Kate Gulliver: Yes. No, I would echo everything that you’ve said. I think you’re absolutely right that AOV normalization certainly has driven order growth and customers. You’ve seen that sequential improvement in customers in the LTM active customer number. And you’ve, of course, seen that order growth number continue to grow. I just point out on the last point you were just making on market share and where the category is, we are obviously up 4% in the quarter with the category down mid to high teens, if you assume at some point when the category returns to growth and normalizes that gives you very significant growth for us up in the high teens. And as we’ve spoken about before, that flows very nicely through to EBITDA and we’re poised for that momentum. I think you had another question on the International segment.
Niraj Shah: Yes. Exactly. So on that, let me — again, I’ll start and, Kate, you can jump in. That segment is like 10% to 15% of our revenue or thereabouts. Those are — that’s kind of the businesses outside the United States. And we mentioned how getting back to form on our recipe is the predecessor activity for taking share gaining ground. And again, you see the share grade driven by order strength and you’d see all the positioning that you’d want to see in terms of how we are doing. Well, on that, what I would say is that each of the countries is a different state in the recipe fully being back intact. But as we’ve been getting it back intact, we are seeing the momentum we want. And so what I would point out is that the KPIs that we would use to measure the success of those businesses are not necessarily evident to you.
And honestly, we are very focused on making sure that every dollar we spend goes really far. And so we are not interested in continuing to invest in something that we don’t think is going to give us a gain, and we’ve done a good job of stripping out a lot of those costs, and we’ll continue to do that. But we are pretty excited about our smaller businesses, whether it be Perigold, which is in the luxury space, small that continues to take share at a nice pace. What we’ve done with specialty retail brands, which compete in the specialty segment. Wayfair Professional is one of the bigger of the smaller businesses that’s clipping along nicely and then the international countries. And so we believe that the same model works there. There’s a bit of a lag in timing.
But again, you see losses compressing. And what I think is I would say that folks are focused on that segment. It’s a little bit of missing the forest for the trees as it kind of my view on it.
Kate Gulliver: Yes, I think that’s right. I would just add that there’s nothing that we structurally see about the international market that suggests it should operate over time in any way that’s different than the nice EBITDA that you’re seeing in the U.S. market, and we’ll continue to invest for growth there, of course. But we also were mindful of the cost structure there. And as we spoke about in general, we took out these costs. those impacted us globally, not just in the U.S.
Ygal Arounian: Great. Thanks. Thanks, guys. I appreciate the answers.
Operator: Your next question comes from the line of Anna Andreeva with Needham. Your line is open.
Anna Andreeva: Great. Thanks so much and good morning. Thank you for all the color, guys.
Kate Gulliver: Good morning.
Anna Andreeva: Two questions from us. You mentioned some of the category callouts with mattresses and also pets. Just curious in aggregate, how did big ticket versus smaller more decor type of items perform during the quarter? And is the decel you’re seeing quarter-to-date driven by slower big ticket purchasing, just given the macro? And then secondly, as a follow-up to Chris’s earlier question. So should we think if revenues are flat in ’24 year-over-year, you could be at the low end of that mid single-digit margin goal that you guys talked about? Thank you.
Niraj Shah: Yes. Let me start with some of your questions on big ticket versus small ticket and then maybe Kate can answer the guidance question. When I say on big ticket or small ticket, you could see this — well, I guess, maybe you can’t see this in AOV because again, you see the overall effect of the deceleration — not deceleration, the normalization of AOV with the inflation turning into deflation and coming back out. Basically, no, there’s no real mix effect there. So we are seeing strength across the board. Part of that is the price elasticity. When that big item which typically is bulkier and has a high ocean freight factor gets hit with those costs, it really drives up the price of that item a lot. When that comes back out, that item becomes more price attractive that basically helps that item take share.
So we’ve basically done well across the board. There’s no real mix there. And then you mentioned a deceleration in Q4. I just want to comment again, if you look at it sequentially, you see a strong holiday ramp into Q4. So I think the deceleration is based on assuming the year-over-year comps in Q3 and Q4 were both normal flat comps, and they’re quite different from each other because, again, Q4 last year is when we started taking share as a much stronger comp. So as you would expect, even if we have strong comps continuing, that compresses before it expands again. That’s where the 2% sequential customer count, the strong order growth, but all these other numbers kind of point to what I think is really happening. So just keep that in mind. I would model it sequentially.
You can also model a top down. But if you model sequentially and then impute year-over-year, I think you better see a better trend of what’s happening, and it sort of explains what I think otherwise may not. And then so I’ll let Kate comment on that, and then Kate can also comment because you had a question about in 2024, what level could EBITDA be revenue at the low end. I think that’s probably because as we mentioned, there’s a lot of cost savings still to come. And so I don’t know if you want to guide that or not.
Kate Gulliver: And as you know, we don’t guide to 2024. I would point you to following Chris’s question, I think we talked through some of the puts and takes on that thought model. And really seeing in 2024, obviously, the full impact of that over $1 billion of cost savings up and down the P&L and work with that sort of from gross margin on down and the benefit of that should certainly drive substantial EBITDA growth beyond that, we haven’t commented on 2024 guidance.
Operator: Your next question comes from the line of Simeon Gutman with Morgan Stanley. Your line is open.
Simeon Gutman: Hey, thanks. Good morning, everyone. I want to ask a question about — a little bit about the fourth quarter, and then second about your posture around, I guess, promotion and ad spend versus sales. So first, the fourth quarter the chances of it getting more promotional, curious how you think about that? And then given your posture around margin, I guess, preserving margin over sales here, it sounds like you wouldn’t dip your toe into that, but can you give us a sense how vendors are approaching it? Would you share some promotion versus them? And then in terms of advertising, are you inclined to ramp that up if you saw that market share was getting worse for some reason because of the promotional backdrop?
