Carter's Inc (CRI) 2024 Q3 法說會逐字稿

Welcome to Carter's Third Quarter Fiscal 2024 Earnings Conference Call. On the call are Michael Casey, Chairman and Chief Executive Officer; Richard Westenberger, Chief Financial Officer and Chief Operating Officer; Kendra Krugman, Chief Creative and Growth Officer; and Sean McHugh, Treasurer. Please note that today's call is being recorded.

歡迎參加卡特 2024 財年第三季財報電話會議。董事長兼執行長 Michael Casey 出席了電話會議；理查德‧韋斯特伯格 (Richard Westenberger)，財務長兼營運長；肯德拉‧克魯曼 (Kendra Krugman)，首席創意與成長長；和財務主管肖恩·麥克休。請注意，今天的通話正在錄音。

I'll now turn the call over to Mr. McHugh.

我現在將電話轉給麥克休先生。

Thank you, and good morning, everyone. We issued our third quarter 2024 earnings release earlier today. The release and presentation materials for today's call are available on our Investor Relations website at ir.carters.com. Note that statements on today's call about items such as the company's outlook and plans are forward-looking statements.

謝謝大家，大家早安。我們今天稍早發布了 2024 年第三季財報。今天電話會議的新聞稿和簡報資料可在我們的投資者關係網站 ir.carters.com 上取得。請注意，今天的電話會議中有關公司前景和計劃等項目的陳述均為前瞻性陳述。

For a discussion of factors that could cause actual results to vary from those contained in the forward-looking statements, please see our most recent SEC filings and the earnings release and presentation materials posted on our website. In these materials, you will also find reconciliations of various non-GAAP financial measurements referenced during this call. After today's prepared remarks, we will take questions as time allows.

有關可能導致實際結果與前瞻性陳述中包含的結果不同的因素的討論，請參閱我們最新的 SEC 文件以及我們網站上發布的收益報告和演示材料。在這些資料中，您還將找到本次電話會議期間引用的各種非 GAAP 財務衡量指標的調整表。在今天準備好的發言之後，我們將在時間允許的情況下回答問題。

I will now turn the call over to Mike.

我現在將把電話轉給麥克。

Good. Thanks, Sean. Good morning, everyone. Thank you for joining us on the call. Before we walk you through the presentation on our website, I'd like to share some thoughts on our business with you. Our third quarter results were better than forecasted. Our sales and earnings exceeded the high end of the guidance we shared with you in July. We believe consumers responded favorably to the strength of our product offerings and our new pricing and marketing strategies launched in the third quarter.

好的。謝謝，肖恩。大家早安。感謝您加入我們的通話。在向您介紹我們網站上的簡報之前，我想與您分享一些關於我們業務的想法。我們第三季的業績優於預期。我們的銷售額和收入超過了我們 7 月與您分享的指導的上限。我們相信消費者對我們的產品實力以及第三季推出的新定價和行銷策略反應良好。

The better-than-forecasted sales were driven by our US Retail segment. Our US Wholesale sales in the third quarter were at the upper end of our forecast, and our International sales were at the lower end of our forecast, reflecting a slow start to cooler weather apparel sales in Canada. Earnings in the third quarter were well above the high end of our guidance. Gross profit was in line with our forecast. SG&A was lower, reflecting good control over discretionary spending.

好於預期的銷售是由我們的美國零售部門推動的。我們第三季的美國批發銷售處於我們預測的上限，而我們的國際銷售處於我們預測的下限，反映出加拿大涼爽天氣服裝銷售的緩慢啟動。第三季的獲利遠高於我們指引的上限。毛利符合我們的預測。SG&A 較低，反映出對可自由支配支出的良好控制。

Inventory levels and cash flow were better than planned. We ended the quarter with a higher cash balance, no seasonal borrowings, lower interest costs and over $1 billion in liquidity. Our best-selling product offering continued to be in our Baby age segment. Baby apparel sales grew 2% in the quarter compared to last year and contributed over 50% of our total apparel sales. We saw slightly lower sales in the Toddler age segment. Collectively, our Baby and Toddler apparel sales contributed over 80% of our total apparel sales and were comparable to last year. We had a double-digit decrease in sales in our apparel for 4- to 10-year-old children. It's largely a playwear product offering and contributed less than 20% of our apparel sales. We believe we have strengthened this component of our product offering for 2025. In the context of our good, better and best product offerings, we continue to see a barbell-shaped trend in our US Retail sales in the third quarter. We saw low single-digit sales growth in our opening price point product offerings. We had over 50% growth in our best product offerings, including our Little Planet, PurelySoft and Baby B'Gosh collections. Sales of our mid-tiered product offerings were down over 10%. We saw lower sales on bestsellers carried over from last year, and we saw higher sales where we offered fresh color stories, new multicolored prints and elevated fabrics.

庫存水準和現金流量好於計劃。本季末，我們的現金餘額增加，沒有季節性借款，利息成本降低，流動性超過 10 億美元。我們最暢銷的產品仍然屬於嬰兒年齡層。本季嬰兒服裝銷售額比去年增長 2%，占我們服裝總銷售額的 50% 以上。我們發現幼兒年齡層的銷售額略有下降。總的來說，我們的嬰幼兒服裝銷售額占我們服裝總銷售額的 80% 以上，與去年相當。我們 4 至 10 歲兒童服裝的銷售額出現了兩位數的下降。它主要是休閒服產品，占我們服裝銷售額的不到 20%。我們相信我們已經加強了 2025 年產品供應的這一組成部分。在我們提供優質、更好和最好的產品的背景下，我們第三季的美國零售銷售繼續呈現槓鈴形趨勢。我們的開盤價產品銷售成長幅度較低。我們的最佳產品成長了 50% 以上，包括 Little Planet、PurelySoft 和 Baby B'Gosh 系列。我們的中端產品銷售量下降了 10% 以上。我們看到暢銷書的銷售額比去年有所下降，而我們提供新鮮色彩故事、新的彩色印花和高檔布料的銷售額則有所增加。

Shopping for holiday-related apparel trended later than last year. We believe consumers are shopping closer to need and buying what's needed and only when needed. In recent weeks, thankfully, as weather turned cooler in more parts of the country, the trend in our holiday-related apparel has improved. Relative to last year, our third quarter sales were down 4%, reflecting a 5% reduction in average prices and a 1% increase in unit volume. That's the best unit volume performance we've achieved since 2021.

節慶相關服裝的購買趨勢晚於去年。我們相信，消費者的購物更貼近需求，並且只在需要時才購買所需的東西。值得慶幸的是，最近幾週，隨著全國更多地區天氣轉涼，我們與節日相關的服裝趨勢有所改善。與去年相比，我們第三季的銷售額下降了 4%，反映出平均價格下降了 5%，單位數量增加了 1%。這是我們自 2021 年以來取得的最佳單位體積性能。

At the end of July, we announced a plan to invest $40 million in lower prices and $10 million in additional brand marketing to improve the trend in our US Retail sales. Year-to-date through July, our comparable US Retail sales were trending down about 10%, including a 13% decrease in July. We focused our price reductions on less than 20% of our product offerings, largely opening price point products, which are typically basket starters like our basic t-shirts, shorts and leggings. We'll show you examples of where we lowered prices, and we'll discuss the related benefits this morning. We believe consumers responded favorably to those sharper prices.

7 月底，我們宣布計劃投資 4,000 萬美元降低價格，並投資 1,000 萬美元進行額外品牌行銷，以改善美國零售銷售的趨勢。今年迄今為止，截至 7 月份，美國可比零售額下降了約 10%，其中 7 月份下降了 13%。我們的降價重點是不到 20% 的產品，主要是開放價位產品，這些產品通常是基本款 T 卹、短褲和緊身褲等入門產品。我們將向您展示我們降低價格的範例，並且我們將在今天早上討論相關的好處。我們相信消費者對這些更高的價格反應良好。

Our comparable US Retail sales in August and September were down about 5%. Fourth quarter-to-date, our comparable Retail sales are trending down about 4%. Collectively, we believe our investments in product benefits, price, marketing and a better in-store and online shopping experience have improved the trend in our conversion rates, transactions, unit volume and new customer acquisition. We're pleased with the near-term benefit from these investments. Longer term, we believe there may be a more meaningful benefit as we reengage and attract consumers who shifted over to the mass channel and off-price retailers as inflation reached historic levels beginning in 2022.

我們 8 月和 9 月的可比美國零售額下降了約 5%。第四季迄今為止，我們的可比零售額呈下降約 4% 的趨勢。總的來說，我們相信我們在產品優勢、價格、行銷以及更好的店內和線上購物體驗方面的投資改善了我們的轉換率、交易、單位數量和新客戶獲取的趨勢。我們對這些投資的近期效益感到滿意。從長遠來看，我們相信，隨著通貨膨脹從 2022 年開始達到歷史水平，我們重新吸引並吸引那些轉向大眾通路和折扣零售商的消費者，可能會帶來更有意義的好處。

The results of recent market analysis were consistent with our experience over the past 2 years. It indicated that millennials and Gen Z consumers, our target demographic, shifted to value apparel retailers beginning midyear 2022. The research indicated that although apparel prices had grown only 5% since 2019, other costs of living, including grocery prices up 30%, drove them to value apparel retailers. Carter's is a value apparel retailer. Our average prices per piece are about $6 and change. In the third quarter, we believe more competitive prices enabled our US Retail unit volume to be comparable to last year. By comparison, Retail units sold in the first half this year were down 6%. We plan to continue to seek the sweet spot in pricing to drive growth in unit volume and plan to be less reliant on higher prices near term to drive growth. In the third quarter, we launched a new marketing campaign focused on the beauty of our product offerings and the special moments of early childhood. We'll share some of that brand marketing with you this morning. We believe our brand marketing is resonating with consumers. We saw a lift in new customers in the third quarter. We also saw an increase in reactivated customers returning to shop with us after more than a year since their last purchase. With our better-than-forecasted third quarter results, we are reaffirming our previous outlook for annual sales and profitability this year. If current Retail trends in the United States continue, we may have upside to our guidance. That said, we believe the potential upside opportunities in the fourth quarter may be offset by market-related risks to our forecast. At the high end of our guidance, we are forecasting annual sales of $2.8 billion this year. Our US Retail business is expected to contribute about 50% of our annual sales. We're assuming our Retail sales this year will be down about 8%, store sales down 6%, e-commerce sales down 10%. We believe in the importance of stores as the very best expression of our brands. Nearly 70% of children's apparel is purchased in stores, and our stores are the #1 source of new customer acquisition. We believe our stores drive our e-commerce sales. When we open stores, we see a lift in e-commerce sales, and when we close stores we see e-commerce sales in the related market decrease.

最近的市場分析結果與我們過去兩年的經驗一致。它表明，我們的目標族群千禧世代和 Z 世代消費者從 2022 年年中開始轉向價值服飾零售商。研究表明，儘管自 2019 年以來服裝價格僅上漲了 5%，但包括雜貨價格在內的其他生活成本上漲了 30%，促使他們重視服裝零售商。Carter's 是一家超值服飾零售商。我們每件的平均價格約為 6 美元，並且會有所變化。在第三季度，我們相信更具競爭力的價格使我們的美國零售單位銷售與去年相當。相比之下，今年上半年零售單位銷售量下降了 6%。我們計劃繼續尋求定價的最佳點以推動單位銷售的成長，並計劃在短期內減少對更高價格的依賴來推動成長。在第三季度，我們發起了一項新的行銷活動，重點關注我們產品的美麗和幼兒時期的特殊時刻。今天早上我們將與您分享一些品牌行銷內容。我們相信我們的品牌行銷能夠引起消費者的共鳴。第三季我們看到新客戶數量增加。我們還發現，自上次購買一年多後重新回到我們商店的顧客數量有所增加。鑑於第三季業績優於預期，我們重申了對今年年度銷售額和獲利能力的預期。如果美國目前的零售趨勢持續下去，我們的指導可能會有上行空間。儘管如此，我們認為第四季度潛在的上行機會可能會被我們預測的市場相關風險所抵消。按照我們指導的上限，我們預計今年的年銷售額將達到 28 億美元。我們的美國零售業務預計將貢獻我們年銷售額的 50% 左右。我們假設今年的零售銷售額將下降約 8%，商店銷售額下降 6%，電子商務銷售額下降 10%。我們相信商店作為我們品牌的最佳表達方式的重要性。近 70% 的兒童服裝是在商店購買的，我們的商店是新客戶獲取的第一大來源。我們相信我們的商店推動了我們的電子商務銷售。當我們開店時，我們會看到電子商務銷售額的上升，而當我們關閉商店時，我們會看到相關市場的電子商務銷售額下降。

Increasingly, consumers enjoy the convenience of shopping online and picking up their purchase the same day in our stores. We saw a 12% lift in omnichannel sales in the third quarter. Omnichannel sales include the store fulfillment of online purchases. About 38% of our digital orders were supported by our stores, up from 35% last year. These are margin-accretive transactions and reduce the need for shipping online purchases to consumers. Initiatives to improve our store performance include opening 40 high-margin stores this year in good shopping centers and closing about 30 low-margin stores in declining traffic centers as leases expire.98% of our stores were cash flow positive over the past 12 months. Our new stores continue to comp better than our older stores. To improve the performance of our older stores, we have increased our investments in store remodels this year. To improve our US Retail performance, we are responding to the barbell pattern in consumer purchases by increasing the mix of our opening price and premium-priced product offerings. We have invested in technology to improve our performance, including a new inventory allocation system to better support the expectations of consumers shopping with us in our stores from Maine to Hawaii. And we have also invested in new marketing personalization technology enabled by artificial intelligence to tailor our digital marketing to consumers' product preferences based on the age and gender of their child. For the year, we are forecasting US Wholesale sales of over $1 billion. The strength of our Wholesale business continues to be in our exclusive brands sold to mass channel retailers. Carter's has an unparalleled competitive advantage as the largest supplier of children's apparel to Target, Walmart and Amazon. Collectively, our unit volume to these retailers in the first 9 months this year was up about 15%, by comparison, the unit volume in our US Retail segment was down 4%.

消費者越來越多地享受在線購物並當天在我們的商店提貨的便利。我們看到第三季全通路銷售額成長了 12%。全通路銷售包括線上購買的商店履行。我們約 38% 的數位訂單由我們的商店支持，高於去年的 35%。這些都是利潤增值的交易，減少了向消費者運送線上購買商品的需求。改善門市業績的舉措包括今年在優質購物中心開設40 家高利潤門市，並在租約到期後關閉客流量下降中心的約30 家低利潤門市。正。我們的新店繼續比舊店表現更好。為了提升舊店的業績，今年我們加大了店面改造的投資。為了改善我們的美國零售業績，我們透過增加開盤價和溢價產品的組合來應對消費者購買的槓鈴模式。我們投資了技術來提高我們的業績，包括新的庫存分配系統，以更好地支持消費者在我們的商店（從緬因州到夏威夷）購物的期望。我們還投資了人工智慧支援的新行銷個人化技術，根據消費者孩子的年齡和性別來客製化我們的數位行銷，以適應消費者的產品偏好。我們預計今年美國批發銷售額將超過 10 億美元。我們批發業務的優勢仍然在於我們向大眾通路零售商銷售的獨家品牌。身為塔吉特、沃爾瑪和亞馬遜最大的童裝供應商，卡特擁有無可比擬的競爭優勢。總的來說，今年前 9 個月我們向這些零售商的單位銷售量成長了約 15%，相較之下，我們美國零售部門的單位銷售量下降了 4%。

With inflation weighing on families with young children, we believe our target consumers have sought the convenience that mass channel retailers provide with one-stop shopping for groceries, diapers, baby formula and children's apparel. Carter's has benefited from that traffic to mass channel retailers. Our exclusive brands are forecasted to grow to 55% of our total US Wholesale sales this year, up from 51% last year. By comparison, our sales to department stores this year are forecasted to be less than 20% of our Wholesale sales, down 3 percentage points to last year.

由於通貨膨脹給有小孩的家庭帶來壓力，我們相信我們的目標消費者已經尋求大眾通路零售商提供的一站式購物雜貨、尿布、嬰兒配方奶粉和兒童服裝的便利。Carter's 受惠於大眾通路零售商的流量。我們的獨家品牌預計今年將占美國批發總額的 55%，高於去年的 51%。相比之下，我們今年對百貨公司的銷售額預計將低於我們批發銷售額的 20%，比去年下降 3 個百分點。

For the year, we are also forecasting lower sales to off-price retailers. With our progress managing inventories, we are forecasting a nearly 50% reduction in low-margin off-price sales this year. Excluding off-price sales, we are forecasting low single-digit growth in our US Wholesale sales this year. To date, we have received bookings, which indicate modest growth in Wholesale demand for our brands for our spring and summer 2025 product offerings.

今年，我們也預測折扣零售商的銷售額將會下降。隨著我們管理庫存的進展，我們預計今年低利潤折扣銷售將減少近 50%。不包括特價銷售，我們預計今年美國批發銷售額將出現低個位數成長。迄今為止，我們已收到預訂，這表明我們品牌 2025 年春夏產品的批發需求略有增長。

Our International sales this year are expected to contribute about 14% of Carter's annual sales or a little over $400 million. Our operations in Canada and Mexico are expected to contribute over 80% of our International sales. We're forecasting high single-digit growth in Mexico this year. By comparison, in Canada, we're forecasting a high single-digit decrease in sales. The Bank of Canada has cut interest rates 4x this year to strengthen the economy. Like the United States, families with young children have been weighed down by inflation and higher interest rates. That said, we're encouraged by recent trends in Canada with cooler weather arriving, our Retail sales in Canada are comping positive in the fourth quarter. Our supply chain continued to be a source of strength for us in the quarter. Product costs were down 5%, down 7% year-to-date. Shipments to our Wholesale customers and our stores were largely on time despite unrest in Bangladesh, a port strike on the East Coast and rerouting of ships to avoid the Red Sea. We're forecasting a low single-digit decrease in product costs in the fourth quarter. The early read on product costs for the first half of 2025 suggests modest inflation.

我們今年的國際銷售額預計將佔卡特年銷售額的 14% 左右，略高於 4 億美元。我們在加拿大和墨西哥的業務預計將貢獻我們國際銷售額的 80% 以上。我們預計墨西哥今年將實現高個位數成長。相較之下，我們預期加拿大的銷售額將出現高個位數下降。加拿大央行今年已降息四倍以提振經濟。與美國一樣，有小孩的家庭也受到通貨膨脹和利率上升的壓力。也就是說，隨著天氣轉涼，加拿大最近的趨勢令我們感到鼓舞，我們在加拿大的零售額在第四季呈現正成長。我們的供應鏈在本季仍然是我們的力量來源。產品成本下降 5%，今年迄今下降 7%。儘管孟加拉國發生騷亂、東海岸港口罷工以及船舶改道以避免紅海，但我們對批發客戶和商店的發貨基本上還是準時的。我們預期第四季產品成本將出現個位數的低幅下降。2025 年上半年產品成本的初步數據顯示通膨溫和。

Our market research suggests consumers plan to increase the mix of apparel purchases for their holiday gift giving this year. Our market research also continues to indicate that families with young children have pulled back on spending due to inflation. Children's apparel is a relatively small component of a young family's budget, but even less discretionary purchases like children's apparel have been scaled back because of inflation. We believe that Carter's advantages in inflationary markets include our focus on essential core products, a high mix of less discretionary baby apparel, our broad and unparalleled market distribution capabilities, including our exclusive brands sold through Target, Walmart and Amazon, and our compelling value proposition with average retail price points of less than $11, including many high-value multipacks.

我們的市場研究表明，消費者今年計劃增加購買節日禮物的服裝組合。我們的市場研究也繼續表明，由於通貨膨脹，有小孩的家庭已經減少了支出。兒童服裝在年輕家庭的預算中所佔比例相對較小，但由於通貨膨脹，即使是兒童服裝等非可自由支配的購買也已縮減。我們相信，卡特在通膨市場中的優勢包括我們對必需核心產品的關注、非隨意性嬰兒服裝的高度組合、我們廣泛且無與倫比的市場分銷能力，包括我們透過塔吉特、沃爾瑪和亞馬遜銷售的獨家品牌，以及我們引人注目的價值主張平均零售價低於 11 美元，其中包括許多高價值合裝包。

Our growth strategies are focused on the fundamentals, including elevating the style and value of our product offerings, improving our marketing capabilities and effectiveness, and leveraging our unparalleled multichannel market presence to ensure wherever children's apparel is sold in a meaningful way, consumers will have a good experience with our brands. We'll share our thoughts on each of these growth strategies with you this morning. I want to thank all of our employees, many tuning in this morning for helping us exceed our third quarter plans and their commitment to achieve our growth objectives in the home stretch this year.

我們的成長策略著重於基本面，包括提升我們產品的風格和價值，提高我們的行銷能力和有效性，並利用我們無與倫比的多通路市場影響力，確保無論在哪裡以有意義的方式銷售兒童服裝，消費者都會獲得對我們品牌的良好體驗。今天早上我們將與您分享我們對每項成長策略的想法。我要感謝我們所有的員工，其中許多人是今天早上調教的，他們幫助我們超越了第三季度的計劃，並感謝他們在今年衝刺階段實現增長目標的承諾。

At this time, Richard and Kendra will walk us through the presentation on our website.

此時，理查德和肯德拉將引導我們完成網站上的示範。

Thank you, Mike. Good morning, everyone. On pages 3 and 4 of our presentation, we've included our GAAP basis P&Ls for the third quarter and year-to-date periods. On page 5, we've summarized non-GAAP adjustments to our reported results. This year's third quarter results included a noncash charge related to the partial settlement of a legacy OshKosh B'Gosh Pension Plan and last year's third quarter and year-to-date results included charges related to organizational restructuring. I'll speak to our results on an adjusted basis this morning, which excludes these items.

謝謝你，麥克。大家早安。在我們簡報的第 3 頁和第 4 頁上，我們列出了第三季和年初至今的 GAAP 損益表。在第 5 頁，我們總結了對報告結果的非 GAAP 調整。今年第三季的業績包括與部分結算遺留的 OshKosh B'Gosh 退休金計畫相關的非現金費用，去年第三季和年初至今的業績包括與組織重組相關的費用。今天早上我將在調整後的基礎上談論我們的結果，其中不包括這些項目。

Turning to page 6. We have a summary of our third quarter performance relative to the guidance we provided on our last call in July. As Mike noted, we exceeded our sales and earnings objectives for the third quarter. Our consolidated net sales were above our guidance as a result of better comparable sales in our US Retail business. Earnings were also higher than our guidance, driven by higher sales, lower spending, lower net interest costs and a lower effective tax rate. Turning to page 7 and some highlights of our third quarter performance. Net sales were $758 million in the quarter, down 4% versus last year. We had lower sales in our US Retail and International segments, while sales in our US Wholesale business were essentially comparable to last year. Operating income was $77 million at an operating margin of 10.2%. I'll speak to the components of operating margin in a moment.

翻到第6頁。我們根據 7 月最後一次電話會議提供的指導對第三季的業績進行了總結。正如麥克指出的那樣，我們超出了第三季的銷售和盈利目標。由於我們美國零售業務的可比銷售額更好，我們的綜合淨銷售額高於我們的指導。由於銷售額增加、支出減少、淨利息成本降低和有效稅率降低，獲利也高於我們的指引。翻到第 7 頁，我們第三季業績的一些亮點。該季度淨銷售額為 7.58 億美元，比去年下降 4%。我們美國零售和國際部門的銷售額較低，而美國批發業務的銷售額與去年基本相當。營業收入為 7,700 萬美元，營業利益率為 10.2%。稍後我將討論營業利潤率的組成部分。

Adjusted earnings per share were $1.64, down 11% from last year, less than the year-over-year decline in operating income as a result of lower net interest expense on lower borrowings, a lower effective tax rate and fewer average shares outstanding due to our share repurchases.

調整後每股收益為 1.64 美元，比去年下降 11%，低於營業收入的同比降幅，原因是藉款減少、有效稅率降低以及平均已發行股數減少導致淨利息支出減少。

On page 8, we have our consolidated P&L for the third quarter. On our nearly $760 million in net sales, gross profit in the third quarter was $356 million, down 5% from last year and gross margin was 46.9%, a decline of 60 basis points versus last year. The lower gross margin rate was driven by several factors, including price investments in our US Retail business, a higher mix of lower gross margin US Wholesale sales and higher inbound freight costs. Last year's gross margin benefited from the release of inventory reserves as we successfully sold through pack and hold inventory, and that benefit did not repeat this year.

在第 8 頁，我們列出了第三季的合併損益表。在我們近 7.6 億美元的淨銷售額中，第三季毛利為 3.56 億美元，比去年下降 5%，毛利率為 46.9%，比去年下降 60 個基點。毛利率較低是由多種因素造成的，包括美國零售業務的價格投資、美國批發銷售毛利率較低以及入境貨運成本較高的綜合影響。去年的毛利率得益於庫存儲備的釋放，我們透過打包和持有庫存成功銷售，今年沒有重複這種好處。

Product input costs were favorable in the third quarter, which partly offset some of these gross margin headwinds. As Mike described, we made some targeted pricing investments in the third quarter to increase the competitiveness of some of our opening price point products and to move through prior-season inventory. These pricing actions affected consolidated gross margin by approximately 170 basis points, but we view them as enabling the improvement in Retail sales we achieved in the third quarter. Spending was well controlled in the quarter and was comparable to last year. We invested more in brand marketing and had lower spending on professional fees and lower provisions for performance-based compensation. SG&A as a percent of sales was up 140 basis points compared to last year, largely due to fixed cost deleverage on lower sales. And as discussed, third quarter operating income was $77 million and our operating margin was 10.2%. Below the line, net interest and other costs were about $3 million less than last year, driven by higher interest income and lower interest costs as we've had no seasonal borrowings outstanding on our credit facility this year.

第三季的產品投入成本有利，部分抵銷了毛利率的一些不利因素。正如麥克所描述的，我們在第三季進行了一些有針對性的定價投資，以提高一些開盤價產品的競爭力並清理上季庫存。這些定價行為影響了綜合毛利率約 170 個基點，但我們認為它們有助於改善我們在第三季實現的零售銷售。本季的支出得到了很好的控制，與去年相當。我們在品牌行銷方面投入更多，專業費用支出較低，基於績效的薪酬規定也較低。SG&A 佔銷售額的百分比比去年上升了 140 個基點，這主要是由於銷售額下降導致的固定成本去槓桿化。如所討論的，第三季營業收入為 7,700 萬美元，營業利潤率為 10.2%。在線下，淨利息和其他成本比去年減少了約 300 萬美元，這是由於利息收入增加和利息成本下降，因為我們今年的信貸安排沒有未償還的季節性借款。

Our effective tax rate was 17.5%, 500 basis points lower than last year, and as I mentioned, lower than we had forecasted in July. This lower rate reflected favorable resolution of prior-period tax items and our expectation for US-based income to represent a lower proportion of our full year earnings relative to income expected to be earned outside of the United States. For the full year, we're expecting an effective tax rate of about 21% compared to just over 23% in 2023.

我們的有效稅率為 17.5%，比去年低 500 個基點，正如我所提到的，低於我們 7 月的預測。這一較低的稅率反映了前期稅收項目的有利解決方案，以及我們對美國收入佔全年收入的預期，相對於美國境外預期收入的比例較低。我們預計全年的有效稅率約為 21%，而 2023 年則略高於 23%。

Our average share count was 3% lower than last year, reflecting the benefit of share repurchases. So again, on the bottom line adjusted earnings per share in the third quarter were $1.64 compared to $1.84 last year. Pages 9 and 10 include summaries of our year-to-date performance, which we've included for your reference. Year-to-date net sales decreased 5% with roughly 70% of the decrease driven by lower traffic and sales in our US Retail business. Year-to-date operating income declined 11% on the lower sales. And given lower borrowing costs, a lower effective tax rate and lower share count, adjusted earnings per share were down only about 1% in the year-to-date period versus last year. Our third quarter business segment results are summarized on page 12. Third quarter sales were $33 million lower than last year with our Retail business and to a lesser extent, our International business driving the decline. US Wholesale sales were comparable to last year. Operating income declined $19 million, largely due to lower sales year-over-year and the pricing and marketing investments in our US Retail business. Third quarter corporate expenses declined by $8 million or 26%, principally due to lower professional fees and lower provisions for performance-based compensation. Beginning on page 13, we've provided additional detail on our business segment performance in the third quarter. Sales in our US Retail business declined 6%. We believe a number of factors, including inflation and higher interest rates, continue to weigh on demand from families with young children. As Mike said, after a slow start to Retail comps of down 13% in July, our Retail business strengthened as we moved through August and September and improved demand has continued through October as we've started the fourth quarter. We had particularly successful Labor Day selling, achieving a positive comp, which represented our best holiday sales performance this year. Business slowed the last 2 weeks of September, we believe, due to warmer weather around the country and the impact of Hurricane Helene in the Southeast, one of our largest markets. For the third quarter in total, US Retail posted a down 7% comp, which was a notable improvement from the down 12% comp in Q2 and the down 9% for the first half of the year. We saw a particular inflection in trend in the e-commerce portion of the business. E-commerce comps down 14% in the first half, which improved to a comp decline of 5% in the third quarter. And e-commerce comps in October have continued to improve. We're currently running a low single-digit positive e-commerce comp fourth quarter-to-date.

我們的平均股票數量比去年減少了 3%，反映了股票回購的好處。同樣，第三季調整後每股收益為 1.64 美元，而去年為 1.84 美元。第 9 頁和第 10 頁包括我們今年迄今的業績摘要，供您參考。今年迄今的淨銷售額下降了 5%，其中約 70% 的下降是由於我們美國零售業務的客流量和銷售額下降所致。由於銷售額下降，年初至今營業收入下降了 11%。由於借貸成本降低、有效稅率降低以及股票數量減少，今年迄今調整後的每股盈餘與去年相比僅下降了約 1%。我們的第三季業務部門業績總結於第 12 頁。第三季銷售額比去年減少 3,300 萬美元，其中零售業務和國際業務的下滑在一定程度上是造成下滑的原因。美國批發銷售額與去年相當。營業收入下降 1,900 萬美元，主要是由於銷售額年減以及我們美國零售業務的定價和行銷投資。第三季公司開支下降了 800 萬美元，或 26%，主要是由於專業費用下降和基於績效的薪酬撥備減少。從第 13 頁開始，我們提供了有關第三季度業務部門業績的更多詳細資訊。我們美國零售業務的銷售額下降了 6%。我們認為，包括通貨膨脹和利率上昇在內的許多因素繼續影響有幼兒家庭的需求。正如麥克所說，在 7 月份零售業績緩慢下降 13% 之後，我們的零售業務在 8 月和 9 月期間有所加強，並且隨著第四季度的開始，需求的改善一直持續到 10 月份。我們的勞動節銷售特別成功，取得了正面的業績，這代表了我們今年最好的假期銷售業績。我們認為，由於全國各地天氣變暖以及颶風海倫對東南部（我們最大的市場之一）的影響，九月最後兩週業務放緩。就第三季而言，美國零售業的年減了 7%，與第二季年減 12% 和上半年年減 9% 相比有了顯著改善。我們看到電子商務部分的趨勢出現了特殊的變化。上半年電子商務年減 14%，第三季年減 5%。10 月份的電商業績持續改善。迄今為止，我們第四季的電子商務業績目前為低個位數正值。

US Retail operating margin was 7.7% in the quarter compared to 13% a year ago. A good portion of our investment in price reductions was covered by the benefit of lower product costs in the quarter. The balance of the reduction in Retail's operating margin was driven by expense deleverage from the relatively high fixed cost structure in the Retail business and higher spending on marketing and new stores. We believe our investments in sharper pricing and additional brand marketing have driven good results for us. As mentioned, we've seen a change in our comparable sales trend in the US over the last few months. The trend improvement has been stronger to date online than in stores, but we would expect longer term to see improved traffic in the stores as well. Importantly, we believe these investments have helped to improve customer acquisition and retention. Improving our customer counts is important for driving longer-term sales growth and increasing the lifetime value of consumers shopping with us. The pricing action geared towards reducing prior-season inventory was also successful with spring/summer units down about 65% from the level we had on hand coming into the third quarter.

本季美國零售營業利潤率為 7.7%，而去年同期為 13%。我們在降價方面的投資很大一部分來自於本季產品成本降低的好處。零售營業利潤率下降的主要原因是零售業務相對較高的固定成本結構以及行銷和新店支出增加所導致的費用去槓桿化。我們相信，我們對更清晰的定價和額外品牌行銷的投資為我們帶來了良好的表現。如前所述，過去幾個月我們在美國的可比較銷售趨勢發生了變化。迄今為止，網路上的趨勢改善比實體店更強勁，但我們預計從長遠來看，實體店的客流量也會有所改善。重要的是，我們相信這些投資有助於提高客戶獲取和保留。增加客戶數量對於推動長期銷售成長和提高在我們這裡購物的消費者的終身價值非常重要。旨在減少上季庫存的定價行動也取得了成功，春夏庫存比第三季我們現有的水準下降了約 65%。

Given the success we saw with our targeted price reductions, particularly in reducing prior-season goods, we've leaned a bit more into investment there than originally contemplated. Our revised forecast reflects a total second half investment in pricing and marketing of roughly $60 million, about $10 million higher than we had shared on our last call with that incremental amount directed towards pricing.

鑑於我們在目標降價方面取得的成功，特別是在減少過季商品方面，我們比最初預期的更傾向於在這方面進行投資。我們修訂後的預測反映出下半年定價和行銷方面的總投資約為 6,000 萬美元，比我們在上次電話會議上分享的用於定價的增量投資高出約 1,000 萬美元。

Turning to page 14 and third quarter results in Wholesale and International. Third quarter sales in our US Wholesale business were comparable to last year. As I've said, we posted good growth in our exclusive brands and lower sales to department store customers and had a meaningful reduction in low-margin off-price channel sales.

翻到第 14 頁，以及批發和國際業務的第三季業績。我們美國批發業務第三季的銷售額與去年相當。正如我所說，我們的獨家品牌成長良好，百貨公司客戶的銷售額下降，低利潤的折扣通路銷售大幅減少。

US Wholesale delivered a strong operating margin of over 21%, down 90 basis points compared to last year. While product costs were lower year-over-year, Wholesale margins declined mostly due to higher inbound transportation costs and the absence of favorable changes in inventory reserves, which benefited last year's third quarter.

美國批發業的營業利潤率強勁，超過 21%，比去年下降 90 個基點。雖然產品成本年減，但批發利潤率下降的主要原因是入境運輸成本上升以及庫存儲備沒有有利的變化，這使去年第三季受益。

In our International segment, third quarter sales declined 9% on a reported basis and 6% on a constant currency basis. In Canada, the largest component of our International business, consumers continue to be negatively affected by higher mortgage interest rates and higher unemployment. This time of year, our Canadian business tends to be weighted towards colder weather outfitting. Weather was warmer in Canada this year, particularly in September, which we believe pushed out demand for this product. Demand trends in Canada have improved in October with the arrival of more consistent colder weather. We continue to have good momentum in Mexico. Retail comps grew 9% in the third quarter with growth in both stores and online. Unfavorable movements in currency exchange rates reduced the contribution of this strong growth in Mexico in our US dollar P&L. Sales to Wholesale partners outside of North America declined versus last year in Europe and in the Middle East, given ongoing conflicts in that part of the world and due to changes in timing of shipments to our partner in Brazil.

在我們的國際部門，第三季銷售額按報告計算下降 9%，以固定匯率計算下降 6%。在我們國際業務最大的組成部分加拿大，消費者繼續受到抵押貸款利率上升和失業率上升的負面影響。每年的這個時候，我們的加拿大業務往往專注於寒冷天氣的裝備。今年加拿大的天氣變暖，尤其是九月份，我們認為這推動了對該產品的需求。隨著更持續的寒冷天氣的到來，加拿大 10 月的需求趨勢有所改善。我們在墨西哥繼續保持良好勢頭。第三季零售業績成長 9%，實體店和線上業務均成長。貨幣匯率的不利變動降低了墨西哥強勁成長對我們美元損益的貢獻。由於歐洲和中東地區持續不斷的衝突以及向我們巴西合作夥伴的發貨時間的變化，北美以外的批發合作夥伴的銷售額與去年相比有所下降。

International segment margin was 9.6% compared to 11.7% last year. This decline reflects fixed cost deleverage, lower pricing and higher transportation costs that were offset in part by lower product costs. On page 15, we've included for your reference information on our year-to-date business segment performance. Now to some balance sheet and cash flow highlights on page 16. Our balance sheet remains very strong with over $1 billion in liquidity at the end of the quarter. We have good cash on hand and virtually all of the borrowing capacity under our credit facility available to us.

國際業務利潤率為 9.6%，而去年為 11.7%。這一下降反映了固定成本去槓桿化、定價下降和運輸成本上升，但產品成本下降在​​一定程度上抵消了這些影響。在第 15 頁，我們提供了有關我們年初至今的業務部門業績的信息，供您參考。現在介紹第 16 頁的一些資產負債表和現金流重點。我們的資產負債表仍然非常強勁，本季末的流動性超過 10 億美元。我們手頭上有充足的現金，而且我們的信貸安排下幾乎所有的借款能力都可供我們使用。

Third quarter inventories declined 2% compared to last year. The quality of our inventory at the end of the third quarter was high. A year ago, we were carrying $44 million in pack and hold inventory, which we've successfully sold through at good margins. Year-to-date operating cash flow was $11 million compared to $206 million last year. The change in cash flow reflects a more significant reduction in inventory last year as we sold through that pack and hold inventory. For the full year, we're forecasting operating cash flow in excess of $200 million.

第三季庫存較去年下降2%。第三季末我們的庫存品質很高。一年前，我們擁有價值 4,400 萬美元的包裝庫存，並已成功以豐厚的利潤出售。年初至今的營運現金流為 1,100 萬美元，而去年為 2.06 億美元。現金流量的變化反映了去年庫存的大幅減少，因為我們透過包裝和持有庫存進行銷售。我們預計全年營運現金流將超過 2 億美元。

Our outlook for good cash flow and ample liquidity has supported continued investments in the business. Year-to-date CapEx was $40 million. And for the full year, we're planning CapEx of approximately $65 million, principally on new stores, store remodels and technology and distribution center initiatives. Through the third quarter this year, we have returned $138 million to our shareholders through dividends and share repurchases. Our plans for return of capital are anchored to our outlook for free cash flow. To better align our planned return of capital to our latest view on free cash flow, we've paused share repurchases for now. In light of the $51 million we've completed in share repurchases year-to-date and our projected remaining dividend payments this year, we expect we will distribute somewhat more than 100% of our projected full year free cash flow. We regularly discuss capital allocation and the return of capital with our Board and we'll continue to do that, particularly as we firm up our forward forecast for cash generation for 2025 and beyond.

我們對良好現金流和充足流動性的前景支持了對該業務的持續投資。年初至今的資本支出為 4000 萬美元。我們計劃全年資本支出約為 6500 萬美元，主要用於新店、店面改造以及技術和配送中心計劃。截至今年第三季度，我們已透過股利和股票回購向股東返還 1.38 億美元。我們的資本回報計畫取決於我們對自由現金流的展望。為了更好地使我們的資本回報計劃與我們對自由現金流的最新看法保持一致，我們暫時暫停了股票回購。鑑於我們今年迄今已完成的 5,100 萬美元股票回購以及今年預計的剩餘股息支付，我們預計我們將分配超過 100% 的預計全年自由現金流。我們定期與董事會討論資本分配和資本回報，我們將繼續這樣做，特別是在我們堅定對 2025 年及以後現金產生的前瞻性預測的情況下。

And now I'll turn the call over to Kendra for an update on our progress with our product and growth strategies.

現在我將把電話轉給 Kendra，了解我們產品和成長策略的最新進展。

Thank you, Richard. Turning to page 18. Through the hard work of our teams, commitment to innovation and focus on our three growth strategies, we are realizing positive momentum in our business. Those growth strategies are grounded in our product, delivering on our customers' expectations of style and value, our unparalleled brand reach, where we are improving our experience across 20,000 points of distribution globally and our marketing focused on acquiring new customers and deepening our connections with our existing customers.

謝謝你，理查。翻到第18頁。透過我們團隊的辛勤工作、對創新的承諾以及對三大成長策略的關注，我們的業務正在實現積極的勢頭。這些成長策略以我們的產品為基礎，滿足客戶對風格和價值的期望，我們無與倫比的品牌影響力，我們正在改善全球20,000 個分銷點的體驗，我們的行銷重點是獲取新客戶並加深與客戶的聯繫。

Starting on page 19 with an update on our product strategies. Informed by consumer demand and insights, we started a meaningful shift of our retail product assortment in Q3. Over the next year, we will increase by 10 points of penetration each our opening price product and our best more premium fashion assortment. As Mike mentioned, both our opening priced and best categories are delivering positive comp increases. Even with this shift, a significant portion of our business resides in our better mid-tier product assortments where opportunity still remains to improve our style and value proposition.

從第 19 頁開始更新我們的產品策略。根據消費者需求和洞察，我們在第三季開始對零售產品類別進行有意義的轉變。明年，我們的開盤價產品和最優質的時尚產品系列的滲透率將提高 10 點。正如麥克所提到的，我們的開盤價和最佳類別都帶來了積極的補償成長。即使發生了這種轉變，我們業務的很大一部分仍然在於我們更好的中端產品類別，其中仍然有機會改善我們的風格和價值主張。

Page 20 illustrates the Retail price investment we've made to be more competitive in select opening priced categories, where we see the least price elasticity and the products are less differentiated from private label brands. These items are basket starters and represent less than 20% of our assortment, primarily in the Toddler and Kids size segments.

第 20 頁說明了我們為在選定的開放價格類別中更具競爭力而進行的零售價格投資，我們發現這些類別的價格彈性最小，且產品與自有品牌的差異較小。這些商品屬於購物籃入門商品，占我們產品種類的不到 20%，主要是幼兒和兒童尺寸部分。

As an example, our opening priced t-shirts and leggings last year would have been priced at $6. This year, they were sharply priced at $5. As mentioned, this targeted strategy informed by our enhanced pricing capabilities is helping to drive an increase in conversion and units per transaction in stores and e-commerce versus last year, with e-commerce realizing mid-single-digit increases in both metrics.

舉個例子，我們去年的 T 恤和緊身褲的開盤價為 6 美元。今年，它們的價格大幅上漲至 5 美元。如前所述，與去年相比，這項以我們增強的定價能力為基礎的有針對性的策略有助於推動商店和電子商務的轉換率和每筆交易單位數的增加，電子商務在這兩個指標上都實現了中個位數的成長。

Featured on pages 21 and 22, we continue to realize growth in our more premium brands and collections of products. The meaningful shift to double the penetration of our best product is supported by our house-of-brands strategy that enables us to leverage our new, more targeted and differentiated brands like Little Planet and PurelySoft as well as our curated collections from Oshkosh B'Gosh, Skip Hop and Carter's. Sales in our best assortment have significantly outpaced inventory throughout the year and are effectively driving an increase in new customers who are younger, spend more on apparel and have higher income. As an example, customers who buy our Little Planet brand, who most often also buy our other brands, have a lifetime value 50% greater than our average customer. We have a comprehensive strategy to retain these valuable multi-brand customers with personalized marketing tactics as well as new brands and assortments launching in the near term.

第 21 頁和第 22 頁介紹了我們繼續實現更優質品牌和產品系列的成長。我們的品牌之家策略支持了使我們最好的產品滲透率翻倍的有意義的轉變，該策略使我們能夠利用我們新的、更有針對性和差異化的品牌，如Little Planet 和PurelySoft 以及我們從Oshkosh B'Gosh 精選的系列、Skip Hop 和 Carter's。全年我們最好的品種的銷售量顯著超過了庫存，並有效地推動了年輕、在服裝上花費更多且收入更高的新客戶的增加。例如，購買我們的 Little Planet 品牌的客戶（通常也購買我們的其他品牌）的終身價值比我們的普通客戶高出 50%。我們制定了全面的策略，透過個人化的行銷策略以及近期推出的新品牌和品種來留住這些有價值的多品牌客戶。

Additionally, page 23 highlights some of our top-selling styles from this back-to-school season, including fashion denim, statement outerwear and trending skirts for girl. Our talented product teams are responding more quickly to consumer demand, which are increasingly leaning towards fashion and style. Turning to page 24. Today's parents shop at an average of 6 retailers for their children's clothes. Thanks to our incredible relationships with top retailers and our over 1,000 North American retail stores, parents can find our brands nearly everywhere they are shopping. Across our retail fleet, we've made significant progress over the last year to test new formats and accelerate remodels. Our newly remodeled stores are providing an updated, more on-brand customer experience and are delivering a meaningful sales trend improvement, heightened customer satisfaction scores and an increase in reactivated customers. Highlighted on pages 25 and 26, this week, we opened our first-ever flagship store in the heart of Atlanta's Buckhead neighborhood. This nearly 9,000 square foot store experience was informed by consumer insights and includes inspiring brand-centric presentations, in-store shops for Baby, Toddler and Kids, modern digital displays, a gifting station and community engagement events throughout the year. Learnings from the ongoing innovations at our flagship store will inspire our new and remodeled store experiences across our fleet. Turning to page 27, in Wholesale, one of our most important growth strategies is our brand reach enabled by our long-standing relationship with retailers like Kohl's, Walmart, Target and Amazon. These partnerships are significant contributors to not only our sales and profitability, but also to our consumer brand awareness. We will continue to prioritize investments in our brand experiences with our Wholesale partners, both digitally and in-store.

此外，第 23 頁重點介紹了本次返校季的一些最暢銷款式，包括時尚牛仔布、個性外套和流行女孩裙子。我們才華橫溢的產品團隊正在更快地回應消費者的需求，消費者的需求越來越傾向於時尚和風格。翻到第24頁。今天的父母平均在 6 家零售商購買孩子的衣服。由於我們與頂級零售商以及 1,000 多家北美零售店的良好關係，家長幾乎可以在任何購物場所找到我們的品牌。去年，我們的零售團隊在測試新業態和加速改造方面取得了重大進展。我們新改建的商店正在提供更新的、更品牌化的客戶體驗，並帶來有意義的銷售趨勢改善、更高的客戶滿意度分數以及重新激活的客戶的增加。第 25 和 26 頁重點介紹的是，本週，我們在亞特蘭大巴克海特社區的中心開設了第一家旗艦店。這家近 9,000 平方英尺的商店體驗以消費者洞察為基礎，包括鼓舞人心的以品牌為中心的展示、嬰兒、幼兒和兒童店內商店、現代數位展示、禮品站和全年社區參與活動。從我們旗艦店的持續創新中汲取的經驗將激發我們整個艦隊的全新和改建的商店體驗。翻到第 27 頁，在批發領域，我們最重要的成長策略之一是我們與 Kohl's、沃爾瑪、塔吉特和亞馬遜等零售商的長期合作關係所帶來的品牌影響力。這些合作關係不僅對我們的銷售和盈利能力做出了重大貢獻，而且還對我們的消費者品牌知名度做出了重大貢獻。我們將繼續優先投資與批發合作夥伴的品牌體驗，無論是數位或店內。

Finally, on page 28, we move into our third strategic priority, deepening our relationship with consumers through marketing. We are investing in data-driven customer-first personalization tools and initiatives. These investments are yielding a positive response with continued growth expected as we better connect the digital and store experience for our customers.

最後，在第 28 頁，我們進入了第三個策略重點，透過行銷加深我們與消費者的關係。我們正在投資數據驅動的客戶至上的個人化工具和計劃。這些投資正在產生積極的反應，隨著我們更好地為客戶連接數位和商店體驗，預計將持續成長。

On page 29, our new brand marketing campaign, launched earlier this fall, is driving relevance and receiving strong consumer engagement across every touch point. Additionally, our incremental marketing investment is delivering double-digit trend improvements in our media-driven e-commerce traffic, customer acquisition and customer reactivation. We are leveraging new marketing technology and capabilities to dynamically shift our spend into the most productive media channels. On page 30 and in summary, our strategic focus on product, brand reach and marketing is driving positive trend changes in our business, including market share growth in our most important Baby and Toddler segments, growth in unit sales for the first full quarter following a period of decline that started in 2021, all while sustaining our long-held top position as the most trusted and most recommended brand in young children's apparel.

在第 29 頁，我們在今年秋季早些時候推出的新品牌行銷活動正在推動相關性，並在每個接觸點上獲得了消費者的強烈參與。此外，我們增量行銷投資正在為我們的媒體驅動的電子商務流量、客戶獲取和客戶重新激活帶來兩位數的趨勢改善。我們正在利用新的行銷技術和能力，動態地將我們的支出轉移到最高效的媒體管道。總而言之，在第 30 頁，我們對產品、品牌影響力和行銷的策略重點正在推動我們業務的積極趨勢變化，包括我們最重要的嬰幼兒細分市場的市場份額增長、繼我們經歷了自2021 年開始的衰退期，但同時保持了我們作為幼兒服裝領域最值得信賴和最推薦品牌的長期領先地位。

Relative to the first half, US Retail trends have strengthened, including comp trend improvement and most notably versus July, we have maintained an over 8-point improvement that is carrying into October, increases in our conversion rates and units per transaction, growth in new customers and upward momentum in customer retention, and we maintain our industry-leading customer satisfaction scores.

與上半年相比，美國零售趨勢有所加強，包括比較趨勢的改善，最顯著的是，與7 月份相比，我們保持了超過8 個百分點的改善，這一點一直持續到10 月份，我們的轉換率和每筆交易的單位數有所增加，新產品的成長客戶和客戶保留率的上升勢頭，我們保持行業領先的客戶滿意度得分。

We look forward to sharing more on our progress in the new year. Richard will now cover our financial outlook.

我們期待在新的一年分享更多我們的進展。理查德現在將介紹我們的財務前景。

Thank you, Kendra. Our expectations for the full year are summarized on page 32. As noted in today's press release, we are reaffirming our previous full year outlook for net sales and operating income. We continue to expect full year net sales in the range of $2.785 billion to $2.825 billion. We're planning lower sales in US Retail and International with US Wholesale sales comparable to up in the low single-digit range. We're expecting adjusted operating income in the range of $240 million to $260 million.

謝謝你，肯德拉。第 32 頁總結了我們對全年的預期。正如今天的新聞稿中所指出的，我們重申了先前對全年淨銷售額和營業收入的展望。我們繼續預計全年淨銷售額在 27.85 億美元至 28.25 億美元之間。我們計劃降低美國零售和國際銷售額，而美國批發銷售額將在較低的個位數範圍內成長。我們預計調整後的營業收入將在 2.4 億美元至 2.6 億美元之間。

We've raised our previous expectations for adjusted earnings per share by $0.10 to $4.70 to $5.15 to reflect a lower effective tax rate and lower net interest expense than we had previously planned. Turning to page 33 and our outlook for the fourth quarter. We're planning net sales in the range of $800 million to $840 million. In US Retail, we're planning total sales down in the high single digits to down low double digits. We have maintained our prior guidance of a comp sales decline of 9% to 12%. Our down 7% Retail comp in the third quarter was obviously better than this. As Mike said, comps in October are currently running down less than 5%. If this trend continues in the more significant months of November and December, then perhaps we could have some upside to these forecasts. In US Wholesale, we're planning sales up in the mid-single digits to high single digits compared to last year, driven by growth in our exclusive brands.

我們將先前調整後每股收益的預期上調了 0.10 美元至 4.70 美元至 5.15 美元，以反映比我們之前計劃更低的有效稅率和更低的淨利息支出。翻到第 33 頁，我們對第四季的展望。我們計劃淨銷售額在 8 億至 8.4 億美元之間。在美國零售業，我們計劃將總銷售額從高個位數下降到低兩位數。我們維持先前的預測，即公司銷售額下降 9% 至 12%。我們第三季零售業績下降了 7%，明顯好於這個。正如 Mike 所說，10 月的比較目前下降了不到 5%。如果這種趨勢在 11 月和 12 月等更重要的月份繼續下去，那麼我們的預測可能會有一些上行空間。在美國批發方面，在我們獨家品牌成長的推動下，我們計劃銷售額比去年增長中個位數到高個位數。

In International, we're planning fourth quarter sales down in the mid- to high single-digit range. Canada is driving the majority of the planned decline in International sales, more on the Wholesale side of the business in that market. As I've said, we've seen an improving trend in our Retail business in Canada, which represents the majority of the business, especially since the arrival of colder weather in October. With respect to profitability, we're planning adjusted operating income in the range of $70 million to $90 million and adjusted EPS in the range of $1.32 to $1.72.

在國際市場，我們計劃第四季銷售額下降在中高個位數範圍內。加拿大是國際銷售計劃中大部分下降的原因，主要是該市場的批發業務。正如我所說，我們在加拿大的零售業務（佔業務的大部分）已經看到了改善的趨勢，特別是自 10 月寒冷天氣到來以來。在獲利能力方面，我們計劃調整後營業收入在 7,000 萬美元至 9,000 萬美元範圍內，調整後每股收益在 1.32 美元至 1.72 美元範圍內。

We're monitoring several risks, including consumer demand and confidence in the context of the upcoming election. In past years, we've seen some temporary disruption to demand around presidential elections. We're also monitoring the ongoing impact of macroeconomic conditions on families with young children and the degree of promotional intensity across the marketplace. And with these remarks, we're ready to take your questions.

我們正在監控多種風險，包括即將到來的選舉背景下的消費者需求和信心。在過去的幾年裡，我們看到總統選舉期間的需求出現了一些暫時的中斷。我們也正在監測宏觀經濟狀況對有小孩的家庭的持續影響以及整個市場的促銷。透過這些評論，我們準備好回答您的問題。

(Operator Instructions)

（操作員說明）

Ike Boruchow from Wells Fargo.

來自富國銀行的艾克·博魯喬（Ike Boruchow）。

Hey, good morning guys. I wanted to ask about the gross margins in relation to the pricing strategies you guys are implementing. So the strategies were implemented, and I believe if I'm understanding this correctly, it was basically $30 million in 3Q and $30 million in 4Q in terms of like brand investment. But the gross margin decline in 3Q was better and only down 60, but to get to your kind of full year guide, it looks like the grosses are going to be down somewhere around 300 basis points in 4Q.

嘿，早上好，夥計們。我想問一下與你們正在實施的定價策略相關的毛利率。因此，這些策略得到了實施，我相信，如果我理解正確的話，就同類品牌投資而言，第三季基本上是 3000 萬美元，第四季是 3000 萬美元。但第三季的毛利率下降情況更好，僅下降了 60 個基點，但從全年指南來看，第四季的毛利率似乎將下降 300 個基點左右。

So just trying to understand how to kind of like look at 3Q in relation to 4Q and why there would be so much more pressure if the price investment in dollars is similar and how much pricing -- just how to think about the promo versus the comp and how you're weighing that?

因此，只是想了解如何看待第三季度與第四季度的關係，以及如果以美元計算的價格投資相似以及定價多少，為什麼會有更大的壓力 - 只是如何考慮促銷與補償你如何權衡這一點？

Sure. So I would say the pricing investment in US Retail was closer to that $25 million number in third quarter, Ike, and a similar amount, to your point, earmarked for the fourth quarter. You do have a fairly significant mix effect that's different between the fourth quarter and the third quarter. And I think that's a reasonably consistent forecast assumption for us.

當然。因此，我想說，艾克，美國零售業的定價投資更接近第三季的 2,500 萬美元，以及指定用於第四季的類似金額。第四季和第三季之間確實有相當顯著的混合效應。我認為這對我們來說是一個相當一致的預測假設。

All along, we have planned for very nice growth in Wholesale. That is the lower gross margin part of the business. So that is one key difference between Q3 and Q4. I wouldn't say we're planning gross margins down 300 basis points, probably close to 200 basis points, but fairly consistent pricing investment in US Retail, $25 million each of the third and fourth quarters.

一直以來，我們都計劃在批發領域實現良好的成長。這是該業務毛利率較低的部分。這是第三季和第四季之間的一個關鍵區別。我不會說我們計劃將毛利率下降 300 個基點，可能接近 200 個基點，但美國零售業的定價投資相當一致，第三季和第四季各 2,500 萬美元。

But is it fair to say, Richard, that you're on promo or discount or pricing, whatever, however you want to characterize it, is that going to be deeper in the fourth quarter relative to what you're doing during Labor Day in the third quarter?

但可以公平地說，理查德，你正在進行促銷、折扣或定價，無論你想如何描述它，相對於你在勞動節期間所做的事情，第四季度的情況會更深嗎？ ？

Typically, Ike, in the holidays with Black Friday, year-over-year typically tends to be more promotional. I think the big progress we made in the third quarter was knocking down the prior-season goods, spring and summer. Our prices on the prior-season goods were down about 10% in the third quarter. On the in-season goods, where we got sharper, just more competitive on certain key items, prices were only down about 3%.

艾克，通常情況下，在黑色星期五的假期中，促銷活動通常會比去年同期更加頻繁。我認為我們在第三季取得的重大進展是減少了春季和夏季的前季商品。第三季我們的前季商品價格下降了約 10%。在反季商品方面，我們變得更加敏銳，只是在某些關鍵商品上更具競爭力，價格只下降了約 3%。

But we made very good progress moving through the prior-season goods, which puts the inventory position heading into the balance of this year in better shape than it otherwise would have been.

但我們在處理前季商品方面取得了很大進展，這使得進入今年平衡期的庫存狀況比其他情況下更好。

Jay Sole from UBS.

瑞銀 (UBS) 的傑伊·索爾 (Jay Sole)。

Terrific. Thank you. My question is just about how the compares on the US Retail side look post October. In other words, like what are you lapping versus last year in November and December? And then I have a follow-up after that.

了不起。謝謝。我的問題只是關於 10 月後美國零售業的比較。換句話說，與去年 11 月和 12 月相比，您的圈數是多少？之後我會跟進。

In terms of comp changes, easier comparison, tougher comparisons?

就補償變化而言，比較更容易，比較更困難？

Yes.

是的。

So looking at fourth quarter last year, comps were down around 6%, and we're planning them down somewhere in the range of 9% to 12%. So again, it's that comp was probably one of the better comps we had in the fourth quarter last year relative to the previous three quarters last year. So we had a good fourth quarter. Typically, we have a good fourth quarter. Christmas is a kids holiday. And given our value proposition, the low price points, people are out buying their Christmas pajamas in the fourth quarter. So we're, we hope there's more upside than downside relative to our US Retail guidance in the fourth quarter given current trends.

因此，看看去年第四季度，比較下降了 6% 左右，我們計劃將其下降在 9% 到 12% 的範圍內。再說一次，與去年前三個季度相比，該比較可能是我們去年第四季獲得的更好的比較之一。所以我們第四季表現不錯。通常情況下，我們的第四季表現不錯。聖誕節是孩子們的節日。鑑於我們的價值主張和低廉的價格點，人們在第四季開始購買聖誕睡衣。因此，鑑於目前的趨勢，我們希望相對於我們第四季的美國零售指引，上行空間大於下行空間。

Understood. Mike, if I could follow up on that. A little bit different question, but how do we judge the ROI of the pricing investments? And how are you judging it?

明白了。麥克，我能否跟進一下。有點不同的問題，但我們如何判斷定價投資的投資報酬率？你是如何判斷的？

Return to growth in unit volume. We've been losing ground in unit volume. The whole focus of these pricing strategies and marketing strategies are to reengage the consumer who swung over to mass channel and off-price retailers, when inflation surged in 2022. That's where we started to lose ground.

恢復單位體積增長。我們在單位體積上一直在失去優勢。這些定價策略和行銷策略的重點是重新吸引在 2022 年通膨飆升時轉向大眾通路和折扣零售商的消費者。這就是我們開始節節敗退的地方。

Prior to the pandemic, we had 31 consecutive years of growth, had a strong recovery in 2021, '22 started off to be a good year. And then when inflation hit, consumers swung over to the mass channel and off-price retailers, trying to reengage them and it seems as though some of the strategies, particularly online, we are reengaging that consumer and we got sharper on prices starting in August and September because we felt as though we had widened, unintentionally widened the gap between our prices and the competition.

在疫情大流行之前，我們連續31年成長，2021年強勁復甦，22年開始是個好年。然後，當通貨膨脹來襲時，消費者轉向大眾通路和折扣零售商，試圖重新吸引他們，似乎我們正在重新吸引消費者的一些策略，特別是在線策略，從八月開始，我們的價格變得更加敏銳九月份，因為我們感覺到我們的價格與競爭對手之間的差距已經擴大，無意中擴大了。

The first quarter this year started out good in the market. Second quarter got notably weaker. Consumer confidence dropped like a rock in the second quarter. Inflation in the first quarter was being described as moderating. Second quarter being described as sticky. Gas prices were trending higher. So we saw the market weaken in the second quarter. We saw our competitors dropping prices. They dropped prices because they needed to move through the goods and drive traffic to their stores. Because our inventory position was good in the second quarter, and we felt as though the product offering and the inventory position was in good shape. We didn't participate in those deep discounts in the second quarter, but decided to take a different strategy in the second half, particularly we got beat Memorial Day, in the 4 of July shopping holidays. We had growth in comparable sales in Labor Day, it had a very good Labor Day. So we see just by narrowing that spread, between our prices and private label competitors and other brands, the consumer responded to it, and we reengaged them. The plan is to continue to reengage in the balance of the year and then decide what's the best strategy for 2025.

今年第一季市場開局良好。第二季明顯疲軟。第二季消費者信心急遽下降。第一季的通膨被描述為溫和。第二季度被描述為黏性的。天然氣價格呈現走高趨勢。所以我們看到第二季市場疲軟。我們看到我們的競爭對手降價。他們降低價格是因為他們需要運送貨物並增加商店的客流量。因為我們第二季的庫存狀況良好，我們感覺產品供應和庫存狀況良好。我們沒有參與第二季的大幅折扣，但決定在下半年採取不同的策略，特別是我們在陣亡將士紀念日（7 月 4 日的購物假期）中擊敗了我們。我們在勞動節的可比銷售額有所成長，這是一個非常好的勞動節。因此，我們看到，只要縮小我們的價格與自有品牌競爭對手和其他品牌之間的價差，消費者就會對此做出反應，我們就會重新吸引他們。該計劃是在今年剩餘的時間裡繼續重新參與，然後決定 2025 年的最佳策略是什麼。

And Jay, I'd just to add to that, Mike mentioned our units. We want to see unit growth, but that is over the whole basket. So not only are these goods lifting with the reduced prices, but we're seeing these items be basket starters for her and then she's adding other items into her basket. So we're seeing a total UPT lift, not necessarily just in these items.

傑伊，我想補充一點，麥克提到了我們的單位。我們希望看到單位成長，但這是整個籃子的成長。因此，這些商品不僅隨著價格的降低而上漲，而且我們看到這些商品成為她購物籃的首發商品，然後她將其他商品添加到她的購物籃中。因此，我們看到 UPT 整體提升，而不僅僅是這些項目。

Yes. Transactions are up, conversion rates are better and the comp trends are better. So that's how we're measuring the return on investment.

是的。交易量上升，轉換率提高，競爭趨勢也更好。這就是我們衡量投資回報的方式。

Chris Nardone from Bank of America.

美國銀行的克里斯·納爾多內。

How should we think about the $60 million in pricing and marketing efforts in the back half of this year as we move into the first half? Should that stick around next year? And then just in terms of your pricing strategy, do you see risk that some of your competition could continue to get more promotional into next year? And how would you balance kind of maintaining your margins with also striving to improve the comp growth rate into 2025?

當我們進入上半年時，我們應該如何看待今年下半年 6000 萬美元的定價和行銷工作？明年應該繼續嗎？然後就您的定價策略而言，您是否認為您的一些競爭對手可能會在明年繼續進行更多促銷？您將如何平衡維持利潤率和努力提高 2025 年的複合成長率？

Yes. Keep in mind, Chris, that we -- a good portion of the pricing, at least to date has been focused on improving the mix. So I think the prior-season goods were probably some portion of 50% of our Retail inventories at the end of the second quarter. Today, they're closer to 10%. That's where you want it to be, prior-season goods, you want a better mix of fall and holiday product in the stores and online at this time of year. So if we continue to make sure that we manage inventory, we shouldn't see the level of promotions that we saw in the third quarter and some portion of the fourth quarter.

是的。克里斯，請記住，我們定價的很大一部分，至少到目前為止，一直專注於改進組合。因此，我認為第二季末前季商品可能占我們零售庫存的 50%。如今，這一比例已接近 10%。這就是您想要的，過季商品，您希望在每年的這個時候在商店和網上更好地混合秋季和假日產品。因此，如果我們繼續確保管理庫存，我們就不應該看到第三季和第四季部分時間的促銷水準。

Okay. And then just on your Wholesale business, as we think about the color you gave on your order book for spring/summer, how might that differ between your exclusive and nonexclusive partners?

好的。然後就您的批發業務而言，當我們考慮您在春夏訂單簿上給出的顏色時，您的獨家和非獨家合作夥伴之間有何不同？

We would expect better -- continue to expect better performance with the exclusive brands. That's where people are shopping these days. And we're benefiting from that. Go into Target, go into Walmart, you'll see probably the most dominant brand presence is the Carter's brand at both those retailers. So we're benefiting from that traffic. So we would expect that, that would continue to be a good source of performance for us in 2025.

我們期望更好——繼續期望獨家品牌有更好的表現。這就是現在人們購物的地方。我們正從中受益。走進塔吉特百貨、沃爾瑪，您會發現這兩家零售商中最主要的品牌可能是卡特品牌。所以我們從這些流量中受益。因此，我們預計這將繼續成為我們 2025 年業績的良好來源。

Paul Lejuez from Citi.

花旗銀行的保羅‧勒胡埃斯 (Paul Lejuez)。

Sorry if I just missed this, but did you say if you expect the gross margin pressure that you're seeing in the fourth quarter to continue into the first half of next year? Should we expect the pricing investments? You seem happy with what it's doing from a unit perspective. So should we expect the price investments to continue through the first half?

抱歉，如果我錯過了這一點，但您是否說過您預計第四季度的毛利率壓力是否會持續到明年上半年？我們應該期待定價投資嗎？從單位角度來看，您似乎對它正在做的事情感到滿意。那麼，我們是否應該預期價格投資將持續到上半年？

And then again, should we expect a similar level of gross margin decline? Or maybe could it be a little worse? I think you mentioned there was some AUC pressure as well in the spring season. So maybe if you could just talk about the outlook, first half gross margin?

話又說回來，我們是否應該預期類似的毛利率下降？或者可能會更糟一點？我想你提到過春季也存在一些 AUC 壓力。那麼也許您可以談談前景，上半年的毛利率？

Paul, I would say probably too early to comment on specific expectations for gross margin for next year. We'll share more of those plans for you on our February call.

保羅，我想說現在評論明年毛利率的具體預期可能還為時過早。我們將在二月的電話會議上為您分享更多這些計劃。

What we've said in the past is that a number of product input costs continue to be favorable. Cotton, in particular, has been favorable that will -- our expectation, extend into next year. Labor continues to go up. Transportation costs are higher. So we are expecting in the first part of next year, that's what we have good line of sight to, I'd say, kind of modest low single-digit inflation in product cost.

我們過去說過，有些產品的投入成本持續有利。尤其是棉花，我們的預期將持續到明年。勞動力持續上漲。運輸成本較高。因此，我們預計明年上半年，產品成本的通膨率將維持在個位數的溫和低點。

That's kind of what we're expecting right now. We're still in the process of working through fall, so we don't have line of sight to that. But we'll give you our expectations for gross margin when we get on the February call.

這正是我們現在所期待的。我們仍在秋季工作，所以我們還沒有看到這一點。但當我們接到二月的電話會議時，我們將向您提供我們對毛利率的預期。

And the opportunity, Paul, in the first half, if the consumer responds well to the spring and summer product offerings, best margin is on product selling well. So if we bought it right and it's selling through, that's the opportunity on the margin side in the first half of next year relative to what we experienced this past year.

保羅，上半年的機會是，如果消費者對春季和夏季產品的反應良好，那麼最好的利潤就是產品銷售良好。因此，如果我們買對了並且它正在出售，那麼相對於我們去年的經歷，這就是明年上半年利潤的機會。

Got it. Got it. And then just can you talk about the sell-through rates at your three large Wholesale accounts and just what you're seeing there? And what were the drivers of the slightly lower Wholesale guidance for the year?

知道了。知道了。然後您能談談您的三個大型批發帳戶的售出率以及您在那裡看到的情況嗎？今年批發指導略有下降的驅動因素是什麼？

I would say on the Wholesale forecast, really two things. One, I'd say good continued momentum with the exclusive brands. We had replenishment demand planned up fairly considerably in the fourth quarter. We're still planning for very good growth in replenishment, just not quite at the level that we saw before. And I'd say a little air came out of the balloon in the department store group of customers, some orders moving to the right, a bit more in terms of order cancellations and their replenishment demand a bit down relative to our previous expectations. But those are the majority of the revisions.

關於批發預測，我想說的是，其實有兩件事。第一，我想說獨家品牌的持續勢頭良好。我們在第四季相當大地規劃了補貨需求。我們仍然計劃在補貨方面實現非常好的成長，只是沒有達到我們之前看到的水平。我想說的是，百貨公司的顧客群中，有一些空氣從氣球中逸出，一些訂單向右移動，訂單取消情況有所增加，他們的補貨需求相對於我們之前的預期有所下降。但這些是大部分修訂。

And off-price sales were planned lower relative to what we thought in July.

與我們 7 月的預期相比，計劃的折扣銷售量較低。

Yes.

是的。

William Reuter from Bank of America.

美國銀行的威廉·路透。

My first on the pause of your share repo. Did you say for what time period you're putting this on pause? And I guess, is it just based upon paying out in excess of 100% of your free cash flow? And will that kind of always be the kind of the guardrails for share repo going forward?

我的第一個關於暫停您的共享存儲庫的事情。你有沒有說過要暫停多久？我想，這只是基於支付超過 100% 的自由現金流嗎？這種情況會一直成為未來股票回購的護欄嗎？

So I think in recent years, we've used our forecast for free cash flow to guide the amount of distribution of capital that we make. We're fans of returning capital. So the pause relates more to the balance of this year. As I said, we continually talk about this with the Board. And as our plans come together for 2025 and beyond, we'll certainly revisit it.

因此，我認為近年來，我們使用對自由現金流的預測來指導我們的資本分配量。我們是資本回流的粉絲。因此，暫停更多地與今年的剩餘時間有關。正如我所說，我們不斷與董事會討論此事。當我們制定 2025 年及以後的計劃時，我們肯定會重新審視它。

But our forecast for free cash flow has come down a bit relative to our initial expectations coming into the year. We don't think it's appropriate to take on debt for the sole purpose of returning capital. And so since that forecast for free cash flow has come down a bit, we think it's appropriate to modify our return of capital plans. But we'll continue to revisit it.

但我們對自由現金流的預測相對於我們今年最初的預期有所下降。我們認為僅僅為了返還資本而承擔債務是不合適的。因此，由於自由現金流的預測有所下降，我們認為修改我們的資本回報計劃是適當的。但我們將繼續重新審視它。

Great. And then in terms of bigger picture, clearly, these price investments were meant to kind of cede or I guess, stop the cede of share to some of these lower price point private label products that you're seeing in mass. How do you feel that you did versus the category in the third quarter? I know data points can be somewhat limited, but based upon anything you can see, how do you think your share fared?

偉大的。然後，從更大的角度來看，顯然，這些價格投資的目的是讓出某種份額，或者我猜，阻止將份額讓給您大量看到的一些較低價位的自有品牌產品。您認為與第三季的同類產品相比，您的表現如何？我知道數據點可能有些有限，但根據您所看到的任何內容，您認為您的份額表現如何？

We gained share in Baby and Toddler apparel. That's over 80% of what we do for a living. So we're pleased with the results.

我們在嬰幼兒服裝領域獲得了份額。這是我們謀生的 80% 以上。所以我們對結果很滿意。

(Operator Instructions)

（操作員說明）

Jim Chartier from Monness, Crespi & Hardt.

Monness、Crespi & Hardt 的 Jim Chartier。

I just wanted to ask about the assortment shift towards better and best and good. Is there a plan to go deeper on units in those parts of the assortment? Or are you adding additional products to the assortment?

我只是想問一下品種轉向更好、最好、更好的轉變。是否有計劃深入研究這些類別中的單元？或者您要在產品系列中新增其他產品？

Hi Jim, this is Kendra. I would say it's both. So we will be investing more depth and breadth and particularly our best categories, leaning into our new brands and new assortments that fit there in the good bucket. I would say it's a little bit more depth than it is breadth, but it will be both.

嗨吉姆，我是肯德拉。我想說兩者都是。因此，我們將投資更多的深度和廣度，特別是我們最好的類別，傾向於我們的新品牌和新品種，這些都是適合的。我想說它的深度比廣度要深一些，但兩者兼而有之。

Great. And then in terms of the pricing promotions this year, third quarter, was that primarily focused in the good part of the assortment? Or was there some of that -- or I guess, in the better part of the assortment? Or is there some of that in the good part as well?

偉大的。那麼，就今年第三季的定價促銷而言，主要集中在該品種的優質部分嗎？或者有沒有這樣的東西——或者我猜，在分類中更好的部分？或者好的部分也有這樣的部分嗎？

It was almost entirely in the good portion of our assortment. So those are items like t-shirts, leggings, some other kind of stock-up basket starter items that are most competitively positioned against private label brands where there is little differentiation in the product and where we saw private label really go deep and low on those prices.

它幾乎完全屬於我們品種的大部分。因此，這些商品包括T 卹、緊身褲和其他一些庫存籃入門商品，這些商品與自有品牌相比最具競爭力，這些商品的產品幾乎沒有差異化，而且我們看到自有品牌確實深入且低端。

So it's mostly in the good bucket, almost entirely in the good bucket and mostly around Toddler and Kid assortments as well.

因此，它主要屬於優質產品，幾乎完全屬於優質產品，而且主要圍繞著幼兒和兒童品種。

Yes. And Jim, just again, a refresher of what we saw in the second quarter because business generally slowed in apparel sales generally. We saw some competitors selling kind of basic products, t-shirts and shorts for $2.50 each. I would describe that as thrift store level pricing. And we didn't go down to that level, but we did narrow the gap between our pricing and our competitors' pricing.

是的。吉姆再次重申了我們在第二季度看到的情況，因為服裝銷售總體放緩。我們看到一些競爭對手以每件 2.5 美元的價格出售各種基本產品、T 恤和短褲。我將其描述為舊貨店級別的定價。我們並沒有降低到這個水平，但我們確實縮小了定價與競爭對手定價之間的差距。

Once that product cleared through, their prices came up. And I think another important thing to know, in some cases where we lowered prices, we didn't see the unit velocity, so we raised the price back up. So this isn't a one-way street. When we lowered it and we saw a noteworthy trend change in unit velocity, we stuck with those prices where we didn't see an improvement in unit velocity, we restored the pricing.

一旦該產品通過，價格就會上漲。我認為要知道的另一件重要的事情是，在某些情況下，我們降低了價格，但我們沒有看到單位速度，因此我們又提高了價格。所以這不是一條單行道。當我們降低它並且我們看到單位速度發生顯著的趨勢變化時，我們堅持那些我們沒有看到單位速度改善的價格，我們恢復了定價。

Okay. And then any gross margin implications from the mix shift next year? You're increasing the good assortment 10 percentage points. Is that going to be a headwind to gross margin next year?

好的。那麼明年的組合轉換對毛利率有何影響？您將優質品種增加了 10 個百分點。這會成為明年毛利率的阻力嗎？

The shift in product composition doesn't have a huge impact to our gross margin rate.

產品結構的變化對我們的毛利率沒有太大影響。

It should be a net benefit because the mid-tier isn't working. Because it's not working, particularly in that Older Age segment, 4 to 10, we had to get much more promotional to clear it out. The consumer just didn't see sufficient differentiation between the good, which is good-looking product, and the best. It was -- it got caught in the middle and they opted for one and the other and not the mid-tier.

這應該是淨收益，因為中間層不起作用。因為它不起作用，特別是在 4 歲到 10 歲的老年群體中，我們必須進行更多的促銷來清除它。消費者只是沒有看到好產品（好看的產品）和最好的產品之間的足夠差異。它被困在中間，他們選擇了一個和另一個，而不是中間層。

So we had to promote it. If we get the mix right, you'll have less pressure on the margin.

所以我們必須推廣它。如果我們的組合正確，你的利潤壓力就會更小。

Carla Casella from JPMorgan.

摩根大通的卡拉·卡塞拉。

Just 2 follow-ups. And one you may have answered, but I dropped for a moment. Did you say the impact that the warmer fall weather we've had has on either the ending third quarter inventory or thoughts for a third quarter and whether there could be any clearance related to that?

只有 2 個後續行動。你可能已經回答了這個問題，但我暫時放下了。您是否說過秋季暖化的天氣對第三季末庫存或第三季的想法有何影響，以及是否可能有任何與此相關的清倉？

Well, I would say we certainly always have a weather impact. It did warm up in the final 2 weeks of the quarter in the US and in Canada, which slowed sales a bit. I would say though that over the course of the entire third quarter, we made very good progress moving through the spring and summer inventory, which would otherwise have been problematic going forward.

嗯，我想說我們肯定總是受到天氣的影響。在本季的最後兩週，美國和加拿大的氣溫確實回暖，這導致銷售略有放緩。我想說的是，在整個第三季的過程中，我們在春季和夏季庫存方面取得了非常好的進展，否則這將在未來出現問題。

Yes. It's a natural stimulus every year. When that weather turns cooler in the second half of the year, we see a nice lift in sales. And then again, in the spring, when weather turns from cold to warm, we see a nice lift in sales. It always comes, hard to predict with certainty when it comes, but we -- as weather turns cooler in more parts of the country, we've seen business trends improve.

是的。這是每年的自然刺激。當下半年天氣轉涼時，我們會看到銷售額的大幅成長。再說一次，在春天，當天氣由冷變暖時，我們看到銷售量大幅上升。它總是會到來，很難準確預測它何時到來，但隨著全國更多地區天氣轉涼，我們看到商業趨勢有所改善。

Okay. Great. And then just one question. Can you just remind us how much you import from China? And any thoughts you have on potential tariffs if Trump takes the White House?

好的。偉大的。然後只有一個問題。您能提醒我們一下您從中國進口了多少嗎？如果川普入主白宮，您對潛在關稅有何想法？

Yes. So we've been diversifying the countries of origin over the probably the past 5 years or so. The amount of finished goods now coming out of China is less than 5%. So we've -- even our China-based suppliers have built capacity for us in Cambodia and Vietnam.

是的。因此，在過去 5 年左右的時間裡，我們一直在使原產國多樣化。目前來自中國的製成品數量不到5%。因此，我們甚至中國的供應商也為我們在柬埔寨和越南建立了產能。

We've got first-class suppliers in India and Indonesia. So the exposure, I believe, to tariffs is significantly reduced relative to where we were, say, five years ago. The likelihood tariffs get put on children's apparel, I don't think that will be on the short list, but time will tell.

我們在印度和印尼擁有一流的供應商。因此，我認為，與五年前相比，關稅風險顯著降低。我認為對兒童服裝徵收關稅的可能性不會出現在最終名單上，但時間會證明一切。

At this time, I would now like to turn the conference back over to Mr. Casey for closing remarks.

現在，我想將會議轉回凱西先生致閉幕詞。

Thanks very much. Thank you all for joining us this morning. We wish you all and all of your families a happy holiday season, and we look forward to updating you again on our progress in February. Goodbye, everybody.

非常感謝。感謝大家今天早上加入我們。我們祝福您和您的家人度過一個愉快的假期，並期待再次向您通報我們二月份的進展。再見，大家。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。