Lulu's Fashion Lounge (LVLU) 13 Nov 242024 Q3 Earnings call transcript

Good afternoon, and welcome to Lulu's Third Quarter 2024 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for the prepared remarks and Q&A. At this time, I'd like to turn the conference over to Lulu's General Counsel and Corporate Secretary, Naomi Beckman-Straus. Thank you.

You may begin.

thank XXXX joining results. and Lulu's to everyone, quarter third afternoon, you us for discuss Good

continued statements measures, objectives performance of Before remind financing as fiscal Act future the call and environment, expectations conference forward-looking our ability return you begin, of that the we product fiscal market we report well impact XX-K made report report the this to in XX-Q and XX, call September the our would in our and not December results, impact references these do Form XXXX. results, and All statements with represent of financial year or various expectations, will intended on Litigation of forward-looking outlook management's quarter Private for but forward-looking achievements on ability achievements other ended XXXX, on from around limited to afternoon's the December our our this not quarterly our matters XXXX, strategies, including, XX-Q this regarding by XXXX, debt pursue plans, quarter implied risks, Securities should management's annual XX, consumer at the initiatives our as our with launches differ including on demand like other date options, statements the performance Any estimates and the cause filed statements implementation, assumptions including are statements regarding or XX, ended These second fact of that ending as our the or realize applicable, actual the Form and to These business, historical SEC financial within our Reform SEC, website reduction macroeconomic this as the for December cost which to our to and expressed XXXX, the quarter uncertainties XX, to goals on call. assumptions the afternoon, and to our fiscal investors.lulus.com. to, third for press release found statements. expectations relate meaning detailed Form such rates forward-looking risks, filings quarterly be important of and on be ended could June this opportunities, uncertainties, year growth. are their include for of subject forward-looking XXXX, of statements our ending all factors, considered alternative XX, results, which can materially year

elect or future, to required by at any While we point obligation the some law. may update update to no undertake revise information, or except statements statements such forward-looking forward-looking as we in

for underlying financial operational EBITDA free adjusted intended or this or of our discussions as and adjusted During presented superior accurately The our more call with not in results will today, of margin, considered of believe certain to information, cash they also substitute non-GAAP financial use reference in financial We business. the and measures as represent our net non-GAAP EBITDA, prepared debt flow. and performance information non-GAAP the including a presentation we in true information to some we GAAP. financial be isolation accordance is

each description, release be in press afternoon's found for may measures non-GAAP measures non-GAAP GAAP well using measures Reconciliation as Our rationale other in measure our to limitations different of SEC be and can non-GAAP used the by from filings. companies. and as this

our our CEO, Crystal are Smith; on our and me Landsem; the CFO, call President and Tiffany CIO, Mark Joining today Vos.

the With call Following that, over to I'll we'll the Crystal. our for call questions. remarks, open prepared turn your

sales, which bridesmaid attire. market good appreciate in and our the dress we QX, overall leadership positive In event to our growth record achieved joining and Naomi, you special returned everyone. dress We in year-over-year today. affirming occasion you, Thank quarter growth afternoon, categories, in us and boosting

prompting this wear reassess strategic take pose these quarter, the in cost Last Softness casual in and action segment our strength which initiatives challenges, apparel category on us structure reduction with to in rightsizing event-focused for and to efforts, remain our we full categories. force. better core outlined cost align

we the prior $XX loss Additionally, million, year are million period, do as facility. a priority, the Net alternative are million so. pursuing EBITDA provide in share to able to the updates we period. a debt than revolving adjusted and financing flexibility prior soon X% was $X.X top that we options more current and credit revenue is lower compared was $X will actively than Lulu's as This

we and achieved This position our net growth last leveraging inventory in and to future decline. promotions year, inventory, managed inventory a markdowns outpacing for X% quarter, over our proactively reduction revenue balances X% optimize

address While markdowns our confident leverage performance reduction near-term the and are growth. needs we business, strategic due that cost sustainable stage higher and shoe affected to strengths, efforts will weaker margins liquidity in for separates set and our our

efforts Amplifying assortment. our brand to robust engagement increased As strategic and include drive excellent marketing to delivering customer an grow elevating and performance culture improved evolving by to data insights, our to brand our growth and with reorder optimization brand data-driven a unique leveraging algorithm and community-focused our reminder, and value visibility and customer DNA our of introductions. deep word-of-mouth drive service insights model fans brand continued merchandising initiatives awareness evolution through and a

investments in and insights improve customer continually higher and platforms technology decisioning, proprietary our and and increased to Continued our engagement operations efficiencies. analytics customer better drive stack

encouraged core growth. best are and customers sustainable positive our to the We drive and momentum our to from initiatives these serve by remain committed strengths leveraging

in of third developments some positive the quarter. the to Turning

dress destination. event dress our all over for bridesmaid the increased position the outstanding quarter. nearly another market apparel as growing These XXXX, for attainable QX life's of brand categories year-over-year, and results X% Total delivered position luxury quarter net the by special XX% sales and occasions. sales results a marking record Lulu's reinforcing business go-to in occasion with for Our reaffirm destination strong as

revenue to XX% continued by reorder also increasing for novelty well, styles year to same and compared year's QX. last perform New

and team's Based positive newly reorder by introduced trends, to up QX on merchandising in The XX% to from comp fresh styles, QX. managed resonating the levels end the to with funnel helped sales by with these XX% the XX% making in product third X% driven our will that total the new first colors Inventory in-season decline Our sales sales. reorder narrow in in vision typically of adjustments year-over-year is customers. expect we were well year, quarter XXXX reorders of Net point from decline revenue quarters after rates, updated from fourth and return improvement improved highlighting to showed increases improvements and more of with rates policy in Return quarter. a our quarter positive X straight positive negative fit the prior X% year outperforming of fourth the comps in down for a year-over-year in the comps return inflection X%. expected consecutive net quarter also single-digit the compared impact importantly, revenue last in year-over-year quality. quarter, and stronger the

QX, brand social brand of initiatives more strategic we is sign across and Interestingly, segments, and price early and gaining The we the media to our in intent. detail our traffic, an markdown third-party and impactful reflected increased interest are traction. collaborations third all customers engagement, our in discuss commitment Mark lapsed reacquisition saw full customer highlighting initiatives, success of influencer but in shortly. brand positive year-over-year strategy these brand will partnerships in purchase clear quarter, launched engagement, and Regarding which building

than nation's September, in in the compared by presence to major we showcasing last key strong through partnerships person, several reaching Notably, In third our Dillard's Dillard's, QX largest year. holiday announced nationwide. We gross strategically we revenue product strengthening our XX% quality audiences latest with quarter, strategic retailers occasion shopping business the QX, with and into like Finally, bring stores new expanded and partnership homecoming Lulu's special event fashion to collections strengthens with year-end to and a wholesale collaboration season. continuing growth the wholesale more our of anticipate XXXX. wholesale retailers. timed key one increased markets, XX and moments in This in

favorable the Turning to the less quarter. aspects about

net the shoe year-over-year business declines separates in Our the driving majority remains challenged, of sales. and

event for improved better align sequentially summer strengths our in strategy and reevaluating QX, shoes seek us already turning wear and shifting programs vacations are impacted demand In shoes, we by on by for assortment with events, our our our dressier underperforming for. nights, where and separates date towards occasion to fall. customers social While styles areas late out options was special and in seasonal workwear, response, key

we will focused our confident are dressier initiatives, our basis that margin to are are in underperforming already Damages resulting the our both net costs. part journey. to year this and the up We end, and compared will assortment sales deleveraging Profitability shoes to from have We're reducing for costs the Gross and quarter. customer leaning inventory refining our occasion meaningfully forward QX strong quarter due drive to healthy reset markdown in that in aesthetic towards through with XXX line base. categories efforts points shopping vision revenue the a decreased compression we implement conviction separates. improve reset third merchandising higher also also optimization and and loved on assortment versus a in higher our and to fixed that going centered a more abusive smaller combined profitability gross SKU position, curated onboarding in refined behavior markdowns expansion separates. pressured of to the are due To excited improve as margin bottom XXXX strong maintain prior in due in to product demand to support contributing count wear the customer the vision to on position was lower shoes during accelerate our inventory product quarter

strategic third cost were company profitability discussed In taken. for the improve alongside growth. position reduction quarter, the we initiatives measures quarter, we last the our As to and following better implemented actions

slower-than-anticipated implemented to reduction a of cuts, XX% second to reduction in XX% operating and top-of-funnel executive we align select made a costs marketing targeted commitment XXXX, undertook better renegotiating part or we sales by spend. to the service half our and And As contracts pay agreements. management canceling our for which further in headcount our of costs expenses reduced payroll fixed and lastly, We reduced in our recovery. reductions with vendor

$X.X these and continue our capital from for to reduce further to flow, on return our We achieve agile further year-end we to costs streamline the in growth operations initiatives $X.X year believe QX Additionally, will and protects from execute into X efficiently expenditure a Board turnaround. that of members accelerated and continue the brand the million which profitability. We allow reduced optimize quarter, to expectations supports an actions enable the model other and our million. robust support decision-making to realizing cost-saving and strategic XXXX we XX while early third growth. size We in to generates more and goals cash XXXX, paves began the from through operating will savings the us business will sustainable a long-term profitability these to more still into positive for our reduced for objectives, to way measures maintaining

year Prudently our QX, control. and Our path the smallest liquidity through clear. of forward disciplined quarter inventory is in manage expense

For and same we approach to to strength fans long-term more XXXX, customers, for are we're event company costs, optimizing our brand and By our the dresses and near-term drive separate event existing positioning profitability as attract with wear the in reengage do sales. wear prioritizing growth. and we new taking

Vos, in against year-end, Mark that, our Mark? XXXX like I'd on Information to to Officer. have to progress and confidence will priorities. some our turn Chief we growth. With and approach share return we business President the over our updates call improvements ability to He As

Thank how quarter. an the during update with providing on interacted she customer and you, us I'll start Crystal. by our

counts year-over-year a by remained are flat signs quarter-over-quarter We active decline. despite of customer stabilization encouraged as

New adoption customer over year, by acquisition rose and momentum. last showing loyalty are strong X% rates

new full engagement, acquisition remain around price previous improvement Love brand, in the on trajectory. double-digit and marketing assortment about progress the year. centered sustaining and membership, we over impact trends segments, of Rewards We entrants in focus last QX's Our optimistic reflect customer overall customer notable in believe new increase year. strategic these marking total saw our membership growth and an an mostly growth this from positive

the reactivating top successful rate third Year-over-year our sales to day customers at year-over-year last customers bridesmaid, were are XX high they those high-performing event in lapsed and achieved special higher we that QX international our months, in gravitating customers double-digit growth and U.S. hadn't XX segments towards returned XXXX. Additionally, Lulu's its sales than of Lulu's purchased Lapsed a growth outside in the and like dresses. continued consecutive quarter in countries across occasion from

markets. I'll and build strategic strategically the model to our U.S.-based initiatives starting product key assortment third to QX. and the continue optimization now enhance around merchandising optimization in We and assortment comps significant with novelty our in impact improvement expansion evident global efforts quarter, potential related select and see supported share some our brand our updates styles with efforts. international quarter, of during newer a further became by receipts reorder the margin awareness reflecting In QX shipping team's progress colors, from

As XX% previously, reorder year revenue Crystal same styles by mentioned for year. over last increased

this will optimistic assortment momentum reaches that consumers. are as refined We our continue

buying Our AI on using improve our to we scope and systems, data-driven AI-generated of enhanced model. predictions refine continue and integrated work have predictions demand further to to and segments, the these success forecasting we recommendation will our into seeing buying in are our been several with enhance broaden

also flexibility while in size consistency off. fit improvements product have returns across brand. focused positive improved of have QX, line on progressing the continued optimizing introduction impact of holistic combined planned, products general. is reducing introduced by focused that reads newly reducing of and fit extra-large efforts, where fit is the we XXL and product as especially fit-related design saw a bottom in increases provides and returns pay to return these initial Lulu's that several product our fit and to and focus consistency on we flexibility fit-related rate across through returns improved. remain In The XXL sizes Our on starting across categories taking show We approach

acquisition of start size XXL expect a of over also will customer based this we and addition base. time see broadening Additionally, customer our an to of the size that contribute on encouraging new

possible Regarding have different year. made in the to progress China, potential over in import increases tariffs from where past beyond sourcing of our we China diversifying origin countries

increasing we customers. reliance especially successfully the believe the quality our excels. However, strategies, the impact and of successful done QX, third customer of manufacturing for and third-party Lulu's Should origin brand, the and In our diversification, arise, Lulu's our all and ways requiring for new engagement. our to brand in margins. improved influencer tariffs she manage the and social meaningfully. In remains, we the to as elasticity products channels medium engagement In near plan reinforcing share and sufficient our vendors, to Life efficiencies have import presence Friends to enhanced offset impacts built China sourcing product term, before, exploring tariffs by on costing our higher build are to our launched we partnerships, or specialized positioned categories own to potential commitment across we and chain to the country allow for including term, quarter value meeting details impact supply where our Chinese we campaign invest long across we with on and is. customers our the expanded cost our continue QX, price distributing In impact in on media quarter-to-date, sewing hug

across strong engagement that partnerships third-party in and invest channels. drive visibility to continue We for Lulu's

Footwear as effective increases particularly we awareness. younger Home reach, and for to Lulu's a of such Lulu's strengthened with July, Los with these expanded Z influencers, the As last and have social call, activations in select which among value resulted TikTok second and deliver Angeles. into presence in of billboard audiences. We and earnings And equity. post earned quarter our collaboration quarter. familiarity Out D'Amelio brand media with our brands with in Times D'Amelio engaging the with including returns engagement, of continue Nashville brand in providing some elevated the Gen we areas, in posts Square our our mentioned relevant The successful Collaborations and additional influencer edits and fall attractive most product customers launched seen increased on social new our markets Campaign

brand, We Girlhood also our feminine our campaign, independent generated value unapologetically and reinforcing offering unique new elevating own The launched complement of media major BOHO and project earned which the campaigns to product of millions of the is our brands in the impressions. to designed significant aesthetic quarter, both and audiences. introduction new

Lulu's across paid enhance ways on our improved channels. we quarter customer solid the third continued customer Our with users during to third that growth in efforts, and to website conversion investments engagement our app Alongside traffic strong yielding The supports initiative driving experience constantly ongoing rates in app results. focuses are experience. and looking enablement technology our experience for

to discovery During product and the introduced contributions focused journey shown Tapped positive pages also and improved improving subsite, quarter, we engagement videos customers' product have across product launched conversion listing our rates. the all on and

We and lower customers, higher with continue and rate which resonated site, video to on more to conversion. feature contributing has the return body diversity

rollouts, including focused In potential merchandising several boost we customer recent to tools, developments, opportunities about customers. optimization AI quarter product for and across customers testing to these third to these the momentum discovery experience now provide with engagement. our are Financial brought Beyond manner. over strategic And improve and the to pleased shopping the summary, on solution best We're our and additional I'll positive more excited an in to their cost-efficient promising we Tiffany color We our are hand initiatives. on Chief a thoughtfully to the our products deliver financials. Lulu's executing remain Officer, Smith, you

Thanks, good afternoon, Mark, and everyone.

order quarter third decrease X% the placed and year-over-year, for in by total by was decrease reduced revenue return decrease driven net orders a volume, $XX X% a a rates. partially X% in approximately average offset million, Our

the impacted gross sales underperforming of the swiftly efforts business. reset additional While of for declined margins third inventory in categories, they is liquidity our year-over-year. compared particularly our These negatively separates, and of part generating approximately quarters X while when a also sales shoes in by driven the first actions to mix compared quarter significant represented to to XXXX, markdown X% This more XXXX.

XX%. special sales showed and bridesmaid with resilience up our categories occasion year-to-date However,

our in with Following turnover improvements a we've continued return last supporting by quarter XX lower rates in XXX inventory the implementation updated XX.X%, of sales seen the our as points improved customer markdowns casual policy, return compared same return at decrease and ongoing of quarter. period we and this basis Gross discounts to trends by higher ended business. softness quarter's rates margin of behavior higher basis last year, points driven address wear year-over-year,

administrative primarily our about $XX.X by our XXXX compensation was to a expenses well higher an were about labor selling decrease and up XXXX. decrease $XX.X line and pay $XXX,XXX QX from and The from million, benefit This costs million, expenses visit. by expense implemented during third General reductions driven due per to executive quarter. marketing items, in and marketing the on decline were to X% QX as quarter online in and cost decreased overall reductions Moving headcount XXXX $X.X million did the entire stock-based expenses cost period. throughout therefore, the due measures as management to savings enacted not QX

$X.X primarily costs. loss a to net selling $X.X by $X and cost compared of $X due amidst QX $X gain our income in increased due $X.X net year-over-year, revenue. EBITDA reduced Our marketing These approximately expenses. Adjusted XXXX's reduced of million to in to administrative provision and EBITDA million million by from was $X tax margin the general alongside and million rates, third offset gross increase savings a lower impact, million million partially a were impact higher revenue, million $X.X quarter million fixed for loss adjusted deleveraging

was compared same $XXX,XXX X.X% EBITDA compared $XXX,XXX was to last for the negative to quarter adjusted QX period in XXXX. in X.X% QX Interest year. Our the expense margin

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quarter As $XXX,XXX approximately In stock repurchased our year, XXX,XXX a first repurchased of Directors third to worth total shares Board announced the this we stock. repurchase of this and been or quarter, repurchase A stock. up of of shares million program. to have XXX,XXX authorized under program about $X.X common date $XXX,XXX in to of our the

to with to investments continue flow. allocate for anticipated balancing will basis, quarterly a striving cash holistic highest take our return view We capital a on the that on while

outpaces as of this QX, Our was revolving $XX borrowings The quarter and context $X on inventory borrowed liquidity year-over-year million net our the facility, terms, under are $X.X provide an additional credit last but about quarter. had from balance drew in end, inventory facility's time. we million inventory unable further turnover $XX.X After we the we million, at end end throughout further see $XX.X same X% as access million strength To the to down under our line. X% of at period year. our year-over-year to million decline quarter continue decrease revenue the

entered of compliance. in XX, amendment more This disclosures, covenant of further that on alternative affords until continue detail our our to the time allowing pursuit the into the report we've December options active in needs to financing support growth the outlined lenders XXXX, business. As an credit agreement, more financial us to us XX-Q our adequately flexible to

the on comps fourth the year-over-year, October to sequential insight September. our sales Preliminary revenue revenue net modest net decline month we to the Moving reflecting in quarter. digits the reflect in for of like guidance, mid-single for improvement provide results some from into would expectations

observed the impacts shopping leading holiday with the comps for revenue up of outlook considers the a caution election, net potential shorter along revenue to season. following Our of we around balance QX softer and the

million, net million year-over-year revenue to quarter, to approximately the and in between a compared year. between X% fourth and the $XX be million $XX last of period we $XX.X XX% decline anticipate For same

executed certain we quarter, reduction reduction needs second third trends. targeted align in noted for As with reductions contracts total our and in expenses costs profitability current for renegotiation measures fixed half the of an and our the quarter with approximate from QX pay members still to to in certain and headcount, our rationalization XX% expect in XXXX implement vendor the in began XX% management sales operating our half. Actions last the fixed of services. and improve growth cost better executives included resulting to to first payroll compared business reductions reduced combined team and spend as marketing reductions as top-of-funnel of well We

focus reset shoes QX. guidance assortments. adjusted for a QX and on potential and accelerating our EBITDA refrain for maintaining turns environment, goals is of maintain on in from inventory further flexibility we through providing cost liquidity, an generating healthy separates these macroeconomic Our uncertain and To reductions

of plan capital of that, million, cost remarks. our part Crystal the year decrease it continued reduction million. our expenditure to as Lastly, our are And expectation we $XXX,XXX previous $X.X efforts, for for will a closing with from back I $X.X approximately pass reducing to

Tiffany. you, Thank

for encouraged growth and us refocusing our towards efforts but model remain confident disciplined in to loyal becoming consumer segment that customer occasions. focus now. questions our us We engagement, operational positions for our luxury businesses, the improved still I'll the business in We optimizing to you, and the our valued more success. and next our are do work cost to to forward sustainable for turn businesses. over commitment lasting are We year. brand earnings dynamic event our life's on With turning casual strategic and profitability fans, growth reduction to you apparel coming always, work on as customers awareness, corner Thank and for a go-to Lu continue look enhancing and all have separates, dresses to separates of dressy crew, dedicated we support to shoes wholesale we and By destination to by that, as call. believe our it to shareholders attainable delivering your reset our will and updating excellence steadfast support ensure through landscape brand continue towards

[Operator Instructions] Goldman comes The Roach from question with Brooke Sachs. first

we I more the could does that hoping percent of wear. talk event in be to versus to expecting? wear should change see about casual reevaluation practice? count and in you SKU expect a on How of little should does this And margins we to mean long the implement? bit strategy take impact what focus overall? was in more both What What terms cut profitability

thanks the creating the with last And a I we've from dressier saying more that we've bring been successful though of depending really it's our season. have more in as where count a the align customers SKUs reduction, the learnings a separates testing into onboarding is on our from would quarters much the more less for over into narrowing at dresses several business. within assortment been anywhere from of process that more to better with it XX% what I'd aesthetic a just guide I'd we be that be Brooke, offering, that's going to on side result question. profitable of in in to the to and shoes. and for businesses. look And fewer curation overwhelming a specifics assortment in curated specifically separates to SKU more those hesitant XX% more product comfortable and

dresses all what profitable, for only I in our learn we to So know she'll but us be sell experience more across will from think of categories. perspective, not more customer a it

to assortment be it's more So for refined customer. intended our a

into going profitable half and much how more have of work should across QX next businesses. in QX to resetting year, of extremely to terms be and long think back efficient In the a having in we and curated some going would into I expect more those take to place, do the assortment much by it QX we we're assortment

So to though, expect see returning more bit by bridesmaid, and occasion, business our special positive back offset comps. to we've a dress overall, pressure, I success little just the on our our had

the on you do one Great. see And efforts improve overall? in for cost additional ahead? just as opportunities as Can expand levers to then liquidity and to you generate additional What optimization you follow-up balances your look liquidity control cash Tiffany.

Yes. Brooke. Thanks,

as some So we already QX in the obviously of on we that outlined enacted on call.

spend. the So there that the and around pay of that pulling were to those into some on deeper some and for done going any management of continuing through variety and a on as QX to back the We're size, next whether team, marketing be elements. continue, executive of we've evaluate adjustments balance reduction headcount outlined we going reducing year of top-of-funnel our were Board go to the we will things that of more can

just speaking, internal generally out one credit doing sales review of than we refund we and ago couple customers process being think, rather to store -- just having thing rolled basically to product I refunded our sort was trying and of to weeks certain we're how some a cash.

internal at changing opportunities can of that where internal ourselves we process. for looking an just sort create like by liquidity processing So

for call, So we really progress. on a and the that of outlined those be And is will then other continue us on to all the August. top credit which as evaluate the priority flexibility table financing now credit a we revolver there reduced renegotiation part looking alternative options to was we the after and our original around in facility bit had really is of that the back for afford more us right essentially

So we're just source another liquidity. focused well as on that of as

Stichter line next of is BTIG. with The the Janine question from

product How but should us business, need margin been now. QX the Historically, you're promotions the think is particularly QX? the and gross needs? a of follow-up to the with possible. into by Just and through promotional dictated is dynamics versus it And clear liquidity. into the liquidity extent bit that something continuing markdowns that sounds on like A help underperforming categories we much assortment leaning more haven't maybe out a to about you

Yes. Thanks, question. Good Janine.

little outlined and Crystal I question. QX, think was reset mean that for it this both. our previous in a business, bit casual definitely really start our around the opportunity process shoe we to more reset saw business, of I separates the

the position, same time in comfortable a that I wanted metrics our liquidity. make we sure at our that were a keeping inventory think that was generating key keeping check in we to inventory and element while

is on. I key think thing that we're a that focused

expect continue things went to, quickly, trying I hand that QX would assortment assortment separate and of alluded casual next year as hand. reset early balance to well. through and QX, I would and So of X us our the the more our Crystal I in as into expect to through with wear think kind

Okay. performing? Great. I if missed how on And then sorry that's retail any it, physical update or

working been putting that for in And like us. quarters. accelerating got to has we've up. comps several call, last great we alluded we're over the It's been double-digit the Wholesale

mouth. product our time, from a And customers' our influencers, giving been in interact get brand our from that's straight progress, with to real can perspective, store engage we customers it's person. a activation Melrose So been and a in experience chance to center great continues data with great, customers and where and

So on sense, near-term been progresses. Extra future in No it more you as point, that it's this great. update plans stores that but at for we'll

The next question is Telsey Group. Telsey the with from Dana of line

landscape, terms reset did about recently, continued softness there see competitive the we what in your in health How China, tariffs? time terms you and the of of thinking then and of are that mentioned SKUs in come regional, wear? all the when are do seeing you it? be Is As categories of consumer you've And do How lastly, your should assortment the with it of any goods you. from more China? of along pricing? you casual Thank explicit? more the terms about last you seen given with anything you the in what think What

you. Thank

dollars provide, really the from start products with and destructing could did with imports helps a last much consumer there what have a And what is our what that a China. clear products last our few is in so we but quality to the what tariffs our Let time share with China, and, I that me not order can there relates right, is pricing pricing work that that. has from without so from perspective increased to that were the that. at we be And come on and to dependency demand, as look vendors obviously And to there been essentially all well as added do to the to we we it manufacturers No, that burden, as we offer from did the basically their say. one alluded and as successful. across

that in Obviously, partly we're China higher the obtain overall a in and for can, take of lower and to chain a is consolidation, short term, rethinking out certain we about cost lower feel so it's where it that spoken way where a of and to example, diversify the at chain portions to as at or response. so that, or vendor continue the then pricing can supply we've And order we we volumes, that's the products cost. can is supply as out looking reduce we more about we well how costing

inventory QX your has start Tiffany competitive promotion do is if perspective, to alluded working relates you on been QX. at so landscape, we Part competitive our it from a to to look the probably reset specifically and promotion throughout very trackers, of out using around and there. process cetera, a which will continue portion that et our it question As of to,

that be be the and across each of to As but the to. reacts to say, working material terms not pricing our as response of of the reset, classes we're look relates there's customer to reduction, go it the will we reset SKUs what our And across assortment leverage a at likely as there board. we're changes to to continue going will GBBs, I'd for be far as in it pricing, dynamic and

all material we to No currently. price similar the have way So changes fairly expect to there. Halo mix point stay still on up to price what that point, entry that I'd

that today's was Ladies last This and the concludes teleconference. question. gentlemen,

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