Abercrombie & Fitch (ANF) 25 Aug 222022 Q2 Earnings call transcript

Good day, and welcome to the Abercrombie & Fitch Second Quarter Fiscal Year 2022 Earnings Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Pam Quintiliano. Please go ahead.

Thank you. morning. Good our earnings to quarter second welcome call. XXXX And

call the quarter the call Horowitz, Act Chief presentation. statements the mind on XXXX. on that Chief me with uncertainties our Exchange and Officer. subject today section. discussion to and results Officer; our are investor Securities These Private company's Fran we available the on the second issued in expectations under and Securities contained we any Lipesky, that made Joining and website Executive at the actual risks assumptions are is the detailed of an are of subject to mentioned and in provisions on this forward-looking our morning, these Harbor Safe Please from release, is corporate.abercrombie.com Commission. keep earnings A which filings Earlier Investors differ available Financial statements Also Litigation factors Scott uncertainties of Reform cause to materially could forward-looking today. website

be we measures financial the during addition, certain non-GAAP referring In call. to will

of to a financial that, Additional this will With measures call release issued GAAP in reconciliation to earlier morning. adjusted details I the turn are Fran. and included over non-GAAP the

joining Good results. discuss us morning. you And our thank for to today second quarter

to get each and best your a I global would moment continuing like started, bring to teams take every Before I to for thank our day.

challenges that to our we in over during of in Investor been enterprise-wide one focused in centered enterprise-wide work last evolve have which and our dynamic three, targets with time, focused now our since experienced Investor it's successful my agility our retail. digital retail revolution while several around our of the enabled most execution continued to executing operating of Day near-term forward year months we the have our career landscape growth, long-term principles: to We're to plan At years three done So discipline. The environments rapidly. improve is Day, and a couple always long-term XX-plus-year and and the that has take decisive on I of introduced June goals. to strategic remaining us provided financial navigate has action XXXX the brand

well-documented During second made we despite quarter, all consumer progress headwinds, the against three.

with principle, start I'm first excited their positioning. the I'm growth, in our Let's opportunity about brands, our of brand focused confident global and

However, income company whose tilts in customer divergence the and call. Challenges on driver outlook Adults of base we tale of we've primary adults two lower was sales behaviors, Abercrombie gross sales our a a our been the recently Hollister, Abercrombie our significant relative list analyzing QX total to the margin scale trends it When at two worlds. brand largest Hollister. margin and truly provided on amongst the spending brands, operating experienced compared QX and has to the

For led strength X% growth the which a X% currency were in constant Abercrombie constant second basis, quarter, or a currency brands, on X% on total company down opportunity, Abercrombie kids, grew by sales declined includes primary X% Adults. our ongoing basis. and

last witnessed, have Adults an you the has of years. As Abercrombie had turnaround many over three amazing

have needs see our of successfully cater We brand fits and young millennial positioning, customer runway evolved and to to the target additional the assortment ahead. lifestyle we

since our and XXXX fit, outperform. leading going knits in plan, with press dresses were XXXX from were month-to-month its the Abercrombie their our and with encouraging, quarter, QX second the team. sales and weddings since AUR comfort up QX the assortments. to trips, consistent was sales XXXX. to the this AUR Men's promotion achieve back QX conversion During Adult since celebrating of also its markdowns jeans dresses, TikToks and standout XXXX. a were to remained delivering at to and continuing style highest everywhere for popping shopping Sales viral highest Congratulations customer remained the weekend QX in results best our actively Women's best adults office. Throughout since to and delivering our summer, its headlines AUR all line

seeing here newest to across to remains Last, has genders. new least, we caters basis Your all recent more our not YPB currency Best such contrast which strong been XX% a discovers needs in as his constant the are or declined was in shoots Abercrombie the second quarter. XX% Hollister We and or but which response very performance Personal as green brands, golf sub-brand, on sharp our to that well brand the of launch lifestyle product received. shop, certainly the

As a reminder, this includes tourists. Gilly Hicks and social

inflationary and basket pressures resulting conversion experienced shift our lower in global mounted, behavior, size. the in we shopping As teen

trending While for and registered our best were we ever targeting customers traffic buying occasion customer's responding categories more store the was than our woven men's of apparel we searching women's in Outside U.S., browsing special our like track closely doing to sales to dresses, these items and where promotions. shirts. and QX

kicked has behavior Hollister to years off, has has several our tops dresses. and into bottoms, out top-performing Demand deviate of has the back-to-school As been continued last customer moved which our a expectations. shopping from category over

As core. out we've into swift had trends seen action. selling trending We've adjusted of shifting fun a than higher our develop, holiday to call we've orders categories

Active of steps levels, stores on our and strategic of go-to-market reopened balance and assortments. into quarter and back has the XX% product. timing And Total defined inventory freight start is new of a between summer world brand confident We're Inventory This roughly warmer QX product, origin line reimagining items. component reflecting at our goods of our are similar growth early longer-life was social with in will XXX% inventories current We management and Abercrombie as XX% continuing for sell-through year our as strategy conversation the at as soft historic Hollister principle. of closures, help a team is lounge continued or set quarter opportunity experienced XX look end country as COVID XX% with Hollister, we returned outperform, in and we back-to-school had weather in a store QX increase, delays that key our to additional macro on at up through clear which to points our to increase of to product the get receipts. environment leaning inventory year, ended $XXX experience Of back-to-school including contributing trans fault related reminder, Hollister, the assessing which while in-person production, to in the as digital fashion Rounding our recent largest I'm to last season. Hicks, been challenging. significant we lapped to and remains haven't largest even to inventory ideal Kids total we've addition, In has plus areas a impact seasonal Vietnam if XX% to goods a of up roughly was the markdowns or of took At outsized tourists, the due XXXX. these significant marked the been XXXX driver, track brands, shopping. an factory were to million Gilly last on higher decade low delays. that exposure up

season forward proactively Unlike up After year, spring, plan pull another year. increase the not coming this with we points. the we XX being in holiday hand this with able to lowest final as holiday and since levels goods season. the total receiving keep year, in is contributed half that after in the year-over-year the decided our were in-stock still peak Christmas. product lapped which demand Units on-hand for we the we points ensure piece is line before when back contributed deliveries higher mid-XXXXs. to in-transit into sales inventory late positioning product Our of costs, and And last want last inventory back-to-school quarter the X of to our here fall on QX

our that We the expectations have taken our half. to sales closer back in action inventories move to ensure

falloff reduce and as eyes keeping the We're Hollister We expect shift experienced we of more inventory taken receipts. QX and late away the the recent our we and slightly to in core QX we in of QX benefits June elevated and anniversary to inventory reflecting realized on experienced unprecedented as from growth receipts improve year than significantly last would year-over-year number moderate and categories. moves like, inventory in the turns is peak late

trends turning. recent items keep to expect we consistent, remain to Assuming continue seasonal QX to leverage in markdowns

inventory Hollister utilizing rightsizing inventory of series and levels are for and box certain of beyond core We receipts, on sets. through a re-cadencing reducing timing holiday that the strategies included items and hold actions

in inventory strategic our of growth to evolving experience is principle. the successful store critical also our opening new Beyond management, execution brand stores

As this and heavily stores open fourth to reminder, year, XX we weighted third the to expect around quarter. a

brands an amazing are Our updated representation our today. of stores

markets Hollister well Xx planned On average fiscal hotel the which store a markets least that design, existing right the locations of we At that Abercrombie, are identified smaller find as the closures. data exited an the format contribute Adult opening at sales updated an our recently of through Getaway basis, lobby. New in we new couldn't that we deals and analytics. volume the and is store aesthetic chic the mix of new annual XX anticipate XXXX have Abercrombie will evoke stores we in shop, we because meant store introduced to as

average roughly of you X,XXX square X,XXX of pop-up Investor which Day, feet. feet design, elements chain of had this those attended who the For there a our is versus square shop new

The right ability -- stores to will locations year stringent and These If one do right the check of Los away Abercrombie all and well size, this in in under the we economics. new first can't as our the to remainder three, two as that. updated estate Abercrombie XX% will just just others in our Milan the of real Angeles and revenues others box be to digitally derived continue fiscal right in brands we strategy, opening do in have this other true locations opened, well across XXXX, the stayed as with we format. walk location, year

second data make continued Day. progress revolution. longer-term to turning Investor our quarter, second to aspirations at discussed and the digital towards enterprise-wide the Now our principle, we digital strategic In technology

reminder, sophisticated a operation we a sales XXXX. digital As reaching global with billion large $X.X in our roughly have

principle customer ways able to experience the customer across time, goal same shopping accelerated experience pace is we agile of In the to improvements our of journey. across through our revolution the we to experienced listen our a we deliver digital new efforts, is to operating our drive These leverage decision-making Our to company. with strategic moving have omnichannel best-in-class, cloud data At our across modernization digital core and to the more were fueling working, system, efforts deliver least, technology seamless continue upgrading architecture. and merchandising the our space, our that organizational not multiyear agility discipline. certainly improve our and the and to last, but key financial ability company. data enable evolving retail including to continue rich will the And third

investments. As while the and became managed customer spend more and quarter, strategic in challenging marketing prioritizing second long-term the business we both noncustomer-facing

Looking with are running trends from remainder levels, each of cutting top year, made to the have Quarter-to-date, of the decreases. volume-related sales improved week. further million we've expense on back half $XX the sequentially approximately adjustments, although consistent QX

As EMEA. to we look the we inflationary potentially to continue expect pressures in half, and back heighten

across level, at action brands reflecting these taken have We assumptions. corporate a and

items. to fulfill set chase how trend on dollars. continue are our Hollister, optimistic our by for be half not pressures. to Abercrombie, that tough discretionary and customer the inflationary their back we more become into reflect At we At updated If faced preposition decisions making are with accelerates, we inflation demand be will to future the we While will and potential where are receipts impacted we've will cautiously to to spend improvement that tweaked assuming moderate, to customer able outlook.

mentioned, reduced back we've and to As employing for the trending are where chased hold appropriate. promotions categories, adjusted and half, bots receipts,

to control experience, margin turn and respond judiciously operating include: Hollister digital merchandising these enhance control, we growth above to in data, footprint billion As to we've are how and achieve customer. drive with goals, late the began we annual investing across quickly changed. provide unknowns. we to revolutionize can environment, billion they through of modernizing to targets, impacted XXXX. sales multiple our support when at and last our years, we'll awareness to provided to areas to flexible customer have our forward with a and openings approach We on to our our gain our year X% clear, paths the to as traction to them and quarter and Based few will balance achieve during brand the with near marketing adults we've would and first plan, line core in remain the $X.X to and at to be years ability evolve be our to Day consistently consistently and protect to it would in that in the have tools the investing goals. our and be we top flagships updated continue executing ability investments ability inflationary confident detail 'XX in goals I'm store sheet committed to talent that, QX of remain XXXX platforms turned holiday, growth in the term to pandemic, more full the our overcome done we over and customer been dynamic the I'm respond key XXXX our on and come. our reinvention have we we about always that outlook. around that faced has late of and pressures future. and $X.X to past, over we more again That rightsizing to what and in from time linear. fiscal rate arrived the and At We've and we including in end or to the to performance by drive going our Scott and not the to we sustainable longer-term months we Hollister that proven closing excited And store And time, the I provided by when first Investor our challenges assume Abercrombie

morning. good and Fran, Thanks,

business stayed basis, basis X% XX% consumer, includes a For $XXX or as basis on decline behaviors below largely a Sales as million, X% which with currency which reported down reflecting sales the on compared and constant constant softness throughout constant has the brand, Abercrombie, and quarter, at APAC for a expectations. shopping in we and were was single-digit we its XX% second open. currency for on year U.K. delivered X% was constant X% X% line includes sales change was By seen Tourist, net to and basis. the Social This progressed. low have on decreased and compares XX% basis. Middle the region, on Hollister XX% on country Hollister, quarter constant the and year net expectation core In or to and macro In on our constant year as on XX% basis down By last currency XXXX and Europe. a Hollister, and back-to-school respectively. versus basis. prior XX% and mostly basis U.S. currency of in Hicks basis, Western XX% a region, reported a a on the shift rose quarter nice sales categories. internal to reported by X% reopened declined kids, and net in of mounting a growth offset internationally but a on and lower in a EMEA EMEA, core last currency softened Gilly for strength in basis, reported down currency pressures Abercrombie declined a demand a X% XX% on a pressures COVID-related trend East down experienced China, By the

to offset in by the impacts driven of the pressure was basis year-over-year worse anticipated, the higher of was impact XX by costs XX.X% Abercrombie FX rate adult product line. higher These than drivers basis exchange and our Our adverse rates brands. were points. Relative slightly partially while expectations, of cost AUR of XXX change gross XX.X% Key year. was versus product last profit were points

half to back freight levels. this rates are remain steady Looking year, to relatively we QX modeling with of

flow last this We to tailwind be freight see costs and costs usage through anniversary closures due commodity year. product to a flip expect to This to we air we air rates will by COGS rising offset as continue higher elevated as fall. see Vietnam

XXXX. trends we realize that cautious the us to will and We peak optimism by will that in are this recent year be fiscal across encouraged begin benefits giving commodities and rate

up ended is the inventories. on year, of quarter with We to Moving last which to current. XX% inventory XX%

our QX on-hand at as and shipping was times a current, Vietnam the 'XX Fran total over it inventory, experienced we and we from keep to As saw inventory Overall, decade, the cost way. intend mid-XXXXs the lowest shutdowns. mentioned, in significant since lowest lengthen our is inventory delays and that

the We areas to bulk strength, Hollister QX, are trend plans in greater-than-expected keeping falloff chased and on in we've inventory. items. a close Based and on moving receipts reduced on hold of place certain eye categories slower put and

remaining necessary inventory as ensure markdowns appropriately. to utilize turns the will We

total year to Looking late operating $X excluding as receipts $XXX ramp basis. our and by driven expense, other QX inflation incentive-based ahead, offset and pretax our compensation. inefficiencies XXXX operating fulfillment last excluded West year-over-year $XXX digital year. distribution we last last adjusted we moderate this digital expense, Coast lap see by as we charges million approach million have cost QX up asset in year, an levels to QX impairment temporary cover rest non-GAAP in the compared center. million seen was lower higher $X income, on On I'll inventory results respectively. and for of growth from QX expect year now we of all new We partially fulfillment, million and

We QX. inefficiencies expect these in to moderate

on of to breakeven year. operating last the income $XXX are compared income million line operating We

for share outside to on Net to For compared obtain due inability net per tax, per pretax tax U.S. a to a year. tax of income loss we diluted benefit $X.XX incurred certain $X.XX expense was the recognized loss our a last share losses

and quarter million. the ended $XXX with cash liquidity We strong. $XXX remained of sheet million balance Our of

shareholder shares XXXX of start authorized end, arability pending to share approximately share At in excess committed liquidity to repurchases, we to quarter, expect the down XX% X accelerate from for price quarter our had XX.X repurchase focus shares levels, and putting program. cash $XX and remain to on million. under we the the We approximately million share repurchased conditions, remaining previously with business. work XXX million outstanding, returns market During million investments

investments. to Turning

We continue stores half supporting million, half digital and approximately and to maintenance. $XXX and with supporting expect fiscal 'XX of CapEx technology about

for us new continue approximately net opener a We macro renewal, back towards react the XX with which the half. we store leases be gives approximately to to year, have This year to this stores up globally weighted environment. expect great flexibility XXX

this pending current finish inflation with our partners. negotiations year related rates expect with that landlord around demand our to locations the guidance, remain and consumer assume levels on pressure which XX we on year, at close year. of outlook, our year-end. thoughts In previous through We updated full replaces all I'll up freight the continues remainder

outlook full Operating the is net an down $X.X basis of from foreign margin for than points XXXX and Embedded our range in X%, worse currency in the deleverage we from to are as of to XXX margin to adverse approximately slightly range our of of For sales, impact Hollister be year, follows: X% lower degradation previous digits potential down estimated sales X%, prior expectation. this mid-single the inventory. planning approximately back-to-school from to level reflecting to X% turn billion.

could a outlook tax incurred higher effective For previous benefit rate of of rate, certain for outside the the recognize losses withdrawing mid-XXs U.S. tax our a the inability be as due to we are there

as level down trends XXXX quarter, high currency. is digits net approximately we sales planning estimated Embedded quarter-to-date basis approximately third The in be follows: adverse points of high assumes to million. to continue. of XXX single $XXX this single the outlook digits sales foreign For an from impact are down

breakeven. in We operating trend. finally, falloff are income that or around not And assuming an improvement

profitability long-term As intend near-term we with we through half, the to strategic balance investments. move back

points $XXX compared we expect or of inflation basis to cost million pressure XXXX. For to XXXX, XXX around due

on taking these current Abercrombie and through on contracts date, projects the on profitability, limited While maintaining while this not reducing managing we planned necessary we are volume-related Adults increases to reduced focus digital, travel following for year, to back expenses. realize initiatives. reduced eliminated efforts spend To certain and top aspirations have sales, driving on support will hiring headwinds data inventory not or negotiated around but expenses environment. noncritical on the lower select fully by based in in key the impact to, in Slowed business on savings half of $XX we receipts, offset tightly the the we will our and million areas reduce including technology,

product portion As we a us XXXX this are beyond, to to help year. margin inflation loss look cautiously that we'll optimistic start costs our and on we operating to of relief to see recoup

confident fund leveraging look we place plan and that, goals, execute With in for months our build come. to strategies our are forward the ready to quarters to in investments we to are liquidity through our have always XXXX to strong forward We operator, and we towards questions. the and our

Instructions] Our from first Dana comes of question today Telsey Advisory Telsey the [Operator Group.

a environment. What Good morning, everyone. changed

think As the can inventory about you levels hope - hear you I me.

in-transit you As the through for and units you we positioning as by product how this and certainly hand environment? Thank of inventory how the promotional the it And planning year, about on the go will differ in you. brand costs? think balance are levels

I'll one Dana, good Hi, kick off. morning. that

really important we for our So with inventory is levels. to understand are everyone where it

inventory long yet actually XX% well life, is goods even have define with, that begin of are current, been by current inventory and we set that goods. not to early current goods but as So our are

transit. Now to if in it of you last of question, year break and ahead your the take is you XX% that, down, half

more year, last the additionally, in COVID. to or anniversarying But closed our year. all factories had last of year So supply XXX% decade. due last from over Vietnam during At XX% million of out -- $XXX last because this we year. our all those lowest were a goods of pressures chain point year, levels managed we Everyone are last than probably from inventory through coming

are is you Now of of them, the if production then costs. you units, on-hand balance X, points, which which XX the XX take take our and

are. how year really We customer get to where last half. -- not it's in disappointed we So the to down goods. very are, We break able why we were and back our understand important

after goods receiving started last year. we fact, In still Christmas

know, anything I So like if that hope that add. you helps. don't there's else Scott,

to So year. we yes, year-over-year on from lap last like with in significantly be Vietnam looking in we will then a has late peak. finish moderate basis Fran the We'll forward, we QX growth QX as expect and receipts all QX those here moderate

reminder, into As year. goods we we January, receiving that week holiday goods last are the to were a of and this going do not

So we'll as in moderation see the good inventory half. through go that back

Thank you.

next Our question Corey Jefferies. of from comes Tarlowe

merchandise to at taking I it can what relates good then markdown some that the the my embedded in Hollister as the half? with now? Thank Any a Hi, consumer little throughout that's really bit maybe we improvement And you promotional morning. ANF. back your then, or trends a about well think resonating outlook questions. Fran, right from a for release there? talk And so specifically first, far Maybe seen we as called environment, Scott, have look perspective in out of in bit either what an seeing you've you the more little you're back-to-school.

spend their QX during was couple can the so Corey, Hollister, on nice AUR be what a have shift and particularly. there that see such quarter, continuing This resonating in a categories start quick and really they dresses. have into in greater shift a second as things. We'll yes, we spending. judicious exciting headed the as pressed some brand. jeans tops has quarter see bottoms It's and their inflation those continuing grow really customer the In money Abercrombie growth come this an third of quick, than we key and to into to dresses very on and And honestly and in consumer out with significant on. still seeing and We're seen of consumer, Abercrombie.

into though, they maybe and buy some to got of waiting he perhaps to those go tops more are buying August, she that on. bottoms we As started with

Hollister what's as shift is ever best QX one, in dresses. shifting and in the would well But saw quicker I QX, saw as seeing number in Abercrombie, consumer say, Hollister we than happening some we're behavior. resonating, our exciting a what So consumer we dresses Abercrombie. things much

All right.

grab me Let promo the piece.

some saw it QX, the holiday into have the reduced many in Hollister a we through exact time, business. June saw turning. July, that went the beyond. that we At promotions, on same trend current like heard Once kept little specifically same Hollister of of receipts soften kind we markdowns for that, as saw So we and inventory we've and once we others, and turned kept bit, we back here, business the

So feel we by right-sized about holiday the of level good and beyond. for for the receipt Hollister,

we inventory is a So on but what focus operating to as inventory QX bit that just feel in margin in that rightsized through reduction is we're going our the level. and Hollister to margin there that of business turning keeping we keep go inventory back-to-school part as outlook the good to reflecting little get of that QX pressure turning, beyond we have

much. very you Best of luck. Thank Great.

Thanks.

Paul Lejuez of to And can go Citi. we

has certainly curious Thanks just I does could Holster is Paul. the underperforming like It been a for on for our while. about an brand. inflation for if I'm take a step Hollister a Kelly we this impact. talk little seem bit and questions. taking having more Hi, is that maybe just back know

business? So need have that to diagnosis that strong. there are made Europe -- be you have reposition actually did Hollister the any that we mainly of anything is And any there the has that others underperform. then brand? the changes to because heard color on Or in also just Europe, been from brand? there just potentially Is And

your of Thanks. curious just there. So thoughts

Hollister. off kick Kelly I'll with Hi,

U.S. which CAGR a Day, discussed of recall, the the saw couple four Hollister, talked you had Plan. about months we and within we've in is as growth. our that, ago, past So Hollister we years, Investor just And our a OEs X% Forward

consumer our income with This scale a look pressure it lot think course, continually that and of through the inspect from a significant with did is of really team. and So feeling is understand macro. there's the part of that that, to lower QX, own end we but what's of business it have and really definitely is falloff happening. inflation We for who continued the and we on resonate to see part of

I to They saw made we got to trending and earlier, shift tops for are a from little in work. receipt. categories those So line work mentioned on quarter. as got team sure They to really the a fourth bit bottoms the that

to and We can in we supply have chain happening a agile the what's here, react and business. very flexible

what future So and can into confident control, the Hollister. we are we in we're of

grab EMEA Let's side. the

that Second results seen seen great what countries, two with is would it's next question. in talked East. haven't and Germany so more recently. bifurcating. in EMEA Where seen the we Middle about our U.K. I as results strong last biggest We And in results say We've France. also quarter. strong are the We've

So we're Middle QX. the And as on into seeing and go and be that our we'll we're looking teams we U.K. that Germany in do France. about address focused to have and excited while in forward results opportunity we are East, QX

to have are go term. EMEA We It there do as and our opportunity is address. long will region, we second committed largest and we we forward

it. Got

the that Just where we're mainly the that Or seeing brand, to is it is kind Hollister board? weakness? across that's - clarify, on of

then U.K. the but the the is and France. more it's Hollister board, EMEA and softness across Middle Across strongest and trend seeing highly into in both brands a East Germany in board, the region, similar penetrated

Got it. guys. Thanks

question comes next Kloppenburg [Operator Our Instructions] Joseph of Research. Janet from JJK

hear Can everybody. you Hi, me?

Yes. Good morning, Jen.

on it this Thanks Scott, the bit to outlook And denim about have little your preference maybe you. about and well. inventory category. hear year love as that Also much. could wanted what's change if Fran, in of denim trends Fran slowed Scott. Hi on plan talk you're Hollister bit the to dig and at views, then, I A&F planning just going in deeper given at things and trends the go at little a hi if get you Hollister. how on end the for forward, so at Thank a in

Okay.

Let's face it the the top back up here, all way to Jen.

And been fashion that in significant business, the shift occasions The very traditionally see very know, there you the years, quite were we time. a some consumer a did saw in closet. past Hollister, have and we So have those three is shifted shift. lot bottoms have a bottoms strong of quick, newer does bit. trending as back-to-school their a Bottoms

mentioned, for So us exciting. record QX, we dresses were, super for as a

decisions on of brand as quarter. Hollister currently the had August, A&F, what She's of continue very they saw into really that that headed the in information and know. growth short tops we outlook put have to in our XX-hour We back the limited with as responding shift the spend, see girls we the opportunity occasions to weekend bottoms And in These what term. today, into making saw we're decisions. and tops, her. the shifted have a wearing trend. back changes see we nice as to a is with that half we the we giving there that and that their open always we to based is third going would actually judicious the this we to we on head exciting well. money about amount As But continuing we could up in be jeans. are work we consumer -- talk And weather and

gotten dressed back to to the So offices denim of and up wearing back have some casual. They're the the go office in. office. going our to They're fashion more

So The divergent. two, are diverging. between customers the behavior seeing brands the two. different are We're

go forward. [indiscernible] Okay plan for Janet, the

- we growth on received. as those to lap get pretty year in will the in will At QX, if we we'll all and we late So that last XXXX as from to moderate point, lapping rate levels QX, QX. last peak will get transit year. here will get to close In will be hand be down, year year-over-year last of close receipts we'll units levels,

As are about that today. about we thinking we XXXX, think

period, QX softened in QX, reduced talk to As spring in receipts It's and reduced receipts something QX for about that the year. chase July season next have and capacity a there specifically there. brand we that time In for business internally get of Hollister because There have QX to we mode. June, want out our the is we the lot. the

back the the conservatively. people You've planning for out receipts and half industry, across seen many taking

doing same So we are the thing.

next our So year. we and QX about plans of feel Hollister into for specifically, good inventory QX

We there I is to. like need will do there, there And that. chase we to capacity if said, out

Thank you.

Thanks Janet.

UBS can we of Mauricio go to Serna Technology. And

the like that experienced that and do experienced, for little sales Thank wanted to quarter exit what monthly potential you you've recover that how you talk freight pressures you can costs think you bit July, guess freight. little of for good if my throughout the do mean, taking And year? questions. year, terms thinking compares saw you. I permanent? recovery bit be about progression you the Hi, morning. rate could over maybe much how talk to in have see the you how And particularly? probably a next you about could Thanks the are of I last much I that a

start with Let's freight.

inventory we cautiously coming seeing what significant had that we Vietnam the So out had into last freight issues we Zooming amount year, we're optimistic the a air Abercrombie are of specifically, markets. with about of in we even into last QX in higher carried a hit QX, and year into use that QX QX of usage those -- higher to XXXX. and over little needed and QX bit that last and rates us

tailwind at actually a planned That's freight we throughout year. been the Abercrombie So to this for expect year. become

that expect We can you optimistic shipping there have in the in. been that the market, in in, coming and continue continue through and that optimistic in what about rates seeing they'll out think zoom this rates ocean again those freight year. stay are we to come and least we'll market stay come and XXXX. air see When general, that in then maybe at flow to We're to see and start there

we hopefully into forecast no the yet peak seen but optimistic future, have the we go So as here. that

of in question the progression Hollister, split progression. let's kind Next brands. the two on would monthly sales our say specifically I

the you've the into back until forward the of there carrying point, going of out saw the been on about assuming over Our last bit nicer in for seen June a the QX outlook as trends change. went in are week-over-week that at to broadly Hollister out to they more they're in We this We're July throughout we're that assuming that progression new we've trends a side, assume improvement. in really We're we hearing that's our period. of going that, in not consistent seeing here is fall-off QX. seeing quarter just that start the talked trend. progression some I weeks, news half Abercrombie couple strength of be And little year.

X% higher continue see little that to the X% a the currency or the momentum basis that that Abercrombie actually in brand. in kids bit. than being with plus down excited bringing in quarter So Plus brand adult on a constant

that Abercrombie in Fitch. optimistic continue momentum continue to see & that really So we'll

much. very Great. Thank you

Shapiro next of Our Marni from Retail comes The Tracker. question

stores looks or hoping want a have and Hollister in guys. it I sounds exceptional Hi And the some overall little is you I'm file for back-to-school selling it the really where have -- more customer I of noticed small to dive a But fashion assortment. very it's only a like I've it. Hollister, have well in into like -- the quick bit fashion then question. portion

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kick off with ever the the for in best seen as dresses example dresses Hollister. question second so quarter, -- an Hollister. the saw I'll Marni, on quarter in what we've were we

the point, and yes, and pressured to have they're they're buying. on much is is right now. They they're your what responding So very to it, the to judicious selling but how well very spending be consumer fashion

got it tops So on to accelerate. our to that we see nice continuing Scott that, as growth have as to receipt. quarter, started just into is monitor we're really through And went the the third

yes, shift nice just seeing out question, answer So your selling on of the fashion, bottoms than anticipated. to bigger a

continue On Part the marketing here growth to the continuing even and protect broadly the industry, standout, Abercrombie where to assortment that marketing Abercrombie see Abercrombie, in more and more happening of We're our the in love get We where light eyes of marketing the we've we're pressed going Fitch. people, We of the in last in in this in is year. what's file, up positioning to customer we product, to to our goal is. to investments focus the be year brand. & on was continue love comeback bets brand of Abercrombie half back story Abercrombie. continues a for the

we new our and brand, customers growth, continue want customer to continued to customer the we have. into with we happy because that brand we're while coming story new the accelerate love so And

the back rest offline. of take Best to luck Fantastic. I'll school. to

Thanks Marni.

conference And remarks. to like as for Horowitz questions no at further closing are the Fran there would back I turn this to time,

for us her Thank Head the Scott you, of Quintiliano. Relations, opportunity, call she'll today. Pam as & Investor also best thank and our everyone, I wish and is to Abercrombie we joining her another the with pursue Sadly, would of luck. Fitch leaving to last like call this be

and you gentlemen, your may concludes you and Ladies participation, conference call. all for that thank now We today's disconnect.