Sean Sobers: Yes. I mean I think Tom, the marketing is always lower in Q4. And so, that’s typically our playbook. I think this Q4, even in particular, we expected it to be a competitive holiday season. We expect the consumers to feel squeezed around how to spend those discretionary dollars. And so I think we thought it was even smarter to push some of that spend in Q4 into Q1, where we thought it would be more productive. And I think that’s what we are seeing. And so, I think it fits our seasonal pattern and – but our expectation is to continue to drive top line through marketing spend. But at the same time, moving slowly towards our long-term targets that we set out at the IPO, and we are sort of on that glide path as we think about 2024.
Tom Nikic: Great. Thanks very much for taking my questions and best of luck this year.
Sean Sobers: Thanks.
James Reinhart: Thanks.
Operator: Thank you. Your next question is from Edward Yruma from Piper Sandler. Please ask your question.
Edward Yruma: Hey. Good afternoon. Thanks for taking my question. Two for me, I guess first, some very constructive comments around Gen AI. Curious kind of what the cost structure for that looks like and kind of what the uptake has been thus far? And then second, I know you guys have complained a little bit about the inventory situation in first price. Obviously, results got better in the fourth quarter. Are you starting to see some of that industry inventory normalized? And do you think it’s kind of allowing some of your price gaps to better show? Thank you.
James Reinhart: Yes. Hey Ed, let me just hit the second one first. Yes, I mean we are definitely seeing the inventory levels across sort of our competitive set normalize. And so I think that, that actually really sets up our value proposition to perform well as we get into 2024. I would say the only counterpoint to that is, as you have – Sean mentioned, talked about, right. So, there is still a squeeze on the discretionary dollar. And so I think as that maybe eases throughout the year, combined with leaner inventories, I think ThredUp is positioned very well for that. But we certainly see a better competitive environment for our product. On the Gen AI stuff, similar to my prepared remarks, I remain very bullish, on its ability to improve our business really disproportionately compared to others.
Given the long tail of product, the constantly changing nature of our product, we really rely on sort of the dynamic nature of the technology to do a lot of work that would otherwise be done by inferior algorithms. So, I am very bullish on its ability to delight the customer on the front end. And I think we are working on a number of things that will start to materialize this year that I think will really change how consumers shop resale. And so I am very excited about that. And then the last part would be on the operations side is, we have been employing AI in a number of ways in our DCs for years. But I think just in the last 12 months, you have seen the step function change in what the technology can do. And I think it has real implications for how productive our operations can be.
And what the margin profile can ultimately look like. So, you can probably tell from my voice, I am quite bullish on it, and I think we are uniquely positioned to benefit from it.
Edward Yruma: Great. Thank you.
Operator: Thank you. Your next question is from Alexandra Steiger from Goldman Sachs. Please ask your question.
Alexandra Steiger: Great. Thank you so much. So, we have a number of eCommerce, consumer companies, calling out a very weak January this year. So, I am just like wondering like, what are you seeing among your customer base that would give you confidence in your Q1 guidance, you can comment a little bit on like the month-over-month dynamics you are seeing in your business? And then one follow-up question just on the business initiatives and leverage AI, can you maybe talk about the contribution or the growth contribution you expect for this year versus your assumption around a potential recovery in the broader consumer spending environment? Thank you.
James Reinhart: Yes. Hey Alexandra, yes, I don’t think we are expecting AI to drive anything sort of in an outsized way in the results nor do we expect some big inflection later in the year on the consumer environment. I think our guidance reflects our best estimates of how the business is going to perform this year. I will say that AI is – we have finally rolled out the new search and some of the work just in the last week or two weeks. And so we are only starting to see the benefits of the entire customer experience using it. And so I think as we get better information, we will sort of update those numbers. As for Q1 and what other companies have said, I don’t think Q1 is noticeably weaker than we expected. I mean I think our business tends to receive the hangover from Q4 Christmas, New Year’s holiday period gift giving.
And so we see some of that normally in January. And I think I don’t think it’s been an exceptional consumer environment, but I wouldn’t characterize it as sort of darker draconian. So – but I think we expect the consumer to be challenged in this year. And so I think that’s where we feel good about our active buyer growth and our gross profit growth in an environment like this one while we drive to positive EBITDA.
Alexandra Steiger: Thank you.
Operator: [Operator Instructions] Your next question is from Dana Telsey from Telsey Group. Please ask your question. Hello Dana, your line is now open.
Dana Telsey: Hi Sorry. Hi everyone. As you – in the fourth quarter and as you are thinking about 2024, how are you thinking about spending behavior by buyer cohort or buyer demographics and what you are seeing there? And then also, as you are thinking about the promotional environment, has the promotional environment or the competitive environment changed lately? Thank you.
