric two questions. If I may one follow up on on the investment you announced or you started early in Q2, you what are kind of pick the key areas of investment there and just wanted to understand if and how you are long gone.
Esmin priorities might have changed now.
Now with cobot. Thank you so much.
Okay. The definitely two different different questions. So the first.
It's really a reversal of everything that we identify that we're going to pull back on operating expenses. When cobot. Initially had so first and foremost was marketing we just covered that kind of how we went back went down now working to progressively building backup next was there a variety of payroll related expenses, we furloughed.
15% of our staff, we had a lay off of about 10% of our staff.
Various other things you know we didn't give raise is suspended bonuses et cetera. At this we are building back so there's almost no one left on furlough.
And we have begun selectively hiring across the business, particularly in our technology organization, that's been driving tremendous innovation for us and most recently in our sales organization.
Going to higher relatively aggressively in sales in the back half of the year to support our returned to strong sustainable growth.
So in terms of how that informs our priorities going forward I would say, there's no no significant impact I would point to the innovations that.
Have come as a result of co bid that have been focused in our sales organization, having to reinvent our supply acquisition strategy altogether leaning into virtual appointments, adding in self scheduling. So these are potential unlocks to sales productivity overtime.
So that doesn't necessarily mean, we invest more in sales, but we're getting the returns from our technology investments. So we feel kind of embolden two to contain continue leading in there, but overtime I think what we're experiencing during hope it is that we see a path to potentially stronger unit economics longer term.
As a result of the efficiencies that we've gained during cold.
Great. Thanks.
And as an aside it's very difficult talking through masks.
Which we're doing that.
Your next question comes from the line at Ed Human with Keybanc capital markets. Your line standards.
Hey, guys. Thanks for taking the question.
To to quickly for me I guess first on the vendor side you guys indicated that you had some strong success there.
I think it was up close to 20% from an inventory perspective, I guess kind of whats the stability of that channel was within a short term phenomena or did you can continue to lean on that and then second in areas, where you have reopened physical location.
What are you seeing both on the sell side and the buy side. Thanks.
Okay. So I'll start on on vendor and then maybe Julie can start your thoughts on the stores Anil chime in so the vendor channels. As you mentioned is doing well. So GMP I think is what you're referring to was up 19% year over year in the quarter supply actually in vendors up a bit but more than that so that continues to be a.
Comparatively strong channel for us so we'd expect to see that continuing certainly for the balance of this year and probably realistically through next year will remain at elevated levels, but not a focus is strategic priority to to grow that business at a much much higher rate than it is so did tick up from brought me.
Good for 5% of GMP to about 8% of GMP in the quarter, we'd expect it to be in that neighborhood, but may be hitting 10%, but probably not much more than that we do use it to strategically infill product focused on higher value products, particularly in a handbags jewelry watches.
And that's the strategy there so.
Did you get the the question on stores as well, what we're seeing so far supply so stores have been interesting because right. When we opened we were hit with some social unrest and had to shut down so they've been open now since about the third week of AD keel until early data that is incredibly encouraging.
Looks like right now, though one the month of July they did about 80% of what they were doing pre Tobin and we're getting an appointment.
Simonton curbside drop off for a consignment was.
Tracking pretty close to the demand. So we're encouraged by the stores.
New York in particular has picked up ally is picking up again, we got to remember we only have for that we are so encouraged by the stores that you can expect we are going to open one more started before the end of the air We had previously announced that we were going that we had time to lease to open a store in Chicago.
And we are going to go ahead and open it to take advantage over the holiday selling season, which also is a great time press to get consignment that star will open sometime in November.
Got it best of luck.
Thank you.
Your next question can spend the line, it's Aaron Kessler with Raymond James Your line is now open.
Great. Thanks, a lot a couple of questions. My first on the services revenues. So is it looked like it was close to zero. If my math was right. There and just be curious are you seeing any kind of counter cyclical or.
Benefit than any of the markets, where consumers are home more obviously able to make clear I'll spend more time clear up their clauses are starting to see some of that benefit at all right now as well. Thank you.
Mhm.
Yeah, well onto your first question second maybe sizing we might have taken I get back to you on understanding that and I think the question on services revenue I think just to.
To remind everybody here says services revenue is arkon about our.
It's all of the in non consigned, it's not the direct revenue and it's everything other than the the take rate that we got our consignment channels.
So thats parts is probably shipping.
So there's no particular reason I would have that trend would have been markedly different.
Ends and your other question is general supply to remain I I wouldn't say that.
We can connect we haven't certainly done consumer research to understand the motivation.
During co bid for people consigning, but our supply trends have been consistently it more and more urging so certainly to some extent that is what as people settle into their stood there there's stay at home routines. They aren't getting up clauses in doing that we're seeing broad based strength until recently, we weren't seeing that in our largest markets of new.
New York in Los Angeles, starting see that now.
There's a case to be made that once new yorkers come back that there could be.
Quite a strong rebound owned and the surge of supply coming out of New York.
For the reason of that dynamic you mentioned, but broadly I think the interest in consignment is is strong and our value proposition is even stronger in times or value wins and certainly.
Times or in our that.
Great. So quickly gross margins were little bit better on consignment is that a mix issue there as well.
Little bit build it better year over year.
Absolutely.
So that's that's shifting improvements in our shipping expense that we negotiated that then last part of last year, that's primarily right.
Okay. Thank you.
Your next question comes from done line at I Keep me too with Wells Fargo. Your line is now open.
Hey, everyone I'm going to see the improvement I guess just for me I mean, maybe Matt.
On the take rate you talked about in the quarter the mix of business kind of driving that down year over year just just.
Just curious you should we expect that mix dynamic to continue into Threeq and Fourq. How are you thinking about how that plays out and then how that flows through to your take rate.
Next quarter and Rebecca.
Yes, yes, so we almost always at a steady state what we saw in Q2, we see in Q4, so the always seasonally we mix opt in handbags fine jewelry watches in the holiday quarter.
We saw that happening earlier this more of a co but effect. So I don't see that our mix should change dramatically. So our take rate more or less I think is gonna be stable in Q3, maybe we're going to mix up even a bit more because then you're going to have the cobot impact compounded by what people traditionally buying the holiday season anyway.
So I think our ASP is likely to go up even further in Q4, which has a pretty clean correlation to take rate.
Got it and then just quick follow up Matt.
You guys have said, you're hoping to get to positive growth like you forums, you've got the AD spend kind of ticking back up I'm not sure what else is going on on the expense. So if you kind of get to where you are hoping you can get on top line to end the year.
It should be adjusted EBITDA margin also begin to improve or is it is not going to work its way out that quickly.
Depends on what yet so yes, I think as we get back to growth you're going to start to see EBITDA margin expansion.
And that's going to be sort of broad based the way, we're thinking about reinvesting right now and it's not directly one for one.
Once we saw the positive signs our primary focus moved to supporting the growth.
Yes for this year to support a strong close to the year in Q3 Q4, the most importantly to set us up for a very strong 2021, so we're going to continue leaning into that.
Effective that is with the GMB upside that we're seeing versus what we thought a quarter ago that GMB upside will pay for most of the the reinvestment there were making this year.
Well generate strong GMB underpinnings for our strong next year that can can lead to a accelerated operating margin.
James which will update as we get closer to that.
Got it thanks.
Your next question comes for underline Rick Patel in lines now open.
For discounting in the broader market this fall.
A lot of branded retailers with excess inventory out there heading into fall. So as we think about your outlook for a it'll be do you see the changes in product mix being able to offset pricing pressure you could be seeing on like for like categories.
And so I'm going to start and I'll kick in order to Matt and interestingly enough. We have you actually no. We have a very diverse category, Max and where we've always seen price compression in the most impacted in apparel, well handbags jewelry home art man's have all pop that apparels actually the slowest to recover.
Consequently.
We aim we havent seen any price compression on the apparel, but more importantly, it and we expect us to continue as long as people are working for how it's becoming a less important part of our mix, where it was aim and women's apparel was a significant part so we haven't seen at any price compression or promotional effect.
And our mix has changed showed the higher value items, which we do expect to continue so we're pretty bullish on an elite going forward.
Okay.
Yes.
Just looking at Matt when are they room for a change, though I think that cap.
Great and also question on the growing B to B business.
Can you help us understand how this product flows through your business I'm curious are you taking on inventory here or is this product drop ship and then how do you handle returns and then is there anything that.
To highlight in terms of how it affects financials differently than the underlying consumer business.
Yes, so must set a couple of things straight. So we don't really have a beat it be business period. So when we refer to our vendor bit channel. All that really means is that those are businesses, who are selling to us, but our consigning with us.
No.
Lions share of that inventory is still the same and model, it's a consignment model with take rates et cetera.
So theres no difference in terms of how is recognized the financial statements no no inherent differences in return rates. So the mix of products, we tend to get to the vendor channel skews more toward bags in watches and they have their own return characteristics and they're generally speaking higher ASP products than what come from individuals.
But again, it's relatively small.
And then in terms of what are we do have a very small business, where we call where we buy upfront.
And that's not limited to the the vendor sellers, we offer that alongside our consignment offering to encourage people to can sign and typically what we're doing that as and mostly in handbags, a little been sneakers, a little bit in some jewelry and we just presented consigners in our physical locations with options.
Can sign at this rate.
Get a trade for site credit at this rate or get you know cash upfront at this rate.
The majority of time people choose the consignment options. They are willing to wait to get that the highest payouts. We just find it has a good lever for us to to convert Consigners.
And then one other thing they know when drop ship from their own facility, we still take possession of every item.
We still in fact, it for condition, obviously, that's coming right from a brand we know it tough fenech. However, at we subject inspect it per condition and we've had a graph and then we got to then I'll pick pack and ship and returns right right you're right. So I think you also asked a question about inventory generally so I think it they ended the quarter, we about 20 million.
$1 of inventory, which is very small so thats almost all of that is the result of US taking back returns after we paid or committed to pay a consigner a de minimis amount relates to what I was talking about in our by upfront program, probably less than 10% I'm not so almost nothing.
I appreciate it thanks very much.
Your next question comes from the line at Simeon Siegel with BMO capital markets Your line Standalone.
Viewing families are doing well through all of us.
Congrats on the ongoing sell through trends improving in supply sorry, if I missed it and congrats on the Dnbi sequential improvement, but can you help bridge to the July GBB down versus the supply being up yes also recognizing the July SP strength that you mentioned some how are you thinking through the supply versus demand dynamics now that supplies building any thoughts on when demand for catch up.
Just like given the sell through strength demand. Thanks.
I'll start and then Julie and I think to add so supply generally speaking is a leading indicator for our GMB. So the supply metrics that were giving out we're not necessarily going to continue doing that that because things are software. We felt that the transparency was appropriate at this point.
As shipped units, which has just basically means that our consigner. Our salespeople have quote unquote shipped one of these units into our facilities that it takes there's a certain amount of time. It takes to process. Those and then turn and ultimately turn into sales. So generally speaking, it's a leading indicator number one.
To our supply has being down substantially year over year for a few months now means that we've had to sell more aggressively into older inventory. So as supply starts to rebuild and gets into significantly positive year over year territory. Then you can start to see work.
[music].
That trend starts to change and we're selling more of our GMB coming from newly released products onto our marketplace and they'll tend to correlate pretty well and the study state but in a from month to month, you're going to tendencies supply trends lead GMP. So and then just to add some color we really expect.
Q4 work and then start showing more positive leading growth on demand as expecting adds we expect the belt in supply in Q3. So we're where we are expecting the turned to overall growth and the and work and sustainable growth in Q4.
Great. Thanks, and then can you speak to any savings you'll see with the success of the virtual appointments versus in person Michael.
I can't I can't be Super specific on it yet because obviously, we do not have the volume that can test the hypothesis that we could see substantially greater productivity over time, just not enough data there, but we're optimistic that we could see substantial productivity improvements from our.
Our sales team is virtually all of the reality is virtual is the new norm.
Virtual appointments with curbside pickup supported by our our growing fleet of vans and more recently assisted by the launch of Consigner self scheduling all those three things fit together to lead to a scenario, where we could have substantially greater number of appointments per day per salesperson.
And then in the model, where they were traveling inbetween appointments. So prior to call that a good day per sales person is four or five appointments today with the of the restrictions of logistics you could see that increase substantially. So we look forward to the point, where we're pushing so much volume and so much consignment through that.
We can report out on realized productivity gains that we definitely see the potential for it to be an unlocking our model that we weren't really anticipating as recently as a quarter ago.
Sounds great. Thanks, a lot best of luck for the rest of the or.
Thank you. Thank you.
Your next question comes from the line and Susan Anderson with B. Riley FBR. Your line is now open.
Hi, Good afternoon. This is alec leg on for Susan today. Thanks for taking your question just a follow up on virtual appointments and in home. So have you been able to resume any in home appointments and any location or do you have any plans to do so in the near future and then on virtual appointments I know that you mentioned that.
The number of items consigned virtually is generally a lot lower compared in home.
As you have you guys seen a trend increasing number of items.
And then also maybe the margin impacts on that.
So I think there's a little confusion, we had higher to cover that we had inside sales and we had white glove an inside sales really left us pending the shipping label for someone descended then and we get roughly five to six units an item when they send and virtual and appointment to the winter Hammer work and Mark.
Like 15 to 18 units for pick up.
Our virtual appointments with curbside pickup where we tend to van not just like our white glove appointment, so and interestingly enough the value of those increment of the units from the virtual appointment to the curbside pickup is exactly the same so the combination.
The ban pickup with the virtual is working just like the in house and enhancing canceled tension at so right now it looks like it really efficient trade up to keep on moving forward.
We do expect as we move forward that some consigners, especially because there is quite.
Then we'll get people going to big changes will will pick up 200 to a thousand things that one pickup that in home appointments will return what would be getting these huge whale pickups again, but not most likely not this year, but sometime next year. So we're leaving that option open but virtual right now.
Now virtual clutch curbside pickup.
Is almost it looks like in more efficient and effective trade up to white glove appointments, yeah, I'm just to clarify further so there's there's already there's no official restriction on us resuming in home White glove appointments, we can do that.
We've chosen in our Consigners of broadly speaking chosen not to at this point.
Because the virtual appointments are working well, there's really there we're not finding that there's any difficulty or lack of comfort with.
Using that technology.
They're converting well so everybody is happy with it but as we go forward I think some more in home is starting to Julie's point is is certain to come back into the mix, but I don't.
Personally see a scenario where it goes back the way that it was where we have the majority of our products coming from in home appointment I think the new norm virtual is a large component of the new norm.
Got it. Thank you that's extremely helpful.
Yes.
Your next question comes from the line up.
Marvin Pong wed.
Right.
With BTG your line Standalone.
Thank you.
Thanks for taking my questions.
I'm glad everyone's safe and okay.
Hello, guys. If I missed this I hopped on the call a little late but just though.
Two questions on July the JV very almost hit breakeven did you comment at all in the linear already or.
Oh GMB growth in the month was there actually any period of time, where we're Jim do you actually broke positive.
We love to get some additional color on that and then.
Secondly, I'm just curious if you're if you have seen in the and the four or so once that we've been locked down you know if you've commented forgive me again, but are you seeing a abnormally large growth in your and the number of Consigners and related Lee.
Any notable noticeable change in the motivation for people Consigning, if it related to economic distress or or is is it the normal reasons that'd be great. Thank you.
Sure. So I'll start the GMB linearity and I'm not going to get into day by day, but yes that mean technically speaking there were periods in the month, where we're seeing positive year over year comps, but theres a lot of reasons that could happen.
Including what Dave the week is different the timing of our promotional cadence as et cetera. So it's it's actually I don't particularly helpful to granulate, even further than what we did on them on a monthly basis going forward in the release for the rest of this quarter.
From a growth rate perspective, I'm not expecting that same type of linear improvement because we're comping a very strong Q3 of 2019 or we saw about 10 points of GMB acceleration just holding right around this level is in effect continuance of our recovery.
We do expect to see continuing supply strengthening which will support a re acceleration from a growth rate perspective in both GMP in supply in the fourth quarter as we currently see it.
And then Youre. Your other question around just motivation there was a question earlier around kind of motivations of Consigners and just kind of strength.
New consigners buyers et cetera.
I would say there's no real trends that we can draw we've always benefited from a very strong highly engaged base of buyers and consigners and when we were spending very little on marketing. It was really our base that carried us.
Through and as we've started to Reengage and invest more and marketing, we're starting to see recovery in new Consigners in new buyers as well and that's of course over time is is necessary to support substantially larger growth rates.
Terrific thanks for that color.
<unk>.
Once again, if you would like to ask a question at this time. Please press star one on your telephone Keypad. Your next question comes from the line Kathy Hallberg with D.A. Davidson. Your line is now open.
Hi, everyone. Thanks for taking my question.
Just wondering if you guys had any sort of sense.
Sort of the promotional activity I mean are you seeing anything specific to apparel or jewelry.
Or.
Handbags that matter. Thank you so much.
So in the past misses that Julie obviously in the past, we've actually seen price compression as mostly the department stores move product and there's a different phenomena and that's mostly on apparel is a different phenomenon happening this year and apparel in women's apparel, specifically as is.
Matt has lessened as a percent of our mix by just a few points, but handbags fine jewelry.
And handbags in particular find Joe re man Talman are actually have crown. Consequently, we have an overall seen any promotional attacked the other thing that's happening in the again the online businesses, which are primarily that the department stores and is that they are selling true.
Inventory that is more at less fresh Amar old and perhaps not as unique so while they would've had the sprint desperate their spring season was.
It was actually in trouble and so consequently, they're selling inventory that we true at a price, which we have been selling the AD and resell others are.
Slightly and I don't have the data, but basically that there's appears to be as slightly bigger overlap of what we're selling that our site for our normal resale value versus what they're selling for a higher value as Neil So there's still a bigger gap. The other thing I think I'll note is our ASP in July.
Went up 12% versus the same period year ago again, showing that there isn't at least at this point, we're seeing a lack of and promotional effect in the market right and even the reverse of that and to some extent, particularly in handbags, we've seen a number of the primary luxury players increased the prices.
Of bags during during coven, so naturally is going to support increases in resale value and make the value of a pre owned and accessibility frankly on being able to get get these products even more compelling some.
A lot of sensors, not particularly surprising that those categories are showing particular strength.
Thank you so much.
I think we got time for one more.
Yes, Sir and you had the follow up question from Oliver Chen with Cowen. Your line is now open.
Taking less mountain Julie just these are some factors that are out of your control, but regarding a resurgence our second wave of what have you seen with trends in California, and Florida and in Texas and any factors you can.
Have within your control if that thats to happen to a greater extent and would also love your thoughts on L. stimulus.
Benefit at some of your results.
And then Julie bigger picture.
Potential partnerships with LVMH RMS what are your thoughts on.
Embracing other companies and working with some of the luxury brand houses.
Some of sorry, Matt can follow that with all of it. So we have than there has been a resurgence in Texas, California.
Florida.
I have said the only market that's been negatively impacted for us is alway. The other markets I really don't growing and I really believe that's because of the safety measures. We put in place where we or it is a curbside pickup with the virtual appointment. So the appointment people willing to can sign and wanting to.
And sign actually there's very little human touch with that and they feel very safe consigning and so we feel that that'll continue at late just really needs to be a turnaround. We did have a double whammy. There we had social unrest we had our.
Store closure and then we had our office closure and the delay has seen a resurgence and how that so that went a little harder to predict.
But even into alliance R&D at it already starting to look better. So there's that now the second part of the question brand relationships brand relate you know Oliver we continue to work on it we certainly would bump to be in a position to announce when we were anup and relationships are being we're in discussions can you.
Maybe in discussions and.
I just stay tuned stay tune into this channel so.
Let's just say that covered put at a change in plans, but I expect that the relation a couple relationships will merge M. Shortly.
Yes.
Third part was stimulus.
And I'd like to now hard card card to now.
But I'm not expecting that if there is not a new stimulus program I'm not expecting to see any significant impact I don't think the partners, particularly high overlap between those receiving stimulus payments in our core customer and Consigners very helpful. Thank you best regards.
Thank you.
So at this I think we're closing the call and we appreciate all the participation the good questions and I want to close the say I had the companys priority is safety for our employees, but also to cautiously we invest to support the growth that we really.
Our scene and expect to see going forward, So and we look forward to talking to you again after Q3.
Ladies and gentlemen does concludes today's conference call. Thank you for free spanning you may now disconnect.
[music].