Qurate Retail (QRTEA) 4 Nov 222022 Q3 Earnings call transcript

Welcome to Qurate Retail 2022 Q3 Earnings Call.

During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded November 4. I would now like to turn the call over to Courtnee Chun, Chief Portfolio Officer. ahead. go Please

Thank you.

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

Now, the David over call turn will to Rawlinson. I

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

Athens our and our of Looking we retail through results, are through which these expected driving and all we Athens improved to are the in we be Project in which outcomes and from our focused and June, planning. base linear. for progress made result of like internal moving QX our said fiscal be line the Project in-depth in on are of at factors, transformation will we QX, some laying was to Athens managing performance are that not some year are We phase several external, assessment better XXXX execution the

easier we including Consumer University rate compares. start and the in impacted and revenue expect company XX% Like on inflation, in in deep In a declined year-on-year consumer the results negatively modest In from the of managed against macro XXXX. execution quarter, the headwinds, QX Sentiment rising of interest all driven declined currency, sequential We decline impact execution the that by retail, war better moderation third US, X% to Index total constant XXXX. Michigan in sentiment. September and in rates the Ukraine continued seeing

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impact currency. days work no members earlier our OIBDA Rocky in reduce in are Elevated We've retail reflects constraints during our excess was particularly that programing approximately in levels programing loss HSN. constant pre-recorded based taking its basis million points our retail live lieu XX% safety the inventory promotions inventory, others margins lower Mount across Hurricane Ian. to prioritize HSN four $X adjusted and product also to following pressuring planned sales different. QX to through company facility. margins million at of as to and to Total due in This actions of QX. team $X move a in we we're Switching declined the begun approximately capacity than for of Florida inventory due in we to We estimate XXX

shortly. deleverage that this While OIBDA position margins elevated our sales discuss also improved more Adjusted inventory our costs. I'll and has pressured reflected has year-to-date, it

amplified continue We demurrage marketing. higher Mount inventory, inflationary and as packaging, fire levels expenses, labor shipping, well and of as the Rocky of impacts to in detention to by rates work through pressures fuel, excess leading

took than at clearing We and the environment cadence the lapping management are chain also took environment, of we elected inventory to QxH to increases That expect we and this reducing inventory year, and elevated costs said, raise We We our progress QX former have not moved this in through excess the through Mount also create to actions year. had the Despite our the through December macroeconomic prior XXXX. retail inventory. based but to as inventory supply excess the least of XXXX manage of primarily on sentiment, due We actions Rocky X% also price we actions promotional fire fulfillment but tragic the end do benefits consumer margin on inventory we a year. made by receipt compounded last at lower prices clearance the and quarter center. address to portion inventory. ended pressure

all on of highlight our well One brands in joined like customer Operating role procurement, and The for companies, progress. XXX is for US drive area started center fulfillment operations turnaround including experience all September leadership [Airmark] have retail the HSN. Cardinal and as as and supply experience initial brands key Health, Scott Conagra as Fortune for In is for deep this Group Business chain globally, improving and plan supply late focused I'd and brings multiple estate to Services corporate lead QVC, a role execution to Chief services US to Global performance. the (ph) our chain he and leader Officer. our having is supply are Retail and and for key Barnhart to Scott We responsible talent COO attracting our strategic business. new leading Qurate transformation real global of to service Brands. chains workplace dedicated Qurate

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addition to has look join now TV. on forward HSN QVC leadership. more Soumya’s YouTube under progress In We reporting

holiday this the the in during quarter, Xth qvc.com partner Rockettes the exposure as QVC As the who as Radio feature XX Spectacular attend million November perform City year's will on Rockettes products peer Rockettes fans open the curated Hall. from shopping Christmas social we a Radio millions and people will which X lives media. will of have a the starring the Spectacular, holiday of City fourth QVC nonstop annual presenting City well the Radio will selected Music will worldwide by live Xth. collection this at through look The to to be terrific QVC’s weekend approximately November Rockettes, of season. Christmas party

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said, on outlook the macroeconomic unveiled we XXXX of primarily challenges. we That revenue and Athens that with CAGRs and XXXX, also OIBDA double-digit lower We June, and intensely for by are execution recognize than cash sentiment year, our free flow. last reiterate consumer in is stable driven focused

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declined and reflecting and compression, inefficiencies capacity fulfillment the sale reflect Roanoke, primarily largely Looking of were at resulted freight the headwinds points to deleverage. and due reduction inflation, fulfillment and inventory to XXX in primarily our These main Fulfillment centers at centers fuel due operational from margin Virginia obsolescence margins from revenue. expenses, demurrage wages, components expenses. expenses and primarily sales and leaseback year. our detention basis savings the gross higher well lower margin that margins costs, at product and offset rents Product unfavorable higher by shipping fulfillment decommissioning and Pennsylvania actions, handling as as HSN, decreased up and Lancaster, especially last rates,

the Operating the improvement XXX reflects video due wages cost of macro year expand primarily shift Inventory were the XXX wage deleverage expenses favorable expenses QX X% customer debt buying as less increased behavior. mix due QX air Nexstar. marketing these we primarily commissions debt of started reduced unfavorable due Marketing and efficiency offset due was obsolescence year by due and the efforts lapped rigorous a inventory customer a distribution primarily into QX. service. IT, Ion, on current rent We year-over-year, net reserve though inventory increased These commerce post than inflation points. ventures to also corporate QX Bad not increased basis higher provisions basis apparel. Fixed Commissions XXXX pressure Increased price lower Tonga, and XXXX. the reflecting current were management environment. and investments points, in higher spend. primarily did increases sales in to was provisions, unfavorable Scripts increase more in to which and disciplined SG&A repeat was and of in to pressure sales platforms, X% bad our increases in revenue sale returns from were leaseback. investments We we QxH pressures percent and partially of and expanded to commerce reflects over reflected cost to was of rates. approximately and deleverage an service

my and X% shipping Revenue QVC declined on International, unit primarily will constant revenue. Moving volume on results. to comments and on lower handling focus reduced currency

of QVC of cautious for XX% Germany UK revenue. home, program and were QVC OIBDA particularly margin these Our in historic UK which death in offset David and the International factors. was business, following Adjusted the labor and actions Inventory slow-moving translation have was for points. our unit that consumer and and inventory increased the and currency cost, cost in margin gross in a impact the as digits, COVID double largest changes euro cost lower volume. beauty and commerce is and rates limited The wages as lower yen, modest Japan dollars. growing reflecting adjusted as to and and lower X% the interruption rates dollar to sales costs, fixed related basis challenges, markets. with support and the ongoing following costs basis goods. impact by business. the obsolescence factors declined impacted shipping due deleverage accessories, caused XXX revenue jewelry. They to by however, E- points, was decreased mostly experienced higher due low gains US from apparel and driven including margin reduction against labor decreased to and international into investment as to freight European software IT our primary declined, favorable, to significantly partially minimum purchases less the pressure XXX war Queen. initial be pound. US direct primarily by the handling inventory mid-single fixed declines due and Japan margin The These European OIBDA costs. as increased margins declined overall reflected margin compression unfavorable staffing costs well Product reserves in the and factors, in marketing declined reduced and Gross rose well by of expected mentioned, project Ukraine Fulfillment in QX. line higher in marketing the strengthened of revenue expenses. liquidated and grew Fixed higher costs of SG&A energy, on reflect specific sentiment benefits, experienced inflation, our higher due markets the higher digits.

and markets two Germany. purchases direct are Our largest negotiates direct purchases dollar and limited Germany Japan US has its Japan in euros.

Our UK operations purchase only direct US dollars. about one-third goods of in its

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areas Now technical two I'll from QX. discuss

price conditions, a weekend the accelerated significant stock increase First, in our used, we challenging and discount business annual decline in performance, our to due impairment assessment. rates economic

of result, are included and These adjusted and we related $X.X QxH to taken non-cash excluded operating in charges $XXX at billion names impairment businesses charges of the are from the a As at respective and have Zulily Zulily. goodwill but a trade HSN income, million OIBDA.

relates Second, our that user specifically remediation by in later financial is is to the see The material matter did term. of you developed identified It in processes the one to The a today XX-Q controls near in internal we change misstatements, efficiencies at Zulily. bring used to weakness QxH. expected reporting. technology access because and QxH affects in identified information result controls over controlled that the around we affected closure management will this a filed any systems have not weaknesses identified also plan

of balance let's the renewal capital and contracts. we sheet XX, our TV Total nine $XX months ended So September expenditures million flow. to were cash turn spent the million and distribution $XXX for XXXX on

related by increased the and chain year These headwinds this to partially capital by also for from cash increased the primarily months Our inefficiencies. of liability total in assets. at outflows million remain favorability offset end payments for was TV XXXX attributable cash taxes uses and with payables from year-over-year last timing were free supply to to cash XXXX, proceeds lower $XXX the cash were was use management source ended September insurance related of of to Despite million rights versus year working purchase the to capital impacted of inventory driven year. related a XX, was fixed The by operating year a year nine in capital. flow this unfavorable working some $XXX which of of over lower inventory due Working results paid in XXXX. headwinds operations, more decline distribution transit driven

free a million the months and million cash to fire, in free proceeds which Rocky free related cash recognized fire. cash in loss the operating insurance includes flow flows Mount flow Our cash inventory first from our flow results our in Mount flows. our the Included $XXX investing the $XXX year-to-date, in cash of is $XXX recoveries was insurance XXXX of received in nine remainder positive basis, month last and was to On related million. a to Rocky XX the given impact

completed income QX, XXXX. from before excluded will these was in were last largely lease transactions and sale tax facility. and million liabilities the credit adjusted OIBDA. additional from the for pay on operating $XXX be we on cash approximately we in communicated in gain sale assets five million July, a we property As call the sale included proceeds, to in received sites Proceeds which used The payable leaseback our year-end recorded $XXX we revolving down

lease $XX rates sale the XXXX, payments For with impact fulfillment these the terms the million annual OIBDA. rent QxH agreed arrangement transactions entered leaseback for centers. for we at attractive we that In early of will and properties Germany and long-term UK our adjusted of

We in close of UK anticipate GBPXX for reduce early proceeds use gross these to We approximately consideration and German quarter million million to our receiving first of and center debt. facility expect fulfillment the to the for transactions expect EURXX XXXX.

available on the we our XX on at QVC Looking September had million drawn $XXX revolver billion capacity. debt $X.X of profile, with

defined QVC as revolving by X times. ratio, the leverage credit was Our facility

cushion ample to with the of in credit to OIBDA interest. And for leverage that, relative call Zulily. Thank your the covenant have maximum the adjusted net threshold again will covenant Greg. and I X.X turn times Cornerstone includes leverage We This over facility. QVC, you our net

you. Thank

the improve that where performance But as obviously focused is As year, there environment this at the David weak to retailers, areas we intensity [Q] entire Q we operating among is (ph) promotional highly environment and do are acknowledge clearly management business a need macro and and the stabilizing impacting businesses. well several the retail broader also team of a very as on market. the many

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and on heard, are rates. we will million series European the As of that transactions additional estimated proceeds gross signed of current provide $XXX approximately exchange a sale-leaseback capital, you have

on close to Thursday, first that Day expect to the We Investor of mentioned. XX, seeing debt. and to use on to details. 'XX IR visit early further again, November our in at do look registration the David quarter Please intend website as forward proceeds calendar our you annual for reduce We those

will be annual our session. Q&A We hosting

up open with in for to them that, like questions. submit (ph). advance, [investor@libertymedia.com] like we'd operator, you'd can If to questions e-mail to And you

you. Thank

session. Wintermantel Evercore. We a conduct Our proceed. Please will now comes [Operator Oliver with Instructions] from first question-and-answer question

should a into fourth positive the question important that capital. said holiday a Yeah. how maybe could it the You a little bit fourth Good that us capital about quarter? more working we I that. very should inventory so regarding get the on give quarter? from you about think in But be working should think had you morning. How net details better, quarter,

Great. Thank that you question. for

other to you down and give inventory discussed. last I we on between in and if And to the a we turning inventory As QX. at discussed and I one better up levels don't our our exchange But usage payables the years, an had what guidance inventory catch two we question. as QX, exchange payables. higher look from look should want of the levels reduction disproportionately, was

short to term -- new And on see, in your are plan page to the where presentation customers below the do you. here? levels. existing like customer reactivated I customer Yes. on shows it looks your Thank stabilize how wanted count. bleed and eight just in you It pre-pandemic now

Yes. This declines. customer the Thank We David. count did for you see question. is

doing. of there what little what I'll I talk number them seeing through drivers. about click relatively a and a we're think and then we're are quickly bit

it impacted of Rocky value, product, I last host I better fire normal weak think like over accessed new particularly a And also some model. were say, especially in Mount. we've the we been time, we've would say, for a would think quite customers beauty way by attracting I and business been at there particular categories had our few Obviously, quarters. are have operating on the right the has we that I part not is would in if merchandise. need right that environment, a right right in impact

we that's to difficult point attracted cohort, our pandemic, the out customer crop would of because ability then the which did out, of numbers. way around coming you during large new just our their centers at if count finally, around new really are large working of customers look center and Some electronics that by attract our And were all a very we really still pandemic. home customer which product, low-quality I of see consumer customers, out

know comments, I availability, TS the In terms the was We Value, my new attraction execution business and execute model. Today's it customers when our the stickiness to the it, shortening and back core address best and it really, customers. first of of about doing which talked increases of that in we're on our goes Special we Today's of the Special TS what to action our

reference, a taken, the of decline. of result improvements as in For we rate did some actions of these we've that see

high the we were in low half. teens for teens compared XXs and to the So for down TS our TSVs first low quarter and

see to better. we think count are I flatter perform to we our So continue that that starting there. as will improve customer And

We guests back studios. bringing also are in

guests, feedback. pandemic we to gotten the remote went During we've and consistent

So our that's presentation made less interesting.

help. talent some side, the we merchandise on so, brought on about we side. we merchandise going But think to the of that's in the And talked

had what innovation our talk cycles also here we get brought summit to across them top to vendor and do headquarters different vendors we where and all types our needed a to global of our more We refresh to about at in assortment. of

first to think to in path in year. in we did was of rate the getting customers. new signs XX% half decline down to count It exciting XX% would QX so XX% in we're of on Again, of more moderate point early customer bring down assortments and I some It our was this XX% QX. total the or down And the to QX.

customer of also quarters. making decline. rate compared XX% were the in we QX progress QX with would decline new stemming moderated of We that as that So the that first see mid-teens do in we're down say two in in declines well. each I count

We again. And against file we can position have back where a progress. moving that to been we've moving recognize seen by work customer that decisively. grow moderation we count the count have customer We've healthy signs some growing early it start it's of to to So encouraged we're hopefully a towards to of a business. a in declining get in

good you Thank luck. and much very

you. Thank

Jason Our proceed. of Bank next America. question Please with comes Haas from

my for and questions. morning thanks Good taking Hi.

to a couple ones had of I So ask on Cornerstone. Zulily and on

thought we as just call, mentioned there. well stabilization we that I Zulily, last buying that the better think, talked on had in have seen about earnings maybe in it was would I out results about the better So environment given

top see seeing you in you So are that some better not If to inventory availability. now, would -- line benefit if from expect I'm that curious stabilization? we should when

Yes. On it's a Zulily, question. great

definitely inventory seeing much We availability. better are

We last have brands. we signed had all national Tier on XX months. a over haven't X couple of be brands hundred December. XX, in national new including that launching are to will Those and brands November XX of the various XX brands Those types, XX

So we we we're And of a haven't type in seeing will increase seen availability some think this conversion. time. site

to question, an for it think need outlet. lag will help that also they a revenue. just the realize promoting excess to have Jason. start these stabilize The It's on of us We inventory bit brands to your and cycle. to taken get them, a There's Zulily site time as

We have to negotiate timing.

We get up have we set inventory promotion site. to shipped, have establish the and to run to and the the on then

it's cycle. so And a four three or

And availability site. level we'll month the you'll of difference the and to this in on the so of -- just start brands month see start just next

through there channels. have and Tier is pretty is, seen of into leadership substantially. The I including see improvements the the it's not level and you'll point new getting a now. Facebook the diversifying we've assortment other Last seen us, in season, of business. to strong other out point away we've eight from just a about also marketing which months has number thing that depth about Zulily thing including the holiday already very which brands, expanding also And the think we I been unit about the And the as economics shipping X real of you offer, changes, it's go available would out, at only the I'll

-- hasn't I haven't quickly, I now. as I think come as all would in we have numbers quite So think, a hoped, through good but the would position agree we're with you, it

a about question, I think, had You Cornerstone? also

Yes. of Cornerstone, seem it business, the much and It revenue been they Thanks. I'm lot margin The weren't curious doesn't like factor macro called bit the overall you for weaker. looks were I'm really Cornerstone. gross On those growth curious, a a little has strong. was for external why -- And out a of headwinds. like

why as the there. charges out of called freight some challenges rest macro you think But haven't business? just curious, Cornerstone those as the I much affected

a to great things. it's few Yes, I'd question. a point

think, essentially I proprietary private or all label. Cornerstone is product first,

in that the and going And retail, on from that's so, the first. because discounting it's pressure insulated other some of bit things a of are that

seen category by inflation some there's the when to of more catalogs, actually even environment. seeing the we've think marketing of I I environment. Second, you're is focused direct in think in the category a skill by valuable set, customer, paper, type catalog some marketing being customer that current benefit digital

investments look I also a like now looks to a indoor used of what so, around outdoor. and say And home, like both bit increases we've think a seen strength. I'd weakness, continued in

we continuing their than a really in more to longer to outside. to And some sense I home, think upgrade moderate of upgrade coming dynamic years. grills the to their we're out outdoor people is pandemic. patios that We've than for to things strong and seen people to whether outside thought doing that's leg seen was wallet we've also there that, or home. furniture seen see prior much or might seen their continue consistently shifting what But we've

trends of stickier in. And baked a common look the wisdom those lot I had think so, than

a the to especially going to profitability. continue And so we're continues The next have opening continued good us things Cornerstone stores designs. at talked pace well, continued think Cornerstone grow make have all going of valid look course, into that stores perform year. for we've to growth of about, to And strong this continued deliberate those year, revenue extremely brands, next profile to and of then

additional areas story. open should think stores underpenetrated positive an Cornerstone the we to so continuing for be at And even

Thank all That sense. great. That’s makes you.

comes William Reuter Our Please from next with Bank question of America. proceed.

of from seems shipments the that challenge quarter you Difficulty] delay quarter. when it indicating their discussed the difficult that the -- you comparisons to fourth the more [Technical of going the to timing 'XX, are in of quarter remarks become fourth and kind prepared like third were

So the were seen that? from we more some of trends third could away these message in even get quarter Was supposed the take to we've that that challenging.

Yes.

that was in chain, we advanced everything year of last given lot didn't happening took had ship. exceptional event supply that where a orders So we an

is the compare because recognized. We So, a hurt of QX, bit until they in fair that QX it's don't revenue helped just I in think recognize a little that in it's when shipped. it -- little bit

the we numbers, So in swing the hit highlight improvements levels into impact. of I coming drivers And we're was It's this in saw moderation to just execution a in in there I that. that's not the to but underlying an massive of it we wanted the I that say, about continue to on going some talked think numbers. decline of would quarter. those.

anticipate we make to progress. able continuing so to be And

be the largely you clearance the sounds it progress or these quarter? should then to of this. the into the with done still fourth expect on It end made efforts like And pleased like you the are quarter seems a Or year? amount -- by on of first Do substantial of helpful. of this you'll next continue inventory. you've second going fourth That's is have quarter pretty

the fourth through that feel course. as little a into go good. feel hangover to depend in be QX, we there quarter. could will good quarter of position It's some the possible performs, the be but It pretty We how we going coming Yes. fourth on bit we're though about very

about market's up As other the about suggests across we inventory out industry the if you NPD excess X%. universe, XX% retail. look We're look it at down across data, in some data,

a we're we overall the the improve retail than we lot going So to environment, fourth on think through as more continue we'll into and number clean this quarter. that go

to So be happy go we be getting into QX, we're through into with inventory level going there largely may as think hangover QX. getting clean and we on more we'll some but a

Okay. lastly just And me. for then

have to coming is where difficult, streaming for point? are Do business. your go sales that I know over for have lot your this and streaming you be you some at what percentage will efforts year? a sense You're of where from next of may you sense it clearly a but it maybe think maybe making accelerate the

Yes.

seen some haven't up context. about to give streaming growing has looking primary say it's it We're wouldn't how but today, think and at say I driver to but primary in additional results been out now. terms a visibility I how customers. a yet. we you So it's driver of very would not until our broken into that What quickly. we've of It's material,

customer streaming linear add or customer. is think a valuable valuable we As than TV the more potentially

to as happy even gotten customers portfolio. medium the term, move we've as linear our part be we've to will been as important we've service. long grown the know eventually, streaming, I think people an big to of from But it So to continue increasingly and

in the broader I in reach. market U.S., think reach the already linear overall streaming has surpassed TV

lag there I that of passed think this think a will we imagine be I replicate time, for us. year, we that But same some will and dynamics. threshold over would those I

So it's emphasis. definitely an

pass I’ll it you. Great. on. Thank

from Our next with Casella proceed. Carter comes question Please JPMorgan.

Hi. exchangeable if I'm down Thanks balance little some. just for the sure not I debentures in quarter? purchased or if that taking value the senior the any the bit. back of question. noticed I'm that's you a came did buy you carrying wondering,

did $XX purchased Carla, actually we -- of $XX principal cost $XX Ben We a debentures Hey, cash some million amount or Oren. current -- million. purchased adjusted million and its it's for

-- are kind remaining Great. the owned material beyond two what ones have you your Okay. the of do leasebacks, And in properties? Europe, then additional sale this,

properties. have material do additional several We

to think I continue opportunistic we be doing look but additional will the portfolio. on in interest at sale will opportunities and dependent market leasebacks conditions, across the

quarter. but got see customer pre-pandemic seeing that X% shoots you when the the looking then expect Or I in these since are do are customer down year-over-year, it's And first any know QVC, there yet? XX% stabilization you Great. Okay. at you green count? Are from to -- before, potential at count, XX% any and you -- questions

Yes.

the appreciate question. Say of I So a things. couple

held is, look our best within our at would customers of business sort returning occasional The file. customer have and new say customers. first our total than broken up the out by I best we better customers

certainly, And the strong customers have our been in behavior best And of that. so, extremely growing we're quarter. pleased the spending with

in first source of in being the new a the potential XX% Our been half, have weakness being down down range. often customers

been so a real And drag. that's

valuable best customers. model in customers are Now, our new not nearly as as

they're cut hammer decline and attractive file, of for the rate that we've we're new to But for at customer for our health more away much new very by the already, account half than they continue long-term for customers And of proposition So going less. to important. customers. value more making

I we overall disposal getting we the out customer stabilized seen the in on think We pointed moderation we driving that back of continue working we're growing have a to have know file. like a at we On the decline. we file, moderation, think why tools our rate to and before, customer know

on or one just then the claim. business your And submitted you filed mentioned that interruption, Great. you Okay.

received? is could Just that less damage claim than the be greater? you it magnitude of trying to already understand, that Or insurance the proceeds

David, take do you me that? to want

Sure.

to filed would negotiations There's be property or this don't it's the that I that say, ready Yes, on, comment point amounts claim. we're bigger the going we at to whether I going smaller we've gotten than know back.

business those material Okay. But know amounts like I been? it property have Or well. is is don't it -- just that

Yes.

We to expect it material. be

And capacity you've plenty got just a Okay. clarification, of then revolver now.

you still. You've your you use near-term maturities to out it got revolver? Can near-term use debt? some Would take

take out to revolver the use can near-term We debt.

current and I we're interest maturities. the on with low being term expense, to our relative some nearer coupons prudent interest really to rates of respect think

it as maturity we just proactive use just to would opposed if for example, March likely maturity, were to for more the do prior So revolver, XXXX the repurchase. we to

you. Thank Okay. Great, understood.

proceed. Holden Please Our next question comes Barclays. from with Hale

in had inventory all that a year. question what TSV for what of a looks Thanks on still I morning. guess, flow shifting script. detail the you TS good I'm you than through lot last quick surprised Hi, the given just a you're like statistics I them, morning. this gave the had that better and

would any help. there color So

Yes.

the So we for would fully is supply chain is better chain The in was have it say supply yet. I sure. last healed not year, than that. seen moderation some

there position up own terms bumpiness are than their is -- still in in we're availability. supply arrivals vendors better still in and some of our others And with -- of we So catch still their chain.

we inventory, Rocky as of what's also we calendar. the in salable and discover some not some changes there's promotional The the other gotten what's and it, lumps what need in do as is course, that of piece to Mount we've there's through and inventory at

lot we first those feel in And things, line was the being than much calendar of normal little a continued the it to third operate in in make promotional think in think, it I about but our all half. So I calendar have QX. the quarter unstable we'd more to like, able a with was pretty more good better than

sort be could then seeing And that margin could freight. would there or guys that. on think just what next meaningful a provided, on on that a would that in sort look as And margin merchandise be go-forward costs, of decline a to any you color what bridge the like tell benefit ocean year you follow-up EBITDA I given could bridge shipping In the But the margins. saw helpful. for I basis us we're of

the shipping in rates. We is that which declines market a rates offer you I lot from of that do start And business. seen see in And oceangoing the what supply our we similar spend up Thank reviewing portion to of broader a freight, in to for question. broadly stabilization large would chains our the time marketplace. shipping have we is

some there for out, I two -- substantial lags just point there reasons. is would are

it P&L and lower those it contracted it from on gets the flows on takes rates just the water, that it before to time numbers. First, through up before show the here you gets before time the

are contract. some of a shipping of the also on at but rates lot is spot Second, prices, it

take off rates rates areas have you are the the in the of in those before some roll that lower market. market so to And advantage of can of contracted you spot in

give And going into but a relief so, will like good it guide it P&L does be look come it over time. and the will forward, us

weekend. Great. I checking to Thanks forward the out sale look you. this

Steve question Litt Capital. XXXX from last comes Our Please with proceed.

Thanks. Hi. Yes.

just part you've in is costs much sales the Can two EBITDA to there I Can It's on good. See, double which sounds kind that the a that seems Just all was up the you I surface digit, some question. were then guess, the the given initiatives going costs but so much. there. -- you of And announced to was little I up temporary? is base down. you've surprised and imagine guidance keep a temporary how given related decline highlight,

be targets out? may a and years So so have can Thanks. understanding more means the explicit be what what double-digit you we that on may few what of actual an base be your

Yes. Great.

me first. Let the -- part hit second I

intentionally read established I XXXX, the think base think year we getting a as of and going XXXX. takes and have this tabled the puts cleaner we'll we base We it through or XXXX given some year. into

you it that's a that, going to like land So XXXX we'll more Project as bit like But Athens prepared looks detail think able little talk announce think we give we we're when new why forward. I but we're don't be stated about to able targets to I today. what

In is take to what a separate this the terms different. I in pressures would one a them and of of it's because important. have important them bit think the I it's I'll four against because little with bucket pressures, to cost do we bit buckets, little cost really time

across other efforts deleverage think about then impacts, would inventory liquidation fulfillment, inflationary I sales our the So and P&L.

two supply lot. cost on driver the So a by and to it. largest really fulfillment, This of fulfillment chain components has is

and Rocky We people more to was is hire more we're largest processing Mount. just Mount because had our most of one efficient Rocky first The facilities. manual.

and also as that's have part country. because good more have we expensive coverage We transportation don't that of in the routing

had was Rocky now Mount constraints. we part other of The capacity

out to so And all buildings, So we've and we go of I progress. that out more point out had the trailers, substantial that costs those made more inventory be would lease leave should we were had of also and to P&L. coming

across X,XXX gotten of So that at we XXX down end QX, we've had I think, QX, trailers And the the the network. I further. end since trailers. We're down talked of to about in trailers even the coming various yards into, QX

things work out. So, quarter over time like should demurrage were their penalizing and in way detention which this

category, on terms also where a marketing that's We've into which bit, marketing the that you impacts a see is not business cost. marketing. although of other material hope has would of tough, little sort our digital down. invested been inflationary I environment driver, comes In The second although streaming

continue excess we've hard On rid of early. started of to that that period get the margins. some a end to on I sales impact gross impact deleverage progress. moving constant see it's been -- currency. but down, When on finally, through We've just had to made then And that We seeing promotions. start XXXX. say, sort XXXX, the at that we and think the should we'll obviously, material That's remove see substantial sales the in P&L. line, We down moderate SG&A when to would decline. you're just same were at rate we X% you're of margin

is environment, of because and price. move also, weren't We we're these more able overall we're last What the year the if all because areas, you it of I to of That's taking being promotional can't it inventory. attacking by counteract of even unlike both much would to period. get consumer because very say environment in

headcount. very headcount. of world. very So Zulily then business, course, we're exiting in terms has of also And around across managing already action we're the intentionally the multiple strong leases rightsizing taken

at had headcount look with the notably with you If down despite is the still deal increases the we've across to business year-over-year. overall -- business, deal headcount to Rocky that Mount,

So a grasp really And the office, year we we've up costs of flowing accelerate as as go are intend on the then kept through and transformation cost next these tight effort. how think we sorts only business. into to we I stand

very Great. much. Thank you

for see you day. audience, this your And think York. to weeks you we And the in our as interest I in we it couple a for listening are thank hope morning. operator, in that's of to done many for New said, we Qurate. So And of

you. Thank

teleconference. today's concludes This

participation. for your and thank lines this your time disconnect may You you at