everyone. that you, guidance quarter and macroeconomic perspective. Meagan, Thank We line second despite were bottom from and the good our the morning, pressures, exceeded a both top pleased continued
We even we We a spring is quarter. on better year-over-year, than the during XX% year, our high back total our continue efforts, an our spring/summer cleaner to to inventory inventory single-digits. progress started guidance XX% second inventory the planned our that versus ensure high than last of quarter of position. down and originally we product AUC down down to and during make significantly significant the in half summer QX inventory liquidated more our Due is ending our levels
of inventory in that inventory strategies that half the place we believe year last versus Importantly, continued going XXXX in improvement forward throughout we beyond. and have in our will position result back
exceeded continued of resumption X% strong environment of payments. macroeconomic were These and primarily guidance. and concerns retail result start loan inflation, in decreased highly including our student second a a favorable challenges, the performance the promotional face to to persistent over the back-to-school. which results strong Net or This sales better-than-expected was $XX e-commerce by million quarter driven for $XXX our million,
sales net XX% U.S. sales million $XXX by XX% decreased and $XX or our million. million, Canadian $X by net Our million or to decreased $XX to
X% sales for Comparable quarter. the store decreased
store low down approximately Our double was while traffic was X%, comparable e-commerce our digits. up traffic
Our the improvement key back-to-school pressure month an comp store with selling by was of traffic in the entered May decline as we period. driven
our be more versus However, traffic down than to comp store XXXX continues XX%.
X% and the AUR spring and driven summer the liquidation year-over-year. up basics merchandise, AUR quarter, our consolidated go-forward was of our season by declined While back-to-school product approximately and for
significant come which pricing pay half we significantly of remain transactional levels, AURs back down the in costs success our to and Importantly, of than validating XXXX. continue higher will as prepandemic strategies, believe input the restructured dividends
Gross quarter including at as compared spring/summer order profit XX.X% chain margin costs, of year. growth the in of stronger also in accelerating margins, sales the This and liquidation XX.X% for gross the to an net our costs, QX prior our is cotton operates SG&A inventory business, supply position and lower net a our impact margin. second unprecedented operating input in expenses but increasing early June wholesale sales the operates of in decreased combination reflects of lower starting the significant accretive to to at and which enter to of
$XXX to equity compared reductions store Adjusted as $XXX period expenses, comparable payroll in million office last compensation. decrease quarter the in a SG&A million primarily was was and of second the for This result home year.
transformation heard our a pleased strategy, year transformation critical digital-first you be Meagan, the to efficiencies part of balance marketing through model. a from marketing the we from our for and needs digital able incremental to operating to are our As self-fund is of
our higher rate loan versus The borrowings the the expense million rates for facility $X.X net interest to market was with interest quarter. adjusted higher rate upon expense by prior revolving driven term increases. of increases associated due year's based interest in expense and variable and the interest net average million credit Our in increase $X.X quarter in was
compared quarter rate Our was approximately to XX% as for in adjusted year. tax XX% the prior the
adjusted in the last $XX.X per $XX.X For of the quarter, of million we period reflected an loss $X.XX $X.XX million year. share second share comparable or adjusted per compared or net loss to as net
digital-first fees $X totaling has $X in which lease of lease. employee the termination to consisting early corporate million business transformed with consisting a previously planned a professional as million, severance, the model, associated costs charges benefit headquarter reduction, approximately As implemented approximately associated several legacy $XX we of and and nonoperating operating store resulted from announced, with the other and costs, of approximately termination a of model depreciation million payment, workforce accelerated actions, our
a and balance cash ended million. the modest of sheet. remains with investments long-term our of $XX and which unchanged $XX at expanded $XXX to of We with million borrowings recently credit revolving quarter the million, Moving and on debt, amount short-term facility
continue XXXX further XXXX, by versus We of decrease end by million us to more borrowings the sustainable $XXX positioning than to expect for end long-term the growth. of
of during healthier efforts. expectations, end to noted, the previously as down back-to-school inventory our in reduction inventory our selling position the progress make I enabling period. continued XX%, in levels we a quarter, cost and ending we As were unit enter QX approximately us to ahead important
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closed ending the locations, X quarter quarter, we the During XXX second with stores.
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inventory, significantly people As to and resulting consistent a and in more pandemic, more upon less future, sustainable company less confident with expense, than our we digital-first that were able margin. and do prior accelerated we results we we to retailer, less stores, operate the less can look to remain operating the less based to transformation the
XXXX greater represents in digital year, where I our best most as prepandemic recent pre XXXX transformation. detail. Place specifically, will represents XXXX topics the comparison these cover the accelerated appropriate, reference me and Children's for Let The
stores. less First,
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approximately XX%. Looking peer at other omnichannel is penetration retailers across our group, the digital average
in profitable and in to us allows as channels. continue our the millennial mass be advantage digital we and significant now channel, and believe online have penetration Gen that moms flexible excess of growing is the to We migration prepandemic which and versus more most XX% an profitable competitive historic more Z their a industry-leading
inventory. less Next,
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people. Next, less
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business, margin will our than versus on a and operates be anticipate our operating margin our XXX-basis-point retail percent XXX-plus wholesale business, wholesale, have initiatives than margins. the in our an SG&A accretive business our that expansion Our at is to gross at retail We by gross reduction approximate rate Amazon, will since profitable but XXXX our impact rates our business XXXX expense of XXXX. by ongoing lower rapid negative increase in lower rate most a bolstered second significantly driven which further and
margin than associated However, accretive more business run fixed operating offsets margins. to costs and to the minimal is that the gross our loss
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Finally, more less debt margin. operating and
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For inventory margins, expense by deliver the back driven operating the costs half discipline. and decreased company double-digit in the continues input to expect embedded benefit inventory, of strong to levels of offerings, product XXXX, strong reduced
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to per expected to $X.XX. effective Adjusted approximately of $X tax Our earnings be rate share to in XX%. be expected XX% to the is diluted net range are
$XXX Adjusted third quarter sales representing an million to XXXX, $X.X the rates be impact sales. decrease to to prior due the net the year. million, is For reflecting $X approximately the third year range million to fiscal the the approximate quarter be to X% company is operating expense as $XXX increased quarter. third for for of higher the Interest in profit expects expected following: the are compared Net of third interest million, expected past of be XX.X% expected the to approximately increase to and rates of quarter the borrowings in again over average
to costs XXX diluted effective last quarter due offset lower that decrease XXXX for third range by points are growth which business, gross input XX% by year, reflecting on expected the be third XX%. of anticipate significant expected versus during to wholesale at increase in be to gross our be the anticipated XXX earnings in to approximately of We share is rate decrease of a the quarter approximately quarter, margin XXX the expected sold partially Our the tax goods will Adjusted $X.XX to approximately basis to QX margins. rate for points $X.XX. operates per to net basis the
expected due be year, reductions count, store compensation. offset in expense to increases marketing planned partially other are an by in reduced initiatives, and to store home expense expenses payroll incentive in SG&A lower down reflecting rationalization increase versus office last and slightly payroll
range end the the to low-double-digit expected versus is the inventory of in down be the At quarter. year quarter, percentage third prior third
reflects reduction quarter, versus dollars QX, of expense SG&A To versus expect color the quarter be provide significantly some our fourth the and down be year will on to which impact the down we initiatives. fourth last
last to our to We margin X,XXX year. gross expect will quarter expand basis points profit by X,XXX compared fourth
we operating projections this basis as lower will margin year's our QX than margin. negatively XXX gross gross into we business, previously to take which accretive the by margin rate fourth our Our points impact significant SG&A more discussed, estimate at operates our account and business quarter. versus is of last But expansion wholesale
In of remainder addition, we year. of the of the are expect environment feel negatively expected the for as core continue to our the challenging our customers to also inflation by macroeconomic the impact impacted margins will be continuation
profit low-volume, provided calendar. per an $X.XXX $X.XX projections earnings range a week a include for to to These impact the XXXX revenues diluted This the very impact be sales, based from as the operating billion share. to narrowing impact of XXrd results. to a $X guidance week nonpeak modest be operating upon insignificant net company and X% result, occurs in XXXX, the sales and billion, have on per during of period, in to share is clearance year our full retail the on expected of to range previously adjusted its X.X% is of expected The and ranging in and $X.XXX net now expects net
support of We initiatives which our our XXX the planned have year, expected with reduced capital now XXXX, closures to $XX happening enhancement the range significantly XX of of us for the stores and also We the expenditures million, bulk our million to approximately closing end the initiative, primarily at full our digital are optimization $XX in leaving be to fleet fulfillment part of ongoing anticipate with capabilities. of XXX as stores. the to
you, call will we and Thank to now the questions. open your
