Thread by @d_mccar

A few quick thoughts on $CSPR:

1) As mentioned earlier, no cohorted data, but no surprise there (bit.ly/30e9DQu).
2) Only repeat purchase data points: 14% of customers returned within a year of original purchase, 20% of customers in DTC were repeaters.

3) Not surprised they quoted repeat figures in terms of customers, not sales. Repeat orders at dramatically lower AOV's (mattresses => pillows). As per @second_measure, their annual *dollar* retention is 6% (h/t @ataussig). They do not have repeat business right now.

@second_measure @ataussig 4) AOV math: AOV is $710 in 2019 so far in e-comm => 440K orders placed L9M. But we know new/repeat order AOV is different. Assume initial orders are 80% of total at higher AOV, other 20% are repeats at 10% of that AOV (ala SM data). Then initial AOV = $867, repeat AOV = $87.

5) (4) implies ~350K gross acquisitions in L9M. Sales/mktg of $114M over same period implies CAC of $324.

6) GM is 50%, but gotta assume another 10%+ of sales is is effectively variable overhead (currently 34% of sales) => 40% variable margin.

7) If 10% of new buyers come back every single year at 10% of initial spend the next 5 years (optimistic) at a 20% discount rate, 5-year post-acquisition value would be $455 => 5-year LTV of $131. If repeat was $0, LTV falls to $18. ROI is probably less than 40%.

8) LTV positive but poor ROI. Where we go from here, to discuss... bulls will probably point to stores as a way to bring CAC down, upsell, and supply chain efficiency margin improvement. Bears will point to late adopters being harder to bring in, and competition picking up.

9) Whatever the case might be, it seems fair to say LTV over the last 9 months is positive but mediocre here, which would suggest a very high multiple may not be entirely justified.