Qurate Retail (QRTEA) 6 May 222022 Q1 Earnings call transcript

Ladies and gentlemen, welcome to the Qurate Retail, Inc. 2022 Q1 Earnings Call [Operator Instructions].

As a reminder, this conference is being recorded, May 6, 2022. I would now like to turn the conference over to Ms. Courtnee Chun, Chief Portfolio Officer. ma'am. ahead, go Please

you. Thank

the for Qurate Maffei. Chairman, have Rawlinson. Davis; and X Web we Jeff site. our and Retail on slides note, including GAAP events press begin, company Q&A date speak X such on any note with discuss financial undertaking including which call, call expectations we'd of of reflect in everyone our be we recent the filed of release earnings on XXXX. Retail's OIBDA, or Retail with to Private Qurate due the comparable and XX-K differ conditions to call, forms measures, SEC. Qurate a constant forward-looking as we mentioned Executive like certain QVC free to circumstances disclaims flow with which President in currency. forward-looking call, to or including contained the On definitions in Qurate change this number Actual any adjusted through statement change of includes Act certain meaning required and updates and Litigation published available statement that this are results earnings statements the regarding events, could Information will or Securities non-GAAP materially cash CFO, statements CEO, Qurate earnings and obligation adjusted Today, only uncertainties, regard found Before risks along can expressly forward-looking any Retail Reform remind revisions issued our thereto based. and reconciliations, to Please in earnings release. or any margin, available those today's within presentation, the Greg any Group most OIBDA today or by Retail metrics, herein the of the These any disseminate David we the speaking or and to is Schedules accompany preliminary

Now the over David. call to hand I'll

us today Retail. to Thank and morning Courtnee, Qurate your you, for good and you joining interest for in everyone. Thank

Our factors the second that of continuation first chain and the macro challenges half quarter results disruptions, of reflect execution XXXX. the impacted supply

aspects present We and are to but challenges inventory, This believe of manner work at need customers operational in against repeat. values, more us experienced also offer center, ever, QX, the out a events. inflation our comparison The in and Rocky constant namely Retail we X%. back total up XXXX, curate execution We relevant Carolina at it two great revenue Qurate the fire video merchandise, and headwinds declined basis, certain need Worth commerce stabilize currency. of the to it QX deepening a in superior would address note I coming XX%. base Mount to model a business. grew revenue experience in customer We economic were declined that attractive an revenue deliver total company we engaging On which our fundamentals. brings of a as the year we fulfillment business so that steep than geopolitical XX% company

The the change to and step first the organization is team drive architecting we need.

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that We opportunity, impacted dedicated streaming we on business, shopping stabilizing in digital have unit remain to the business a factors Importantly, stream detail. live I faster incremental pursue opportunities. where Momentarily, alongside created the base I'll platforms capitalize QxH and more to enthusiastic. moving to the discuss new growth discussed very

X% versus currency. XXXX let businesses. provide revenue a First, quick other constant of overview QVC International each me of our in declined

continue daytime in decrease March. the was in slots in to two and single challenges chain late pressures. these privacy XX% returned impacted our reduced following and declined the at viewership Europe, Ukraine partners. low digits Zulily hours our growth. weakened revenue UK, line marketing advertising challenges to challenges, cost invasion. following, supply end and to was and efficiency In through revenue pressure the well following double-digit the XX% demand low and businesses primarily evening time solid ongoing top On attributable product and International business the Germany, OIBDA down QVC as less faced and of chain Japan experienced scarcity news supply a European largest XX% more the Our changes stack, declines XX%, in days to to the year and due February as to demand by has experience invasion. the generated inflation invasion, declined prior In demand than we immediately a

improve to omnichannel and at unit Zulily. retail excellent welcome profitability an in in growth most CEO and is working at to very were as mid-March, And revenue President fit His we are importantly, and and We Zulily. our Boyle, Terry economics. experience of Outlook as e-commerce as excited well delivering Nordstrom

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growth were impacted in in in While apparel. extent best to by deleverage count, QVC digits, in down in low the they than mid-single spend Sales a US quarters. driven QX largely previous greater average to OIBDA customers their increased

marketing In continue inflation and to freight labor. cost for fulfillment addition, rates, experience we center

costs, debt to waiting higher rates and surcharges and also We which discuss. bad obsolescence shipments the new fixed and Jeff experienced be inventory processed will for

an future we forward, discipline value creation. maintaining Looking to of cost committed as driver are important

through factors within a to As business I've are we our the before, growth. the working significant to control be to return said and able undergoing turnaround are

and portfolio turnaround each brands, the itself quickly, the level the on proposition execution our reinvigorate to best have to for leadership number [necessary]. a of that to the charge and in given master refresh brought a making was the the brand. the operators them we HSN pleased bring QxH of I'm and We've take growth put are our initiatives. made product grow will QVC Although accountability customers, US core organization to dedicated decisions and time, advances We we with value at US of restructured We've business brands.

incremental division created streams new revenue to attract separate customers. also We and a generate streaming

we the relevance, past. our Our focus reach. is [Briefly] there, streaming had not to on get and from focus strong enough productivity in penetration better streaming have

of platforms are across our and We position distribution starting applications. a from with streaming strength

HSN on speaking Comcast Xfinity app now XX viewers Xfinity digital shop QVC able been million their and Since services last June, voice on We are remote. on and to on free launch capability platforms. by the households. launched focused streaming these into We to have driving Flex transactional XX let's engagement

already Now program with streaming across Xfinity on Julia staple our features purchases app directly TV, We've April, in they using ways. exclusively make the shows new one Total the introduced Roku, three we remote. streaming-only new content. post TV. Apple four ties Fire apparel our In app and style launched can look

QVC content. for her Jason The the Can't cook an And featured a drop and deal to experience dedicated to first daily HSN XX/X mentors Wu food enhance Vanessa personality who QVC with to skills. is users. experts episode show brand host can't or really Hearing introduces total deal dress. Vanessa app with is a streaming Cook a Spring and exclusive cooking celebrity Vanessa exclusive

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questions difficult changes to at the will imprint leaders focused and months, QVC our business begun The uncover business We be we feel on and causes the US team good visible issues about shareholders. elevate It's their accountability of driving are take the in anticipate to we HSN and not businesses, their our asking stabilizing leadership. on and in deliver a and them. address the putting the team. to value weeks current turnaround, line. the digital of we headline understands create innovation we quarters, do organizational not days we and In have to to believe early the core become numbers, their going recovery on While turnaround the enhance the for straight actions are are root to and the summary, to and and

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vision. We strategic have the ongoing on term work long

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more over a for the I'll Now review turn businesses. detailed Jeff each call our of of to

good macro the unit $X.X XX%, declined XXXX, Overall declined the Starting noted, three David, Mount compare the product already of in and counts David supply growth and reflecting availability Revenue comparison otherwise in primarily customer you, of March strong discussed. that fire factors QxH. volume. Rocky Unless to lower my financial the period chain and for ended with impacts we in on had XXXX, everyone. lower Thank experienced to XX, performance same morning, the comments months XXXX. billion disruptions,

driven last suppressed X, dresses, a office, weakness and reactivated in disruptions smart are product and to chain shortages, lack computers, customers category best and on primarily in X%, declined for last related experienced comparison that comparison The top innovation of and our revenue Electronics and grew in Slide Accessories decline a of casual which which & are growth floor XX% last notably were increased the particularly seasonal was chip and to most care. Body, home year-over-year home steep also impacted with products. year. we care, in of businesses. care and primarily home of also hair and attractive our cookware, due XX%, growth tablets, leather XX% brands, a in home. it to steep in Beauty X%, which most chain pandemic. strength activewear. by kitchen was Home the decline a receipt wellness, year. new declined like Demand shown were materials electronics faced declined leather net issues strong to challenges, further reduction footwear, handbags fitness, XX% in Demand and supply our a into some due raw faced timing and challenges denim, with Bath during primarily electronics steep supply athletic lower XX%, year As to reflecting XX%. mix declined apparel by demand swimwear and skin shift lower, pandemic availability. customers electrics which of and revenue and Prolonged Apparel comparison our to faced during subcategories the fewer and revenue

reactivated decreased quarters. pressured declined which $X revenue couple million line XXX revenue cohorts categories, billion these XX% in margin past of points. XX%, customers OIBDA $XXX E-commerce overall adjusted basis of versus in typically of and declined and these with New Adjusted our performance. fashion categories over-index the

on-site adjusted basis we was to of the at location permanently million Looking adjusted our shown as to of from charge margin vacate of excluded at $XX prepare This Mount and is compression. OIBDA components excluding unfavorable main Rocky an our OIBDA write-down Gross the site. accelerated Slide margin exit margin remaining XXX support inventory the on presentation. points inventory X

reflect which proprietary with margin they unfavorable product While than and pricing our into by obsolescence. shipping expenses net increases Mount and Rocky increased due These mix primarily the of and higher of fulfillment productivity apparel improvements offset capacity inbound is offset year. centers. margins expenses deleverage. as actions labor offset higher mix from down and Roanoke, a and freight was closures from Center, inventory and write returns constraints more in by obsolescence, expenses orders -- partially as incremental higher-margin to category the increase well particularly delivering demurrage gross increased benefited Inventory returns, Lancaster and higher and products, detention primarily to on associated from handling the PA our gains, are costs of due Product higher network were margins benefits Rocky rate lower partially Fulfillment by inventory and revenue. Fulfillment in the reduced and charges larger and XXXX rates which Virginia headwinds in fulfillment the excluding Mount than a QX offset sales the optimization, fulfillment prior

our are As we're taking address elevated taking we actions inventory -- to actions situation.

are teams merchant and purchases receipts. Our reducing inventory future

reflecting in number merchandise primarily favorable lower delinquency. Mount. revenue as marketing and reflects payments deleverage, within production increase debt efficiency to customer fees approximately these Higher increased head increased sales, take pressure work revising debt challenges, basis provision, was critical Marketing increased basis customer a pre-pandemic the call were net to through the prior expenses. as inventory to costs year installment sales from primarily the XX percentage Bad year work favorable to accountability sales that to processed. due Administrative offered commissionable and and organizations. a costs and unfavorable debt for points, were reflecting activity number IT count to related Commissions of adjustment SG&A window are current provision Rocky higher the driven our primarily investment and pressure inflation to gross from installments well greater it We primarily and were as is margin cost buyer XXX sales approximately Bad of due basis an points period. incentive from XX card from higher and our administrative will a expenses of in spend. of anticipate reflect restored by a and the inventory this install in shift due Operating higher stabilization. broadcast reflects is into credit and business time levels. still percent apparel. unfavorable, deleverage service, to We points, plans but unfavorable, marketing bad

a the My QVC in lower to basis increased International. will results. X% Moving comments currency declined focus constant X% from XXXX. on on QX but volume Revenue unit

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and XX%, record paper paper. printing, marketing Moving cost $XXX decor, XX% Hill. apparel bath brands, basis and textiles partially of of as to expenses, business logistics demand Adjusted revenue its with increased sustained $XXX staffing rose Comparable and catalog its higher a at product of primarily for declined grew postage Revenue inflation fixed and reflecting costs. XXX million for merchandise. shortages offset goods, at and as from costs The well products, seasonal early driven points. E-commerce revenue of industry each furnishings, of as case million fabrics, Cornerstone. Garnet by benefited challenges due outdoor well printer, QX circulation and demand margin catalog also by as for for XX%, at OIBDA was XX% sales to gains which leverage and increased inbound penetration interior

and to fulfillment by its its closure primarily factory declined space Adjusted due from sales previously reduced $XXX million inefficiencies included of acquisition million affecting the spend million, Looking a to pricing marketing Pennsylvania and and declined at mix its direct by business. reduce OIBDA income of regional offset marketing center. office costs a XX%, its to privacy by $X chain deleverage, retention. higher actions driven reflecting which and that and were spend, primarily margins, changes, partially constraints, Zulily caused Zulily. Revenue product as announced customer strategy Operating as marketing higher $XX caused well inflation of supply cost related

working balance we of renewals was cash flow TV and attributable attention green income million million use cash to $X for capital contracts. Total sheet inventory, related of QX on of rights decline unfavorable in Total and reduced to to year free use in Turning lower TV expenditures energy. partially primarily a QX, distribution this $X million lower last expenditures million The a year. capital $XXX primarily and and year-over-year in by were the the offset net $XX distribution versus spent was flow. investments our

March $XXX QVC and the On drawn we on capacity had XXst, profile. of billion million under our balance available debt our cash $XXX revolver at million $X.XX sheet. with Looking

that, and Q&A. to credit the facility confident times and a by near-term leverage X.X QVC serve multiple address reiterate times. stated leverage back Our QVC feel was debt defined capacity of as We to service to turn the have the level. long-term target to above maturities revolving X.X our operator I'll we sufficient it With better or ratio, capital for commitment strategies

America. first of Jason Instructions] comes question Bank [Operator from with Haas Our

The Mount long Like how do Rocky curious longer first and impact I'm running, to segment? the we facility. won't up is much on is headwind? will the the kind an question other it you continue the out get called QxH to be can and think for of facilities be sales a until how that as basically,

clear various I time might going we on don't address ways I It think straight line. is that What's it's think a some of be to it's slightly me a little it. think question. good it's have the talk just the which impacts take in ways helpful through I a impact. impacts Mount different them to time for Rocky which levels line each bit of multiple us, have to because

of impacts. parts inventory, I've But about, had Mount talked Rocky the XX% that. our network, network. the number efficient store about turn and to capacity which out our XX% reduced distribution in a fulfillment center course, capacity, network, took it remaining process most of of we've and talked also capacity the in full It destroyed as of So productivity some also This significant our inventory. exceeding overstressed our in both throughout

to to of we and is inventory products this unprocessed move it, impacts the effect detainment and time demurrage remaining the result and also centers storage inventory costs. in places product second ready results that inventory, additional can be overcapacity receive that's additional costs the available in then less when it for sale. system we demand in trailers, trailer because just would date-sensitive The process Once is cost that slower not to I highest. our to some lots sold a and at have point we do not through therefore, and to in inventory had leave and fulfillment available meant not efficient sale then it's is where for the get which or Seasonal we in sales. being and and three further and

delayed see likely most to ability finally, orders customers and Second, repeat. things a in desirable air delay less to to your plan your in ability and also times purchasers are the impacts and are purchase delivery to And on that experiencing then less their put effectively advance. promote likely it

so the look new side, cost we the number some of will at elevated be costs time as would until level quarters, that say. we are way And you I when a up the will think all experiencing of finished over our place capacity, building take I out

side, working our continue improvements inventory. that. already planning able that of see rate receipts, and and and on continue inventory to getting that to more in term the some to come we're underway, I And the would And the I to work we on programming On day deeper a are then business. get some we throughout of say what's already we'll sales issue work control in our level every continue I of a think to understanding to we the near and to increasingly to inventory think understand start side, better the inventory as as through we is as run

But And the it's it not opening will and through. that's better getting so efficient work you a as to supply in anything future more also including and get something take solutions. our near-term said going time. state, won't sometime I into Jeff, capacity. think They're resolved my lot add? to remarks, until chain back be would I to less over intense It network fully we bringing be

sort to our component Mount, carrier with to add to that working What think we our of locations. physical in that Rocky made now will at decision assets rebuild about hard we've I is that we would insurance rebuild now other the we're finalize as not how the claim of

that, business In what take addition is we'll and business interruption our component policy. we portion claims to of that look our a appropriately submit appropriate continue the in under insurance to will at

rates following forward. customers you a more. will that bit But of curious base little the maybe haven't bit my know then gotten question, to that well little core initially retention had if we've if this customers a curious I as better pandemic. follow-up as And from been as expected I'm now point retained, the retained be a we discuss

that So comment outlook. curious if you on could

I'll make a comments. few

part second has and disrupted Part repeat very is factors the in around I been important. note in you and to category. think customer line something last the period the to to is mentioned. get execution become same supply can repeat thing once X loyal to then time, really customers. repeat same them with to attractive of that have a One To that customer I Customers of tend machine say, do you sales. year, tend times X our bit. to The of talked that with a of or beginning one is that, a And first tend customer counts category. be extraordinary proportionately as we've in largest of availability declined basically I about, growth customers need file in they for reflects is it of a initial get to long largely new would then repeat, product due say would machine chain bit and I've a the and we pressure

most the electronics categories of One challenged. particularly popular we've is where been

I so customers And our repeat. think supply to getting our have issues had ability of chain an

level The marketing from the channels efficacy cost our resulted new marketing acquisition customers paid affects our marketing from ability inflation you of digital channels it's spend. of in customer the to paid just to XX% in generate our marketing of is other XX% About today. lower XX% thing inefficiency particularly new marketing that see our

read-through of efficiency well. and direct our that you of see lack counts just new And as so a customer

is one, understand it. story a the customer new think I but So we we of complicated think bit a

curating time. challenges customers each with show customers. lot a to continue of HSN, And programming, attractive we sense concentrating building that's we going our brands consumers that we at value. new some and we more for continue so can newness, to right We sure the in best to of on A QVC products that of are We're think fundamentals merchandise, make the just freshness Ultimately, lot customers. more time a we're variation new over show, of especially host and to get urgency. enhancing especially our the that creating focusing encouraged and be right the be looks moderating so the of by customers, our give strength show on can plans, existing the be of to shortening we and

Final think attractive what we be disproportionately And to type across lot for to I would just customer streaming that as well. unit of us doing the the enterprise say give is new we're we customers new to back streaming new and to so within we're seek stabilize different the we're as attractiveness our new a and some of new will doing reach showing things opportunity get an that to the acquisition. our customers thing customer the platform

the also we've of concentrating there. And that's one been reasons so

could the some retailers if of of gotten And competitors also other the I for the if seeing macro sourcing I maybe had out your slowdown on. environment some some any question. issues imagine there going in a of curious more I Zulily. and some was squeeze one has better in --

that environment if curious a makes I'm for better So sourcing Zulily? you

time, on Zulily. some seeing levels you, certainly we're that that pick with tell that. is provide over We do believe say excess inventory and Terry across inventory some very up would I that retail. can should opportunities I focused levels

be an essentially was excess for that of retail is Zulily across for real inventory set think, that there year, do environment they will excess advantage take in retail -- sold inventory last problem model I again. of is retail. up no excess We think back of our an we're end beginning getting to business to challenge the towards and in the inventory we've, the or so said from And part

could in we signs that think we the do see So more some for future favorable a that provide environment.

next Oliver go to We'll Wintermantel Evercore. with

had the think flow, cash I free of you expect we year for the progressing do cash you regarding free this a question How can use that see of year? generate flow? full should the or you quarter. And use cash cash still throughout do

don't provide free respect with know, flow. As we all guidance cash you to

we've a result of bit a factors. of free had income, well across on As number our different as a segments, inventory most to cash of it as quite as as net an a as the about buildup honestly, definitely quarter, relates the the talked pressure little result business flow we

about think forward, capital that and inventory, in net our appropriately As this attention particularly have as actions that Mount. what cash we Rocky really about conversion focus within on we to inventory I exit of the think our we working accelerate take going and will

we're a focused and respect supplier working see In side our teams, we where such of the working quarter-to-quarter. addition, many that think accounts bit little we on merchant with more times, teams of capital payable. elements that's about is with you'll our supplier receivables at three on course, manage fluctuation Those working that net our where to then, from as because can

I think my question And saying be, it Jeff, would second was then you, international.

did you specific You to international gave US Ukraine after some February beginning well? end examples and Was that then then some that war and March, of the of you or see as of really the in just improvement. in now saw started

QxH recovery once level a result would the from interesting see to business have off days have that. perspective levels viewership of for first some their precipitous we're to a the one week period pretty was the in as lower of Cornerstone for almost a that drop of the identical saw that but subsequent It able XX-plus war would business overall domestic decline two also. Across they in business those the a something demand, about in again, seen items was our of, of a saw distractions that

So it just unique to markets. not European was our

of an some particularly standpoint course Russia of they of of Our from some European impact get term more from about and to the there because back the of impacts. direct the of that the connections, energy it, of a ongoing Ukraine then and had concerns markets longer

Our next from at Casella question JPMorgan. comes Carla

sales just the several years? spending also a that that? you for next you less kind growth as on One look you distribution can 'XX? a about were at direct TV -- grows, rights? Is correlation over they question there expect see to way target Do on your the on on and do quarter. any then distribution significantly mean, this you the e-com rights, I And to talk spend do have of just down between

beginning was given spend double between $XX expected somewhere guidance rights call of renewing. contracts that our with off-cycle we to the we're distribution represent that be an respect million TV is rights, relationships back in we those the to year that almost for. being that distribution what to This year in TV going I multiyear $XX that. pay year prior had of So million major versus number contracts with year the the

you of give So cycle. relationship the on-year off just versus an of kind year

as around not so air, move of around ability But level in affiliate also our these digital up pick as those in of the antennas a decline, who number we about platforms go do signal the direct necessarily there, in platforms, over As the actually adjusted work of a stations there, a those contracts especially to are doing our on renew be a can it's well as of would as how customers And many where our streaming have platforms, obligation on as prominent have great to as customers, they're cord in overall not But our correlation. had use customers US. customers, talked the convert to greater then as not time. to the some other to best well see some other very only we distribution of we now you as are distribution customers but lead platforms we're know cutting and distribution, David those those others, are platforms. recapture presence and many TV of much on we that the a lowering different the same still our those number would times we over there subscribers you the these that that at they're we

into buy done some And bonds your of any of the what any of for in then in did thoughts buybacks the of using additional like cash those you back this you've quarter, past? are your and terms

Ben, to take do that? want you

buy not did any last quarter. the We during

we to the function respect of question with -- got we what much a interest how And previously. we availability made deductibility. think or I we've have said is it's

But at basis. whether when much. we to have that we'll that this determine proactively capacity, year is will and whether so and flexibility or that do have we the something And over of how year course look the we annual on look an it's

missed I I that think that the give number. Could -- revolver And you you borrowing. gave

of X/XX. million $XXX as

take question final We'll America. from our William Reuter of with Bank

some have that the Previously, kind is that to certain you are the challenges the still you? in of this you case, have expect better had all have that mix there chain case? expected capabilities? the at getting may particular vendor related are will note, that had product on year. I And supply to you if a is that second Do supply you guess, vendors And the vendors additional and of your chain shifting half this noted improve try

say, the in still still, would I very would QX If I’ve we've that will and pronounced. expectation supply of still when will chain, when predict learned were half over disruptive through exactly will it I let But would a say pressure QX exactly continue in that, it's anything, this I the up. stabilization some we it's seen to chain not stabilization saw -- to second what and year. try relatively soft the supply have the time

delayed POs X.X delayed on they weeks have I and said of were QX account our an of XX% were think I may basis. average in for

real So chain. through disruption coming the I'd still say supply

are we the most of this We our resilient. learning are through most dependable, through are process this and are partners process, learning the what which regions

with we are, course, I so of consistent those learnings. shifting, think, And

a this be home much to products, as Some for times lead takes ship as some six of months. can while

of But the continuing impacted And right we're those in like thing given doing to structure realizations, by forward. for COVID-related to chain so get Ukraine. have course, things think the China more going reasons always watch shutdowns international to supply of chain supply can't situation interruptions even as the you turn overnight. it I you the a in and dependable also, We're

things closely. we're monitoring And so all very of those

kind guess cornerstone components then of a like value is I've of And as I today's that special the felt one follow-up, the key business. always of

type bit you I the guess half of what challenge decline to to you a do two If of of that shift used be are quarterly little of if for a it availability. quarters, onetime now? these where those comprise last in that's seeing these XX% had you get sales would a sales, product clearly better as

month. it day, XX% still on approximately our week, of comprises to sales a So particular XX%

that level We disclosed not what our at would be of detail. growth have or decline

XX% to be revenue would as you that. with So it the much about in XX%, think would it pretty total representing base, and line

some additional add color. to Just

value. where you're our affects central new to -- think something find affects that because effects And it in it their I affects in Web attractive business. right it saw the they to and I site people that think affects the flow-through special today's it's traffic, it things that today's come not of value customers, are special number

and have special were merchandise how presenting delays broader tempo And planned presentation So of you're within the to in for it's values that the the customers. when disrupted, central are we're to we our to freshen side there on have to opportunity do what some today's special difficult. across we our real values think think right platforms and it control, these and without extent, have I shipment it in also restructure does that the to been both today's I absolutely side effects. things our video that's for

thing fundamentals We have the a going over made lot of that of a on, really that's work generator to such business getting back special time.

and part there is level, there. execution the is discussed think those so are that and tools on we of opportunity we've at And that that an making like tools an sure working focusing optimal

higher more has having just you in or on strength. way any that me. sufficient Is sort shift had between agility felt have if that another of one lack of the for loss availability, either impact But one like this quantify some a been what be products. simply event the I've you're tried And then sales. generating you've you selling often last there's to products the on the of you always would of been there quarters? to quarter categories put availability has always product obviously your And over of, last been couple that of sales probably to

about the put purchase be product customer don't new category we get tried William, you in finer have occasion, for The purchased we same are that many particular today product, it is, just that that lesser one a product There's that purchase a in and still you product who is have to. of and particular times of sort question demand might looking quite But of honestly, times different occasion. that missed many the a for -- play. another demand we've you point great particular number they challenge elements missed to that do we for times which previously. a which quite It's into a come when substituting a many talked honestly, available,

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do challenges versus today's and the material quantified adds impact. we've how through special publicly. do substitution, their our exactly measure there's think when value that productivity we we don't P&L. is these an have we from when planned observe we time there to way certainly, a So impact I -- work from But do

JPMorgan. the close question-and-answer turn we will before to Casella with Carla we And session,

it if reactivated the of would consumer, sort the could the out from if like comes a to of online break cohort So if to I age decline can customers? unit sales thought wanted helpful. unit of or you either kind differences at Or between on little more weakness, drill down different I understand any the be any unit viewership? we if just trying it or just existing comes new, versus get on

categories. categories different the most really coming back and The pressure, to that had our unit decline it from goes the is ultimately significant in product in was -- home which we

overall and see as with and increases is those you even are that, such them quarter. opportunity of our interest as categories, the in of So other unit things the unit in affinity things the new in highest would where for see that you apparel in customer fashion the that the decline. where subcategories some coupled have growth decline they customer Offsetting the of and course of particular some value that best continues within to the look during for categories

the you change bracketing seeing kind are shift in a or major of So of not age your consumer?

over We course time. that at of look a

more have we the great that let's the usually XX bracket see, do to things are of that, we in say, One more is ones you we the with have But insight annual continue capacity, of some continuing the within basis our to as to know provide do that digital younger November little in these that age cohorts on We platforms. expand of an of are to economies that yes, a connection Day. our continue sort older, the resiliency marketplace. and Investor

over at look particular runs quarter. the we again, in that of course But year, a not it a a So gamut. necessarily once

And any that questions the our is back all closing for I'll for comments. turn additional today. or conference

on that lot everybody I currently. again to we their for I just we're I that thank want a reiterate think interest. want have to working

a a the of concentrating making everybody momentum we event. I business also think again better are day. we, also that. on I investor think business day, do continue business and energy a as the different every I'd invite but lot parts it's adjusting to team, there's is the in to of And leadership as every that

thank we'll talk that the of look at and people think these little to more and you environments. have different the to interest space bit I talk go-forward forward to the on and call your opportunity about But in strategy to a efforts some time. continuing for

you will for call. We thank Ladies conclude and gentlemen, participation. that your today's

time. this disconnect may at You