Kohl's (KSS) 28 Aug 242025 Q2 Earnings call transcript

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 Kohl's Corporation Earnings Conference Call. Today's conference is being recorded. [Operator Instructions].

would Senior turn and Vice go I to conference Treasurer. time, ahead. Rupe, Mark President, this like the to over Please At Investor Relations

results, to, and this Certain those materially other in time statements. forward-looking limited reference. from are be uncertainties to such described annual of could are XA risks in include, not in filings including but made from cause Item you. that Kohl's certain statements company's all forward-looking on those by SEC, report to risks which uncertainties, in Thank projected are initiatives projected Kohl's statements supplemented the Such and financial time to on as statements. are recent with differ herein and and subject most expressly Form are Kohl's the future XX-K results call, Such may which incorporated actual

and update Forward-looking initially to no made date undertakes to statements the Kohl's obligation relate them.

this an make can be we during X-K Investor available measures the presentation investor on and In may in SEC to website. financial the non-GAAP as our the filed reference financial Reconciliation Relations filed Form non-GAAP found addition, is call, exhibit measures. of with company's to

Please this will note that be recorded. call

be this of call replays However, will updated. not

Kohl's if So undertakes and is is no you're such possible to call, longer of this no obligation a replay that current, listening it to discussed the information information. update

our morning call Chief Tom. Financial Jill Kingsbury, over Officer; the are I our this turn Officer. Tom With now me Chief Executive Timm, will and to

everyone. and Mark, morning, good you, Thank

significant have for Kohl's future actions We and continue to reposition to to this. accomplish work taken hard growth

quickly. we materialize this that of hopeful top return efforts recognize more line a were growth we take to scale time, would While

priorities. We are making against strategic our progress

softness However, our business. our core in in challenging by and has continued performance a environment impacted been

overshadowed however, our second areas, At decor, and more of customers both an time, we key positive the which their in strong Gifting which and spending, developments. are performance more Kohl's including new to Impulse. pressured discretion experienced in in the customer Home and overall same During attracted our sales Sephora, quarter, increase transactions, exhibited overall growth

Although quarter a in to by and us increase second earnings enabling our continue gross expense disappointed we sales, operationally, strong well deliver XX% margin execute management. driven to and are inventory with expansion we

done Looking focused experience customers. ahead, fully that we both are value ensuring by substantial across and we've that the work recognized product, and on new is existing

we Us highlight on an initiatives, growth price capitalize our expect our partnership value key as new Babies "R" messaging. amplifying from to on emphasis our will areas, with will We and opportunities our our also and new evolve focus with marketing on to benefit while such product to of lower continue all

the challenging. the assumes As in balance our outlook macroeconomic more Jill will discuss of for environment year will remain the detail,

accelerating and discipline this, expenses our executing operating discipline, our strategies, strengthening our the cash of as which and Importantly, return experience, our generation simplifying provide our to sheet. priorities, enhancing against by to will operating strategic we all our with and demonstrated balance Kohl's are meaningful support flow we on growth as customer value further healthy solid to focused Through continue sheet balance performance. QX will inventory managing X work remain and

do action And to value the experience our simplify customer taken we at have and look I work expenses our to significant making, on capitalizing fully inventory strengthened As have to we to simply tightly though progress and have the our we ensure enhance are are we sheet. efforts. continue we more manage strategies, balance and

start Let working. what's me with

opened sales XX%. XXXX teens total across percent beauty in consistent performing growth in better strong And year increasing sales opened the at Kohl's expected. beauty in Comparable past performance with shops Sephora shops in than low First, deliver grew with approximately continued are the to and QX XXXX.

also especially Beauty in and in and were Skin continue Fragrance, Care Tilbury drove Janeiro, and digitally. Sephora in Body quarter Charlotte growth. solid Collection see brands, the Rare growth including impressive strong Bath to We Sol de

with have this acquired we has the Sephora of has millions significant and now been stores industry. a our in within customers incredibly XXX successful. the of share partnership of presence Our X,XXX Sephora Together, gained new opening market shops following year.

in are growth. ahead, continue confident Looking ability solid to we driving our

] Ariana new as in brands Haus fragrance. such Grande and in We by Glossier are and Gaga Labs Lady introducing [ makeup

holiday are significantly building assortment, We year's off also our last gifting expanding of success.

decor, successfully to launched this Us. home gifting our trends in with traction. our coming and sales significant gain opportunity continues years. in Sales growth in continue Second, And to These accelerated Babies areas represent partnership collective underpenetrated impulse in QX. earlier a work categories we the month, "R"

little each me Let on share a these. more of

and and our business expanded sales Our our and everyday more year-over-year, XX% marketing. increased benefiting recent from experienced glassware growth assortment as pet. other in efforts to strong to wall we progress, areas build seasonal storage, across In QX, home decor decor also continues than art, many investments of and such

have and customers our well respond essentials. and For positioning. to backpacks room to highlighted assortment dorm back-to-school, of front continue we our In store gifting,

Mother's of In XX%, across more QX, Day, with increased July. Father's sales solid Fourth key than Day including performances events and

success assortment season. with our for on more an gift build even the upcoming robust holiday will We

we more total drove we as in add than XXX in holiday queue XX% impulse, sales quarter. time to stores we will for to second QX, XXX growth queue the relates In bringing of queue lines expanded more lines more the the to it lines, As season. XX

families. our on provide to Babies which our us young a me "R" Now of let reach broaden update Us, allows with initial launch brief

and in of XXX thousands from products brands. baby the furniture process shops opening gear, accessories featuring across number high-quality of We of a baby are

have of planning shops to during We month. and next opened the XXX are the more our in open than remainder August,

offering is customers online. Our available to baby also

will We from will future this inform which learn initial for expansion. launch, plans our

QX, Motherhood, the introduce Us maternity Babies introducing leading mothers. for a we brand we to are And will offering our "R" launch, the registry. with conjunction enhance In in expected

In apparel. addition infant grow see of a and we maternity, sales to will to and halo baby newborn gear also our opportunity

product. beyond Moving

other initiatives Let some that share of me working. are our

manage We continue declined last inventory to versus X% QX expenses. and in Inventory year. effectively

We continue lower has and despite greater to our which manage sales. open to inventory buy, effectively us enabled flexibility operate with to

committed to remain inventory sheet. our to year. expenses compared QX we mid-single disciplined over what be managing to the I ahead, turns environment. to am balance how declined challenging organization with continues and an Looking SG&A perspective, in a strengthen X% we continued And increasing from in expense inventory And lastly, has last remained down pleased digits.

and by $XXX million revolver by year. to During borrowings the as reduced our second quarter, compared we debt million reduced our long-term $XXX last

discuss in Now let business some are me we our continues of to actions taking. the face headwinds the

customers discretion during and interest exhibited quarter. rates our I As income high previously consumers. the to pressure continued middle Inflation our more second among spending, mentioned, especially

the during core a this we of and this to experienced that performance value our year. product in in of number To ensure and softness all past experienced We the better broad evidence are recognize our of are navigate offering, made across the footwear we enhancements seeing have the apparel which taking actions environment, clearest the quarter. of customers

family. a as the evolving are of entire our message destination Kohl's marketing We value for leading consideration increase to for

only leveraging as to but enhanced price will to into And messaging has real showcase, continue our and key value our not great we'll around of already product also influencers our differentiator. Kohl's And include Our begun customers across course, lower to points advertising Cash values begin lean offering. assortment. we a

footwear apparel we to and frankly, our do Beyond business to our in more marketing have disappointing. core efforts, trends, which been sales we work improve the know have

the confident customers to a feel of are an today by second by that in and Kohl's remain our This quarter. we more is To indicates be we recent offering product resonates is with our clear, the in conversion increase that work we experienced insight customers. supported more customer them relevant

products, new We sell-through we as initial in expanded brands, brands are delivering in benefiting well And which well stores Aeropostale are customers. introduced resonating from and which our seeing with space growth our such including trends Too. are Limited market dresses, promising in newly as as are our

in by quarter. witnessed trend also during we We are active encouraged improvement the

and including our Our private FLX which Gear, and Bauer. Eddie double in and brands, delivered several active brands, Columbia digits we low Skechers, grew growth of national Nike, include Tek positive

pleased relates and positioning it kids girls and to apparel. boys we and with our footwear backpacks, As back-to-school, are

some Nonetheless, to stores. failed space there us which are are example several back, Jewelry areas as of we self-inflicted. of is we Sephora holding for a good of our in that business where are category retain a made sales

expand was call, reestablishing fine will quarter's is as holiday well this that and jewelry category bridge customers, valued in-aisle positioning. a committed As of to we by reintroduce on stores jewelry. we as season, are This our highly placement we've XXX our in last discussed

lost opportunity rebuild we petites our to classic areas in opportunities juniors years. in traction and newness And businesses, recent our in where growing We sportswear home with have identified QX. see to in underperformed also which legacy candidly we've and assortment including increased continue

to During QX, traffic. store, we to the the of front on is influence sales to by this back fall juniors positively which reposition the expected Sephora began capitalizing

continue to bring leverage better to trend also in connect will We market customers. right brands younger our with product to

our electrics, to legacy relates and floor bedding business, sales kitchen within home pressure. remained it under As care

to trends increased and based value messaging. as introductions fall new through we expect a stronger we stabilize However, innovation, brand move on

increasing we And QX, leadership to In digital drive commerce digitally, adding an while to also channels. both the our experience. store are closer across personalization younger management a a sales that to To in future we platform. Lastly, with traffic it's we we outperformed stores driving reach growth, omnichannel we of are stores, sales layer social omni additional into continue leaning our experience transactions to consistent ensure enhance continue important investing audience. strengthening to our chain. to In increase support structure, are across

we believe and strategic So trend. us of and number help sales as reach customers Collectively, our new underway engagement stabilize with we customers. will heard, existing have initiatives improve increase you to actions a our

I now my things. want leave will to comments X with and summarize I you today,

operate consumer First, in environment. difficult a we to continue

smaller are higher QX. our we marketing evident have Recognizing of of messaging. amplified the burden feeling this, the sizes in Our in on This our cost focus value, was customers living. in especially basket

continue to increased QX decline we earnings we XX%. Second, the in position. remain sound and execute in sales, operationally Despite financial a by well

reducing long-term balance discipline by We gross margin, expenses debt. strengthening are expanding managing our inventory our with sheet and and

remain in also through building committed cash are solid key by returning And flow to third, our our growth shareholders We generation. dividend, which is momentum. the capital supported to areas investments

Babies continues holiday expanding additional gifting benefit shops back from offering Kohl's year gaining in will XXX our in bring to "R" strong the and the Us home XXX which incrementally at decor season, significantly positioned all stores builds. QX, sales we opened. awareness impulse half Sephora optimistic to our adding traction more holiday of of growth deliver drive as are in this customers queuing that will and also and We're new launch lines in the are to

the That for As accomplish our in outset, working economic at we said, growth, strategy this and I are to we future significant confidence reposition to action Kohl's are remains hard difficult a taking against our said backdrop. strong.

are to this. delivering results to We believe to strategic And continue long-term the Kohl's I for success. we that making set reflect decisions the forward in up time, right that look

the I discuss our results our their Jill for strategic turn associates Jill? outlook and to Kohl's over will quarter of second want our efforts. all call thank to I in to of dedication for XXXX. now support to

and good morning, Tom, everyone. you, Thank

results QX update down guidance. and X.X% quarter call, second today's an our sales XXXX will X.X% as QX decreased declined year additional well year-to-date. and X.X% Comparable sales details I year-to-date. X.X% For are in in as declined our on Net provide fiscal on

to in increase in Kohl's Tom and QX, are of experienced both developments. As new which overall an we positive customers attracted indicated, transactions, more

which a However, customers in spending, basket their discretion size. led exhibited smaller average more to

to Digital the line year-to-date, which our our last X% both business sales in credit in decreased though Other revenue, sales in quarter, the is expectations. primarily with down outperformed were and store quarter year.

Moving down the P&L.

in increase points. This last managing support and Second in margin store technology and SG&A of the Year-to-date, The in inventory marketing even expenses benefiting to was our SG&A expenses X.X% quarter initiatives. decline an expense fewer compared have tightly million sales. million XX driven was the was X.X% from $XXX decreased gross as year. declined growth last year. gross with fewer margin and management to openings, year-to-date, $XXX by store-related decline and million to billion expense. up $X year. was by expenses $X.X refreshes points Year-to-date, versus freight basis lower basis up in to increase Sephora XX last lower we expenses invested store-related was both driven quarter QX, Depreciation XX.X%, expenses XX.X%, in

million was expense in last quarter, Interest the $X year. $XX from down million

income call earnings charge to expense $X.XX. decreased on interest interest per million the and Year-to-date, reminder, $X.XX. net $X.X XXXX a to our quarter $X $XXX the million As notes a expense executed and QX earnings million. per make-whole May quarter. diluted related million during was included pretax for share Year-to-date, million $XX Net $XX income diluted was the share was was we

sheet of to the QX and cash exceeding ours at QX. in with remains decline. focus Once $XXX cash key was management mid-single-digit We goal to million compared turn, X% X% a cash of Inventory the year. increased balance Moving ended on Inventory which equivalents. quarter of with again flow. end down last our commitment increasing and of

season. we ahead, positioned how about the fall are feel Looking good we entering

And adjusted increase $XXX million, $XX of an million, $XXX cash $XXX was prior improvement free million year. from of year. year-to-date, million the use a last flow cash a operating an in use Year-to-date, was flow of

Now let Capital capital touch million less the year-to-date our by last driven were million, on expenditures me priorities. openings. significantly Sephora $XXX allocation fewer than year, $XXX

investing business, with top remains We priority. also "R" including from Us CapEx XXX of lines, queuing Sephora in revolver, approximately at $XXX small and of X openings, XXXX XXX sheet Babies the of and investment are QX million the the in openings, shops planning million, shareholders launch returning new impulse strengthening QX XXX $XXX of consisting end capital After ended shop store X relocation. still a $XXX We year. our balance on last million down to the

the quarter, of redeemed XXXX, due lowering second our our notes May long-term remaining During the million $XXX X.X% debt. we

cash of our our be remainder the our paying position. year, revolver the on For focus will and down balance rebuilding

favorable monitor address will options will XXXX respect our the closer we July coupon maturity likely to given to some rates. ahead, to notes, Looking with continue the and

as at our to to Board QX, the XX, our returns, to dividend dividend September declared $X.XX of on August cash prioritize for $XX on payable per we previously share levels. continue current shareholders. As distributed shareholder the In we payment And dividends XX. in million quarterly a disclosed, of shareholders

our me outlook on share let XXXX. Now details for updated some

working future As are to in our strategy you've morning, and this hard confidence have for reposition continue strong heard growth. to we Kohl's

the We financial our environment. are first for performance consumer into half taking approaching uncertainty account prudently, year outlook our the ongoing in and

a of expect sales currently X% our a the be the to to XXXX the guidance full of For X% as sales X% X% to of decrease. versus of decrease decrease be a we range to previous compared in year, net to range range X% decrease a a to decrease Comparable X%. in

Our previous mid-single X% year. to be decrease Other sales revenue to a for expected a X% comparable digits down was guidance full is full the range year decrease.

guidance. any fee surrounding being litigation, updated uncertainty rule, the currently the our timing have the Given the is of which of CFPB challenged late implementation in excluded impact we from potential

the continue monitor will when We an will to in and appropriate update development future. provide

to XX basis XX to margin X% expand to points be to year. and for X% the We expect down gross SG&A dollars

in of margin X.X% in the We prior And the as guidance prior our be guidance $X.XX $X.XX This range X.X% to our compared X% compares X.X%. EPS of to of to to to of to be to to $X.XX. expect range operating $X.XX. range

we this In closing, reiterate are prepared that remain I to navigate and environment. financially to want strong

this balance healthy to work sheet operating With our at growth. meaningful we've Kohl's I happy take generation as discipline, return and provide we support continue flow to that, will As cash our time. and Tom are in QX, to solid demonstrated continue questions to

take our Drbul Guggenheim. We'll at question from Bob [Operator first Instructions]

in. I guess, questions if I get X

little don't that the stores the the -- promotional shops can in with you you first businesses could on the those a in bit what doing dresses promotional just just have and And how you're the expand year? environment core just more non if wondering of rest the in expectations the are like and Tom, versus more the business on them? for with is women's talk doing just, The one shops shops, on for

The now. going and customer -- The now. value always on be first even going more to that. can. as right based they're answer Well, promotional really quarter -- currently that with it's very I it's question the Overall, but We're fourth the deliver important what focused squeezed, the the possibly on that on it's is we as much promotional, last promotional. just the really really think floor customer, terms to right first, dealing what we -- think think to experiencing we we in stressed is be selling we're customer they're of middle-income it's

to as said. possible, So I we're to deliver much value try as as going

X non-shops. in women's are in current they're shops dresses, it dresses very pleased the terms from quarter performance We're went very category. team as because happy based versus we're far -- performance of that The performing women's around. if better with our well. really on overall. turn to with not the have backwards. business working is happy all of We're hard expanding in stores Obviously, performing businesses that. The that As is second quarter We're the to they our with not first

have in really we It with apparel decrease made there. team a the there. assortments struggled a brands us The the that had some We of really lot good We up intimate there. overall. hurt our of key business

putting other really in really the to turned that nice real of corner a moving from We're active transformation. of women's we're as business, business the We the -- work saw hard we the under are stores that, be of that very microscope, the business women's middle junior haven't areas can. to the We product been front in business. that nicely. turn really those we business the The turn as middle soon obviously, trying the done, around in sportswear that But improved Active should overall. the very, to third and in store. accomplish that it's in the quarter to able lift the have business

Altschwager Baird. to We'll at move next Mark

Mark Teske there And Can are Amy for morning. cadence challenges, then track? between any amid to of on giving this on and demand core regular material differences you is confidence the and merchandise is ongoing clearance. that This were if you initiatives the through the speak quarter macro what price the

Nothing this I QX inter-months in a quarter event unique the don't we to the We cadence from were large is say and the really a we clearance. call for pretty with that out when speak can would we a consistent comps. had reg -- I perspective. markdown what And had start quarter very year before. on from comping

we're because have back to QX normal so And a QX for more quarter And time isn't that impactful is of change Obviously, and we is business. clearance. really us. the seasonal huge another QX a big then clearance much

So much from isn't there that talk to really about perspective.

we started softer. we said in a think out on I had call the little May,

down we at QX. were ebbs So and we where saw the obviously but some in flows,

these come saw of So second for thing Tom call, down in to items X% you well. expectations particularly, in really your seasonal question, were heard that just on And working, women's, that the it newness core only assortment back our we was but as not in to from about, their I well some is and as think quarter. talked saw the below does we Tom where big intimates, the the is

doing swim but the had some not their of is summer resonated dresses much, incredibly So really with and newness well. as other assortment

bring we're that ahead, in the and do what the that table. to look market, continue to Tom newness we at brought really the looking and we as that's leveraging to strategy So has can

they which across But as mentioned, of around as we to see Limited pick with and in, newness on advantage soft that was we in as the brands think as up, business launched and that should Aeropostale, we're so middle. in saw Sephora, bringing business customer, And newness that customer. Too that So it areas the then been well. those resonating right lot particularly we well like have Sephora bring floor, really we're juniors you the moved see front we them the from taking the left we forefront done madden has girl to can it the Tom a the more

Next, Gordon Chuck move to we'll Haskett. Grom at

you ago, and On guys that they that purchase customers the compares today can early make about Sephora, Sephora the percentage take can speak and year of forward? how going in of a you -- zooming a XX in advantage store maybe better talked cross-shopping way when to, are say, the juniors. about months or you Sephora then I how out, repositioning maybe guess,

juniors that nice Primarily, are baskets store We're trend, a basket, X we of there's front in fact product. Well, of It's Kohl's primarily the because customer we've product Sephora. overall. seen -- juniors crossover it's Sephora take to reason because shopping Juniors impulse a it's into in accessories there's from is Sephora Sephora trend a advantage as XX% and moving have it's their why think the the around crossover we're women's a lot basket. We That's the in a accessories in trying to that another of with well. that. customers from the trend overall. is at feel of that's true juniors product the of the terms basket, a of is

have We those we're repeat been more more to we're possible. the do to customers more that, going and sort trying over as It's of much overall. So feel that categories as time, the we connect stable.

-- hasn't dramatically. you I to don't have I but it want know, a you initially bit anything was it think higher, do it little to changed Jill, was that? add

No.

the cross that we shop it seen of we've in terms very have. think consistent I

also shop X.Xx We more customers us that see do frequently. those like

think, And that, had our X quarter think, in I that we I seen while. haven't up. Chuck, for calls the we So a were of transactions was that the

was the and seeing conversion also we shop buy more and that So up. are frequently, customer

we're resonating. the that products new So bringing

would launching. our as can that we only so complement is be Babies the also Kids the Us I think was in "R" with thing that now seen we'll add I basket, initiative

and advantage how of customer, item. is but to seeing trying So can that that that of basket grow we X/X really baskets, that in all the the over the the of enhancements we're that continue a really areas knowing have get around replenishable really to trips take fact some out more that then to in even we've seen beauty

Yes.

The that's thing customers Sephora that about to that other before Kohl's. times of multiple said new Kohl's the XX% are and this Sephora are we've shopping exciting is the at

still And So overall. to along. hit -- we've seeing the target we're numbers the that's a that pretty on phenomenal number been all

That's Babies seems on opportunity. great. just early the models? you half, phasing thus It any that like far? comps? And be we of in just back a then margins our impactful on "R" think to on could And then be Us, big it or How reads do anything just outlook, the Jill comps gross any thinking , should about

Us. obviously, Jill "R" let in stores, I'll It's and by mean, XXX I that, end Babies stores, talk it's got the will we and really of the obviously it stores. September, have in into I'll XXX XXX but just early. it it answer about be

which car seats cetera, on baby really gear, Just is that's so #X strollers, the want you really good and category see. et color far some is what to it, because

second was The so But category early. something though, that we be really as candidly, another shopping I it if positive furniture. That's really like excited that wouldn't feeding they're or about or it. mean it's gifts, us. is

emerges. hate give that much color some You you really it us we'll it as tout time, be to on too giving because Jill? and

we coming as half be Obviously, for back from perspective. really item guidance, build that's so been we opening And terms Yes. our that a in customer. there real say for extra another September. what guess, And that to August the half expect extra are just positive a XXX little do from talked I opening up the of of in a is would and that starting, of The year us, a BRU in impulse an I in we're about for stores XXX lines, initiatives lot XXX dollars well. the getting additional back the

to that year. stores we're So this looking bring XXX into

on stores. will well. that the launches just happen about the in lot of these back are we're talking that half setting So a then brand And as

So newness you'll the see. that

of think shops. on about year. from bring almost stronger gift as big we're really And excited Xx a so what floor last the think off how gifting gift we particularly I we to skin to in We're holiday, think care. as is can gifting, If to across the I about then around we have what we successes have Sephora those store, boxes some fragrance going saw going and around last into well, out go building year, we're the presence

So learning from last what saw year. we

So, I is be to it us. build a I that to perspective, I then probably sales would to continue And just a I from say for that from build think as initiatives margin a be it's those we've a perspective going think management inventory to with off similar. probably benefit really has able that of pretty QX mean, more of strength. clearance. we've the But had, been going

for pretty the a even pretty year. a two, clear I say the would margin increase So between

our at We'll Binetti Evercore. Michael from final question take

of Jacquelyn is behalf This on Wang Michael.

excluding driving in the what's leverage I it included half what's lower Also, guidance? in this quarter. was is. the margin despite of guidance, the the And sales? the from guidance XXXX durable in know how the CFPB on increased second the Just the first the impact

Sure.

half of and build just bring the have the is we end really from is think trend year, front really of at initiatives so the we about way which looked is in. seen can down the the I they the half about we low back that and guidance X% in talked in that the we the the X% that then the the year, think

"R" completion having shops, XXX in the new Sephora So and Us, Babies the newness really business, impulse. launching brands having of around the

So that's really how we see the build.

us moderation of the the We In freight first we year half up terms just that We see will of half. some XX, won't obviously, XX. have over front the we margin, from in the to promotional us completed XX did think so Tom it to holiday. call, this lean same highly And that where in do half. promotions expect benefit that be gives then back also I the room into to really started in benefit

did we well. from perspective that give ourselves room So some as

margin how the out. plays that's So

of half good the showed an from And really some SG&A then year. obviously disciplines front the perspective, in

think I a continue ebb disciplined from cost have S to expense pretty sales, in that, those flow. an we management we'll particularly and perspective. we've lean if it will proven we have on culture softer

perspective, be mid-single I the the would year, full our half the front the I the down was originally we contextualize way said now down year, of it of line you would would completed we half year. would said and down down be year, think for CFPB other Well, digits the mid-teens it be just a for guided, X%. the and it that From when we revenue it is And in we mid-single front for digits.

So really, that the much it if with impact for of differential CFPB half. we math, the that just you'll do back will line the kind updated. the the you and that guide think half, be in front I And more get in

hits So points. hopefully, X on that your

to Chen And go have we another do question. TD We'll Oliver at Cowen.

apparel softer the happened in having the Tom on the longer which just core raise, fix regarding in that guidance the and taking, the a revenue? the nearer terms Jill, mechanics top easier be you're and guidance, what footwear the of line issues the to microscope will and Jill, on And versus of on term?

because easier lot turn turn. think around I there the and really Well, to be will a out order because as a women's marketplace business the leverage think far we turn business, around, it's an can junior the business in I product as quick there's it of to

of the easier think the be it. trend I business will So piece

will apparel things by it's driven overall. harder more and some because traditional it's like really be intimate just brands the a think business, I

more more will also of classic think harder I time. that a take be brands to the assortment into So the integrate little will bit trying

went will that that Rebuilding our quickly petite we business, out react of something can really think business. because be that fairly we I

So we'll see that But we'll plus moving to able think think and of think mentioned, I quicker, back the inventories, rebuilding put I front the -- do be I just store. the I that. in progress in as it it juniors,

overall. that think help Jill? will I a lot

Yes.

Oliver, line low half year. from in the that top the front in the I of perspective, produced really of way actuals think look terms we at I a end just at the it is stuttering guidance, the

confidence. really about the then change all is that And So build out, do from that the saying where the is which of we have would initiatives trend have that, we that. laid upside no

We is another XXX outperform continue Sephora added expectations, to see doing well. incredibly We stores. our

learning a it there newness of bigger. can into more as holiday last from as that have lean our and make how to we around lot well happening gifting even We

really We space Us just us. They're set "R" for customer. and complete it product that's have that's white younger this month, literally Babies complements coming in that for

So us. opportunity it is a big for

and add with have products. extra And It into basket, it success we've extra which success for those us lower the item bringing a AUR them then but come does seen been has , that impulse, well. drain have does in in a just huge as

So that go will to stores. XXX another

mentioned the done really those then Tom stores, really dress something elements. dress, fashion in past. a We're wasn't been the of hitting just all in have presentation areas bigger on typically like which And around to in hitting that some going have we holiday

men's, So introductions women's. really women's then juniors, perspective. helping from new across a young brain And

about a the seen the And even be the years, than manage sure run me promotional competitive I down season. then I good helped that's we'll inventory several to more up that cost during think ourselves year. make get we've the done mid-single discipline room which confidently And digits, we last that I think margin, holiday us really helps for the over management the I can able how be but come to Tom's then to with margin makes feel giving think proven very have top of -- I line since which So in, we've has inventory it. the

it think saying the trend. on low we I really stays do I and end at of a So different, just nothing guidance perspective, how that's looked from it kind

and like initiatives the perspective end. back top from us that kind the build of feels then it up to So can derisk

spoke Okay. follow-up. you're the seeing. consumer as And a the consumer? UPTs concerned health in mixed most And Are And how you this what we've well? traffic? second, on when more terms changed to what of that considered relate we last had choiceful Because the of might or

Yes.

the me Oliver, one I transactions. that first think biggest that's I what actually we thing probably And the we talked I several years. makes positive in time is talked about happy think saw, about is

seeing we've that what spending the us up. Sephora think seen I is just they're indication we're has because more transactions we're fact like item that on being that conversion of that general. So customer been they're discerning that items they're with money to squeezed. more and seeing some and And that continues less newness What purchasing less either bringing or is the they're higher spending be that really in we're a ticket up, we're And customer. core seeing with an customer go our the resonating in go gives middle-income is

an So from perspective. the I AUR think pressure

AUR. lower impulse, AUR, the AUR decor, lower items. of lower Some Home introduced we AUR;

was Us, and and mentioned, resonate So is fine to Those year, what half If stores, the think into a in of Babies customer #X in, just we're XXX in misses. news came a it like fine we as it the was seeing year that know seller. that be we're ticket the jewelry back introducing all jewelry with "R" bringing customer, items, being Tom going forefront. some are bringing back in of something higher -- we of our

we to her. So back just have for that deliver really

So that the that's perspective. be that's -- we can did that included to expecting how for But is AUR back we be back get I continue from the an to we of half that, and year. pressured, well the why guide think going also

Telsey take a We'll Telsey at from Advisory Group. Dana question

in Jill, as traffic, the something mentioned new. you is conversion obviously which

from? do expect home, category of you partnerships, to Us the where Babies impact as some And are other opportunities Tom, biggest going the forward? "R" think you there new of then the of seeing on As come about some the what you and

Sure.

happens Us, that to we going the October. of at launching And "R" complement a just I to for be are launch I it Babies did and think registry beginning that. think

opportunity as And there's think we cycle kids effect on nice seeing perspective, us, a day, younger business. life the to family really a that do customer, early beginning I think a them their that first from I come having are registry So large halo of in. part we having really for a have

really that just feeding think gear, the toys basket I And be can we relevant and as So have not a, helps how their and accessories that as have us from, into all of more customer. we bring only well. well extra to do items

those can into come see quick we add-ons think that I are the basket. So

the So a I earlier, the think the halo Us so be Us but talked impact, just for increase do up then "R" that a does that even place for we sale be "R" store. really higher. Sephora And about of think it as could Babies for and customers that do of But larger product, not key attachment can to also buying Babies store, how them to the to that more expand continue kids, across XX% I to that. buy really,

market of we've some newness, think going the and just of fashion terms talked -- in also to that from perspective being that relevant much more of I Dana, relevancy brands and about the on and chasing.

really going and chasing that way to things for continues muscle in something benefit us, is a So we're we're It the it's customer reactive to a be likes. that building.

partnerships that for getting areas And in well. it, a excited works say started, We of the of think are So some the I it just and that broadly when do that and think out to more, for looking just are there's we could and there I deep teams as do lot as we're that it about a Tom large well. I well. more have merchant benefit think, would I us be really

our more which is store, important I So customer. think the there's to I in newness going think be to a lot

Yes.

the I made good has the Decor as feel as been progress good, far overall. has to has significant last together build year, I'm the As home was you'll of home right team the decor. a about of the but in day incredible there also forward holiday there decor, be terms which only the presentation an team very in store but front not presentation, in in looking very it the Home every season, seasonal put will holiday overall. the terms see in business goes, decor of the

is, has a business very have been that big extremely us. issue large and which strong pet is as The hurting building there well. The see we overall, electrics have business, we we

the over and the get business the of think are I a seeing of to business part that. bedding and of needs to core have bedding the wall very done nice I in business a overall. good be lot have we business. team of been turned around hurdle good, home business But general, that's repositioning progress has job art rebuild has just very to growth. the The there. we but Our business, the electrics feel obviously, We about for

Well, year growth well. that as call on today. good forward thank we everyone to to the our you. presentation again, some about back of there to a thing other I excited The we're But gifting the see is listening want half day. there. Thank the entire for Have look

concludes your call. And this conference you participation. today's for Thank

You may now disconnect.