Q3 2021 RealReal Inc Earnings Call
Good day, and thank you for standing by welcome to the real real third quarter. It's plenty plenty one financial results conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your thoughts on if you require any further assistance. Please press star zero I would now like to hand decline friends over Caitlin how please go ahead.
Thank you operator, joining me today to discuss our results for the period ended September 32021, our founder and CEO, Julie Wainwright, President Rocky Labatt, outgoing Chief Financial Officer, Matt Duffy and incoming Chief Financial Officer, Robert Julian.
Before we begin I would like to remind you that during today's call we will make over looking statements.
The risks and uncertainties, our actual results may differ materially from those suggested.
Yes.
You can find more information about these risks uncertainties and other factors the operating.
Operating results in the company's most recent Form 10-K, and subsequent quarterly reports on Form 10-Q.
Today's presentation will also include certain non-GAAP financial measures, which we have provided reconciliations to the most comparable GAAP measures in our earnings press release.
In addition to the earnings press release, we issued a stockholder letter earlier today.
Of which are available on our Investor Relations website.
Now I'd like to turn the call over to Julie Wainwright, and Chief Executive Officer, Gilberto introductory remarks, and then we will go directly to a question and answer session.
Thank you Caitlin and to everyone for joining our earnings conference call. Today, we're pleased to announce strong financial results for the third quarter 2021 with continuing robust topline growth as well as solid bottomline improvement.
Based on what we know today.
Effects of COVID-19 are effectively behind US importantly, we have a resurgence of healthy supply in our authentication standards.
During the third quarter, our product supply ramped nicely driven by at home consignments that exceeded pre COVID-19 levels.
Where there are retail stores continued to be an increasingly important and cost effective channel for securing supply.
Therefore, we believe we are well positioned from a supply perspective, as we enter the holiday season.
Additionally, we believe the rail rail unique business model is largely insulated from the supply chain shortages.
And certain inflationary impacts many businesses are currently experiencing.
During the third quarter, we also manage operational kras it pressures within the business like many businesses, we are incurring elevated shipping costs and staffing challenges specifically in our authentication centers to address these issues, we developed and implemented multiple initially.
Including shipping diversification and last mile optimization for the shipping cost and expand in automation and aren't then occasion centers to address staffing shortages. We are confident in our ability to manage these challenges.
While we are in the early innings I'm delivering operational expense leverage we believe the company is starting to see the benefits of previous investments.
These will create significant opportunities for operating leverage as we drive toward profitability in the coming quarters.
Overall, our business is continuing to experience very positive trends and we believe these trends will continue through the end of the year and into 2022.
On a final note I'm, providing forward looking financial expectations, we intend to resume a more typical annual and quarterly guidance cadence in 2022 along with committing to a timeline to reach adjusted EBITDA profitability.
I expect that to begin with our next conference call and with that I'm going to open it up for questions Caitlin.
So do we have here.
Okay.
Yeah.
Operator, operator, we're ready for questions.
As a reminder to ask a question you will need to press star one on your thought of phone do.
We draw your question press the pound key please stand by while we compile the Q&A roster.
Yeah.
Okay.
Your first question comes from the line of Mark Oddsmaker from Baird. Your line is open.
Good afternoon. Thanks for taking my question I wanted to ask just about some of the supply strategies here. So you sound pleased with the trends with with at home appointments at the same time I think the target on the number of LCL openings may have come down a bit versus what you discussed recently correct me if I'm.
But maybe just a little bit more on what youre seeing with kind of each of those channels and now with some normalization in the operations could you give us some current thoughts on how you think that's applied mix might trend in the medium term and how that and what the implications might be on profitability trends. Thank you.
Oh Wow, that's a lot of questions. So let me just start with L. Seals are in our neighborhood stores along with them. We do have one stand alone and and New York and Midtown. So we actually have more luxury consignment offices Dan.
We originally planned because we get at the beginning of the year.
Make a decision to open more neighborhood stores. So we actually have more but we did shut one down and that was in San Francisco because most people prefer to use our are while we have to now in the bay at three in the Bay area. We have one in larkspur, one in Palo Alto one in downtown Stamford.
Francisco So the center in our which is at the base of our office building became less and less relevant how we chose to move that staffing, but in general supply, 70% of our new consignor, so coming from our retail stores and coming dropbox or appointments in the.
L C L.
Fly across all segments fine jewelry watches men's fashion women's fashion handbags.
Handbags accessories all of that is.
Significantly up.
Since year ago, the average unit selling price, which we internally call AUR is actually due as I actually on target if not slightly higher so now and it'll be based on what people buy and that will determine the mix. We are still we are certainly apparel has come back and Roger can talk.
A little bit about that but we're still selling a huge mixture of high value handbags.
And fine jewelry.
So and just one other note and then we can you can ask further questions would be like if I didn't cover it.
Gross margin is clearly in our take rate is clearly a key component on the path to profitability, but it's not the sole path.
It's not the sole component so we feel good overall that everything is progressing them.
Better than we expected for the balance of this year and we see things are looking really good in 'twenty, two and we'll give you more specific guidance in the February timeframe.
That's all really helpful. Maybe just a quick follow up on the gross profit commentary I guess with gross profit per order I mean have the buyer incentives are those fully back to normalized levels or or how are you thinking about that as a lever as we head into the holiday period 2022. Thank you.
We didn't use it when supply was short in order to keep our cohorts engage because we have such a high repeat rate, but that was last year. We returned to normal cadence of any kind of promotional activities earlier this year and that means that and we expect that.
<unk> continues that usually means one.
Really bounced back as we call it to I E. A month and we so we are back to normal pre COVID-19 everything is either better than where we were pre.
Pre COVID-19 or back to normality.
That's great. Thanks again.
Sure.
Next question comes from Oliver Chen with Cowen Your line is open.
Alright. Thank you gross profit per order was very encouraging this quarter.
We look forward what are some key drivers to continue to increase this and Julie as you think about supply gathering regionally and across the country are you seeing pretty broad based strength in your important market. It sounds like you have a renewed confidence that we've entered a more stable phase. Thanks.
I'm going to answer that last bit of your question first and then I'll turn it over to Matt.
Matt and Robert for the financial members, so or we have yes. All markets are back we have a regional strength and national strength and I Wouldnt say its stability I would say we've returned to pre.
Pre at we're exceeding pre COVID-19 growth levels in all markets. So it looks really good very excited.
And am I shall now at one point, New York was shut down for us that is not the case and in case anyone hasn't been to New York lately. It is vibrant that markets all markets are doing extremely well. So we're very pleased with the supply.
And then I'll cover the the gross profit per order just Ted.
Statements in the letters, we were at $94 gross profit per order in the quarter, which was flat versus the prior quarter.
Expect that to go up in the current quarter as it'll be typically is higher sequentially. That's one of the drivers on a go forward basis, but on a sustained basis.
It's really ultimately it's going to be leveraging shifts.
Shipping expenses and other kind of Cogs.
We do expect to see over time meaningful improvements in our shipping expense kind of won not only because we're seeing short term headwinds there beyond that we have a number of initiatives over time to drive that down meaningfully.
And then beyond that the other just the key levers that really just our lv and our take rate, which is stable to modestly increasing going forward as well.
This is Robert the only thing I would add is.
The gross profit per order was up year over year.
$4.
Okay. Thank you and last question.
Fear statistics look look quite solid, but what about the new buyers that you're seeing in terms of their purchasing behaviors and what might you do that make sure to engage them and keep them on the platform.
Thank you.
Oh, you know what keeps new buyers on our platform. It's the same thing that keeps repeat on our platform really good supply.
So that's coming in and the new buyers looked like that the other buyers see the difference between this new buyer group, which we started chain during COVID-19.
Yes, we used to see in a L V that was slightly less than the repeat and in fact, the new buyer a L. V is strong it's not as you know, it's strong as strong or stronger than repeat so I'd say its a nice healthy new buyer and again, it's driven by great merchandise on the site.
Thank you best regards.
Thank you.
Next question comes from Susan Anderson with B Riley Your line is open.
Hi, good evening, Thanks for taking my question.
I was wondering if you can give us an update on your store plans and how many you expect to have at the end of the year and your expectations for next year and if anything's changed on the rollout there. Thanks.
Yeah sure. This is rajeev <unk>, so stores our neighborhood stores, we have 15, which includes our flagship stores as well will have 17 by the end of the year and they continue to be quite healthy for us. So they continue to drive supply and high value supply. They continued to drive about 30% of our.
New consignor, so the supply side again very healthy on the demand side L. V average order value higher average selling price return rates are lower we see a pretty big Halo impact happening on a regional basis. So we're very optimistic about the stores. This is the first season that we'll have our neighbor Ted.
Stores open and we're looking forward to a healthy performance. There. So we'll definitely keep you all posted on next year's plans.
Great that sounds good and if I could just add one follow up I'm wanted to get your thoughts around the holiday with you know kind of now I guess the return to much more normal supply what are your expectations around holiday and do you foresee any shipping issues around the holiday demand. Thanks.
Yeah, we don't see any we are not forecasting any issues on the shipping side like Julie mentioned, we don't have any supply chain issues. So our shelves are full of supply. We're very excited about that yeah. We're we're excited about a healthy quarter with those two things then.
Great. Thanks, so much good luck this holiday.
Yeah.
Next question comes from Michael Binetti with Credit Suisse. Your line is open.
Hey, guys. Thanks for taking all my questions here and congrats on a nice quarter.
Julia.
At the time of the IPO I think we were thinking we'd be approaching breakeven right around now obviously there was a pandemic in between there so.
Clearly we are where we are but you know thinking about what are your EBITDA profitability. I think you guys were thinking for on a run rate for a year about $2 billion was what you needed to get there and I know you're going to give us the past profitability on the next call but.
And then I know theres, a lot of numbers moving around but at a very high level. It seems like the biggest parts of the cost structure.
Pretty favorable today versus what we knew about back then Phoenix seems like it's more efficient in Brisbane small stores seem like you're very happy having cost effective was used in the prepared remarks describe it and I think a lot of the automation you talked about along the way. She is has happened are there are there new tastes to think about to help us think about.
What happens to profitability at $2 billion versus where we thought we were a couple of years ago.
Michael I will be so excited.
Our CFO walk you through our time.
Timeline.
It is to have the right I think that's better or less bad, but I have to say.
We clearly box a year that we didn't really hear you right in the IPO. If we would have continued on our track of growing 40% a year, but in a different.
Current situation I think the key takeaways from today, we're growing faster than they were pre.
Pre COVID-19 supply is strong and we're going to resume to normal cadence and put out the path to profitability in February.
Got you've got a pretty energetic team here around the table.
Okay, Let me.
Let me ask you one other thing if I'm trying to look at I guess, the model and compare the business.
Pre COVID-19 levels for 2019, I think the quarter in the quarter.
Sales were up about 46% and excluding stock comp there was about 200 basis points of operating expense leverage on that kind of a sales growth rate is that you know until we get to February and we have to do our models. Before then is that about the right.
Amount of leverage to think about if we see that kind of G. M. V from you or are the inflection points along the way over the next few quarters that we should think about.
Robert.
Yes.
I'll make some comments on that one I believe our GMB growth was 50% year over year and our revenue growth was 53% year over year.
We're evaluating the business and the cost drivers in the unit economics, and I think when we.
Give guidance.
Next quarter, we'll give you a better sense of what sort of leverage that we should expect going forward I do think that there were incremental investments that have been made along the way.
But we're starting to see some benefit from and I would not expect that.
Youll continue to see investments like that that will prevent us from showing leverage so I expect that we will see.
A fair amount of leverage and again I don't want to be more specific before we give full guidance.
But I don't think that the past is a good indication of the future relative to what sort of leverage you will see in this business right and I you know just as one example, we made a commitment to automate our op centers, which meant that we really doubled down and actually doubled the budget and the technology, we started doing that.
2019, it really shows up.
And you don't have the isolated numbers, but it's a key driver of our <unk>.
That structure and we are seeing the results of doing that and both our data scientists in our technology group, but that isn't something we're gonna be doubling every single year at all in fact, we're at a really good rate well over getting incredible leverage and our op centers given the work.
They've been doing.
Okay. Thanks, that's very helpful. Thanks, a lot.
Robert.
Next question comes from Ike <unk> with Wells Fargo. Your line is open.
Hey, good afternoon, everyone. Two two from me on the model.
Clearly a lot of different things going on from a mix perspective.
More volatile than normal your take rate is normally normally takes a leg down sequentially for Q4.
Can you kind of help us with how to think about that given whats going on from a mix perspective, and then on the marketing side.
There was a very large uptick in marketing in Q4 of last year. I know you guys were just starting to really reinvest because he saw the consumer demand coming back in supply coming back how should we think that marketing is there a chance of dollars come down I'm, just kind of curious out of all of that I would give it given the.
The comparisons that you're up against thank you.
So this is Matt I'll hit a couple of pieces. So we're not we're not going to start going down the path of giving all the components of that would add up to guidance, but.
But directionally with respect to take rate Youre right. There is an inverse correlation between Lv and take rate and typically L. A O visa its high point in Q4, we had a really unusual Q2 this year with our highest ever a O V. So I wouldn't say that's necessarily.
A likely outcome, but sequentially up is very likely so you should expect to see take rate be somewhat down sequentially.
With respect to marketing I don't think you can look at 'twenty 'twenty as a guidepost for anything frankly.
But we know obviously, what our intent is for marketing in this quarter, which reflects more typical seasonal investment levels, which means it'll be up versus versus Q3, but not in a particularly significant.
Got it thanks, Matt.
Next question comes from Siemens Siegel with BMO capital markets. Your line is open.
Thanks, Good evening, everyone I'm sorry.
Sorry, if I missed it I know, it's a little tougher, but any way to frame how some form of like for like a S. P to just to try and neutralize the product mix I I'm basically just wondering if you guys have an opportunity to capture the benefit of broadly higher industry prices without absorbing most of the inflationary cost in pet. So just trying to think through how you think about prices if you exclude mix.
Sure.
Yeah.
I'll take that and rocky feel free to jump in.
Over time should that Theres, an industry kind of environmental component, but there's also an operational and execution story. So our like for like Asps today are significantly higher than they were years ago, what that really ties back to our efforts over time to leverage technology to optimize pricing and in <unk>.
Increasing glenn granular lever level.
The overlay and the environment is very favorable from a promotional perspective.
And certainly there is there just kind of a knock on effect for us.
I follow your train of thought and and concur that that makes sense that to the extent that you see.
Robust prices across the industry, that's true there's no incremental cost to us to process. So ASP upside would be a pretty pretty powerful lever throughout the P&L.
Okay, Great and maybe could you elaborate at all on the comment the vendor transactions to secure additional product holiday do you think they are worth flagging.
Oh go ahead rotation that vendor in there yeah, no. We don't see any I mean vendor as a driver for high value for us. So again fine jewelry watches handbags, and you'll continue to see that trend for the holiday, but it but because we have a really robust supply coming in from our consignor base, which we didn't have before.
Is that going to be an unusual activity. It will just be business as normal we've seen increase in the channel because of the purchases that we were making during COVID-19. So we have inventory.
Which is selling through.
Which has some impact until that inventory has been sold.
Great all right congrats on the progress not good luck on the next chapter of Robyn Caitlin Congrats on Urals. Thanks, guys. Thank you.
Next question comes from Erinn Murphy with Piper Sandler Your line is open.
Great. Thanks, Good afternoon, a couple for me first I wanted to go back to the neighborhood store conversation you talked about 30% of supply coming from neighborhood stores today what percent of your can signers in these retail stores are also buyers.
And then I'm sorry, what.
It's actually 30% of new who signers are coming from our retail location.
Of new Consignor, but I'm, sorry, not supply what percent of your overall supply comes from.
The retail locations then.
We do yeah, I'm, sorry, we don't give out that number at this time.
Got it okay.
Question, how are the new Consignor said, they becoming buyers like they all like our current yes. So.
You guys May recall would you ever really great flywheel effect, where over 50%, it's about 57% of our containers and that being buyers, we're seeing that trend continue our cost outcome.
Consignor base.
Okay understood and then.
Question for the CFO is on ops and tech that was better than expectations expectations should we expect this type of leverage moving forward now that Phoenix is operational in Brisbane is rolling off or is there anything else, we need to be mindful of particularly in the fourth quarter as we round out our models on the ops and tech.
I get there thanks.
First name Robert Yeah, well, one thing I would say there were certainly some redundant costs in the move.
From California, Arizona, I think is largely behind us and you should not continue to see that.
Absolutely true.
I think in the quarter, if you're looking back in Q3.
Opex in general and certainly inclusive of ops and tech.
Somewhat lower than we expected and that's largely due to the difficulties got everyone's experience in hiring.
Hourly labor.
So we do expect to get caught up.
With with our hiring so in the near term, we would expect to see option technical up somewhat sequentially and it's really around supporting our growth, but the fixed components of ops and tech you should see very little growth going forward. So the leverage that you're seeing now is really just the beginning.
Excellent. Thank you so much.
Next question comes from Marvin Fong they'd be Daiichi your line is open.
Yes.
Fantastic. Thank you for taking my questions. Most have been asked but two if I could so cause.
Gradually since it's great to hear that the at home visits is above pre COVID-19 levels I thought maybe we could just.
Ask about some additional color like like.
How what's the mix now between at home versus virtual has the virtual channel kind of boom gone down quite a bit so any color there would be would be great and secondarily.
Hmm.
The return rate is that you know.
That improved yet again this quarter just curious if that's a.
Function of.
Our policy on handbags, and jewelry or is there actual kind of like for like decrease in the return rate. Thanks.
Yeah, I can take I can take that.
At home, Yes has increased but mostly back to pre COVID-19 numbers like we mentioned virtual it's still a component I will say that our sales organization is becoming more efficient and I think that's where you're going with the virtual question. They have become more efficient and that's driven out of our stores and our van and pickup that we launched during COVID-19.
So we feel good about their productivity and return rate, yes are slightly lower and that's driven out of two things the stores, becoming a larger component as well as product mix. So those items that are not returnable like handbags are growing contribution.
So that's on a sequential basis that are.
On a year over year basis returns are going up and that's just reflective of how low they were in the middle in the middle of Covid.
Starting to get closer to what they were historically, but to Rockies point, it's really just a function of of category mix at this point right and they were an all time low because people that leave their house.
Yeah, we're not you can't really compare versus a year ago, we're still significantly better than we were in 2019 for return.
Driven out of what Rajiv said.
Great well, thank you congratulations and.
Best of luck met on your next move and welcome aboard Caitlin and Robert.
Thank you. Thank you.
Sure.
Next question comes from Michael Mcgovern with Bank of America. Your line is open.
Hey, Thanks for taking my question.
Two if I can the first is just for the a O V in store versus online I think you've given some commentary on that in the past and I was curious if you had any commentary. This quarter also if you could comment on Mike.
Sylvia and neighborhood stores versus more legacy stores in urban markets.
And so <unk> be in stores.
We track average selling price they are a bit higher or much higher in stores versus online.
And that's driven again on a fine jewelry watches and handbags and.
And I'm sorry, what was your second question flagship per Se.
I haven't seen any differences between neighborhood and flagship stores and product mix or value them. They.
We are driving the same amount of value on the demand side as well as the supply side.
And I think that's it.
And the story is about two times greater than what it is online and I think that still.
Yeah.
Got it thanks, and I was just one more I was curious.
If you have any commentary on like in store G. N V. Maybe in those core legacy stores from international travelers given the restrictions are lifted today I was curious if like you think there could be some pent up demand from international travelers that are common to say, New York and shopping for luxury goods.
We don't know I mean, we will probably driven that buy a tire when we track international in the past it's been at the people in the stores, it's been a pretty small percentage, hence we weren't really impacted by having no international travel I would say all of our stores and Russ you can get a little bit more commentary all of our stores as well.
Opened one right before it shut down.
And Kelvin Atlas, San Francisco and Chicago, We opened up during Covid in October 2020 every single flagship store, except San Francisco is exceeding pre COVID-19.
Revenue and doing really well San Francisco and in case, you all haven't been there has been a little slower to come back to life.
So we're expecting that it does have a longer tail, but the neighborhood stores are also on fire so far.
But they were never dependent on international those planes, certainly I know the ocean liners, they're that tour ship the cruise ships.
That will well.
Well see if they go to Union square in San Francisco.
Got it thanks, so much.
Next question comes from Andrea <unk> with Needham Your line is open.
Great. Thanks, so much and good afternoon and welcome to Robert then Caitlin.
Thank you have a couple of a couple of questions for us So and apologies if I missed this I was hopping from another call, but in the past you talked about approaching a $100 and gross profit per order in the fourth quarter is that still the case and I know pulling back on buyer incentive is a big part of the story here so our incentives.
Back to 19 level or do you think there's room to cut back.
A bit further there and then secondly curious if you could talk about the get get paid now program.
I know, it's early days, but what has been the initial traction how big do you think this could get for real down the road and how do you think about the working capital component of this new initiative. Thanks, so much.
So we did cover most of your first question earlier on Ana So I'll, just reiterate them very briefly yes.
<unk> to be up sequentially in Q4.
Our incentives are back to pre COVID-19 levels and Theyre very steady. So you should expect higher GP per order in Q4.
With respect to get Peanuts.
Sure I can take get paid now we launched the program to our consignor and our sales team is going quite well, it's another offering to get high value. Good but you know we still pay more on the consignor side went off for when a consignor, it's offered both the cash upfront and.
To sell via consignment, they usually go with the consignment offering because that's how they are earning more money. So the great way to bring someone in our door and get them interested in T. R. And then consignment usually get them converted.
And the second part just around working capital and the answer there is no impact really this is this is this is a relatively small use of capital.
No meaningful impact.
Okay.
Got it alright, well. Thank you so much guys. Good luck for the holidays.
Thank you. Thank you.
Next question comes from Edward Umar with Keybanc capital Your line is open.
Hey, guys. Thanks for taking the questions I guess first one I think this is more of a follow up to ike's question.
As as these as pricing a good kind of continues to escalate and commeasure at kind of the price in the secondary market escalates is it your sense that you also have to chase and kind of pay more for on the sourcing side from your consignor or is or are you able to kind of hold that steady and then second.
I know, it's kind of early days, but any initial commentary from from my Teresa and maybe helping us dimensionalize how big this handbag program to date. Thank you.
So I'm out I mean, I'll kick it over it but we don't.
No. We don't we don't buy a lot of things are so we don't really have any impact on us and we.
On the consignment side of our business so were.
For us it's more about we have do we have enough product flowing into our shelves are empty, we have tons of product or where inflationary.
Forces are hitting us are which we mentioned at the beginning our on our shipping cost and we've offset that by last mile last mile diversification shipping optimization.
And and diversification of carrier. So we feel good about our shipping expenses seem to keep those as well going into the holiday and going forward, even if they creep up we have other methods. We can employ other than that it really comes down to and we are.
We buy so much upfront for things like cardboard boxes that we don't have a real impact on ours.
Pack and ship side on supply so we're really untapped at this point.
And it doesn't and what it how it impacts the kind of diners in theory and in practice there things are going to sell faster they've always held fast but that said, we're always looking to get the optimal price within 90 days, but you know we have a healthy sell through as we always do which means they get paid faster. So it's right now.
We don't have the same issues that other retailers have a nice freezer early days good press for both of us suppliers.
Supplies coming in they're smaller than the U S. But it sounds good relationship and we're happy we have it so.
It's still early days these changes take a lot to get going.
So operator, I think we had a time yeah. Thank you I think we have time for one more question.
Sure and your last question comes from Lauren Chung with Morgan Stanley. Your line is open.
Hey, you've got Nathan feather on for Lauren.
Understanding it's early but on some of the new categories, you've launched recently like sporting goods collectibles and tuck him. If he could put an update on what youre seeing there was very helpful.
Is there any difference in the types of buyers you're tracking to those categories and then nor has it been more of a new buyer a driver more so helping increase revenues. Okay. Thank you.
Yeah sure. This is rocky I can take that question are new categories that we launched in trading card collectibles as well as yes sporting goods.
We are doing quite well you know how we launch these categories as our Consignor has asked us to launch these categories. It's what's in their homes now and they have this extra pieces that they wanted to also give to their luxury manager or a drop off in stores I will state, especially in the trading cards and collectable space, we're seeing quite healthy too.
And then as well as demand so feeling really good about that and then also say that they do skew more male in general.
Okay. Okay. Thank you.
Hey, thanks, everyone for joining us.
Clothing, we want to thank the entire team at the rail rail for their hard work and dedication.
Given the strong Q3 without to what I think mad for his last day of his last call he's getting a little happy dance.
But everybody's commitment to excellence helped drive our business forward every day and we now have over 24 million members. So thank you very much members who are joining us on this mission to extend the life of luxury and make fashion more sustainable. So thank you all and we'll be back in the new year have a wonderful.
Holiday and just leaving one final note we are already so we're gonna have a good one thanks, so much everybody.
This concludes today's conference call. Thank you for participating you may now disconnect.
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