Citi Trends Inc (CTRN) 2023 Q1 法說會逐字稿

Greetings, and welcome to the Citi Trends First Quarter 2023 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode.

您好，歡迎參加 Citi Trends 2023 年第一季度收益電話會議。在演示過程中，所有參與者都將處於只聽模式。

(Operator Instructions)

（操作員說明）

As a reminder, this conference is being recorded Tuesday, May 23, 2023. I would now like to turn the conference over to Nitza McKee, Senior Associate. Please go ahead.

提醒一下，本次會議將於 2023 年 5 月 23 日星期二錄製。我現在想將會議轉交給高級助理 Nitza McKee。請繼續。

Thank you, and good morning, everyone. Thank you for joining us on Citi Trend's First Quarter 2023 Earnings Call. On our call today is our Chief Executive Officer, David Makuen; and Chief Financial Officer, Heather Plutino. Our earnings release was sent out this morning at 6:45 a.m. Eastern Time. If you have not received a copy of the release, it's available on the company's website under the Investor Relations section at www.cititrends.com. You should be aware that prepared remarks today made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

謝謝大家，早上好。感謝您加入我們的 Citi Trend 2023 年第一季度財報電話會議。今天接聽我們電話的是我們的首席執行官 David Makuen；和首席財務官 Heather Plutino。我們的收益發佈於東部時間今天早上 6 點 45 分發出。如果您還沒有收到新聞稿的副本，可以在公司網站 www.cititrends.com 的“投資者關係”部分找到。您應該知道，今天在本次電話會議期間準備好的評論可能包含 1995 年《私人證券訴訟改革法案》含義內的前瞻性陳述。

Management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance. Therefore, you should not place undue reliance on these statements. We refer to you to the company's most recent report on Form 10-K and other subsequent filings with the Securities and Exchange Commission for a more detailed discussion of the factors that can cause actual results to differ materially from those described in the forward-looking statements.

管理層可能會針對您的問題作出額外的前瞻性陳述。這些陳述不保證未來的表現。因此，您不應過分依賴這些陳述。我們建議您參閱公司關於 10-K 表格的最新報告以及隨後向美國證券交易委員會提交的其他文件，以更詳細地討論可能導致實際結果與前瞻性陳述中描述的結果存在重大差異的因素.

I will now turn the call over to our Chief Executive Officer, David Makuen. David?

我現在將把電話轉給我們的首席執行官 David Makuen。大衛？

Thank you, Nitza. Good morning, everyone. And thanks for joining us today on the Citi Trends First Quarter Fiscal 2023 Earnings Call. I will begin our call with highlights of our first quarter financial and operational performance. Heather Plutino, our Chief Financial Officer, will then elaborate on our detailed financial results and a few other items related to our outlook. Then we'll open up the call for your questions.

謝謝你，尼扎。大家，早安。感謝您今天加入我們的 Citi Trends 2023 財年第一季度財報電話會議。我將以我們第一季度財務和運營業績的亮點開始我們的電話會議。然後，我們的首席財務官 Heather Plutino 將詳細說明我們的詳細財務業績以及與我們的前景相關的其他一些項目。然後我們將打開您的問題的電話。

Against what remained a challenging macro backdrop for the low-income families that we serve in African-American and multicultural neighborhoods, our first quarter results were in line with our previously stated guidance. Our team's execution of the initiatives I shared during our fourth quarter call improved throughout the quarter, and our customers remained remarkably resilient. I will elaborate a bit more in a few minutes.

在我們服務於非裔美國人和多元文化社區的低收入家庭仍然面臨挑戰的宏觀背景下，我們第一季度的業績符合我們之前公佈的指導意見。我們團隊對我在第四季度電話會議中分享的計劃的執行在整個季度都有所改善，我們的客戶仍然非常有彈性。我將在幾分鐘內詳細說明。

As the first quarter unfolded, we doubled down on offering extreme value basics, fashion and trends by stocking our stores with more entry price points, which translated to approximately 70% of our units for sale in stores priced $9.99 and under. Additionally, we have great momentum behind continuously improving our store experience. From appealing visual merchandising of fresh head-to-toe looks to welcoming customers we know by name like a friend. Having visited dozens of stores during the quarter, I can tell you that our experience is getting better and better.

隨著第一季度的展開，我們通過以更多入門價位庫存我們的商店來加倍提供極值基本款、時尚和潮流，這意味著我們約 70% 的商品在價格為 9.99 美元及以下的商店出售。此外，我們在不斷改善商店體驗的背後有著巨大的動力。從從頭到腳的新鮮造型的吸引人的視覺營銷，到像朋友一樣歡迎我們知道名字的顧客。在本季度訪問了數十家商店後，我可以告訴您，我們的體驗越來越好。

During our last call, we mentioned sharpening our focus on trend development as a key lever for the year. I am pleased with our efforts thus far. We have more work to do, but early efforts are providing some strong success indicators across apparel, footwear, beauty accessories, home and impulsive snacks, candy and HBA essentials. Lastly, we've seen solid response to our spring and early summer newness.

在上次電話會議中，我們提到加強對趨勢發展的關注，將其作為今年的一個關鍵槓桿。我對我們迄今為止的努力感到滿意。我們還有更多工作要做，但早期的努力正在為服裝、鞋類、美容配飾、家庭和衝動零食、糖果和 HBA 必需品提供一些強有力的成功指標。最後，我們看到了對春季和初夏新鮮事物的強烈反響。

Thanks to our BUY team being really on top of our customers' wants and needs. Having said this, the macro pressures we are all keenly aware of have resulted in our customers visiting less and being more selective about what they put in their basket, as they are still resetting their discretionary spending habits, prioritizing family and everyday life needs, including rent, food, utilities and more.

感謝我們的採購團隊真正了解客戶的需求。話雖如此，我們都敏銳地意識到的宏觀壓力導致我們的客戶減少了訪問量並且對他們放入籃子的東西更加挑剔，因為他們仍在重新調整他們的可自由支配的消費習慣，優先考慮家庭和日常生活需求，包括房租、食品、水電等。

Now for a little detail on the cadence of the quarter. As you have heard from other retailers, spring season traffic trends were choppy. From a monthly perspective, February and April sales compared to last year were very similar in trend while March was much weaker, primarily driven by persistent inflation, lower tax refund and the elimination of SNAP benefits. It's important to mention that we continue to see strong shopper conversion throughout the quarter, a clear signal our assortments are resonating and the Citi Trends brand positioning remains strong.

現在詳細介紹本季度的節奏。正如您從其他零售商那裡聽說的那樣，春季客流量趨勢起伏不定。從月度來看，2 月和 4 月的銷售額與去年的趨勢非常相似，而 3 月則要弱得多，這主要是由於持續的通貨膨脹、較低的退稅和取消 SNAP 福利。值得一提的是，我們在整個季度繼續看到強勁的購物者轉化率，這是我們的產品組合產生共鳴以及 Citi Trends 品牌定位依然強勁的明確信號。

As we manage the quarter, I'm pleased to report that our financial position remains strong as we ended the first quarter with liquidity of approximately $164 million, inclusive of $89 million in cash and no borrowings on our $75 million asset-based lending facility. We are leveraging our strong balance sheet to procure advantageous products to set us up for successful back-to-school and fall selling seasons, while remaining laser-focused on controlling what we can control.

在我們管理本季度時，我很高興地報告我們的財務狀況依然強勁，因為我們在第一季度末的流動資金約為 1.64 億美元，其中包括 8900 萬美元現金和我們 7500 萬美元基於資產的借貸工具的無借貸。我們正在利用我們強大的資產負債表來採購優勢產品，為成功的返校季和秋季銷售季做好準備，同時繼續專注於控制我們能控制的東西。

Now let me take a moment to update you on our progress in support of our 4 strategic priorities, which are: number one, driving comp store productivity; number two, managing inventory and maximizing margin; number three, controlling SG&A expenses and leveraging our balance sheet; and number four, executing technology enhancements. First up, driving comp stores productivity. Despite our negative first quarter trend, our Buy, Move and Sell teams took action to capture targeted demand opportunities. Some important highlights are our customers really came out for their kids during the quarter.

現在讓我花點時間向您介紹我們在支持我們的 4 個戰略重點方面取得的進展，它們是： 第一，提高商店生產力；第二，管理庫存和最大化利潤；第三，控制 SG&A 費用並利用我們的資產負債表；第四，執行技術改進。首先，提高 comp 商店的生產力。儘管我們第一季度的趨勢是負面的，但我們的購買、移動和銷售團隊採取了行動來抓住有針對性的需求機會。一些重要的亮點是我們的客戶在本季度真正為他們的孩子出來了。

Our Citi Mini business was extremely strong. Easter was hopping with sweet casual dresses for girls and short sets for boys and the older kids opted for active inspired brands. Wonky weather patterns drove unexpected but strong momentum in ladies long denim, lightweight outerwear and fashion fleece. As the weather normalized, our ladies scooped up casual looks from trendy tees to woven tops, while our guys gravitated to new curated urban looks.

我們的 Citi Mini 業務非常強勁。復活節為女孩們準備了甜美的休閒連衣裙，為男孩們準備了短褲，而年齡較大的孩子們則選擇了活躍的靈感品牌。不穩定的天氣模式為女士長款牛仔布、輕便外套和時尚羊毛衫帶來了意想不到但強勁的勢頭。隨著天氣正常化，我們的女士們從時髦的 T 卹到編織上衣等休閒裝扮，而我們的男士們則被新的都市裝扮所吸引。

Strong results in commodities, scrubs, basics and replenishment items for the home as well as health and beauty where we offer value and convenience were definite bright spots. Our customers are definitely choosing how to spend their money carefully, leaning into their needs for work, the household and sharp price point fashion and fun.

在我們提供價值和便利的家居用品、磨砂膏、基本用品和補給品以及健康和美容產品方面取得了顯著成果，這無疑是亮點。我們的客戶肯定會謹慎地選擇如何花錢，根據他們對工作、家庭和尖銳價格點的時尚和樂趣的需求。

Lastly, the rebuild of our footwear business is gaining traction and new businesses show a promising feature with an expanded Missy size assortment, strength from our just one more Q line and our expanded assortments that target Latinx men and women.

最後，我們鞋類業務的重建正在獲得牽引力，新業務顯示出一個有前途的特點，即擴大的 Missy 尺碼種類、我們僅增加一個 Q 系列的實力以及我們針對拉丁裔男性和女性的擴大種類。

Our Citi Trends tech club adds another tool to our arsenal in order to broaden our reach with existing customers to drive comp sales. While still early stages of this program, we are pleased with the initial results, and we captured more than 20,000 new members during the quarter. Our second priority is managing inventory and maximizing margin. In controlling what we can control, our BUY team effectively managed inventories across all of our product cities or categories with total inventory dollars down nearly 12% to last year. However, as we discussed during last quarter, our in-store inventory levels were on the low side, and we suffered from too many out of stocks. Therefore, we intentionally built our in-store inventories during April across targeted year-round and seasonal ZIP codes or departments within our cities ending the quarter with 8% more in-store inventory than last year.

我們的 Citi Trends 技術俱樂部為我們的武器庫增加了另一種工具，以擴大我們與現有客戶的接觸範圍，從而推動銷售。雖然該計劃仍處於早期階段，但我們對初步結果感到滿意，我們在本季度吸引了 20,000 多名新成員。我們的第二要務是管理庫存和最大化利潤。在控制我們能控制的方面，我們的購買團隊有效地管理了我們所有產品城市或類別的庫存，總庫存美元比去年下降了近 12%。然而，正如我們在上個季度所討論的那樣，我們的店內庫存水平偏低，而且我們遭受了太多缺貨的困擾。因此，我們在 4 月份有意增加我們城市中目標全年和季節性郵政編碼或部門的店內庫存，本季度結束時店內庫存比去年增加 8%。

In total, I feel we are well positioned to recruit market share and to capitalize on future demand. Rest assured, though, our inventory philosophy remains anchored on ending each season clean and consistently delighting our customers with fresh exciting products at compelling value prices.

總的來說，我覺得我們已經做好了爭取市場份額和利用未來需求的準備。不過請放心，我們的庫存理念仍然立足於每個季節的清潔結束，並始終以極具吸引力的價格提供令人興奮的新鮮產品來取悅我們的客戶。

Our third priority is controlling SG&A expenses and leveraging our balance sheet. The headline here is all about being prudent in our decision-making. Our expense management discipline is consistent and steadfast as we look around every corner to identify cost efficiencies while operating the business in a lean and disciplined manner. As macro headwinds persist, we have ample liquidity to refine assortment as the demand environment evolves.

我們的第三個優先事項是控制 SG&A 費用並利用我們的資產負債表。這裡的標題是關於在我們的決策中謹慎行事。我們的費用管理紀律始終如一，堅定不移，因為我們會環顧每個角落以確定成本效率，同時以精益和紀律嚴明的方式運營業務。由於宏觀逆風持續存在，我們有充足的流動性來隨著需求環境的變化來改進分類。

Lastly, our fourth priority is executing technology enhancements. We have numerous good developments on this front. We are making great progress towards the launch of our new ERP platform later this summer, which, as a reminder, will significantly improve our core operational abilities. We are also making considerable progress on improvements in our distribution centers and in our stores.

最後，我們的第四個優先事項是執行技術改進。我們在這方面有許多良好的發展。我們在今年夏天晚些時候推出新的 ERP 平台方面取得了很大進展，提醒一下，這將顯著提高我們的核心運營能力。我們還在配送中心和商店的改進方面取得了相當大的進展。

In summary, we have delivered first quarter results in line with our previously stated guidance, but we aren't satisfied. To be clear, we aren't hunkered down per se. Rather, we are running really fast and are deeply committed to improving our operating results. At the center of our efforts is bringing our brand purpose to life as we do everything in our power to improve our trends. Remember our purpose, live bold, live proud, respect all. We call it Citi Life and define the behaviors we must uphold to ensure our customers find apparel and nonapparel that helps them be ready for whatever comes their way.

總而言之，我們已經交付了符合我們先前聲明的指導的第一季度業績，但我們並不滿意。需要明確的是，我們本身並沒有陷入困境。相反，我們運行得非常快，並且堅定地致力於改善我們的經營業績。我們努力的核心是實現我們的品牌目標，因為我們竭盡全力改善我們的趨勢。記住我們的宗旨，勇敢地生活，自豪地生活，尊重所有人。我們稱之為 Citi Life 並定義了我們必須堅持的行為，以確保我們的客戶找到服裝和非服裝，幫助他們為遇到的任何事情做好準備。

Our BUY team is making bold decisions using analytics and customer feedback. Our Move team is shipping proud realizing they can really make a difference by getting fresh products to our stores multiple times per week. Our Sell team respects all by creating a customer experience that is welcoming and engaging.

我們的購買團隊正在使用分析和客戶反饋做出大膽的決定。我們的 Move 團隊很自豪地意識到他們可以通過每週多次將新鮮產品送到我們的商店來真正發揮作用。我們的銷售團隊尊重所有人，創造熱情好客且引人入勝的客戶體驗。

Keep in mind, we are the rare brand that serves the entire family within a tight household income range of $15,000 to $50,000,000 (sic) [$50,000] with 50% of our customers earning $25,000 or less per year. Our job is to go with their ups and downs and help bring opportunities to life for them each and every day. We know our customers really well and we know they are under immense financial pressure, which is showing up in lower traffic and spending levels. We also know that the macro environment remains uncertain. Therefore, we are prudently adjusting our outlook for the fiscal year, incorporating a continued challenging backdrop through the first half, followed by forecasting a modest improvement in the second half.

請記住，我們是為家庭收入在 15,000 美元至 50,000,000 美元（原文如此）[50,000 美元] 之間的整個家庭提供服務的罕見品牌，我們 50% 的客戶年收入為 25,000 美元或更少。我們的工作是應對他們的起起落落，並幫助他們每天為生活帶來機會。我們非常了解我們的客戶，我們知道他們承受著巨大的財務壓力，這體現在較低的流量和支出水平上。我們也知道宏觀環境仍然不確定。因此，我們正在審慎調整本財年的前景，考慮到上半年持續充滿挑戰的背景，然後預測下半年會出現適度改善。

With that, I'll turn the call over to Heather. She will discuss our first quarter results in detail as well as a few items related to our outlook. Heather?

有了這個，我會把電話轉給希瑟。她將詳細討論我們第一季度的業績以及與我們的前景相關的一些項目。希瑟？

Thanks, David, and good morning, everyone. As David mentioned in his opening remarks, our first quarter results were in line with our previously stated guidance. While the sales environment is uncertain and the low-income consumer, the bulk of our customer base remains under pressure. Our teams continue to make significant progress against the strategic priorities David outlined, all while controlling the controllables. Our strong balance sheet with $89 million of cash, well-controlled inventory, and undrawn $75 million revolving line of credit and no debt allows us to manage this environment with agility and flexibility.

謝謝，大衛，大家早上好。正如大衛在開場白中提到的那樣，我們第一季度的業績符合我們之前提出的指導意見。雖然銷售環境不確定且低收入消費者，但我們的大部分客戶群仍面臨壓力。我們的團隊繼續在 David 概述的戰略重點方面取得重大進展，同時控制可控因素。我們擁有 8900 萬美元現金、控制良好的庫存和未動用的 7500 萬美元循環信貸額度且無債務的強大資產負債表使我們能夠敏捷靈活地管理這種環境。

Turning to the specifics of our Q1 financial results. Total sales for the first quarter were $179.7 million, a decrease of 13.7% versus Q1 2022. While our results were at the low end of previously stated guidance, shopper conversion remained strong throughout the quarter as our assortments resonated well. We did experience pressure on both traffic and basket as our customers are being very selective about their discretionary purchases.

轉向我們第一季度財務業績的細節。第一季度的總銷售額為 1.797 億美元，與 2022 年第一季度相比下降了 13.7%。雖然我們的業績處於先前所述指引的低端，但由於我們的商品分類引起共鳴，整個季度的購物者轉化率仍然強勁。我們確實經歷了流量和購物籃的壓力，因為我們的客戶對他們的可自由支配的購買非常挑剔。

First quarter comp sales decreased 14.1% compared to Q1 2022. Gross margin was 36.7% or 37.0% as adjusted for cyber incident expenses versus 39.0% in Q1 2022. The year-over-year contraction in gross margin was primarily due to higher markdowns and higher freight expense as we strategically cleared aged inventory and shifted our focus to building our inventory position in key categories. These actions allowed us to enter Q2 with a healthy inventory position. SG&A expense dollars totaled approximately $71 million for the quarter or $70 million when adjusted for cyber incident expenses representing a 1.8% decline to Q1 2022.

與 2022 年第一季度相比，第一季度的銷售額下降了 14.1%。經網絡事件費用調整後的毛利率為 36.7% 或 37.0%，而 2022 年第一季度為 39.0%。毛利率同比收縮主要是由於降價幅度加大和更高的運費，因為我們戰略性地清理了陳舊的庫存，並將我們的重點轉移到建立我們在關鍵類別中的庫存地位。這些行動使我們能夠以健康的庫存狀況進入第二季度。本季度 SG&A 費用總額約為 7100 萬美元，經網絡事件費用調整後為 7000 萬美元，較 2022 年第一季度下降 1.8%。

Lower sales in the quarter drove adjusted SG&A deleverage of 470 basis points versus prior year to a rate of 38.8% of total sales. We continue to manage the business with disciplined expense control, while driving additional cost efficiencies across the organization. Operating loss was $9.5 million in the quarter or $7.9 million as adjusted compared to operating income of $39.7 million or $4.7 million as adjusted in Q1 2022. Net loss per share was $0.81 or $0.66 as adjusted versus diluted earnings per share of $3.59 in Q1 2022 or $0.42 as adjusted.

本季度較低的銷售額推動調整後的 SG&A 去槓桿化 470 個基點，佔總銷售額的 38.8%。我們繼續通過嚴格的費用控制來管理業務，同時在整個組織內推動額外的成本效率。本季度營業虧損為 950 萬美元或調整後的 790 萬美元，而 2022 年第一季度調整後的營業收入為 3970 萬美元或 470 萬美元。調整後的每股淨虧損為 0.81 美元或 0.66 美元，而 2022 年第一季度的攤薄後每股收益為 3.59 美元或調整後 0.42 美元。

Now turning to the balance sheet. Total inventory dollars at quarter end decreased to 12% Q1 2022. Total in-store inventory was up 8% compared to Q1 2022, reflecting our work to rebuild inventory levels in key categories where we believe we have an opportunity to recoup market share. We entered the second quarter comfortable with the level and makeup of our inventory and will continue to apply a disciplined approach to inventory management while investing appropriately to meet demand, all aligned with the key priorities David walked us through earlier.

現在轉向資產負債表。 2022 年第一季度末的總庫存美元下降至 12%。與 2022 年第一季度相比，店內總庫存增加了 8%，這反映了我們在關鍵類別中重建庫存水平的工作，我們認為我們有機會收回市場份額。我們進入第二季度時對我們的庫存水平和構成感到滿意，並將繼續採用嚴格的庫存管理方法，同時適當投資以滿足需求，所有這些都與大衛早些時候向我們介紹的關鍵優先事項保持一致。

Now turning to our outlook. We continue to expect the first half of fiscal 2023 to remain challenging for low-income families. Recall that we serve African-American and multicultural families within a tight household income range of $15,000 to $50,000 per year with 50% of our customers earning $25,000 or less per year. We now expect the cadence of economic relief for our customers to be more muted than we first thought and therefore, we believe it is prudent to update our fiscal 2023 outlook.

現在轉向我們的前景。我們繼續預計 2023 財年上半年對低收入家庭來說仍將充滿挑戰。回想一下，我們為年收入在 15,000 美元到 50,000 美元的嚴格家庭收入範圍內的非裔美國人和多元文化家庭提供服務，其中 50% 的客戶年收入在 25,000 美元或以下。我們現在預計為客戶提供經濟救濟的節奏比我們最初想像的要慢，因此，我們認為更新 2023 財年展望是謹慎的做法。

Our revised guidance is as follows: total sales for fiscal 2023 are expected to be in the range of negative mid-single digits to negative low single digits as compared to fiscal 2022. Full year EBITDA is expected to be in the range of $5 million to $20 million, an expanded range that reflects the level of uncertainty we're experiencing in the market. We now expect to open 5 new stores and to remodel 10 to 20 stores in the year.

我們修訂後的指引如下：與 2022 財年相比，2023 財年的總銷售額預計在負中個位數到負低個位數之間。全年 EBITDA 預計在 500 萬美元到 500 萬美元之間2000 萬美元，擴大範圍反映了我們在市場上遇到的不確定性程度。我們現在預計年內新開 5 家店，改造 10 到 20 家店。

As a result, full year capital expenditures are now expected to be in the range of $15 million to $20 million. Year-end cash balance is expected to be in the range of $85 million to $105 million. All other aspects of the prior guidance remain unchanged with full year gross margin expected to be in the high 30s and the closure of 10 to 15 underperforming stores.

因此，預計全年資本支出將在 1500 萬至 2000 萬美元之間。年終現金餘額預計在 8500 萬至 1.05 億美元之間。先前指導的所有其他方面保持不變，全年毛利率預計將達到 30 多歲，並關閉 10 至 15 家表現不佳的商店。

To recap, amidst a difficult backdrop, we delivered first quarter results in line with our previously stated guidance. Make no mistake, our first quarter results do not represent where we want to be nor do we believe they represent the full earnings' potential of this brand. The Citi Trends team is pulling all possible levers to drive improvement. We continue to focus on controlling what we can control by executing against our strategic priorities and operating the business with discipline from both an expense and a capital standpoint.

回顧一下，在艱難的背景下，我們交付的第一季度業績符合我們之前製定的指引。毫無疑問，我們第一季度的業績並不代表我們想要達到的目標，我們也不認為它們代表了該品牌的全部盈利潛力。 Citi Trends 團隊正在動用所有可能的槓桿來推動改進。我們繼續專注於控制我們可以控制的東西，通過執行我們的戰略優先事項並從費用和資本的角度嚴格遵守業務運營。

Importantly, I'm confident that the progress we are making on our strategic initiatives will serve us well over the near and the long term. With that, I'll turn the call back to David for closing comments. David?

重要的是，我相信我們在戰略舉措方面取得的進展將在近期和長期內為我們提供良好的服務。有了這個，我會把電話轉回給大衛徵求意見。大衛？

Thank you, Heather. Before we wrap up, as you know, we take our connection to our neighborhoods very seriously. And during the quarter, we celebrated 2 milestones from a corporate social responsibility perspective. First up, we are pleased to announce that our CitiCARES council has formally partnered with Goodwill International to create the Citi Cycle program. Citi Cycle is designed to move end-of-season goods that have reached the end of their markdown life to a new usage opportunity in Goodwill stores, helping to reduce environmental waste. The Citi Cycle partnership is aligned with Goodwill's goal of keeping 150 million pounds of materials out of landfills.

謝謝你，希瑟。如您所知，在我們結束之前，我們非常重視與社區的聯繫。在本季度，我們從企業社會責任的角度慶祝了兩個里程碑。首先，我們很高興地宣布，我們的 CitiCARES 理事會已與 Goodwill International 正式合作創建 Citi Cycle 計劃。 Citi Cycle 旨在將降價期結束的季末商品轉移到 Goodwill 商店的新使用機會，幫助減少環境浪費。 Citi Cycle 合作夥伴關係符合 Goodwill 將 1.5 億磅材料從垃圾填埋場中剔除的目標。

Proceeds from the sales of our goods in Goodwill stores are then used to support community programs such as Project Search in Milwaukee, a transition program for young adults with disabilities that moves individuals into jobs that match their personalized interests and needs. The Citi Cycle program is currently available in 8 markets, and we plan to continue to roll out to more markets in the future.

我們在 Goodwill 商店銷售商品的收益隨後用於支持社區計劃，例如密爾沃基的 Project Search，這是一項針對殘疾青年的過渡計劃，旨在讓個人從事符合其個性化興趣和需求的工作。 Citi Cycle 計劃目前在 8 個市場推出，我們計劃在未來繼續推廣到更多市場。

Secondly, we are very proud that this year marks the third year of our Black History Makers program, also managed by our CitiCARES Council the Black History Makers program increases awareness of black-owned businesses and community organizations, recognizing entrepreneurs who are positively impacting their communities. After considering thousands of inspiring applicants, the program awarded 10 $5,000 grants to Black business owners doing exceptional work. We have now played a role in furthering the success of 30 black-owned businesses across the United States in the last 3 years. I'm so proud of our CitiCARES team that operates at such a high level to make multiple impacts in our African-American neighborhoods.

其次，我們感到非常自豪的是，今年是我們的“黑人歷史創造者”計劃的第三個年頭，該項目也由我們的 CitiCARES 委員會管理，“黑人歷史創造者”計劃提高了黑人擁有的企業和社區組織的知名度，表彰了積極影響其社區的企業家.在考慮了數千名鼓舞人心的申請者之後，該計劃向 10 名表現出色的黑人企業主提供了 5,000 美元的贈款。在過去的 3 年裡，我們在推動全美 30 家黑人擁有的企業取得成功方面發揮了作用。我為我們的 CitiCARES 團隊感到自豪，他們以如此高的水平運作，對我們的非裔美國人社區產生了多重影響。

Before I turn the call over to the operator, I want to take a moment to thank the entire Citi Trends team for their commitment and resilience as we continue to navigate the current environment. We are truly grateful for their dedication to our customers and their unwavering desire to improve the business. We are now ready to take your questions. Kelly?

在我將電話轉給接線員之前，我想花點時間感謝整個 Citi Trends 團隊在我們繼續應對當前環境時的承諾和韌性。我們衷心感謝他們對客戶的奉獻以及他們改善業務的堅定願望。我們現在準備好回答您的問題。凱莉？

(Operator Instructions)

（操作員說明）

Our first question comes from Jeremy Hamblin with Craig-Hallum Capital Group.

我們的第一個問題來自 Craig-Hallum Capital Group 的 Jeremy Hamblin。

I wanted to start with the commentary around the quarter-to-date trends. So it sounds like some cross currents in here, you noted good response to spring and early summer assortment, but you noted that their customers are being selective about what they put in their basket. So I would assume that, that means conversions continue to be pretty good and your -- maybe your units per transaction is down.

我想從圍繞季度至今趨勢的評論開始。所以這聽起來像是這裡的一些交叉流，你注意到對春季和初夏的分類反應良好，但你注意到他們的客戶正在選擇他們放入籃子的東西。所以我假設，這意味著轉化率仍然很好，而且你的 - 也許你的每筆交易單位下降了。

But I wanted to see if you could give us a sense for what you've seen quarter-to-date, if the trends have improved on a comp basis from what you saw in Q1? And then just a little bit more color around the dynamics on your units per transaction versus transactions overall.

但我想看看你是否可以讓我們了解你所看到的季度最新情況，如果趨勢在你在第一季度看到的基礎上有所改善？然後，每筆交易的單位與整體交易的動態變化略有不同。

Jeremy, it's Heather. Thanks for the question. I appreciate it. A couple of things. So when we look at the way we exited Q1, David mentioned the construct of the quarter in his prepared remarks, right? Feb and April were performed similarly to each other. March was softer. So April was certainly in the pocket of what we expected when we did our prior guide, but it was on the lower end of that guide, right, and not where we hoped it would be. That trend continued into May. Obviously, May is still underway, but we've seen that trend continue into May. You are correct. We are seeing some green shoots, spring and summer is being received well with our customer, and that is translating in continued strong conversion.

傑里米，是希瑟。謝謝你的問題。我很感激。幾件事。因此，當我們審視我們退出第一季度的方式時，大衛在他準備好的發言中提到了該季度的結構，對吧？二月和四月的表現彼此相似。三月比較柔和。因此，當我們製作之前的指南時，4 月肯定在我們預期的範圍內，但它位於該指南的低端，對，而不是我們希望的位置。這種趨勢一直持續到 5 月。顯然，5 月仍在進行中，但我們已經看到這種趨勢會持續到 5 月。你是對的。我們看到了一些新芽，我們的客戶對春季和夏季的反應良好，這正在轉化為持續強勁的轉化。

But traffic remains under pressure and basket is under pressure. We said it multiple times in prepared remarks that our customer is being very, very selective about what he and she are putting in their basket. And we see that as a reflection of the amount of economic pressure that they're under. So we're seeing some green shoots, but it is very much a story of selectivity of our customers on what makes it into the basket.

但客流量依然承壓，籃子承壓。我們在準備好的評論中多次說過，我們的客戶對他和她放入籃子的東西非常非常挑剔。我們認為這反映了他們所承受的經濟壓力。所以我們看到了一些萌芽，但這在很大程度上是我們的客戶對將其放入籃子的選擇性的故事。

Got it. That's helpful. And then you guys have done a great job of controlling inventory here. You noted that it might have even been a little bit lower than where you wanted it to be. Maybe there were some opportunities missed because of that, but you feel good about where it is now. You did see gross margins -- adjusted gross margins down about 200 basis points in Q1, but still expecting high 30s for the year.

知道了。這很有幫助。然後你們在控制庫存方面做得很好。你注意到它甚至可能比你想要的要低一點。也許因此而錯過了一些機會，但你對現在的情況感覺良好。你確實看到了毛利率——調整後的毛利率在第一季度下降了約 200 個基點，但仍預計今年將達到 30 個基點。

I wanted to get a sense of how you expected that dynamic kind of year-over-year to play out. And if in conjunction with that, if you could discuss at all, freight and the impact you expect freight to have? I know it has been a headwind last year, expected to be a little bit of a tailwind, I believe, this year, but wanted to see if you could provide with some more color on that.

我想了解一下你是如何期待這種充滿活力的年復一年的結果的。如果與此相結合，您是否可以討論運費以及您期望運費產生的影響？我知道去年一直是逆風，我相信今年會有點順風，但我想看看你是否可以提供更多的顏色。

Jeremy, it's David. Thanks, good question. We'll do it 2 part, and I'll hand it over to Heather for freight. But on your question about inventories, I think you're remembering right, at the fourth quarter call, we definitely weren't pleased with our in-stock levels across certain targeted ZIP codes within our store that we knew would be generally good sellers during these tougher times, meaning things that are in the essentials bucket, health and beauty, some nonapparel categories that we could see in the tee leads were going to be better sellers than not. And so when you heard us talk about the plus 8% in stores, primarily driven by fueling more inventory in April to set us up for Q2, we really addressed those categories. So it wasn't store-wide. It was very targeted, very planful and meant to satisfy the upcoming Q2 demand, even a little bit of late Q2, early Q3 as we flow it.

傑里米，是大衛。謝謝，好問題。我們將分 2 部分完成，我會把它交給 Heather 運費。但是關於你關於庫存的問題，我想你沒記錯，在第四季度的電話會議上，我們對我們店內某些目標郵政編碼的庫存水平絕對不滿意，我們知道這些郵政編碼在這些艱難的時期，意味著必需品、健康和美麗的東西，我們可以在 T 卹中看到的一些非服裝類別將成為更好的賣家。因此，當您聽到我們談論商店增加 8% 時，主要是由於 4 月份增加了庫存，為第二季度做好準備，我們確實解決了這些類別。所以它不是全店範圍的。它非常有針對性，非常有計劃，旨在滿足即將到來的第二季度需求，甚至是第二季度末、第三季度初的需求。

So we're feeling good about that decision-making. And we're seeing some good indicators, call them green shoots, of when we increased inventory, sales responded. So I think that validates our thinking back from mid-March that we knew we needed to do some rebuilding. I'll hand it over to Heather for the freight question.

所以我們對這個決定感覺很好。我們看到了一些很好的指標，稱之為新芽，表明當我們增加庫存時，銷售會做出反應。所以我認為這證實了我們從 3 月中旬開始的想法，即我們知道我們需要進行一些重建。關於運費問題，我會交給 Heather。

Yes, I think you had a margin question in there, too, Jeremy, let me address margin in the quarter. Adjusted margin we did see a decrease to prior year by 200 basis points, and that's, call it, 60% freight, 40% markdowns. We took action in the quarter on both of those fronts. One, on the freight side to make sure that we got that exciting product that David just described into the stores in a timely manner, which, in some cases, meant that we purposely chose a higher-cost mode of transportation.

是的，傑里米，我認為你也有保證金問題，讓我在本季度解決保證金問題。調整後的利潤率確實比上一年下降了 200 個基點，也就是說，60% 運費，40% 降價。我們在本季度在這兩個方面都採取了行動。第一，在貨運方面，確保我們及時將大衛剛剛描述的令人興奮的產品送入商店，這在某些情況下意味著我們有意選擇了成本更高的運輸方式。

On the markdown side, we made the decision to take a higher level of markdowns than we had originally anticipated in order to go into the quarter clean, Q2 clean. So we feel good about those decisions. Certainly, it showed up in the margin. I understand that, but we feel good about the decisions because we feel like that plus the inventory comments that David just made have really set us up well for the balance of the year and the key selling seasons that are in front of us.

在降價方面，我們決定採取比我們原先預期更高的降價水平，以便進入乾淨的季度，乾淨的 Q2。所以我們對這些決定感覺很好。當然，它出現在邊緣。我理解這一點，但我們對這些決定感到滿意，因為我們覺得這樣加上大衛剛剛發表的庫存評論確實讓我們為今年的平衡和擺在我們面前的關鍵銷售季節做好了準備。

Freight, specifically, let me do a shout out to our Move team who are working very hard to control expenses in both inbound and outbound modes of transportation. Recall, Jeremy, we are 100% domestic freight, right? So we are not seeing the benefit directly in our margin line on container costs coming down. So they are working hard with existing and with new business partners to bring those rates down and to give us flexibility within our supply chain. So shout out to them, and that will mean that freight expense will moderate throughout the year, allowing us to continue to hold our guidance on margin in the high 30s.

運費，具體來說，讓我向我們的 Move 團隊大聲疾呼，他們正在努力控制入站和出站運輸方式的費用。回想一下，傑里米，我們是 100% 國內貨運，對吧？因此，我們並沒有直接看到集裝箱成本下降的利潤線帶來的好處。因此，他們正在與現有和新的業務合作夥伴一起努力降低這些費率，並為我們的供應鏈提供靈活性。所以向他們大聲疾呼，這將意味著全年運費將減少，使我們能夠繼續保持 30 多歲的高利潤率指導。

Got it. And then in terms of the cyber attack earlier this year, which had clearly some impact on the profitability in Q1. Have you seen any lasting impact to that? Has there been any reputational damage at all? I just wanted to see if that's something that you think could linger on a go-forward basis?

知道了。然後就今年早些時候的網絡攻擊而言，這顯然對第一季度的盈利能力產生了一些影響。你有沒有看到任何持久的影響？是否有任何名譽損害？我只是想看看這是否是您認為可以繼續推進的事情？

Thanks, Jeremy. I'll take that one. The quick answer is absolutely not. No reputational damage. It's really, if you recall, it was 100% internally focused, it had no impact in our stores or to our customers. And so it's something that we've largely put in the rearview mirror. The team did a great job conducting all the right recovery exercises, and we're set up well going forward from a security standpoint. So we're -- we've moved on is the best way to say it.

謝謝，傑里米。我會拿那個。快速回答絕對不是。沒有名譽損失。如果你還記得的話，它真的是 100% 專注於內部，它對我們的商店或我們的客戶沒有影響。所以這是我們在很大程度上放在後視鏡中的東西。該團隊在進行所有正確的恢復練習方面做得很好，從安全的角度來看，我們已經做好了向前推進的準備。所以我們——我們繼續前進是最好的表達方式。

Got it. Last one for me. Your cash balance, you project it based on current share count, I think it translates to about $10 to $13 a share. You have additional liquidity on top of that, but really strong. In terms of mentality on how you can deploy capital, you obviously -- you have not done buybacks for a number of quarters here. I think that's probably prudent. But just wanted to understand in terms of thinking about that down the road, is the mindset of we need to get kind of through this uncertain macro environment before we think about doing anything else.

知道了。最後一個給我。你的現金餘額，你根據當前的股票數量來預測，我認為它相當於每股 10 到 13 美元。除此之外，你還有額外的流動性，但真的很強勁。就如何配置資本的心態而言，你顯然 - 你在這裡的幾個季度都沒有進行回購。我認為這可能是謹慎的。但只是想了解在未來的思考方面，在我們考慮做任何其他事情之前，我們需要先度過這個不確定的宏觀環境。

I noted that you took your CapEx guidance down by about $5 million as well. But thinking about it in terms of the buyback you still have out there for $50 million, but then also as it relates to remodels or potentially open it up stores on a go-forward basis.

我注意到您也將資本支出指導下調了約 500 萬美元。但是從回購的角度來看，你仍然可以以 5000 萬美元的價格進行回購，但同時也涉及到改造或可能在未來的基礎上開店。

Yes, I'll take this one, Jeremy. Thanks for the question. Yes. So the decision to bring down the CapEx guidance for the year, in my opinion, it just makes sense, right? I mean our top line is a bit too choppy right now to feel good about going big and bold on capital spend. And so we're making the decision to ratchet back on the number of new stores and the number of remodels. It also signals the amount of focus this team has on the strategic initiatives that David laid out, right? So we're looking at no distractions. And the fact that we're also preserving cash is important.

是的，我要這個，傑里米。謝謝你的問題。是的。因此，在我看來，降低今年資本支出指導的決定是有道理的，對吧？我的意思是我們的收入現在有點太不穩定了，無法在資本支出上大刀闊斧。所以我們決定減少新店的數量和改造的數量。這也表明該團隊對 David 制定的戰略計劃的關注程度，對嗎？所以我們沒有分心。而且我們還保留現金這一事實很重要。

The question about share repurchase. I said this for several quarters now, so forgive the repeat, but not off the table, it's just not now because we really are in preservation-of-cash mode and investing in the business. So the inventory investments that we talked about in the first quarter are really, first and foremost, in top of mind, right, because that's going to drive the top line, which is what we're looking to, to be the signal of when we are feeling a bit more stable, and we'll start to think differently about capital allocation.

關於股份回購的問題。我已經說了好幾個季度了，所以請原諒我重複一遍，但不是在桌面上，只是現在不是，因為我們確實處於現金保存模式並投資於業務。因此，我們在第一季度談到的庫存投資實際上首先是最重要的，因為這將推動收入增長，這正是我們所期待的，是什麼時候的信號我們感覺更穩定了，我們將開始以不同的方式思考資本配置。

I'll also remind you that I'm saying this, but as one person, but there is an active conversation with Board of Directors about capital allocation. So it is a continuous discussion. We just want to make sure we're doing what's right for the business in the long term. And so we're preserving right now.

我還要提醒你，我是這麼說的，但作為一個人，但與董事會就資本分配進行了積極對話。所以這是一個持續的討論。我們只是想確保我們在做對企業長期有利的事情。所以我們現在正在保存。

Our next question comes from Dana Telsey with Telsey Advisory Group.

我們的下一個問題來自 Telsey Advisory Group 的 Dana Telsey。

As you think about the CTX stores, how is those performance versus the base? Is there any difference between the remodeled stores? And then, David, you mentioned that 70% of the units are now at $9.99 and under. Does that differ by category at all? Does it differ by newness and how you're planning pricing going forward? And just lastly, would the trend development being effective, and you mentioned sharpening the focus, what are the next levers as we move through this trend development time period?

當您考慮 CTX 商店時，這些性能與基礎相比如何？改造後的店舖有什麼區別嗎？然後，大衛，你提到 70% 的單位現在的價格在 9.99 美元及以下。這是否因類別而異？它是否因新穎性以及您如何計劃未來的定價而有所不同？最後，趨勢發展是否有效，你提到了加強重點，我們在這個趨勢發展時期移動的下一個槓桿是什麼？

Dana, thanks for those good questions. I'll tick through those. From a CTX standpoint for our existing base of CTX stores, which is nearing 100 of the fleet, we are still seeing a nice separation between them and the rest of the chain. They're a little longer in their history, as you know, since we did a number of them in '21 and '22 and less so in '23, but we're seeing mid- to high single-digit differentials between them and the rest of the chain. So we're pleased with them, and they're starting to show up regularly in our top 100 stores and all that good stuff. So we're still thrilled about the performance of those.

達娜，謝謝你提出的這些好問題。我會勾選那些。從 CTX 的角度來看，我們現有的 CTX 商店基地接近 100 家，我們仍然看到它們與連鎖店的其他部分之間存在很好的分離。如您所知，它們的歷史稍長一些，因為我們在 21 年和 22 年做了一些，而在 23 年做了更少，但我們看到它們與鏈的其餘部分。所以我們對它們很滿意，它們開始定期出現在我們的前 100 家商店和所有這些好東西中。所以我們仍然對它們的性能感到興奮。

Secondly, on your pricing question, that's a good one. I would tell you, it does differ by category, for example, in beauty, almost probably 85% is under $10. But in apparel, it's more like 60%, 55% to 60%. So it depends on the category. But I would tell you that we've been really thoughtful about it because in a way, our customer votes when we test this stuff and we typically test before we roll to the chain and we've seen some really good voting results dating back to January when we started dabbling in a more kind of entry price point mindset given the nature and the state of the economy. And we're seeing some great pickup by the customer.

其次，關於你的定價問題，這是一個很好的問題。我會告訴你，它確實因類別而異，例如，在美容方面，幾乎 85% 的商品都在 10 美元以下。但在服裝方面，它更像是 60%、55% 到 60%。所以這取決於類別。但我會告訴你，我們真的考慮周全了，因為在某種程度上，我們的客戶在我們測試這些東西時投票，我們通常在滾動到鏈之前進行測試，我們已經看到一些非常好的投票結果可以追溯到1 月，考慮到經濟的性質和狀況，我們開始涉足更多的入門價格點心態。我們看到客戶有一些很好的選擇。

And frankly, a thank you from the customer, right, for voting for these lower price points. So we're monitoring it carefully. I do want to send the message that above $10 is working really well, too, not as if we're not seeing any AURs that are higher. We're seeing plenty of that work as well. But we really wanted to be mindful and as I mentioned in the call, we really know our customer and while they didn't say bring in more $6 stuff, we could tell and we know based on their situation that it will only help and it will feed our top line. So that's been a good development.

坦率地說，感謝客戶投票支持這些較低的價格點。所以我們正在仔細監控它。我確實想傳達這樣的信息，即 10 美元以上也非常有效，並不是說我們沒有看到任何更高的 AUR。我們也看到了很多這樣的工作。但我們真的很想留心，正如我在電話中提到的，我們真的很了解我們的客戶，雖然他們沒有說要多帶 6 美元的東西，但我們可以說，根據他們的情況，我們知道這只會有所幫助而且它將養活我們的頂線。所以這是一個很好的發展。

Thirdly, on trend development itself. I would tell you similar refrain from last call. When we think about the moments in the year that are most important to our customer, that's where we really zero in on which trends will deliver a great moment, so to speak. So are you back-to-school as the next one, certainly holiday in fact, one before back-to-school obviously, would be hard in summer starting with this week in Memorial Day and culminating with July 4. And our team has done a great job at recognizing what we missed last year and what we can do better this year, both from a trend standpoint, but also importantly, the timing of the trends.

第三，趨勢發展本身。我會告訴你類似的最後一次通話。當我們考慮一年中對我們的客戶最重要的時刻時，這就是我們真正關注哪些趨勢會帶來偉大時刻的地方，可以這麼說。那麼你是否作為下一個返校，實際上肯定是假期，顯然是在返校之前，從陣亡將士紀念日的本週開始到 7 月 4 日結束的夏季會很艱難。我們的團隊已經完成了很好地認識到我們去年錯過了什麼，今年我們可以做得更好，無論是從趨勢的角度，而且重要的是，趨勢的時機。

Last year, we were a little late on some trend deliveries and this year, we're well ahead of those right pockets of time that the customer is likely to respond to, for example, cool new short or a great new woven top or a great summer dress. So the team has done a better job not only sharpening the trends themselves but also sharpening when we bring it in and then how we exit it as well. So I would tell you we're checking in with some better scores on that as well.

去年，我們在某些趨勢交付方面有點晚，而今年，我們遠遠領先於客戶可能會響應的正確時間，例如，酷炫的新短褲或很棒的新編織上衣或很棒的夏裝。因此，該團隊做得更好，不僅使趨勢本身更加清晰，而且在我們引入它時以及我們如何退出它時也更加清晰。所以我會告訴你我們也在檢查一些更好的分數。

And then one other follow-up. Heather, when you think about the shaping of the year, and obviously, last quarter, we heard about the meaningful improvement in the second half of the year, now it's moderate given the pressures on the consumer. Any puts and takes that you think about, whether it's second, third and fourth quarter to be mindful of as we go through the year?

然後是另一個跟進。希瑟，當你考慮今年的情況時，很明顯，在上個季度，我們聽說了下半年的有意義的改善，考慮到消費者的壓力，現在是溫和的。您考慮的任何投入和考慮，無論是第二、第三和第四季度，還是我們在這一年中要注意的？

Dana, thanks for the question. What I would say is that the conversation that we had last quarter holds just coming down a bit, right? So the idea of sequential quarterly improvement in the top line holds it's just a more moderate sequential improvement throughout the year. SG&A annual remained constant -- I'm sorry, will remain constant about the year. Margin will start to see improvement throughout the year as well. So consistent with last quarter conversation, just unfortunately, given the topline environment, we felt it was prudent to bring our guidance down.

達娜，謝謝你的提問。我要說的是，我們上個季度的談話只是稍微緩和了一點，對吧？因此，收入連續季度改善的想法認為，這只是全年更溫和的連續改善。 SG&A 年度保持不變——對不起，這一年將保持不變。利潤率也將在全年開始出現改善。與上個季度的談話如此一致，不幸的是，鑑於頂線環境，我們認為降低我們的指導是謹慎的。

One last thing. We're hearing about shrink all over the place with retail. Is your price point too low to be impacted? Is it an impact? What are you seeing there?

最後一件事。我們聽說零售業到處都在縮水。您的價格點是否太低而不會受到影響？有影響嗎？你在那裡看到什麼？

Yes, David, I'll take that one as well. So shrink is a hot topic within the Citi Trends 4 walls as well. It is something that we are monitoring and working to manage in a cross-functional way. It gives senior leadership attention. I think it's not too extreme to say on a daily basis. I will tell you, it saddens me to tell you that the number of instances of carry events has increased. Not unusual in this economic environment but still disappointing. And I will say the #1 concern, certainly, we worry about the margin impact, but our #1 concern is the safety and security of our associates and our customers.

是的，戴維，我也要那個。因此，收縮也是 Citi Trends 4 牆內的熱門話題。這是我們正在以跨職能方式監控和管理的事情。它引起了高層領導的注意。我認為每天都說並不過分。我會告訴你，我很傷心地告訴你，攜帶事件的實例數量增加了。在這種經濟環境下並不罕見，但仍然令人失望。我會說第一個問題，當然，我們擔心利潤率的影響，但我們的第一個問題是我們員工和客戶的安全。

So we take that very seriously and are monitoring it. We are putting some new processes in place, more to come on that, that we think will help us be able to manage and monitor more closely and more efficiently but in total, it's up a smidge, technical term, it's up a smidge, but we're watching it very, very closely.

因此，我們非常重視這一點並正在對其進行監控。我們正在實施一些新流程，更多的是，我們認為這將幫助我們能夠更密切、更有效地管理和監控，但總的來說，它有點，技術術語，它有點，但我們正在非常、非常密切地關注它。

Our final question comes from John Lawrence with Benchmark.

我們的最後一個問題來自 Benchmark 的 John Lawrence。

Great. So David, would you comment a little bit about, if you look at just the inventory situation across the vendor base, what are you seeing out there as you go try to be sharper in certain categories, just that discipline of trying to find newer and fresher product? And how does that work? You mentioned the idea of getting something in faster. Can you just talk about that environment and with other people having trouble with apparel, what are you seeing out there in the marketplace?

偉大的。所以大衛，你能評論一下嗎，如果你只看整個供應商群的庫存情況，當你試圖在某些類別中變得更敏銳時，你會看到什麼，只是試圖找到更新和更好的紀律更新鮮的產品？那是如何工作的？你提到了更快地獲得一些東西的想法。您能否談談那種環境以及其他在服裝方面遇到問題的人，您在市場上看到了什麼？

Sure, John. It's a good question. First of all, I'll give a shout out to our vendor partners because I would tell you our chart and true partners have stuck by our side through thick and thin and we continue to do business with them in really healthy ways and they've got terrific offerings as we go through these difficult times. And you're right, they're feeling it, too, right? Their retail base, so to speak is causing in the seal as well. But they've been terrific partners. And then secondly, we've added an incredible amount of new vendors. So I would tell you we're playing big time offense and we're constantly in the marketplace looking for new resources that can actually deliver the trends that we've talked about in the right -- at the right cost, excuse me, and also in the right time window. And so we're being really creative. We're working with more and more vendors out in LA. Certainly sticking with plenty we can do with -- in a business within New York and even in between, but the 2 coasts for certain categories that are outside of apparel.

當然，約翰。這是個好問題。首先，我要向我們的供應商合作夥伴大聲疾呼，因為我會告訴你我們的圖表和真正的合作夥伴與我們同甘共苦，我們繼續以真正健康的方式與他們開展業務，他們已經在我們度過這些困難時期時獲得了極好的產品。你是對的，他們也感覺到了，對吧？可以說，他們的零售基地也在密封中。但他們一直是很棒的合作夥伴。其次，我們增加了數量驚人的新供應商。所以我會告訴你，我們正在大舉進攻，我們一直在市場上尋找新的資源，這些資源實際上可以提供我們已經討論過的趨勢 - 以合適的成本，對不起，並且也在正確的時間窗口。所以我們真的很有創意。我們正在與洛杉磯越來越多的供應商合作。當然，堅持我們可以做的很多事情——在紐約甚至兩者之間的業務中，但對於服裝之外的某些類別的兩個海岸。

So we're fast at it. We're on top of it. I think the opportunity remains and you can kind of hit on it, how can we just stay on that current sort of modern, relevant fashion and trend plan, so to speak, and just keep on bringing it. And that's our job, and it's our job to write those orders in the right quantities, so we're not over our skis and write it in a way we want to celebrate selling out. So we're all over it. We see plenty of advantageous product in the marketplace. We're well ahead of things in terms of back-to-school, we start shipping that in actually about 4 weeks, and we're all over holiday. Like I mentioned earlier, 2 really big moments that you know are extremely important to our customer and to our sales line.

所以我們很快。我們掌握了它。我認為機會仍然存在，你可以抓住它，我們怎麼能只停留在當前那種現代的、相關的時尚和趨勢計劃上，可以這麼說，並繼續帶來它。這就是我們的工作，我們的工作就是以正確的數量寫下這些訂單，所以我們不會超過我們的滑雪板並以我們想要慶祝銷售一空的方式寫下它。所以我們都結束了。我們在市場上看到很多有優勢的產品。我們在返校方面遙遙領先，我們實際上在大約 4 週內開始發貨，而且我們都在度假。就像我之前提到的，您知道的 2 個非常重要的時刻對我們的客戶和我們的銷售線極其重要。

So I think we're acutely aware of all the peaks and how to manage them. And we trust, as Heather mentioned, that the customer will come along, and it's our job to read the tea leaves as they present themselves and adjust accordingly. But I think we've got the right team to do so and the right vendor partners to join us in that.

所以我認為我們敏銳地意識到所有的高峰以及如何管理它們。正如希瑟所說，我們相信客戶會來，我們的工作是在茶葉出現時閱讀並相應地進行調整。但我認為我們有合適的團隊來這樣做，也有合適的供應商合作夥伴加入我們的行列。

Great. And just a quick follow-up. Obviously, remind us again a little bit about the ERP system, sort of 90 to 100 days behind there. What -- and obviously, a lot of that benefit goes to the '24. Can you just remind us a little detail there? And I assume there's no sort of diminished outlook as far as what that system is going to provide for your productivity loss?

偉大的。并快速跟進。顯然，再次提醒我們一些關於 ERP 系統的信息，大約落後了 90 到 100 天。什麼——很明顯，很多好處都給了 24 歲。你能提醒我們一些細節嗎？而且我認為就該系統將為您的生產力損失提供什麼而言，前景不會減弱？

Sure. Happy to do that. Yes, at a high level, we are on track after a temporary delay from the cyber incident. We are on track to deliver the new platform at the end of the summer. And what it will bring us really is a brand-new way of planning and allocating our inventory and then a much different way in the back of house running our finance operations. Those are kind of the 2 teams, the BUY team and the Support Finance team that will really benefit from this.

當然。很高興這樣做。是的，在高層，我們在網絡事件暫時延遲後走上正軌。我們有望在夏末交付新平台。它真正會給我們帶來的是一種全新的計劃和分配庫存的方式，然後是一種截然不同的內部財務運作方式。這些是真正從中受益的 2 個團隊，買入團隊和支持財務團隊。

And then a third benefit, organizationally speaking, is the power of data and analytics that this new platform will bring to the entire organization, spanning stores, HR, you name it. So we're really excited about it. And we've got a team that's Marshall against the new time line, bringing it home at the end of summer. And it basically will replace literally a green screen antiquated system that have served us well, but we are ready to graduate to the cloud literally and take advantage of this new easy-to-use interface that will offer new sophisticated algorithms and methodologies to most importantly, send the right goods to the right store at the right time. I can't underline that enough. Those -- that little -- that simple line, we will see great benefits from.

然後，從組織上講，第三個好處是這個新平台將為整個組織帶來數據和分析的力量，涵蓋商店、人力資源等。所以我們真的很興奮。我們有一支馬歇爾隊對抗新的時間線，在夏末將其帶回家。它基本上將完全取代為我們提供良好服務的過時綠屏系統，但我們已準備好逐步升級到雲，並利用這個新的易於使用的界面，該界面將提供新的複雜算法和方法，最重要的是，在正確的時間將正確的商品發送到正確的商店。我怎麼強調都不為過。那些——那一點——那條簡單的線，我們將從中看到巨大的好處。

You're right. It won't be as big a benefit in '23 but we got a little bit out of it for sure, and then we will absolutely count on it to impact '24 and '25.

你說得對。它在 23 年不會有那麼大的好處，但我們肯定從中得到了一點好處，然後我們絕對會指望它影響 24 年和 25 年。

There are no further phone questions at this time. Mr. Makuen, I will now turn the call back over to you for your closing remarks.

目前沒有進一步的電話問題。 Makuen 先生，我現在將電話轉回給您，請您作結束語。

Thanks, Kelly. Thanks, everybody, for joining today. Have a great Memorial Day weekend upcoming. Take care.

謝謝，凱利。謝謝大家今天的加入。祝即將到來的陣亡將士紀念日週末愉快。小心。

That does conclude the conference call for today. We thank you for your participation, and we ask that you please disconnect your lines.

這確實結束了今天的電話會議。我們感謝您的參與，我們請求您斷開您的線路。