Stitch Fix (SFIX) 4 Mar 242024 Q2 Earnings call transcript

Good afternoon, and thank you for standing by. Welcome to the Second Quarter Fiscal Year 2024 Stitch Fix Earnings Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Hayden Blair. begin. may you Sir,

Officer; thank Second joining Call. Quarter call Chief on and Officer. Chief the With today Stitch the Executive Baer, Matt Fix Fiscal are David you afternoon, Aufderhaar, us Financial for for me and Good XXXX Earnings

the complete A on link also webcast call results have to press posted results be a our can our quarter the second We section site. found financial of XXXX in release quarterly investors.stitchfix.com. on website, conference

our that could we results this by factors for SEC everyone our be from We making risks to previously our the annual issued as on an for on of Risk would second remind discussion statements. Factors particular, should could a to sections like as Form contemplated statements XXXX, will call, as we be week. quarterly XX-K quarter cause review considered fiscal expect filings and indication filed In Form well later forward-looking our to with Reported those press filed SEC be which results forward-looking XX-Q and today that the with on the our uncertainties. differ of the involve this for the not release Please of which report differ. future of Actual results materially and filed report XXXX performance.

information obligation based law. Also as date. by on any note statements that as disclaim available any update to to us on forward-looking forward-looking call are this today's We statements, required the of except

metrics the non-GAAP began not U.K. In our XXXX, discussed on Investor for on quarter represent report non-GAAP continuing to During provided call comparable all discontinued Reconciliations operations. measures to release this measures. the GAAP business our our substitute to first financial our in operation. fiscal directly the certain Accordingly, These a financial a today's be results. intended measures of as we call, website. will most are Relations are discuss we press

our me now being CEO, on a of Investor over Relations And in our call replay be webcast the website, entirety call on this let its call turn this Baer. Finally, shortly. is available website Matt to will and the

good and Hayden, afternoon. Thanks,

the As we committed business over and EBITDA. second to in few past drive the said time. we line to have term near quarter profitability managing discipline adjusted financial We with growth revenue for both are in with results and outlook our delivered our on quarters,

While is there for business. accessories people for these to additional an our to relevant way is company and our improve years XX today enjoyable fell compelling outlook, Fix to when done easier Stitch ago. clothing founded the shop was trajectory original be as work more to vision create of within The the and as and

Our combined to with leadership continues way in an to technology, exciting stylists passionate and and innovative shop. create our personalization skilled

Fix our fully vision realizing grounded Our transformation evolving are the efforts experience. in Stitch and

place to stated we includes ensuring we the evolve we and our to to strategy quarter's of reimagining we a on lifetime structure call, foundation upon future future. enable to order This are retail needs customers; areas success; build value First, their client across the on disciplines. Second, these and As in right our developing long-term we attract we clients retain we and are in in working are organizational enterprise are experience serve strengthen the simultaneously, the Third across last ensure our as high all focused business practices best have areas: and X best priority embedding the

private actions merchandising, a brands margins us is realize our our and national and to for sustainable, will additional In business we the strengthen to clients. best operations. These opportunity offering execution across these marketing. profitable to efficiencies year-over-year will company the We in contributed priorities on of quarter, and return second serve foundation the our believe merchandising made one the progress ways to In to we the expanding of growth. several gross the of enable our initiatives of provide robust

So of to we enhance both. continue our assortment

media the both national In ongoing efficiency to profitably we brands plan perform private to by than and to better and deepen mix that brands. resonate to Extensive strengthen strengthen brand brand and ones. And making more program to national same to feedback our At our affinity. the offer and our continue that with clients. time, channel with to evolve private we we relationships continue new us our marketing, enhancements brands introducing existing strategies client brands most optimize enables portfolio further and

for they in value order cohorts the our We we clients reach know that quarter. offering resonates, higher as purchase with frequency we client second newer and whom our when have a saw

have and traffic, tactics new current we not conversion, increase mid-funnel an improve invested in that which While to continue have expectations. opportunity upper levels our client have we help our of met to

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reimagining me we and will which higher let right us to believe client gears describe Now help shift drive attract the and clients the how we are lifetime value. engage experience,

focus experience. forward, initial rethink reimagination going Fix to client Stitch experience of A We on are taking the and the engage to our long-term about areas how few to a client are our holistic reimagine how we growth. a clients approach guide prioritizing with thinking

both want visual way will to a experience at more fit deliver that ongoing to more that begin coming with months, fun First, that creates dynamic beginning experience interactive and the introduce sign-up for relationship a and and their Fix. engages Stitch style. and a better them will clients their be create clients we confidence we to new onboarding for plan on we In

ways style and new reasons to give they as personal This our help inspire plan developing their to that engagement clients return visualize style platform. their we Second, our social service. empower to includes them and deepen new discover by through clients creating connections to

to offer connections to personalized clients new for interact Third, points more develop stylists. and we with touch plan

get Our our know connect to relationships stylists these proposition believe stylists, value part their play deeper stylists By want with to we critical behind will have meaningful. more they the and our ways a clients enabling become to told in direct and more fixes. us

to client updates in ambitious will of While months, time significantly the initiatives some work look evolve our I roll it as to coming progresses. begin accomplish Fix plans out these to will forward the take Stitch to our sharing experience.

and to value We only a proposition Finally, Stitch we Fix and an experience stylists about curated tied foundation have of experience the will technology that powerful merchandise to these advance strengthening lead combines strong network outlook. and that, QX to carefully results reimagining that and over the the to our data talk With growth turn client create sustainable, to David that financial our over science priorities deliver. I'll call believe profitable strategic can assortment time. a

detailed driving The we including In focus to in actions while business, spend mix, our since on by the annualized reviews QX identify margins and have in funding throughout in we future measures expand gross back, the we efficiency success. undertaken structure $XXX right QX, fiscal and took step actions a we've P&L implementing savings to XXXX, Thanks, continued of also allowed negotiating place and carrier structure optimizing position cost and reduced SG&A Taking over us Matt. savings resulting opportunities ensuring organizational total QX, cost have of million. long-term that our leverage enable our business initiatives our for growth. us to to our

and range. its in and We enviable for to cost end work cost both unit are continues and drive of margin The our order fixed work economics is XX% done profit XX% high variable believe structures. contribution historical variable our to operate And have leverage to leverage is nearing teams not our produce efficiently us here more improve and to our more gross and done. additional there opportunities the

million, X% QX results. and $XXX, me client XX% last up approximately compared per at Net net year-over-year Now to QX but quarter compared quarter-over-quarter. ended X.X down Revenue the $XXX the million down let to ended the quarter X% active get Active at year-over-year, quarter. quarter revenue X% last clients X% clients. down down was into

Matt for value up both As we to with continue frequency order client clients. fixed year-over-year strength said, in newer our those see and

per revenue for the of points points was down driven year-over-year, growth. quarter XX.X%, XX strong margin inventory XXX improvement and quarter third by consecutive Gross had basis XX-day margins, sequential transportation product client our Additionally, leverage. in its basis and quarter-over-quarter active and up health

quarter-over-quarter XX% as fiscal at due decreased inventory our Net the of the of front-loading beginning inventory year. expected this to

management inventory expect successful with on to adjusted levels QX due quarter-over-quarter assortment the fiscal lower XXXX and revenue ongoing $X.X private the to balances for reflected rationalize We inventory position quarter typical we align remainder our and in holidays. focus at EBITDA around the our XX% was seasonal X% discipline. our came lower as these of our cost Advertising to demand, brands. million continue spending our in of down

As expected, flow the $XX.X investments free be and debt. million cash to was flow due in equivalents for related to purchases timing the receipts full free in expect in the and no of to inventory quarter We cash quarter year cash, bank and cash our the million still QX. negative positive with ended $XXX

Turning to our outlook.

the We our outlook in our we full are current updating to trends reflect fiscal seeing year business. are

QX, be million and $XXX total between million. to $XXX we expect net revenue For

between breakeven. negative We and EBITDA be will expect QX adjusted $X million

XX% between year, XX% gross our inventory margin the a and and the In efforts in efficiencies result the we costs. back position ongoing as improvement of to increase to half of to in our drive expect transportation

X% revenue. We between advertising expect to QX and of be X%

our we we or are on the past, the about marketing based As seeing. said are adjust in will we've when may continue be ROI investing approach down to methodical in we up and

the net our the active are clients. year, revenue we we current are expectations to trends For full reflect in seeing lowering for

We expect and revenue be $X.XX to billion billion. $X.XX between now

EBITDA be and adjusted expect million $XX million. We to $XX between

our work about to margin year, approximately today, business gross to fiscal reimagine For full of Overall, ability we expect we X% doing our revenue. XX% am are experience. I be client in the excited strengthen advertising maintain profitability the and the and approximately be the foundation and confident I'm to to of

We focused profitability, and by remaining acquisition value customers. will along and leverage with high on of lifetime do engagement so

turn me the let Now Matt. to call back

David. Thanks,

As right place generate time. sustainable, to you in we the strategic that heard growth have profitable earlier, priorities me say believe over I

We are our foundation strengthening the business. of

customers. value strategy client clients needs long-term lifetime future. retain areas And best in serve their the to build we and reimagining are the We high upon to a we evolve and as ensure developing these are attract our experience

you it over turn take forward I'll operator And your work as look we sharing now our all to begin year, to progresses. to some While to experience. will will accomplish plans ambitious it take client reimagine to life our these Fix later this the initiatives Stitch come I of to for can Thank updates today's know time the call. we questions. joining so

[Operator Instructions].

of question line first Truist Securities. comes Our from the Squali Youssef with

Active year-on-year. I about count a down X-part guess client question. was XX%

I baked at think in that's reverse client XXXX deterioration maybe What's QX kind term? into flesh key least just from And the should sight near medium or count that into the your you growth. line out initiatives have that of can to quarter's of stabilize the prior you help guide? and

Youssef, we're he terms wants to the the focused what's answer let those to I'll and on into additional add it's terms additional initiatives out question. I initiatives guide. share David round in that in the of that baked Matt. Any of then appreciate on. I'll color first color

Yes.

of you a couple questions I client think asked around active count. Youssef,

call-outs specifically, a couple you just and of think I QX called there. out First,

the And below play second, and reactivations in of adds First, and there. we were conversion there. QX is clients. an we are what's Matt as softest to opportunity typically have that active expectation, comments, continue was really And those gross had mentioned our down quarter-over-quarter. both And for factors our earlier at quarter client

And QX so specifically. that's

we active half the back expect in that the half do a think the remarks year, of we're for year. to seeing have and the continue in back third higher is to acquiring sequential in priority order we And guide earlier the decline clients quarter growth to new results don't In we're in clients again And the active continues the clients, said, specifically that returning to still for but higher row. up company. by very mentioned of frequency. We're RPC our be that in we client XX-day a the healthy encouraged the I value focus

about into will on our it leaning reimagining performance we're we're Matt so experience. funnel really while full And the also said of focused and improving client earlier, returning work media excited of to really to to believe taking make Matt? and And our high-value we on prioritizing a sure the approach as we that client that's needed more growth. attract of retain focus healthy, clients. those And why around have continue time really active the this. sustainable methodical We're long-term that

within calls build terms just a being in right on we're that sure spend a sure noted judicious of make targeting make that just to for I've absolutely media in of previous and acquiring order clients right of mix, of that that media that us. Maybe demonstrate optimization our that to likelihood that. It's our in high quick focus Yes. the as clients really we're dollars, are strong ones marketing is LTV that characteristics the spend our all and clients the our

at there front And over that test and making right right storytelling expansion work clients now continue really in options an on unique uniquely be mediums is right We're the we're team feel new out at continue to around the we're a that confident relative that into we They're in and video I the those our focused and sure clients to business terms serve marketing really calls job as increasing segments in got their well we've message doing of manners we'll within perspective of to which disposal. retail testing spend our other might can in doing time, be [indiscernible] the that can of targeting. model terms we the learn. client time, good that of the so there. right of differentiators

So gives lot that a of confidence. me

that's David terms is the just in piece reimagination noted other important The really our what experience. of of

where very them. many have. really, their could about their extremely that's know and clients their X, aspire and we transaction. of we on know preferences, over their first can asset an We the know We really fit retailers know we we more to And their powerful than have style value that orientation, just early relationship differentiator client their asset our course entire nail as about as with a phenomenal day

to experience, going the to reimagine we make we're that do. as everything And we sure within embed that

of noted of that the on prepared the us onboarding one focus remarks, in I is As first experience. for areas

at much We more the that And the confidence end make that they us convert have opportunity an with higher to dynamic. prospective more levels. clients, of inspire more so fun, in day, at

the be even clients through of to increase hopefully we dollars we'll they come optimize conversion funnel, to able As be that be and the increase able then and new to more our able media number through funnel. the

term. can to the improve and our client time, deepen also or existing that us that encouraged from confident now and per increase experience And well, so be metrics. one I'm them. can to preferences, investment, and that their revenue greater understand reimagined we've do how fit remains longer our our clients as able reimagine already helps for long by revenue recent orientation we optimized that our to over That the better of media is in active generate opportunity to that even clients conversion our tenure I'm we'll continue experience so our as the seen optimize relationship style we active and continue and that loyal keep with a value over changes we

Our of BMO Capital next line Markets. Simeon question from the Siegel with comes

to whether you'd confirm sales Did and say private total differential the just And and I percentage margin through an you that take there's for maybe to ideal wanted private of then what's national? versus something. brands ASP like

up been The down. I has still this at ], I [ XX-day think months now is for you said think XX trailing quarters. straight RPAC so point, X

around quarter that any order So of months that some it's magnitude trailing just you just should if safe right? that possible? to So be confidence should up, and strong say give is XX next color

additional to private color let of to terms speak speak about David in I'll questions you'd and the that brand share questions Matt. like RPAC I'll our it's the portfolio. around brand. to private any Simeon,

we've private strong out shake the the lead In based with to interest our their longer our of a gives brands to first, into that, perspective experience greatest and clients. the built we terms them. on approach. with of that they're dollars organically voting national penetration ways in term our client-focused of what's very by And and have that opportunity over between that a ability the and is to brands the to that mix interact an putting going other effectively allow all on that have clients both us with we're

assortment true currently Now and margin us it's for does brand demonstrate contribute private keep that higher our rates. a higher

brands to As I matrix in to national to deepen with our the we rationalization best that spoke previous do continue resonate helping us calls, relationship though, continue around with brand a our clients. is which national our

of we improve that clients, the well I continue helps relationships performance brands but brand develop onboarding to that So national to information the the performance through them, work our able our as national to buys back both from them. the also the continue continued time. we're data -- it's with of with of market, the that as of over feel our on experience some best similarly us our private make only have that improve amount to product The with to will brands through confident not perform

I overall, the the but effectively client us get balance, finding there. help think So about it's letting

X%. And ARPC we're year-over-year, what in XX-day we standpoint, by then, from overall I ARPC out, And in part an you quarter-over-quarter, we're of definitely Simeon, yes, done is encouraged it's slightly. on AOV. ARPC. called the But the think But the a still strength seeing also seeing side, it's big are up that

called quarter continued multiyear sort strength out hit the we're row. quarter overall a we of second in last a as which seeing think AOV, this in I well. fixed But for high

something encouraging definitely that's so sign. And an

that sequentially you we year-over-year? looking should be continue? would And Like to than expect this at

From an perspective? AOV

Sure.

Yes.

that upside there. we're the encouraging certainly, to focus we're But that. to seasonality is continue to there progressing going seeing AOV, and on think is I

of comes the Tom question line Wedbush. next from Nikic Our with

about marketing. ask wanted I to

of X% X% second we've higher will I It's be sales. half seen higher and said think year-over-year. than recently to what you

You you fact guess to know or to side reinvigorate the that your marketing to that sort marketing try more something spend? to you're see in planning also The channels ROI because I feel higher on on to starting you comment of better as you the up a kind a that You've line? made Is plan of to sales the a the gas getting, you're pay half. a bit of spend pedal of is just starting on that, pivot flex that that because kind returns little like want I depending second the and down. efficiency a -- there can percent to you top to was going and the Are of marketing. off that on? of little see step Or on there else you're

Tom, to answer And color, you in. want your additional question. any add to I'll free David, jump if feel

we're In built to still sales There's have year. fiscal the of tracking a that our spend of sales, percentage of marketing quarter-to-quarter. our amount terms we've spend we marketing, where guided year terms as some of the towards also the that in, of the of terms totality and in for in seen as we of a marketing percentage seasonality

into lean investment. on where both ROI strongest marketing us strongest we're helps That have where that and based also then the we

haven't from we we the coming year. So into what anticipated fiscal deviated much

order the return within them. we're look The continue spend. in is that basis. getting daily, the moment we're client make that at to of terms but investments And it increase where also we're pretty it's those targeting terms in we spending on and and to of sure of where where not we're in marketing which spend, the the making We at that from totality a segments each that weekly we're just In dialed quite judicious it's channel. team would our

as give another balance. top to state longer a confidence order to would spend, to marketing in conversion that also life, see without marketing sales reimagined line. comes the We a future us return increasing experience in continue higher And of a a to ARPC, we'll we'll see in which But funnel, time us as over might period through then would continue drive help as the we start signal which of the increased percentage we to anticipate greater even higher it's that get for it. that

could right. And I margin. follow-up All a if Understood. on ask gross

it again, of half the So fiscal sounds year. gross like the second margin for

be first the runway you're help much said the improvement the you take half I Can better And seeing? year. than more think it us just in fiscal should of driving there gross how understand that is you I guess kind gross what's to margins of higher? margin

Tom, thanks question. for Yes. the

with side, the On the made. gross progress we margin are really happy we've definitely

were -- basis and about think you If XXX year-over-year. where -- gross points last was were margins up quarter, we

really quarter, out this What for points up And basis couple quarters. talking of think benefits inventory quarter a retail strengthening establishing and around last a the foundation margins last really planning year-over-year. are seeing I gross there. and quarter the was about cost about This things we've couple practices. XXX our sort merchandising from of and Matt standpoint. there of buying and called best That's There's

continue transportation been mix adjusted negotiated highlighted as big also our we carriers, carrier use part to focus. We've of carriers and of well. our We've has that local some our national a we've

a just guide of shipments. we're shipments inbound focus lot outbound talking around XX% sort with so that, half that's both about And And to and comfortable XX%. back of a why of

that to there's the of our called high business we end that that back about I also XX%. structurally different says think get we've that out range can't nothing historically of

of a and leverage continues big forward. making so And and we this margin bridge to focus live are go we contribution gross sure be driving that ours as

Aneesha Bernstein. with of next line comes question Sherman from Our the

what square of seeing a Can deceleration year you're what seeing saying -- top Really at So and into will about your heavier a way seems as like just and lag do Matt, quarters kind that of for versus kind pretty feels last of kind X, continued bit? top at structurally when little here? business improving start the what we it, seeing no actually because marketing working. matter you're and the the we're accelerating with you line time the a -- and the metrics growth like couple which quality business, a at over Like is next that much you're the if to you've which us it about the where I odds line of of you top versus see XXXX Like look look XXXX. of how X stack talking guided, investment line again? that client or you lag quarters are in the materializing the right,

appreciate the I question.

I'm first state unequivocally, in Fix. future of me Let success the just confident Stitch

continue As several discussed of to confidence further myself success, I previously. to continues And business, many future grow. immerse in it our the my I've in in this is things, rooted which

I their first, The the surveyed the customer retail accessories have clear just shopping. and that for landscape the apparel they optionality satisfied as is it's overall not for current with

experience, customers As for at offer topical And the we solves physical we shopping know customer. it previously, clients their aspire of relationship. overwhelming. remains the their better to Fix Online Stitch cumbersome. course Stitch remains at The just of I many Fix, retail service is now, extremely the frustrations it as those extremely many noted can retailers know on over than Day X, our that

value that and your with able your that it's And orientation serve to nail we're style preference, your fit. know information

informed since also learning and part very that data course as artificial DNA our our that, us, those we're of inception. And to it's that been we further It's algorithms, we're intelligence, by as XX-year history. forward. we've our as invest that demonstrated to something continue they're They've our Fix, of continue to and is that upon going model. experiences, our early go are As transaction. first And going build tool of forward. going fundamental that in elements all to over personalization of many the Stitch science, for systems machine critical

time. of also transformation, the noted, Now and a as in you transformations midst take we're

stronger our scale. organization. more the business, throughout efficiently. practices these for must that's cost that that built a reductions retail experience. One best-in-class and also foundation unlocks rooted one embedding strengthening us we best for operations improving And operations allows And in to from we're operate client to continue that while the our foundation develop One

too, on part healthier this maniacally call, as As that we've focused discussed of strengthening on already we're client foundation, franchise. a

as we're so We client marketing high in that client -- experience we lifetime that to targeting when have one critically, the through continue it's the enduring into a experience and and fit core your experience. us reimagine value or the we're retailer, to a preference, X, terms for over just advantage we a of how manifests client methodical demonstrating us characteristics long bring proven all disruptive that so and a sure clients day proposition that an and with quick. need competitive value, make judicious our to orientation as that And that extremely relationship history continue segments and strength style It's value of evolve. of on we the needs time. that finally Well, the will the with knowing spend, that bring

to make and it engage reimagining clients that provide. the that so continue our perspective service extremely And our with to we as and the so easy I that we're we fun both onboarding mentioned in in remarks, confident remain can currently experience the prepared they current

through and a It's current reimagine interact improve more this work continue to other. these serve including better experience clients, time, continue new And progress. be we as and to over it with how stylists each clients better conversion As the improve you. share experiences, to serve clients, continues, we'll we'll end-to-end in with excited I'll funnel

pre-COVID contributing back to helpful. half sales? go second of is That's half kind follow-up? was your ask where you I which where seasonal expect more little weighted bit were second half a slightly usual Do Can a having of heavier a annual of than you to quick cadence super

mean I it's a good question, Aneesha.

now think growth active client those that to the that of sustainable drive could growth. I business. I point, like But trends think we're some think actions return some we to those as I near-term doing we're I of towards because sort Matt's revenue know we forward, on of go us focused think will right and

Next Canaccord. is from Maria of from come the Ripps question line

advertising us can spend? are how or features that bit revenue give talk of launch First, impact the about? it growing the some from more you And you the experience. around talk onboarding in will are competitors the secondly, maybe be from client you then What can have about U.S., in maybe maybe And course can just lower process. whether new a of just standpoint in new intensifying color whether that seeing mind the you little the competition different you're aggressively from any current that

to happy those both yes, of questions. answer Maria,

into First, around a the question entrants lower-cost newer market.

one one -- that taking resonates client competitors model this our basis. well the is really of so and business. the to don't having are away that's understand Stitch of we're in feel think about like some with we that with Fix terms a encourages the natural serving I on service things considered in deal for which me business We of our

clients Fix, build But terms fits from that's wardrobe. are and ones their apparel a styling, starting coming our that completing Stitch looking the or they are personal that out help perspective, of are their finding job Ones them new understand assortment that in collection that for to the to looking perfectly. looking that ones how the and help closet with to for workwear of completing with a full someone that are their struggling so have

much that of that in we states like retailers are that better mind. other us satisfy amount the We a for might the competitive meet than those we're retailers. to able us of you so feel need many differentiators -- All from have tremendous offer protection that

today. others are, many That the in ways, disrupting market in

achieves new sure experience, the this a point, through make to that onboarding I'll that at experience this share our few different objectives. additional goal In terms color is process what of is on the

that serve very we're from we first clients able the possible first with in well we as which as acquire the all interaction prospective is that The from them. of to to have information order them that need

we're need we'll sure able their understand those orientation. them that that to We meet experience to preference, that to through also confidence delivering value to needs style be that make be able their we'll

is has that we development need nail as which that confidence early to I'll the to be those tenants important be then be It engaging. has third are the We it, closer. we're has principles because something tremendous product. be stages of to are the And we'll get their But have this fit. It the the of to really understand fun. new will underlying and manifest to -- And them and more it that able piece, that is dynamic. share and in

PSC. comes Our with line the Edward Yruma of next question from

Two large kind first, that there's the of for is to of of of kind reactivation XX-month And the people's still a I change. customer at that any efforts me. of preferences are later a customers? time against holding? process fallen base lapsed thought that's Is know kind XX- guess out obviously making there size was you I a IPO, or what the period as around

this that? of area then of some of a of I are with follow-up, of disposing on And kind excess policy one as has you I are where inventory. And refinement guess kind excess know the inventory. you been around clearing how

the Ed, question. I appreciate

we're extremely doing dormancy on new fend current feel to very campaigns. I and focus well And we're job similarly in the mindful As the to we acquire we're in dialed in clients it's as of is retention about how clients. better prior about current amount ensure that something proactively. our off understood the to team reactivation improve focus working order our we terms continue that our that we're and engagement of first engaging it's continuing to to part, drive ability and has do right And on with clients calls, judiciously, the talked this. I a in

And of the reimagination that them we're visit of to our CRM longer And right to message focus to those this come to our basis. over who giving a what start is experiences continue to these reason also make And investments, through invest to experience a sure keep engagement We we'll clients. we're continue capabilities pockets that that can And to us can deliver part what like right have speaks around period within to that right we're can deepen have better success that current important a continue success engagement to to is really the our of deliver of going on more we we the to understand reengagement. or so time that's open. the clients on frequent message. is back continue and the that really feel how are time, them, are, going we with second

a confident feel in that, to an we such share we'll wallet a continue their over the of take investment do of of experience that's time. important as journey greater terms the And that to reengagement be shopping we continue of why And part that's part the there.

with In additional little of color it on bit of allow there. and I'll jump a question the answer terms of the David part second in clearance, to

rates. pricing right that less important to in have We we that of got our keep ensure that to pricing to to as science really And so drive investment want feel cadence can getting we'll percentage that's of then, sure inventory things right the have right be we sure invest total to and that continue ages, make the there. help smarter the as the can I that able clearance. is good that our our about we of needs intelligence sell-through a that about level so that will retail we've go that we're our we make we ensure markdown One less there.

best I feel seen outsized it's focus this initial results And focus on practices on the phenomenal impact of retail have our some and good business just of continued overall also from pricing we've can science. about that the increased performance. in a it our that

growth business of what do about I invest can the And of ability over out that that getting we talking finally, our terms think further a leverage was lot in David to initiatives speaks in to so time.

that, a can is an on sales we describing where add a around clearance benefit as that of just Freestyle, the avenue aspects Matt use a to and promotions for ways Freestyle certainly the from been clearance was of the just on side, and lot in using has us Ed, targeted And that one that other perspective.

And from has so that an inventory standpoint. helped certainly us health

comes the of Kunal line Our from next UBS. from Madhukar question

about be numbers that you lot I between what some in the growth coming because -- profess and are in the guess of especially coming to seems dichotomy because questions there a we see.

so XXXX So about percentage other thinking share do much experience active current with of the better back what then client to than when kind currently retailers, is if wallet And the that you're have user is from is their you share, wallet the the levels? what of base it existing experience is clients. January

with be talked the would personalized like you stylists. a experience having And about a more follow-up

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