The Children's Place, Inc. (PLCE) 9 Mar 222021 Q4 Earnings call transcript

Good morning, and welcome to The Children's Place Fourth Quarter and Fiscal Full-Year 2021 Earnings Conference Call.

On the call today are Jane Elfers, President and Chief Executive Officer; and Rob Helm, Chief Financial Officer. At this time, all participants are in a listen-only mode. After the prepared remarks, we will open the call up to your questions. We ask that each of you limit yourself to one question, so that everyone will have an opportunity.

call recorded. this reminder, a is being As The full-year this XXXX issued its morning. and fiscal fourth quarter earnings Children's Place press release earlier call company's website. A materials the release the Relations have today's Investor the copy to been of and section posted of for presentation

these today I found made Risk in as year. press as results subject we statements or this events risks forward-looking after recent to begin, everyone to in any Safe involve and the company's turn Form to of on no its now the well forward-looking The SEC's circumstances section actual over the date call materially. like to morning's Factors would to Jane cause undertakes company Before pleasure could to filings the remind release Elfers. the to forward-looking fiscal that Report statements are statements differ publicly These including the obligation my reflect uncertainties It for company's Harbor statements release Annual is hereof. XX-K to that revisions most any

XXX delivered reset point the has delivered in delivered a impressive our XX.X% you margin, levels. improvement outstanding XX.X% morning of good the first XXXX. X% company margin everyone. versus another in results. a basis and a XXXX a operating margin, to gross record versus We XX% in margin We at onset and adjusted quarter operating with structural XXXX. delivered EPS Thank accelerated digital all Since gross We pandemic,

we've hard with a versus XX XXXX challenges in want in $XXX fewer was with XXX work in associates XXXX in in of delivering their for operating stores, million to the income thank despite digital. increase $XX.XX XX% having all We months. versus adjusted I delivered and industry-leading the these Starting all XXXX faced particularly income last net sales Our full-year million, $XXX our our million X% of our versus XXXX a XXXX or results, was XXXX. increase. $XXX EPS operating $X.XX

our been overhead operating gain single-digit to versus leverage digital return drive significantly high Our driven its UPT, lower higher the our to and highest on stores with fixed we due business, contributor margin our of continue costs acceleration digital always additional costs, overhead business low channel. And margins. pandemic has digital rates, and

XX% Our digital XXXX, versus as sales represented annual our target penetration sales in a we industry-leading of for full-year QX an XX% digital XXXX. XX% QX

an accelerated XXXX. rate XX% our full-year Importantly, digital improved to XX% in ending transfer further supporting customer penetration, industry-leading XXXX from our full-year

grow growth. continues which are investing our respect With technology to customer and file. As where XXXX, between to focused marketing between acquisition, XX:XX both digital customer. significantly additional benefiting investments customer channels, to channel split in higher in improved acquisition store spend, a business our our continue investments In channel. we balanced support our in tactics, and customer drive higher And customer with and more the in with planned margins resulting obtained XX% average a new our near-term. the which in digital per our and line penetration is fiscal from acquisition, mix, is increase line, top digital We're to on marketing bottom the through we in customer we've brand on and continues our making leveraged this to significant to marketing awareness, focused achieve acquisition digital we're

audience. resonates enhanced each personalized XXXX, efficiency and content two over we've with to we've customer years, As And able by shift acquisition higher use to cost to that target to being customers spend. identify our brand, digital the by targets and during customer has data established segmentation drive data past benefited the accelerated better robust and retention enabled our that marketing by deliver

of tool allow more efficient our to recently budgets much marketing app In a us a shift expectations. exceed we've in in than mobile capable support and the to attribution mobile manner towards continues and The contributing to the incrementality multi-touch our investments, tactics of us and highest understand nimble addition, enabled we shift help of. our previously our better were

of device. we the come had highest over QX, through transactions. of our over of converted device XX% During our using were at percentage mobile And digital a ever transactions XX% for a full-year, transactions mobile

XX% Afterpay, of customer digitally Afterpay's purchases. performance Our mobile our for higher mobile up app full-year continues of in only the option, penetration our mobile Afterpay Afterpay, now, our app low Afterpay than half XXXX. respect and on importantly, on new customers in delivering new increases Not impressed users mobile are do And we're months is bringing our transactions our the than transactions And over saw average higher to-date. launch. non-app XXXX. engagement in of is with resulting our customers digital to during we first mobile acquisition. XX% to already run double-digit the native our to basket the a top app six brands, the acquisition With our XX% since drive pay already AOV's transacting the non-buy on tender first total sizes later a teens of of strong Afterpay just high significant is penetration this for digital launch of pandemic with driving

brand our the we As partnered in our the deck, campaign. with and course X.X for in of Campaign, investor impressions on Kardashians Afterpay we PJ Family Christmas over resulted the QX billion our highlighted which

XXXX us continue the original to very optimization We millennial full-year Z to our stores for and terms to bringing to continue closures XXX strategy, respect XX leveraging through for With lease on customers Gen of XXXX ability versus Afterpay's full-year closures and stores. to XXXX stores our our XXX partnership. favorable to reach focus secure we new to our reduce total target allowing QX throughout fleet

For stores. close XX targeting we're to full-year XXXX, approximately

we planned our our On targeted in opportunity. launched of able are file tween to were We're savings adds from action to of XX% on the as store offer products, realize over growing $X XXXX with to remain come XX and of to from at experience XX% an our our of Gymboree significant brand digital we reset industry-leading With Sugar the our significant highlight we is our laser-focused launch respect onset to malls With business, months. having looking investments past lease to this thrilled off-mall. momentum, to an customer this XXXX, They momentum to a the realize anticipated, Big of Based coming off-mall XX% Sugar actively our our them And important of targets addressable We X our of and our for structural we tween planning & our since we XX% we coming our & from with market marketing to wholesale, this Jade forward brand. strength approximately accelerate to and to in It's to currently digital extension to unique November sales approximately in billion natural initial Jade. additional we we're positive able capture also Sugar sales, market. of we together be to holiday our from that our joined a With retail deliveries. families Jade approximately holidays, and total plan While retailer. to received coming brand & our to with names core learnings XXXX first our XXXX. digital-only the armed we respect and marketing. retail business Gymboree, savings to have sales continue excited beyond. million Clearly, for to dedicated we're for well-positioned next on retail this X, our whom remain strongly we're information, XX% as continue with about the enter sell-throughs supporting XX% and well-positioned Girls their building within strong competency children Sugar & stores, Amazon. stores response strong we continue from significantly total occupancy holiday overwhelmingly dress chose sales on the Jade traditional pandemic, our U.S. newest a in business with to this brand. brand many and grow holiday celebrate to a our the very on We're

projecting the resume of after impact the pandemic. the stimulus clearer released start to QX of plan ago. our EPS economy enjoy have We in a to since a year and May, are closing, and earnings for guidance top-line taken unprecedented In record of with into understanding We call XXXX a during very Amazon company providing value our XXXX beyond. to growth have that due breaking considerable We loyal delivered structural in significant we reset first digital that following. one has offer the we brands strong results lapping place accelerated the

top particular focus impacted these. cotton we and decade continued gasoline and disruptions, a global significant headwinds transportation is bottom-line on rising Lapping consumer oil core prices, XXXX, freight at last and as ahead our stimulus rapidly particularly the Looking are including year, by with from surging prices, facing inflation high rising costs.

new enhanced we challenges, our combined to And confident and inventory our Rob. demonstrated optimization, baseline that marketing, our promotional bar to double-digit as positioned now, successes including I'll to data-driven many structural turn full-year a over to margin us these reset, reset respect fulfillment and and significantly digital company, has to are beyond. despite However, with pricing double-digit the SG&A and our reset and EPS accelerated first and ability initiatives, management, with the deliver XXXX for maximize fleet operating it

and million by remarks QX to to adjusted the respect year's I we million XXXX. versus delivered $XX $XXX and additional Thank good provide XXXX. Net or increased fiscal sales $X.XX. Jane, with I by of morning QX our record review a X% After million quarter, will last $XXX fourth EPS decreased you, some X% versus everyone. results, In

$XX a sales QX sales X% by versus net million increased retail or or million, $XX to our to Canadian positive $XX versus year's last year's XX% million, Our $XXX U.S. XXXX. while million. net sales million, million increased $XX versus were Comparable XX% $XXX by last

product and response pricing by promotions. our our AUR were the reset and December, key both Our stores significant in of positively of net assortment holiday and sales increases our due impacted strategic to strong in November digital the to period in channels selling customer and our

versus we variant estimate representing the quarter, quarter. of Our representing closures for Consolidated and which negatively the XXXX our digital QX $XX were impact our QX or dictated XXXX negatively approximately of XXXX sales were XX% store well impacted for the versus digital quarter, $XX XX% high the mall XX% fewer percentage net Store as by permanent XX% million sales. by stores in the in sales XX% increased XXXX, consolidated QX. QX having in single-digit operating represents Omicron landlords. month of XXXX million by for January, total sales reduction in increased of XXXX net approximately net million hours QX sales XXX sales our $XXX sales the surging by versus approximately store in impact Despite the as impacted a as which versus of the

higher improved XX% holiday and the weeks Our by QX store calm driven traffic traffic December. versus in November significantly XXXX in key selling

business was points of expenses our strategic store resulting of the versus focus our increased store Adjusted year. higher to XX% increase and were in QX, higher below traffic our Omicron well XX% product gross the net which store for store order recognized due digital the versus sales one-time in margins from increase expense gross with significantly our gross the Occupancy promotion resulting fulfillment to supplemental Canada on fixed leverage quarter Adjusted versus in from double-digit strong expenses customer leverage QX ship increases deteriorated in abatements End to XXXX net XXXX surge traffic pricing and $XX from in variants as remained Traffic sales the down and January down XXX QX store optimization, XX.X% QX sales, merchandise the last down per e-commerce of However, million acceptance. resulting virtually eliminated January XXXX. The lapping XXXX. with basis impact AUR strong of traffic the reset XX.X% amount in as due pre-pandemic and resulting compared channel in levels of we consolidated support costs. U.S. net of required result digital the QX a in January to as lower margin. rent margin XXXX in from XX%. record QX of margin

costs SG&A higher and freight income sales for $XX of net to higher operating in to the or freight an the sales, $XXX Adjusted store launch incremental deleveraged year. XXX lower million basis accruals. $XXX air of and in Adjusted quarter and million operating inbound leveraged last resulting a negotiations result amortization due by the of in $XX was sales million was expense. net gross and of by XX.X% including higher Jade, driven were of expenses of incentive Sugar XXXX million increased market favorable sales QX results last year, to occupancy X.X% basis margins adjusted QX $XX in XX.X% last However, points & XXX income. expense the $XX approximately XXXX higher record was million reductions container XXX Adjusted million, occupancy year. spend Adjusted costs Interest transportation levels net points. lease compared operating depreciation year versus versus of closures. to chain rates versus last quarter. The and in challenges for income compensation Adjusted compared QX support XX.X% and QX million $XX impacting Supply SG&A. deleverage worsened to of basis QX to points permanent

a interest quarter and of quarter in credit early adjusted reflects rates lower interest the lower Our average expense The the as rate. the Tax interest result the versus debt was our a year. for refinancing million $X.X in decrease last facilities balance. expense million $X.X

Our adjusted accruals incentive XXXX. in XX% due to tax was higher rate compensation

on to sheet. balance Moving the

quarter over inventory short-term facility. up year, Our on with ended investments quarter ended transit. our at in the versus the Inventories the our revolving million. We and XX% ended of $XXX cash outstanding with million last XX% $XX quarter credit

and taken including pull-ups actions ongoing packing opportunities to have of shape the supply receipt elevated mitigate and good in disruption we strategic receipts. to chain is impact complexion inventory the transit Our global times, mitigate hold late and

million. and year. We from million flow QX million $X expenditures cash in to QX last $XX were in Capital cash liquidity. in versus on generated Moving operations $XX

quarter. shares our with $XX $XXX in the During outstanding million million million repurchased which XXX,XXX $XXX company we fourth for authorization, the the quarter, by leaving increased current on was

For the fourth term our quarter the the full-year both shares XXXX, down for our term facility and revolving refinanced we repurchased part as loan transaction. by million million. in of We $XX X credit facility $XX paying million loan our

stores an XX of bringing store quarter. our financial than continue short-term these locations XX% us stores closures closures our from store store favorable years, the meaningful flexibility of to of provide of Now to The quarter, original in closed are negotiations. favorable activity closure the of update target XX% XXXX. lease store on of X.X XXX and XX I'll XXX With a profitability and and stores of the a locations two-year quarter the in XX% over past of optimize XXXX XXX maintain underperforming four-wall closures due and compared total with We to to decrease action over our in with fewer coming store the to to QX We occupancy our in with lease our will stores of the square over full-year of XXX. closure decrease XX% continue up our months, provide we and Between we XXXX, total onset negotiations million, store fleet XX fourth mix. since These portfolio. margins pandemic. benefits costs the the these the flexibility the delivering next improved lease two have our our ended our in the significantly footage to leases

planning on EPS providing in QX Jane May. mentioned, As not we're our until guidance call

margin on we despite to and baseline current but double-digit headwinds pre-pandemic have these continue new quarter as to limited beyond. with the we we accomplished top-line to XXXX be operating operating start up significant first which since anticipate most QX The will impact QX net had sales the operating pronounced single-digits sales; government provide total toughest versus and of economy year economy quarterly XXXX, and due headwinds. our into you structural stimulus to well uncertainty last ago the our structural into the will a down company that against continues be to we're We bottom to as year changes, are the we with unprecedented And combination top due the today, net to year compare, line high the unprecedented EPS benefit mid-single of will Starting EPS deliver stimulus released and be accelerated year, to variant. impact customer; significant want its in the closures establishing from one our lapping the lingering digital levels, we believe the $XX one surrounding deliveries reset and the its the QX, on double-digit resulting facing and store for last impact our in able XXXX. near-term of pandemic QX we our since of due in that visibility global volatility full-year Given and first the our in contributed the full-year million chain; believe to prices, particularly margins above high supply permanent our on XXXX; margin. thinking in oil released the the ago, roughly surrounding sales the lapping net the inflation, gas impact prolonged which disruption late Omicron QX our

in transportation margin $X in million highs, for million we abatements loss margins of QX business in of the to costs current on in to the and including disruption while pre-pandemic we of last Government to from preferences the will margins QX we supply XXXX, that delivering we QX; the structural well an made trade Ethiopia, do chain QX. operating impact benefit not reinstated rent our freight not XXXX; $XX impact the which incremental the represents mitigate an anticipate AGOA in costs inbound approximate lapping half to recognized that first accelerated margins of deliver we approximate the XX, $X and due Federal for air the representing year, a be anticipate have on one-time December our was QX experienced pandemic. million operating headwind operating will Our if double-digit onset by to: since significant and And reset above continue announced the of higher

is sales. for by planning is last a expenses lower point sales to impact e-commerce margin due the which represent and store versus lapping of headwinds savings. million, and is $XXX year were partially in we in year, items Adjusted marketing, gross QX of the of be gross brand in Canada While alone depreciation million. offset last XXX year range occupancy basis in investments margin temporary amortization in the the in higher lower our SG&A impact last three and will last these cost than planned fulfillment incremental be range These be closures planned to to year. $XX

We expect range XX%. to in the of our be rate tax

focused Moving on starting top-line. by to actions we headwinds the facing balance on are top-line throughout we with believe the mitigated of the delivering that the We in will year are XXXX, be XXXX. strategic

we're for our incremental we respect quarterly Amazon which the meaningful be gains very to and for on making are in lap year-over-year year, & as opportunity QX, traditional on build investments actions the planning will of sales total in uncertainty both from these last and from planning headwinds further back sales onset fiscal to the retail we include: total we we're grow awareness enhanced becomes and of approximately store top-line pent-up as top the offset net tax year global in freight XXXX; with deliveries an and impact and for top-line in of sales approximately that will supply we permanent year, lastly, we our supported launch. fiscal XXXX; back-to-school the sales particularly initiatives for our selling necessary; impact planning top the digital in coming surrounding in from the credits payments past late comparisons since and costs will we're sales by intend pandemic, of pricing by progress learning raw we're headwinds from models; recent these pull-up year, a So XX the which year oil closures the in impact chain, of last in of which towards planning significant Gymboree, air the we where of to tax unprecedented results season QX when million half spikes; Strategic taking in in anticipate and the record options, child managing that our brick-and-mortar brand our to net and impact $XX XXXX, return building only our XXXX, estimated are against XXXX, the the brand; $XXX versus and setting the of opportunity made full-year from of in XXXX; months, Sugar include: we disruption and in-person XXXX. been strong last contributed driven sales the the for the less the With stimulus up million positive vessel the increases, we're year; Jade material impact to are credits. momentum child stimulus offset payment the actions roughly making and the use sales of industry-leading prolonged of accelerated and in than to resulting projecting inflation, funnel carrier top the of of we marketing sales of encouraging gas for to demand significant pronounced. sales on from net benefit planned consolidated higher rollout sales early for growth are represent XXXX, with us deliveries, the additional while XX% lower sales impact XX% net on of consolidated the we be including acquired our the through the X% XXXX XXXX last Top-line lapping cadence investments have the stimulus the marketing digital bottom-line;

last QX last sales back-to-school and to that For the will fourth We our year, due than setting we to return a sales sales impact rollout and quarters. the our XXXX lower deliver back lap tax anticipate half more the we season third between of net balanced record and QX to outlined. growth child net anticipate we I be actions of split sales than higher that XXXX the enhanced credits. anticipate just organic from the be of will as And spike strategic year Omicron

XXXX bottom-line. Starting beyond the basis to continue results. margin, will we be gross we exceed XXX on gross full-year with and XXXX our significantly pre-pandemic to while that approximately margins will gross Moving lower anticipate expect XXX than points down margin full-year our our highs, XXXX to

We that of be year half, costs are for XXXX versus QX I continue degree a lower to in gross back balance margins planning gross chain. continued transportation throughout versus in second greater headwinds to from the the half. half first the global outlined. expedited by costs, the will the air these half inbound us driven supply in will increased the anticipate just to resulting the fiscal the freight disruption first We impact particularly Higher of largely costs, of margin impact XXXX

elevating AUR. prices, a planning to full-year, with single-digit For corresponding we increase to single-digit a are cotton we for in mitigate to increase COGS the are which high our due high planning

point, inflation, record full-year prices, yet on have of surging levels However, AUC. do the XXXX at visibility we this oil not on based particularly

preferences in Ethiopia further it's to $XX million. and we how wait further our clarity may to projected have is commit AGOA AUR significant at trade before full-year increases loss until of any more mitigating And the inflation believe is So with further increases. we prudent we impact on AUC XXXX AUCs

as our favorable through gross impact which in higher permanent impact the in headwinds will we of realized fiscal the pricing XXXX occupancy Lower recognized to supported the costs of closures, due increased reduce mitigate more offset investment we by promotions lease negotiations, store to awareness to fiscal will of than funnel XXXX these million in are of partially as $XX markdowns. We versus continue and brand abatements and anticipate margin benefits one-time XXXX. marketing, which our well top of the planning

to We per distribution optimizations and work intent in XXXX. order fulfillment have on already in our across to reduce our an chain place global initiatives optimization significant for the supply build our on further cost to centers, continue we fulfillment

be in Moving full-year on higher for planning to We're slightly SG&A than SG&A. to XXXX.

cost our First, reinvesting efficiencies benefits we and of from some optimization and marketing. program into incremental are the brand investments fleet

will in These incentive we planning for increases in accruals In XXXX. addition, our partially increases compensation be by are wage stores. lower offset

to for in on depreciation and fleet planning continue We and depreciation program store the optimization to from and XXXX amortization and lower are amortization XXXX. our accelerated than see line be benefits closures

We for the fourth as XXXX from expense in our interest decrease and favorable are secured credit loan term in planning as the significantly we lower $XX revolving rates of interest term our part loan. the of as refinancing facility resulting well the quarter, million in

XX%. our rate full-year tax be of to in expect We the range

to to then the significant expect opportunity continue Given $XXX XXXX. in the on of generate deliver the to flow cash reinvest significant business, much opportunity to us in expect business, structural in half project we strong provide historical seasonality with we in to our cash back accelerated with XXXX our portion range an strategic and of operating provide in putting our These and these investment capital will we cash next combined us, in full-year These us business, our count, the for to the of Based free lower of reset a to million the cash levels flows cash pre-pandemic with to our significantly XXXX. behind digital year. transformation operating the decision and digital significant for flows levels transformation significant and flows store cash pre-pandemic, return XXXX shareholders a flow continue beyond. to our levels to did higher of of free operating and will accelerate flow the result of for generate

expenditures At open will the allocated initiatives. the We fulfillment we digital the your range fiscal million call majority of in this with are chain point, year capital questions. XXXX, $XX a planning for large to supply and to for

We'll Dana Telsey take Instructions]. [Operator a question Group. from of Telsey

Your open. line is

Thank morning, all giving everyone. Good the for information. you

Dana. Hi,

you for information framework and the thank all giving for XXXX. Hi, the

Is for? first I was the at Jade, more the still, there of you. what Kardashians Sugar that uncertainties of about think thing things whether difference year, this new any on and impactful AUCs it's there cotton year increase in quarter, all, difference fourth in looking you're planning you And planned? price that it's one whether As than the new should the in another? a like the brand what mean, in And marketing, watching half? does to impact be the is any that business Gymboree, take? costs cadence Thank upcoming we all & the very you're the it and

Sure.

AUC all we're AUR the taken the pricing TCP we Jade impact is in increases but a & of three are the taken, AUC and as impact the cotton we've brands. in on call, increases Gymboree. new, planning Rob on increases throughout on across, outlined think, We've Sugar mitigating, year big in the full of with past I in obviously, user And XXXX.

really say view, one little From there that sticks think point out. that's answer. strategy would I complicated I that, a a brand of marketing isn't So more a of bit

segmenting some more But work year-and-a-half, We've a on lot much big understanding really and we've marketing months, last, personalization the of business. lever is. I'd We've customer marketing. really we've who significant, XX over the think, last to have in really on years. strategic done a last help our to I lens gotten in file, able a several been our our on move outside say

at all audience one's attitudinal marketing. there. who for is across points then partner we And helped they then behavioral really journey multiple specific psychographics, consumer marketing took pillars, name we map, their so think really come in map. four like retention, and create demographics, customer journey exactly we is the those data I us channel those and customer I who about reactivation the centric brand Merkel, all us will, platforms, do really are, our And the you customers if outside helped touch profiles, by had from marketing and what based And and they journey really align maps. against really least And tactics our on they acquisition, plans think us an take and define first helped said,

be then, change the to able probably building. profiles really that pillar our a us journey And that get really and change the So a level to to think for is with is I us. really mapping. the on for second big customer is And important brand

other then points about go the and celebrities are influencers XXX throughout perception, from on kind And our it and our of journey, down awareness the brand. obviously. media. build again, our customer And stories are product mentioned three this points. which throughout and outsider shift an really top efforts your optimization. ultimately really of the And and that point funnel call degree really then but tell invest the Rob to touch Kardashians for around really and we big we in campaigns we to then create all of the all emphasizing we then promotional, and different with that monetize brands us And So of and on away brand doubling our had the we brand those to change more awareness there's the come the in year, learnings us with And this. mix marketing is values really help

So help in is call And multi-touch mentioned my they really where remarks, spend a that to us attribution a, going we have tool. count. our what we I've dollars

move much our on really all fourth, lead includes obviously nimble, our focus to investments shifting it a which the brand working measure makes us enhancements, building we've to strategically is to experience. acquisition what we're really then to like able that things a implement statistical better more three what a then the channels multi awareness And new to And like is technology. forecast us really personalization, top focused really And And where all look optimize tactics. best-in-class name, finding as app marketing digital spend the customer and more experience. mobile and So that spend, us. different the and back, those customer marketing attribution model tool out and the identify and fancy it but incrementality does does back look more enables of funnel been and site and much and clearly our digital on marketing acquisition, mix to then on around is of

the really forward. So some be that'll think lever powerful results, XXXX. we're marketing seen We've we early excited about strategy in a going and great have

your gainer about of have last seeing out share opportunity terms to opportunity, opportunity? that your different go-forward, as share landscape year, had quick other had Jane, we there think your follow-up, from One we in Any unpack Perfect. anything you're obviously, stimulus, that way sales away. in also but the competitors you gone

retail Well, I clean as of think when we & And Sugar Jade information kind accounting you look that. on does. certainly, at XXXX, the not everyone else waiting just because we're information get for

count double you wholesale. can't really So

only kid's the Dana, hold you the have think foreshadowed XXXX. And this was hold and our "essential be business. data in we able against XXXX. back growth being XXXX with share to all were player were open up. some would basis when XXXX which market anything I with do issues up XXXX world share the in we over up of rest So do the the on hold market points very few to up we It's the as to in the XXX Amazon pure kids, share really one share flat based us is allowed We X,XXX gross did, they to able year, fact knew We the the And basis think of versus retailers" year, so this of points able giving business. that were and in margins to versus the was about had, to doesn't retail that in are kind the we as with we that picked COVID. share

confidence reset gives that our I staying is us think it pricing sticky, kind and of power. has

I are powerful. those statistics So think pretty

Monness, from Chartier Crespi question next Hardt. our of take & We'll Jim

my for Thanks morning. taking questions. Good

Hey, Jim.

of return planning the business really of kind in having how the a of are first you quarter, you and years? is talk impactful couple that and you quarter Could about quarter, not Jane. Thanks. first environment for after promotional dressy Hey, XXXX then how for in fourth then saw for business what Easter

what are I people I rationale, of think from kind benign, we everything see in. think getting our base, product really, very Yes, competitor is in Sure. that still having issues some

And so to environment. see, continue a promotional that see we're think to I going rationale

are we for same feel believers I that think think product. I can competitors our we of more the way. our get some firm And

to everyone's to around page So I these as at discipline inventory holding least on getting the price management. increases, same on think and currently

the to then Easter. point love reason it why relatively And but chance for up with calm. From So the Easter, of the the at an I come not will April, you bode dress before, late a know, for times And get the when that same pretty starts or we ask Easter usually remind see don't Spring environment, changes, many of the X/XX second she for I Easter she than buy early this -- up didn't this, in the in but Easter the time. or you lot Christmas is, I April the and business year. date as stock business a favorable whether weather's having dress And kids. we've dressy Easter us, mom stronger shop to well much late we're said But you we year did the back this Easter dress at this for up, promotional times, the business in March, she in does some look get what's available was you, mom have much last weather to in And strong, not, said, a and only March students quarter. not year. a is which to has should greatest does, Easter. we to a at Easter

So March March, April. until early really timing late wait change she'll impetus for mom April, for that's a unless April with perfect get strong no to weather a out come really or you there's in March, us late the and in

-- QX think a the which our So toughest up from when is believe amount we we're of a mom out. when that's feel of point stimulus products, you against view, But really year, that as last our comes to, when we that of be do view to and really Easter, compare with a have at think we point toughest said, produce going that an such and together going from inventory we'll to about Rob compare. fact we're of dressy it point we we good and combine look our and Rob talked about view tremendous well later a product positioning

Sole question from next Our Jay of UBS. is

then XXXX clarify can idea Great, half. versus level the lower gross maybe XXX thank in mean us two if year-over-year margin, could in sales could you be lowering lower Thank you or of margin in margin second in of for incremental the an Jade XXX, Rob, down so and and half of change you be of the explain sorry, & said sort Gymboree, second versus Sugar And in the you the things. overall bps give QX, you will from first gross half? QX you One, of you. much. will year that first benefits gross terms QX versus the the the Did half QX Amazon.

and a talked margin this half QX in in declines comparison perspective, freight down of the of and expect decline XXX basis get a within for year-over-year QX. gross we pronounced the back moderation quarter. overall The amounts Amazon From X% in that our the margin and for Gymboree increase XXXX. increases, call Jade, QX sales year; the versus as & the of And terms QX I a year that than we included From points the we to to will XXX Sure. we consolidated have gross be in call it about of didn't net perspective, the but Sugar I year. they're sales more

tween us billion is days. it's a be $X and in early the terms brands for of is Sugar $XXX continue Jade & excited market We a Amazon. million. But to long-term Gymboree Amazon in big market. addressable And the opportunity about for the

and excited XXXX. about we're significant in growth we So growth over see we saw significant in opportunity that XXXX the

Citi. Lejuez of to Paul We'll next move

Your line is open.

growth would on you Thanks. grow dollars. market set the it's Here's apparel And goal. versus you something in if curious XXXX in Children's that how Hey, is growth you the to year as in ahead? in of much just units a pricing? FY sales and that thanks, units FY your expect curious for guys. the Jane, view market about XXXX share And assume

we perspective up also year last unit a From were AUR. year. question. your had answer this we versus gains And can in double-digit I significant Paul,

The had e-comm As costs was increases in also focused on order is on much operating decidedly fulfillment we're really an more And driven higher. order provide the even double-digits. and to tremendous value our higher margin pivot order our highest at digital our business, we in value. significant our up for value and e-commerce business penetrations leverage channel

cost the fulfillment continue year expect We we to optimize structure. continue for benefits to next as

And from of B. our Susan question we'll take final Riley. Anderson

for call. the the Hi, good all Thanks have on to nice morning, details.

with guess Are it Just for curious, line based like on in those you like currently stabilized are that March you entail looks compares? assuming based that guide full-year, the use half. your and of falloff all in the does I sales for kind April guide? in is top-line back quarter, And the then guide comping the expecting tough [ph] and sales on the you're first

last you I'm still the big So year? guys assuming stimulus benefit of tax a wasn't have as March into child in credit

in-person that's tax Rob balanced because And and child expect to this to credit. demand helped with return pent-up see us more did the learning expect think we to last year the Susan, not, why child of said, a QX. credit QX Yes, we we I obviously the tax lower year than and be to QX

great We November through in dive month know, a Rob and had a against stimulus. really rebound nice to when is a Omicron wasn't up hit, were We But up February saw comp As for detailed we obviously question, your January took as response in December. February. mid-single-digits a initial We was and really traffic. we the And tough small a in and February. month really sales of end as us.

today. drop the about exactly year in stimulus which expect off March month significant we ago was do we one anniversary of a So as the

of we're going you know the to bulk and and see we quarter think. up March the that's where So make drop the really April

Thank call us joining our this conference This does well for you for session conclude morning. our question-and-answer today. as as

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now may You wonderful disconnect day. have lines and a your