Sean Sobers: Yes. Anna, the 4Q guide contemplates literally everything we knew as of, let’s say Friday last week.
Anna Andreeva: All right. Fair enough. Thanks so much, guys.
Sean Sobers: Thank you.
Operator: Thank you. And your next question comes from the line of Rick Patel from Raymond James. Please go ahead.
Unidentified Analyst: Hi, guys. This is Josh filling in for Rick. I was wondering can you talk a bit about cost savings you’re seeing from the improved return rates and how should we think about the impact of that on EBITDA in 4Q?
James Reinhart: Sure, Josh. Yes, I mean, I think we saw 700 bps of improvements on our return basis year-over-year. And I think all of the work that we began at the beginning of the year around key for credit, Thrift Promise or all those things are continuing to bear fruit. And I think they’ve reflected in the Q4 guide. And I think that’s again focused on the U.S. business. That’s where we’re seeing that positive momentum on the return rate. And I think that’s what reflects the EBITDA be in Q3 and into Q4. And so, again, the story really for us is just continuing to tweak what we need to do on the European side to be in a better position.
Unidentified Analyst: Okay. Yes. And any initial thoughts on the way that’ll impact 2024?
Sean Sobers: I mean, we expect return rates. I mean, our goal here is everything we’re doing is return rates are going to improve. So obviously that’ll improve across the board, but nothing specifically for 2024 yet on that side.
Unidentified Analyst: Okay. Yes. Thanks so much for the color there.
Sean Sobers: Thanks.
Operator: Thank you. And your next question comes from the line of Tom Nikic from Wedbush. Please go ahead.
Tom Nikic: Hey guys. Thanks for taking my question. Sean, modeling question for you. So in the fourth quarter, the revenues should be a bit lower than they were in the third quarter, and the gross profit should be lower. But I believe the adjusted EBITDA loss should be smaller which would suggest that the OpEx would be down quarter-over-quarter. Can you kind of help us think about the buckets, the ops and tech, the marketing and the SG&A and how we should think about those lines?
Sean Sobers: Yes. You’re exactly right. I think the biggest driver to that is the decline in marketing in Q4. Generally, I think if you look historically, what we’ve done in Q4 in particular from our U.S. business, we’ve brought down marketing spend. Still today, secondhand isn’t a gift giving destination yet. So marketing super expensive in the fourth quarter, so we pull back on the U.S. and that’s the biggest driver as far as kind of OpEx savings. And then OP&T just flexes up and down depending on ins and outs, and that’s going to kind of match with what revenue does.
Tom Nikic: Understood. Thank you very much.
Sean Sobers: Thanks.
Operator: Thank you. And your next question comes from the line of Dana Telsey from Telsey Advisory Group. Please go ahead.
Dana Telsey: Good afternoon, everyone. If you take a look and break out Europe, how many of the – how much of the product margin or the product sales, how much of it was Europe versus the RaaS business? And just can you expand a little bit on that budget versus premium consumer, what they were buying and how that changed from the prior quarter? Thank you.
Sean Sobers: So I think generically, if you think about Europe, the last time we talked about them publicly, they’re around 20% of the total business. So you can assume that, but they’re heavy weighted in Q4. So three quarters to date, they’re probably, I don’t know, 60% of their 20%. There are too many numbers there, but it’s not. And then the U.S. side is, I don’t know, we’re probably transitioned at the 80% mark. That’s a lot of numbers. I can do the math behind the scenes and give you a different number, but I think you put all together with that.
