Victoria's Secret & Co. (VSCO) 1 Dec 222022 Q3 Earnings call transcript

Good morning. My name is Amanda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Company's Third Quarter 2022 Earnings Conference Call. Please be advised that today's conference is being recorded. All parties will remain in a listen-only mode until the question-and-answer session of today's call. to call like to now would turn over the Mr. I Financial Vice Company. Investor President Wynk, Reporting of & Kevin Secret External and Victoria's Relations at you begin. Kevin, may

to third Thank Secret October XX, for and Good you, ending welcome Amanda. the period & earnings quarter Co.'s XXXX. conference call morning, Victoria's

our remind filings statement make releases. a subject today press As to to of and found forward-looking any our I formality, that matter Harbor in are SEC our statements in like Safe would you we may

Joining me is Martin on the call CEO, Waters; today Johnson. TJ and CFO,

available SEC We non-GAAP items section comparable adjusted investor special Thanks. filings, to discuss our SEC are Reconciliations to GAAP filings. release results our Certain for Investors on are other the any And in we to our I'll the measures exclude the most described today the measures of of minutes press on the these call included also over in up to turn results are Martin. and answer our XX our now, the website. press presentation today call in posted questions. release and

Kevin, good morning, Thanks, everyone. and

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Looking continued headwinds balance we the of the will and on at a the economic retail customer pressure that our of environment. promotional mindful year, remain drive highly likely

are in on the and As same costs by management. inventory share shifting continued to volatility. pursuing and confident of this sales time expect ability we aggressively such, season, navigate spending being extremely and we We believe landscape margin our at and the we're positioned to and holiday margin customer for on our sales optimize diligent well

we holiday November quarter, here's from start the a weekend the cautious the The in quarter of range million. income single-digit $XXX my to be reflection of a a fourth very million until to challenging quarter, thus to expect sales you're we're continuation seemed hear performance our likely a customer be For in my take Well, the last compared of Black take. and decrease to I operating the expect far. $XXX to range environment. the up year, to forecasting high Friday third of fourth trend on the very all much economic in

and level positively, uptick trend However, have in Black performance. responded our pleased since the of our been with we've and customers Friday, very an

quarter. levels said, where have in both traffic were important being in of ahead and our appropriately still our for the the make month fourth profits been busiest with of majority in are conversion online. Our overwhelming the aggressive many stores December, the days the some there That increased stores and mall, promotional very of and we

December the quarter for season. reflects aggressive share in Our guidance to-date and need our we'll the fair and expectations get consumer more this of to that our to spending be results holiday

operating be to forecast the million of of in year, full X%, expect to $XXX $XXX the X% we to approximately income to or For retail to sales. decrease million sales X% range X% and adjusted

adjusted single demonstrates operating we Given a stabilization rate business solid of today's income macroeconomic challenging the in environment, represents high digits believe and our base. an

significant to Number in the strengthen ahead be leadership principles: foundation business customer and to growth transform to will macro brands, market clear, leading transformation Led a position our three, we by challenging our in bras, We're within a focus At normal at performance and in apparel. global which of our enhancing to the the number discussed guided the fashion increase we a our growth; inventory ignite outlined what's costs best to our by America. by share, one, being our intimates We control: in October, relentless more leverage management. intimate the plan, and category-defining company. retailer experience North three our is Day optimizing Investor believe to trends core; goal runway on merchandise two world's strategic Beauty and number committed of brand two, current Our position return on focusing environment when our

shifting ensuring be business more Our and remarks, culturally opportunities focus for have. questions committed in environment. is that to take that becomes a and as shareholders. value in our you as future-facing our company happy and leaders our sustainable on this we'd That We're remain prepared a might consumer more than confident long-term and any delivering more to we're concludes relevant

We Instructions] with [Operator Hutchinson Lorraine our have Bank first of America. question from

is line Your open.

get environment the on really have thoughts sales promote your with this to you require view to really Or you conversion? can does customers responding what that it that is the on your to? I newness? And wanted drive to are drive

question. great a it's Lorraine,

that answer when she's I given the is think and we've well the responded know customer it. yes. really that We to short newness yes

assortment week immediate one a The Shack hit the So to which ahead PINK being of first that, of straight immediate, great even an an positive. of blew launch Bombshell went the was in one impact was -- So had America's number Obsessed within the fragrance fragrance. out the It selling store. example number The Bare within extremely is and

So are a at newness brands times, looking in looking she's difficult that give to and and is hand. works, her for she's helping deal these to recognize That said, difficult she for looking the help, in a best times market and no question.

choice. is end in feel We had than buy year, And be a so have fight. were more Monday QX And do. we we as U.S. then that in and customer in back at promotional which we take, on all markets of the on were to the and make looking could. And sure that we we that's morning Friday about stores what hard to value and weekend, be the different day the balance gifts, as fighting were is we appropriate that reported to was in to And in as previous up good customers promotional stocking striving to with Christmas about than it over Black same everybody the been hungry for we're across good out they're more the of decision made been the order it's out merchandise, possibly the great

our quarter, the the in that the her great to opportunity for guidance balance I provided So give Lorraine. of value. for hope we helps,

in additional then you the at the also then follow-up. and of the one million you of talk Can the cost $XXX through of savings outlined Day? freight And costs that Analyst pace recovery the pace

that this is one. Lorraine, TJ. Yes. I'll take

As costs freight consistent referring in prepared were to the months. quarter what really we incremental And the supply we third I'm articulated costs remarks, relatively have is XX mentioned that the over year-over-year. last chain

third that higher price the of headwinds. ocean from looked the cost in through worth raw rates, difficult of And incremental way $XXX an starting an about increases spring inflationary So we rates, the higher supply perspective. all material season, XXXX, chain more million like estimated air quarter or

that at million. in into year-over-year entirely anniversary almost was year, to our of so 'XX season results. need, be was Through third we and that quarter, Our runway, to about dependent stores, impact a in QX relatively about activity, merchandise XX-month start saw particularly was that guidance the holiday on and last the 'XX in QX embedded similar that $XX through speak, we of our million so airing the our $XXX to

or both we As into rates given $XX believe take we've the in our airplanes, able quarter. quarter, -- costs the that we'll off news to move We gets supply and fourth merchandise closer that season. into million chain both an significantly, air business. about $XXX recognize thing or have which merchandise lower take to probably about is spring less we and for put that good ocean on think been the moderated a of of as incremental given good million number of We fourth now move more

our $XXX ability the through next, stabilization between of the we airplanes will of total. abate cost and term? of the long from call it, about an the months, a nine move reliance TBD. half our there? on So incremental containers less ocean is Where rates million, do far think go to to How go we're this I costs in from pressing of that airplanes. We perspective, can How everything do that's ocean perspective think much we down? do from sticky and continue rates know and

$XXX continuing on season. about answer costs, to comes question, to incremental us So in the your back think, starting half quarter and -- we in million of through the the spring fourth of

the $XXX of then cost And savings? million additional

Yes. you really we The me. at forward reminding cost a business. that's of articulated look Thank for savings Day, million Investor that $XXX for incremental the the

think started it small million in So 'XX Will season. to in from here as grow it I a in growing 'XX. of fall $XXX But would from way XXXX. the a perspective, 'XX to

three reminder, elements that. to a were there As

goods cetera. materials, perspective, finished from et we cost, really goods, was goods how opportunities, raw finished element freight a materials between first The about product and that move like lower-duty looks and raw

of part million. the sold the the biggest of So $XXX goods cost was

stores, The kind of like operator, the Company and people modernizing is bucket, from third terms a changes really distribution biggest a York lower as was our in operator in your call was cost you'll in and I'll New indirect Columbus, being here processes to or costs, really, office in the across centers that And non-merchandise procurement of around transforming high-cost world. business. costs the which second the the it, low-cost looks then recall, and and

the So $XXX XXXX grow we here season, the million in different the talked XXXX 'XX. initiatives that and are business earlier. grow and about These will than new chain headwinds in the that in have in for started is supply fall

Thank you.

next comes with Wells Ike Our from Boruchow question Fargo.

Your open. line is

you side anticipating what better? the follow-up. Ike. XQ parse apparel. versus up to of Could the and out bit more performance degradation XQ. you terms think of while on margin in trying wanted Just performance panties category you're This the in be I and saw I on you is the bra, majority the and then business, maybe of by XQ maybe in is lingerie Would to that one part for intimate And more Kate dig the in a in merch apparel what apparel? XQ in would have of the on of just say holding maybe core

Yes.

to little out margin get product try and on I appropriately think the to promotions want categories, sure mentioned, make that again, that everything aggressive we're year, we're started store, kind of of just focused good but on question. being to get to doing panties to be focused tend across category share months, on the few apparel, fair category appropriately also to we Martin but From giftable intention be sure not as build our Thank a -- to a you, a that conversion. Kate. the try we're capturing time traffic, be fair have this it's and and at there. and transpired basket From mall little to I perspective, across increase promotions our over more and those our aggressive the conversion weeks more in we when make can -- on a generally, perspective, maybe that's traffic last our to think you of look share

profile in to So what strength how retailers drive it's strength try is a less use increase -- might at about margin product, do you seeing traffic feels more the that our liquidation. it's about and the be other in This our conversion. really not we to like

our about to paths is very and product on. traffic product and to I feel promotion This is good this to we and liquidation So, try activity. the underline, drive conversion. position not strength want our we're Again, that glide inventory using

I follow-up. guess TJ, then, just And Great. one Okay.

freight to supply you're some some the year not why as of of here other you a maybe going about fiscal and about seen we're ahead gross are half the next some of Is the but there year, flip As headwind better place, to reason pressures. margins think being excess we guide, you're up shouldn't talked easing fiscal I in chain next understand to want back obviously looking a last why in the way? the inventories promotions

Yes.

giving as from Day the think we messaging and I But same, story correct, Kate. the the back XXXX, you're about not and I'll we pivot Investor our the really are guidance. to think remains perspective,

we're the the need we some side and improvement do very particularly in on in American which, I focused think recall, for business the North you'll core, as environment economic strengthening of customer. the our

We continue performance good on growing an and from be we had Clearly, international beauty focused our perspective. share perspective. very to market an intimate from

about the growth pillar that we is think talked if So you about. excite International strong.

New to to the our Amazon points particularly of continue on and the continues with and distribution excited Beauty development future, sort of business success about. of increasing progress, be we

those remain intact of opportunities all growth for So, XXXX.

However, economy spring focusing from in tailwind a to on need perspective. some believe opportunity about we question just for around freight year-over-year. North we particularly into do help as your a season, expect we rates we think freight margin, the moment, and some American go we from When the do have

rate overall performance because in will North that of where some performance, in anticipate economic I I spring. gross think that impact and will on be there most an continue the perspective, think challenges from margin sales we America do people go the believe the do level

of kind mall. does create the the go And in deleverage base? promotional environment does the then So what where that on

be in fall the I assuming you're a season. inventory position most out seem that think in correct much retailers to coming of better

was across And the and So lower does subside. QX it does activity it in go the mall promotional where QX. than

TBD. where We'll goes. see that I that's the think

conversion, focus to traffic some a to be to freight from tailwinds and perspective. we have competitive though, We will on do want mall continue in but the

where see mall to and gain trends to So be competitive remain to to do wait, continue and continue we we're go the share. to to going how on Kate, really have

Thank you.

Boss with from comes question Matthew JPMorgan. next Our

open. is line Your

Great.

that to to printer lower there rates point, seeing your and you pricing? as that holiday, we post maybe element as growth this revenues top and macro year? on what could next I to Meaning, So Is in we to the if competitive through level trends that walk and guess on then, stores of or Or conversion are year? about to it you quarter? is puts reasonable decline? do the takes digital. impacted this a just guess relates And improvement you is I could relative what gives need and turn tied to this the expand Martin, macro if the both you're TJ, as revenue product confidence not consider initiatives underwear we in the think the line stem

Yes, the that. first take I'll of part

Of are something market? how are we course, cause the we it's overperforming, share. at is conversion a down we about an And concern. as we daily fair sales and it's generally, down, look underperforming think on getting relative our when results, our to basis for Are or extreme

Market find. to third indicators go year and share we up panty. share last so not strength where a growth it bra good share in one, can And that So quarter intimates. a good a market to it's driven but in the relative is one, share in ever was That's nudge for was other one. by bras, in the we reduction the market only slight a our in

hard the harder. performance got could little panty of the within category. business of be satisfied losing We're to bit So ground. work a a we overall We've promotional gosh, really that, that's at but and say, intimates, with look

So that's indicator. one just

looks can share purchase retailers which mall us indicator and to Another before. intent was tracking. extent landlord at us, for Victoria's look get that it's traffic it traffic that higher our it indicates the the with was is other to balls like share than tracker, and we relative we and white We that with at look

pleased? we've terms feel in we're of concerned? inventory, we of and say, well in year. the got it terms in or we we've is set and So very holding up should activity satisfied? Honestly, of be December most thereabouts all Should dashboard there mix, got we the think look important the of in to play pipe. I for. terms be in We And promotions, Should across the we're our month own. think we be I the the

execution and to part? the So focused That's on it's right second all we paid we're get now. want you focused to what that's take what do on. do, TJ,

Yes.

when we we second about next some Matt, level candidly, macro everybody the think does macro anniversary when unfolds talked the of what the trend Investor North of improvement. And revenues from need I of at then part, into we the Again, year, challenges to second end from American about comping towards we'll that speak, talked perspective about start side a comp, first We believe in really quarter, from business, to see going Day. the perspective. some a to the a -- think we what the perspective you're as come. of the remind quarter what macro do so

of to think that's us going do. the buck all Do on front have in of to initiatives try we business retailers. I in we as all the Absolutely, trend?

appropriate relook Martin As getting we and again, do the a business. in best bras, terms growth core mentioned, being at focus the traction make of of we're sure on our in panty amount how

intimates is perspective, a a top so fragrances, we over continue to do at, they of our the which our business, grow total, all So is in we new That's really our launch of speak. that's clearly, little From chart, to market the to do continue beauty to core. and share. how go XX% best about

growing apparel bit our Day, the and a core little beauty are core of best mix that things feel as we more the Beauty starting at working the intimates, about business to into focusing for and in very Investor the percent growing about refresh store. business We So that in a good continued of business newness and talked again, parts the deemphasize it the us. the some of and

foreseeable underline performance XXXX, growth XXXX. of open XXXX country a world store seeing as additionally, of future pipeline the is the strong both digital back three see in international to again, think want growth out growth, through first up to internationally I starting for the the very again growth, We I there. quarters we're can

international very the good business. part of the we So about feel

a business Store that's business. forward at could going great team done that and I of we down talked grow think starting have six about his ago. Future. Investor Day, opportunity development. to the only but job the initiatives list New was our going We of an Greg keep Amazon weeks in that the

in All place. still of those are

and those. on very those good feel of are still about we All track,

Thank you.

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

Your open. line is

Thanks Thanksgiving. everyone. Morning. I family a hope had nice your you and

so So can $XX so you within staying aside through just levers. -- what XQ said is out composition healthy. were the And margin, context to AUR then, the Any or you quantify the And any just could Martin, expected us the gross I guess, that the parsing million, means? to, down. was of of speak guidance? So way just thinking other you give I UPTs assume that implication

just they're think So pressured, be like does it buying you might view just on are through Or They're last you using the willing that your sounds tell to and the if fewer So is of healthy, that. would I about I just they that do guess, working what overpurchased reflecting idea units? UPT over what the like still then things? AUR people fewer you love maybe it and is need years, couple excess promotions? pay said.

TJ, the want part the first question? take you do to of

want margin good of do we needs of where about strength we're quarter, the about about business, bit strengthen AUR and and Again, net and necessarily to see, the think our are. I the of quarter, about AUR basket that Bowl, to kind do get continue like and level we're four what all is like if share. What that profile from we're the do we is change can want we we the in use promotion we about. we very of business. That's at in kind of Simeon, that ticket to it's to to we're the use really when mean see our talking not feel the fourth from But to positioning we have doesn't conversion this talking good that would a little in of fourth feel a to Super the we be fair here how growth Yes, the for strength. very And that to perspective, an talking getting really still year. we'd need growth ticket sure make clearly, what traffic perspective, AUR we we everything to quarters

in thinking or terms necessarily we're the it sure that about question I'm In your of past, not around overproducing way. overpurchasing

we're think as is are competitive in There in it mode. environment more different the there that position a I about and in our view, thinking we are are across very inventory liquidation a mall. are others than much

a perspective of is a we about in Our strength sales we're position from an inventory not profitable liquidation. It's difficult getting sure how that do make environment.

that Yes. I'll TJ. piggyback bit, just a little

that in the to has transaction Like covered But do are the I think customer I Basket is overperforming you've units per different categories I size recognize But down. it. were down. choose TJ said, don't from. past. we think

have the a reflection years, are we and changing should that's during more at come time. And dollars to dollars available times than the those they going say, of now out the being in just All wallet. intimate I'm and come apparel category. in that were than categories previous There's stronger COVID open back of point were other

back. So relative I down go looking We're what market is to come at which the to down. will It market's And performance and market's the our the down. we in compete.

newness most the of of in that we make we're best is can sure possible giving and in value. important we're think terms terms thing that offer competitive, super to and I her the that

we focused control that's So control. what now, right we're where can

thought Perfect. what was just the the commentary. the was AUR Yes, of I asking That's all healthy about. interesting I being point in of light

Yes. the Thanks for clarification.

Thank you.

Straton from with Stanley. Morgan Our Alex question next comes

open. is line Your

kind been past focus supply to for over wanted is pretty in I know the impaired last Victoria's has chain year. really been known its advantage some an -- That's strategy. challenges. react of on of I but the the

do that should to to react contributing fully think you the Or we in it terms being progress when how the back advantage? does some read So that? sales to the and pressure? about is of Or normalizes? of think maybe stand that where And

goods Yes, think like in difficult impaired, happy We more We well Thanks, what We we've needed. we base the supply. but supply. chain of to in that. the during had environment freight base a supply take that for to being got We of because them competitive share was feel available the be in than fair we the performed honest. a very very don't of of about bit to got pay Alex. COVID challenges, our more

COVID very feel that we that period. we So did during well

supply there cost TJ some where it relates current during to that to fourth starts was in As us, chain are the third go mentioned period the quarter. pressures away quarter the really behind

XX% open open were cost economic of We spend bought, get being us, the in Where would difficulty that unwise supply to don't the because really XX% the when would But XX% is We that ability sales business more behind and the back that I've about at to So start is, XX% chain like with the behind way we new bites open. bought didn't it about us. be best, previously is dollars. is get and open. And fall. that its fall and the substantially is season it a those to to enter substantially we spend the said season is level our outlook, this quite it XX%, open. pressured,

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the being and ability into if us commitment it's than So in being switch place just boats agile orders question out checking to of we faster and amount that of careful way we and of that is our do. very to in make we the anticipated something it a airplanes our

supply So a I say that on to broad hope bit question. expect 'XX would perspective. from more would be I you normalized chain In substantially we color gives a the outline,

high me, through nice year. a step to picture. margin longer-term you a the of Great. that taking from on That just mid-teens next just walk single-digit for us this sounds Can of kind target of here? for one back, and a more path kind an like see tailwind puts level you that's year the Maybe bigger around EBIT takes that and kind how

Yes.

nothing's the six we just And our think, from the Alex, view, weeks. really kind in I last Day, stepped this. of Investor changed through

maintained perspective. we've an guidance operating for rate and from the So income year current our

best the XXXX. earlier. then plus the new partners, or channels date. It track, a The equals an So spoke the the to three results procurement. points if the we that the you end of the future perspective, the That It think the renovating of for outlook very path two, looks Store which the really about, the take the that last of first opportunity, side, growing that two focus mix foundation at and of sold like to transforming whether Beauty with stores that's last one, base lighter the X%, from on in plus two quarter, points, Investor business three store initiatives the those we XX. looks in just growing we're growth really at North above. standpoint next Future, goods feel about America, I growing also the the is what the nine of where growth, -- international to terms is in that of plus the simple Store math share, next That's million modernizing into and so X% the from strengthening we're focused X% that's opportunity of Company fourth looks and talked of format intimate the percent nine $XXX little on the is the bras, cost the new so next then of good like The high X%, processes two, of new well like That development, points, et Future at Day. looks terms about to of the efficiency about to points range, efficiency happened igniting pleased Store plus XX%, pillar. all And the the indirect plus that's that's the and quarter on third bucket. and in on share, core. apparel talked keep is distribution, cetera, plus a starting we continuing about one, it's three plus people like

current Adore it's here originally new perspective happens. past in to and a have Me. that different think a about from is are for clearly, perspective HSR nothing's announcement the at to opportunity we business different year anything the acquisition or transforming changed say of the an it strategically. from note, on for the prepared the was that of that's and Investor initiative mid-teens But is that more X% X% important Day. We'll in the So his when that an -- that something business opportunity really from the do in or growth for the I contemplated Martin approval that mentioned waiting remarks,

about Investor we be at clear, We were To couldn't contemplating it. it talk Day. the just

you. Thank

Saad Our Omar Evercore next question Partners. from comes with

Your line is open.

of have the out, into of Black follow-up kind consumers the kind to that, one centralized just guys respond or to think it's more Having it do the to is of wanted promotionality a if any kind value lean of you period? and recent do acceleration. if really you customer couple love taking Or that thoughts Friday the the near-term on hard I'd you to follow-ups. around returning shopping shopping, accelerated the a and patterns I time acceleration? seeing I around kind historical holiday have quick more of

money. and crystal save towards customer money. Friday that when happen. looking Black pressured save to opportunities she what's and that, to that it's logics are opportunities to gravitates guessing shot to the at And really a take a economic environment the It me Cyber ball Monday I'll and tough going very in is in

that December So in a times, waits the was of economic is trend, she patterns going surprised about was and then round look difficult No, we a Black I is of strong at new way. Monday? that the previous up Friday I for she that and doubt at then Because was it is not when I beginning deals. think the this it. follow spends and know of to customers Cyber next surprised gravitate I a strong whole and I don't deals to it all. of What whether

a think it's and before, prepared be So all December for retail, can. across taking I fight else's. Because not as in need category we elbows to as around to tough and than to somebody said our our we're our just within rather about we it's category, to winning hard as dollars I sharpen just about

can only I that the about that's So you, Omar. give forecast

we're our with able be a and pivot needed. we're that on results, it basis agile assured even taking over we're You intraday results all to change day-to-day should and as

add get We contingencies sure to have make do be and you and in there. TJ, available out we'll have plans or... that to strong whatever we prepared we is anything place and want

busier one numbers. think certainly, from stores seeing I that to everything we weekend, the both think were I what traffic, that for have with agree mall and would or a country been in one in reports the team I very And we Being we're stores. is our the that here look was the perspective actually there there, Yes. add an and that's of and reported, mall. mentioned most think mall Friday mall I the in and the across We Martin busy. at Black really prepared acknowledgment the out

correlated saw, think Martin bit preparedness the the than part in on better programs the was traffic that's And we the mentioned mall. that we a lift that the little of So -- we team. little a to think, that's directly

color. strong? in color. the so helpful haven't the helpful on store Beauty future of been details very Maybe why Yes, for in that's important then people And who is any quickly, Very one? Martin, thoughts

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it is open. stronger than So categories? fact why So would reflects I that the the be other think Beauty market more

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Thank you.

Our comes Barclays. next from with Yih Adrienne question

Your line is open.

customers? measuring spike marketing to quarter, question first Martin, my younger sheet do for starts you you, then last in you How over see you three to of assessing success? both inventory, are sort on is, the my year the it's can one. quarters. how balance XX% right, first And millennial, working the next subsequent That's you for acquire know for fourth that Gen and Z of

model et in the maybe this the safety So was cetera. TJ. a and stock lot that mix, kind of of And change is

have sale unavailable much that of kind was again? the unit perspective from this, of in difficulty sales, but appreciate to flexibility you unit won't back don't to we're How sales if you what in promotional of that's off drive need So building or full how So transit? price for you you a much of then and velocity? be either be? to if be you can to marketplace, be that need those that And positive I do repurchased if drive if are that was this in how contemplating and how

questions. Great Yes.

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previously. Difficulty] was is more than marketing ever dollars [Technical efficient now So spending it

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you Hi, with still us? are Adrienne,

am with you. I Hi, still

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expect was. very our So, in the look those all consumers broad the significant expect that And We us appeal us. good in things we leading multiple of be broad we They that and we'll be sexy XX% a bring the are. customers to And with provocative. as you base a be such That if of where are, the feel things at of business. less to doing like as brand as of us demand people They communication from expect very about brand. we expect Victoria's in our who are comfort. be positive, and They to reality said, us very democratic inclusive. there way is old is back that

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helps, hope Adrienne. I that So,

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to want you do part? the TJ, take second

how been address I to Adrienne, inventories, Yes. your flowing. let it's question right me on if try understood

year that fourth last when of received of the out supply correct quarter to are last you that timing and So, coming difficult. year we chain certainly challenges inventory made due

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to gave start being working sheet balance financially been and against a generating is It own we've flexibility stable company, strong and from having lower our increase a Martin costs sheet. and earlier. that So, mentioned, that our overall balance to the long a do cash good perspective. year The us news all flexibility, as

work the will that down account. year, inventories We start think exiting as year early end timing this balance way the get a sheet think perspective, with mix from fully that actually dollar be we we difference on As inventories think we the to will Again, a And take this it digits. into up model mid-single-digit do on mid-single system. range. receipt of has we into in to started inventory XXXX. anniversary majority we the on we We its through think about basis

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think start inventory we have as to additionally, I of timing in I we the of more mentioned incrementally improvement to position. as opportunity next year enter of a see and into little on bit inventory turnover, because being

chase Difficulty] XX with next the ability have than been [Technical months. last Difficulty] entering [Technical year to inventory and So in levels the where down we

helpful. extremely That's

What best two and was of the of Just Thank deleverage in holiday. you much And what housekeeping. for luck very digital quarter? was sales? percent

deleveraged was What on margin the in quarter [Technical Difficulty]…

basis points, What the yes. was

digital. was And what

percent want digital do sales. Kevin, digital, So you of destroy to

we'll of points. to that. in We'll have deleverage sales, quarter math do the here. And get XX the B&O basis The then some percent was

It's high high XXs XXs. In the percent.

and gentlemen, for best luck you, of Thank Perfect. holiday.

question it more morning. we one before take we call a Should you. Thank

Thank you.

last Kim with comes Jonna Our question Cowen. from

is line Your open.

year helpful. can Adore think you Any would comment you business on Me that for the about Victoria's ways modernizing leverage deal. be curious as congratulations on acquisition, Any Just next Secret?

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the future. billion and do transform And we then engine just and of the at Victoria's targeting $X is the we we'll working that with to company ways bring technology call provides, for closely that so, foundation the Adore incredible PINK where And of particularly modernizing the to our heart the that third segment Morgan currently compete. it Me growth for don't and the team everything of find value market

remains interest for business. us and in Thank So that guess, everybody lots all us that happy is wish owner thank I'm very of very glad you your a good be to our for and for holidays, business, asked. you reasons for a and to you. good healthy I

participating. conference. That concludes for you today's Thank

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