Citi Trends Inc (CTRN) 2025 Q3 法說會逐字稿

Greetings and welcome to the City Trends third quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Nitza McKee, senior associate at ICR. Please go ahead, Nitza.

各位來賓，歡迎參加 City Trends 2025 年第三季財報電話會議。（操作說明）提醒各位，本次會議正在錄音。現在我很高興將電話轉交給主持人，ICR 高級助理 Nitza McKee。請繼續，妮札。

Thank you and good morning everyone. Thank you for joining us on Citi Trends third quarter 2025 earnings call. On our call today is Chief Executive Officer Ken Seipel; and Chief Financial Officer Heather Plutino. Our earnings release was sent out this morning at 6:45 AM 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.citrends.com.

謝謝大家，大家早安。感謝您參加花旗集團2025年第三季業績電話會議。今天參加我們電話會議的有執行長 Ken Seipel 和財務長 Heather Plutino。我們的獲利報告已於今天早上美國東部時間6點45分發出。如果您尚未收到新聞稿副本，可在公司網站 www.citrends.com 的投資者關係欄位中找到。

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 1,995. 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 10k and other subsequent filings within 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. I will now turn the call over to our Chief Executive Officer, Ken Sapo.

您應該注意，今天在本次電話會議中發表的準備好的演講可能包含 1995 年《私人證券訴訟改革法案》所界定的前瞻性陳述。管理層可能會針對您的問題做出其他前瞻性聲明。這些聲明並不保證未來的業績。因此，你不應該過度依賴這些說法。有關可能導致實際結果與前瞻性聲明中所述結果存在重大差異的因素的更詳細討論，請參閱公司最新的 10-K 表格報告以及隨後向美國證券交易委員會提交的其他文件。現在我將把電話交給我們的執行長肯·薩波。

Ken.

肯。

Thank you, Nitza. Well, good morning, everyone, and thank you for joining us today for our third quarter earnings call. I am pleased to report another quarter of consistent performance demonstrating discipline, execution, and progress across every area of our business. Our transformation strategy is gaining significant momentum. Our operational capabilities are advancing, and our customer connection is strengthening. As I shared at a recent investor conference, we're in the early stages of what I believe will be a compelling transformation for Citi Trends.

謝謝你，尼札。大家早安，感謝各位今天參加我們的第三季財報電話會議。我很高興地報告，我們又一個季度業績穩定，在業務的各個領域都展現出了嚴謹的紀律、高效的執行力和不斷進步的勢頭。我們的轉型策略正在取得顯著進展。我們的營運能力正在提升，與客戶的聯繫也在加強。正如我在最近的一次投資者會議上分享的那樣，我們正處於我認為對 Citi Trends 而言將是一次引人注目的轉型的早期階段。

We've established a clear line of sight to achieve approximately $45 million of EBITDA in 2027, which represents a $60 million increase from the 2024 levels. The substantial growth trajectory will be driven by our continued focus on consistent comparable store sales performance, gross margin expansion. Operating expense leverage and strategic new store expansion. Today I'll walk you through the drivers of our third quarter results and provide additional details on how we're executing against this exciting long range roadmap.

我們已經明確了目標，即到 2027 年實現約 4500 萬美元的 EBITDA，比 2024 年的水準增加 6000 萬美元。我們將持續專注於提高同店銷售業績和毛利率，從而推動公司實現顯著成長。營運費用槓桿作用和策略性新店擴張。今天我將帶大家了解我們第三季業績的驅動因素，並詳細介紹我們如何執行這項令人興奮的長期路線圖。

Turning now to our results, in the third quarter, we delivered comparable store sales growth of 10.8%, which represents a 16.5% growth on a two-year basis. This marks our fifth consecutive quarter and 15th straight month of strong comp growth, with total sales up 10.1% as compared to last year in the quarter.

現在來看我們的業績，第三季度，我們實現了同店銷售額成長10.8%，兩年內成長了16.5%。這標誌著我們連續第五個季度和連續第十五個月實現了強勁的同店銷售成長，本季總銷售額比去年同期成長了 10.1%。

Consistent with our year-to-date performance, the majority of our Q3 sales results were due to increased customer traffic. We began the quarter with a strong back to school season, and we finished the quarter with an equally strong late fall fashion and pre-holiday product performance, with particular strength in children's, men's, and basic apparel categories throughout the entire quarter.

與我們今年迄今的業績一致，第三季銷售業績的大部分成長都歸功於客流量的增加。本季開始，我們迎來了強勁的返校季；本季末，我們又以同樣強勁的秋末時尚和節前產品銷售業績收尾，其中童裝、男裝和基本服裝類別在整個季度都表現尤為強勁。

Our Q3 performance brings our year-to-date comp to a 10% or plus 12.3% on a two-year basis. We're seeing positive sales increases across all store volume groups and geographies, as well as across all product categories, underscoring the breadth of the top-line improvement across the business. Plus, I am pleased to report that our holiday is off to a good start and our strong two-year stack sales momentum has accelerated into the fourth quarter where we are poised to generate our sixth consecutive quarter of year over year growth.

第三季業績使我們今年迄今的業績比去年同期成長了 10%，兩年累計成長了 12.3%。我們看到所有門市銷售組和地區以及所有產品類別的銷售額均出現正面成長，這凸顯了公司整體業務收入改善的廣度。此外，我很高興地報告，我們的假期開局良好，我們強勁的兩年銷售勢頭已加速進入第四季度，我們預計連續第六個季度實現同比增長。

Gross margin rate in Q3 was consistent with the operating plan expectations and year-to-date 2025 performance. Our merchants have done a nice job of managing product costs while delivering amazing prices in the ever changing landscape of tariffs. Due to the macro disruptions, the off price deal flow continues to be robust, which allows us to have confidence in continued margin performance in the foreseeable future.

第三季的毛利率與營運計畫預期和2025年初至今的業績相符。在不斷變化的關稅環境下，我們的商家在控制產品成本的同時，也提供了極具吸引力的價格，做得非常出色。由於宏觀經濟動盪，低價交易量依然強勁，這讓我們有信心在可預見的未來繼續維持利潤率表現。

I should also note that we made a tactical decision to pull forward some of the product originally expected in early Q4 into late Q3, which created a purposeful shift of freight expense from Q4 to Q3 this year. And as noted in our press release, the prior year gross margin rate results in Q3 2024 were artificially high last year due to Q2 strategic inventory reset activity. Actions that ultimately jumpstarted the company's top-line turnaround last year.

我還應該指出，我們做出了一項策略性決定，將原定於第四季度初交付的部分產品提前至第三季度末交付，這使得今年的貨運費用從第四季度有意轉移到了第三季度。正如我們在新聞稿中指出的那樣，由於第二季度的戰略庫存重置活動，2024 年第三季的上年毛利率結果去年被人為抬高。去年，這些舉措最終推動了公司營收的扭虧為盈。

SG&A leveraged 130 basis points compared to last year, which includes the incremental funding of performance bonus program for our employees this year. We're making good strides in improving execution consistency in all areas of the business, which in turn is having a positive impact on expense control. Looking ahead, we're focused on efficient execution to enable us to continue to leverage expenses as we grow the top-line. As a result, we achieved better than planned EBITDA in the quarter, giving us confidence in raising our EBITDA guidance for the year.

銷售、一般及行政費用較去年增加了 130 個基點，其中包括今年為員工績效獎金計畫提供的額外資金。我們在提高業務各個領域的執行一致性方面取得了良好進展，這反過來又對費用控制產生了積極影響。展望未來，我們將專注於高效執行，以便我們能夠在提高營收的同時繼續有效控制支出。因此，我們本季實現了比計劃更好的 EBITDA，這讓我們有信心提高全年的 EBITDA 預期。

Now turning to customer dynamics, our turnaround is rooted in a clear, unwavering focus on the needs of our African American customer who is at the center of everything we do. As I mentioned on prior calls, I believe the primary reason for the quick turnaround in our business is our laser focus on the needs of our African American customers and our highly differentiated competitive advantage of neighborhood-based locations. Our stores are embedded in communities that we've served for years, and proximity combined with word of mouth serve as powerful traffic drivers. Citi Trends has built a truly differentiated competitive position in this high performing off price retail sector.

現在來說說客戶動態，我們的轉型根植於我們對非裔美國客戶需求的清晰、堅定不移的關注，他們是我們一切工作的核心。正如我在之前的電話會議中提到的，我認為我們業務快速扭轉局面的主要原因是我們始終專注於滿足非裔美國客戶的需求，以及我們基於社區的選址所帶來的高度差異化的競爭優勢。我們的門市紮根於我們服務多年的社區，地理位置的便利加上口碑傳播，成為強大的客流量驅動力。Citi Trends 在這個表現優異的折扣零售領域建立了真正差異化的競爭地位。

We're really the only off price retailer specifically focused on the African American consumer, delivering styles, brands, and trends at compelling prices that resonate with this underserved demographic. Our cultural relevance is a significant competitive advantage. African American consumers are trendsetters and early adopters, and understanding this dynamic allows us to curate assortments with immediate appeal to our core customers. We also know that our customers are discerning. They understand that value is not just about price. They are willing to spend more when the style is for them, the fashion is on trend, and the quality is right.

我們是唯一專門針對非裔美國消費者的折扣零售商，以極具吸引力的價格提供能夠引起這項服務不足人群共鳴的款式、品牌和潮流。我們的文化相關性是一項重要的競爭優勢。非裔美國消費者是潮流引領者和早期採用者，了解這種動態使我們能夠精心挑選出能夠立即吸引我們核心客戶的產品系列。我們也知道我們的客戶眼光很挑剔。他們明白價值不僅體現在價格上。如果款式合自己心意、時尚潮流、品質優良，他們就願意花更多的錢。

Our consistent, strong traffic and basket performance in the third quarter provides clear evidence demonstrating the strength of our uniquely loyal, high frequency customer base. We continue to strengthen this connection by elevating cultural relevance of our assortments and refreshing the shopping experience to better align with our brand voice. Our brand promise says it all styles that see you, prices that amaze you, and trends that tell your story.

第三季我們持續強勁的客流量和客單價表現，清楚證明了我們獨特且忠誠、高消費客戶群的強大實力。我們不斷加強這種聯繫，提升產品系列的文化相關性，並更新購物體驗，以便更好地與我們的品牌理念保持一致。我們的品牌承諾完美詮釋了這一點：展現你個性的款式、讓你驚喜的價格、講述你故事的潮流。

This holiday we are launching and have launched the rebranded City Trends Joy Looks Good on You holiday campaign with updated social media presence under the We Are at City Trends tagline. We've also implemented city bus ramps and shelter marketing in key markets to strengthen our local presence. All of this reflects a more refined, culturally relevant, modern brand voice.

今年假期，我們推出了重新命名的 City Trends Joy Looks Good on You 假日活動，並在“We Are at City Trends”的標語下更新了社交媒體形象。我們也在重點市場實施了城市公車坡道和候車亭行銷，以加強我們在當地的影響力。這一切都體現了一種更精緻、更具文化相關性、更現代的品牌形象。

Looking forward to further enhance our customer relationships and drive deeper engagement, we're making strategic investments in our technology infrastructure, including the design and implementation of a new CRM and loyalty platform. This work will deepen our interaction with our most frequent customers and enhance long-term customer value. While we're in the early stages of this initiative, we're excited about the opportunity to create a more meaningful brand interaction with our best and most loyal consumers.

為了進一步加強與客戶的關係並推動更深入的互動，我們正在對技術基礎設施進行策略性投資，包括設計和實施新的客戶關係管理和忠誠度平台。這項工作將加深我們與最常光顧的客戶的互動，並提升長期客戶價值。雖然這項計劃還處於早期階段，但我們很興奮有機會與我們最優秀、最忠誠的消費者建立更有意義的品牌互動。

Before diving into this quarter's product performance, let me briefly remind you of our three-tiered product strategy. What's important to understand is that we're serving customers across all income levels, and we have a significant portion of average and higher income customers, which creates tremendous opportunity for our assortment of recognizable brands at exceptional prices that align with their style and trend preferences.

在深入探討本季產品表現之前，讓我先簡單回顧一下我們的三級產品策略。重要的是要明白，我們服務的客戶涵蓋所有收入水平，其中中等收入和高收入客戶佔很大比例，這為我們提供了一系列知名品牌，價格優惠，符合他們的風格和潮流偏好，從而創造了巨大的機會。

At the opening price point we offer value focused basics through our City Score program for budget conscious customers. The core of our business is our better tier, typically priced between $7.12 , which offers a broad selection of on trend styles that drive loyalty and consistent performance across women's, men's, kids' footwear, and home categories. At the top end we're expanding our best tier through two distinct approaches.

在入門級價位，我們透過「城市評分」計劃，為注重預算的客戶提供物超所值的基本款產品。我們業務的核心是我們的高端產品系列，通常定價在 7.12 美元左右，提供各種潮流款式，在女裝、男裝、童鞋和家居用品類別中都能提升客戶忠誠度並保持穩定的業績。在高端市場，我們正透過兩種截然不同的方式來拓展我們最好的產品線。

First, trend relevant fashionable styles priced well below specialty retail.

首先，跟上潮流的時尚款式，價格遠低於專賣店零售價。

And second, extreme value opportunities featuring well known brands at steep discounts, often up to 75% off MSRP. We're targeting this extreme value segment to represent an incremental 10% of total sales as these branded treasures drive both traffic and basket growth while delivering strong margins. With this strategic framework in mind, now let me walk you through your Q3 product performance, which is broad-based and balanced in all categories. Strong results were driven by both apparel and non-apparel categories, and all divisions posted increases.

其次，還有以超低折扣出售知名品牌的超值商品，折扣力度通常高達建議零售價的 75%。我們瞄準這個超高價值細分市場，希望它能為總銷售額貢獻 10% 的成長，因為這些品牌精品既能帶動客流量和客單價成長，又能帶來強勁的利潤。考慮到這個策略框架，現在讓我帶您了解您第三季的產品業績，該業績在所有類別中都具有廣泛性和平衡性。服裝和非服飾品類均取得了強勁的業績，所有部門的業績均有所成長。

But first I'd like to congratulate our children's team on their strong double-digit growth in back to school and throughout the quarter. As our children's team continues to improve style curation and product in stocks, our customers continue to respond positively. Children's is a cornerstone of our business and a model of consistent execution this year.

首先，我要祝賀我們的兒童團隊在開學季和整個季度都取得了兩位數的強勁成長。隨著我們童裝團隊不斷改進款式選擇和庫存產品，我們的顧客也持續給予正面回饋。兒童業務是我們業務的基石，也是我們今年持續執行的典範。

Equally, basic product for kids, men's and women's had a strong quarter driven by better styles and improved inventory position in store. Our men's division had another strong quarter of growth reflecting the team's work to increase trend for our younger male customer while also tending to the fashion sensibilities of our mature male consumer. We're excited about this more comprehensive approach to our male customer, and based on the positive initial customer reaction, we have significant growth ahead in this particular category.

同樣，由於款式更新穎、店內庫存狀況改善，兒童、男士和女士的基本產品在本季也表現強勁。我們的男裝部門迎來了一個強勁的成長季度，這反映了團隊在努力提升年輕男性顧客的時尚潮流的同時，也兼顧了成熟男性消費者的時尚品味。我們對這種更全面地服務男性客戶的方式感到興奮，並且根據客戶的積極初步反應，我們在這個特定類別中將有顯著的成長前景。

We also saw momentum in women's footwear, which is an area we've been working to regain lost market share. There's still more work to be done in this category, but we're encouraged with Q3 results and customers' response to our branded product at extreme values.

我們也看到女鞋市場發展勢頭良好，而這正是我們一直努力重新奪回失去的市場份額的領域。雖然在這個領域還有很多工作要做，但我們對第三季的業績以及客戶對我們超低價品牌產品的回饋感到鼓舞。

Looking ahead in product, we're focusing on strengthening our product offering in all categories. Our creative director has significantly raised the bar and is focused on curating trends to ensure our product is always trend right. From the opening price product to our best branded fashion, our merchant team is finding ways to elevate trends and styles at amazing prices.

展望未來產品發展，我們將專注於加強所有品類的產品供應。我們的創意總監大幅提高了標準，專注於引領潮流，以確保我們的產品始終符合潮流。從入門級產品到我們最好的品牌時尚產品，我們的採購團隊正在尋找以驚人的價格提升潮流和風格的方法。

In Q4 we're repositioning the men's store presentation to highlight increased emphasis on young men's trend apparel while maintaining our core and classic portions of the assortment. We're in the early stages of repositioning our women's area to better reflect the style, trend, and sizing opportunity that we see for the business and plan to introduce an improved assortment to our customers in Q1 of next year.

第四季度，我們將重新調整男裝店的陳列方式，更加重視年輕男士的潮流服飾，同時保留我們核心和經典系列的服飾。我們正處於重新定位女裝區的早期階段，以更好地反映我們看到的款式、潮流和尺寸方面的業務機遇，併計劃在明年第一季向我們的客戶推出改進後的商品系列。

As I've mentioned before, we're continuing our focus on growing our intensification classifications, which includes big men's, plus sizes, and family footwear, all of which have significant upside potential in the future. Turning now to operations, as I've discussed in the past, our transformation is guided by a 3 phase framework designed to deliver sustainable, profitable growth. In the repair phase, we focused on restoring fundamental business practices to ensure a strong foundation for growth, including sharper clarity around our African American consumer, our three-tiered product assortment, and implementation of AI-based allocation software to improve in stocks, reduce markdowns, and accelerate inventory turns.

正如我之前提到的，我們將繼續專注於擴大我們的強化分類，包括大尺碼男鞋、加大尺碼鞋和家庭鞋，所有這些在未來都具有巨大的成長潛力。現在轉向營運方面，正如我之前討論過的，我們的轉型以一個旨在實現可持續盈利增長的三階段框架為指導。在修復階段，我們專注於恢復基本的業務實踐，以確保為成長奠定堅實的基礎，包括更清晰地了解我們的非裔美國消費者、我們的三級產品組合，以及實施基於人工智慧的分配軟體，以改善庫存、減少降價並加快庫存週轉。

We are now firmly in the execute phase focused on implementing best practices across all areas of the business to improve productivity and enable SG&A leverage. This includes increasing supply chain speed, reducing working capital costs, and aligning our teams around KPIs and performance link compensation to drive continuous improvement.

我們現在正全力投入執行階段，專注於在業務的各個領域實施最佳實踐，以提高生產力並實現銷售、一般及行政費用的槓桿作用。這包括提高供應鏈速度、降低營運資金成本，以及圍繞關鍵績效指標和績效掛鉤薪酬來協調我們的團隊，從而推動持續改進。

From an operational standpoint, we made continued progress on -- these excuse me, on these phased initiatives in the third quarter. I want to congratulate the entire team, specifically our senior leaders, for improved business execution in Q3. One of the keys to our success was consistent execution of a detailed plan that emphasized tactical excellence to win the quarter. We continue to improve our inventory efficiency, supporting a 10.8 comp with overall 3% less inventory than the prior year due to speed improvements in our supply chain.

從營運角度來看，我們在第三季繼續推進——抱歉，是推動這些分階段的舉措。我要祝賀整個團隊，特別是我們的高階領導，在第三季取得了更好的業務執行效果。我們成功的關鍵之一是始終如一地執行詳細的計劃，該計劃強調戰術上的卓越性，從而贏得季度冠軍。我們持續提高庫存效率，實現了 10.8 的年增幅，同時由於供應鏈速度的提升，庫存總量比前一年減少了 3%。

We are also able to execute a 4.5% higher average in-store inventory in the supply chain. Improved work processes, productivity standards, and day to day leadership enabled us to efficiently reduce in-process inventory. This improved efficiency drives working capital optimization and provides flexibility and speed to react to sales trends while protecting gross margin.

我們還能夠在供應鏈中實現平均店內庫存增加 4.5%。改進的工作流程、生產力標準和日常領導使我們能夠有效地減少在製品庫存。效率的提高促進了營運資本的最佳化，並提供了應對銷售趨勢的靈活性和速度，同時保護了毛利率。

In the quarter we finalized implementation of our AI-based allocation system across all merchandise categories, and we remain pleased with the results. We're now turning our attention to an AI-based planning system to help streamline sales and inventory planning processes for our merchant teams.

本季我們完成了基於人工智慧的分配系統在所有商品類別中的實施，我們對結果感到滿意。我們現在正將注意力轉向以人工智慧為基礎的規劃系統，以幫助簡化我們銷售團隊的銷售和庫存規劃流程。

As I said before, retail is detail, and execution without measurement is just guesswork. Our use of KPIs and dashboards across all key functions provides the visibility that helps our team stay on track and drive continual operational improvement, which is the core element of our execute phase strategy.

正如我之前所說，零售業講究細節，沒有衡量標準的執行就只是猜測。我們在所有關鍵職能中使用 KPI 和儀表板，為我們的團隊提供了可視性，幫助我們保持正軌並推動持續的營運改進，這是我們執行階段策略的核心要素。

Looking ahead, while we've made good operational progress, as I said earlier, we recognize a significant opportunity remains to improve execution in many areas of our business as we advance to our execute phase and improve consistency. We expect continued SG&A leverage to enhance flow through of sales to profit.

展望未來，雖然我們已取得了良好的營運進展，但正如我之前所說，我們認識到，隨著我們進入執行階段並提高一致性，我們業務的許多領域仍有很大的機會改善執行。我們預期持續的銷售、一般及行政費用槓桿作用將增強銷售額轉化為利潤的效率。

Now turning to our growth strategy, we remodeled 24 stores in the quarter, including 15 high volume stores. Year-to-date we've remodeled 62 locations and now have about 30% of our fleet in an updated format. These refresh stores inspire our teams, elevate brand perception in the community, and send a strong signal that we're investing in local neighborhoods.

現在來說說我們的成長策略，本季我們翻新了 24 家門市，其中包括 15 家高銷量門市。今年迄今為止，我們已經改造了 62 個地點，目前我們約有 30% 的車隊採用了更新的模式。這些煥新門市能夠激勵我們的團隊，提升品牌在社區中的形象，並發出強烈的訊號，表明我們正在投資當地社區。

In the third quarter we opened three new stores in Jacksonville, Florida, Columbia, South Carolina and Bainbridge, Georgia, bringing our store count to 593 locations across 33 states. In addition, we remodeled five stores in Columbia, South Carolina and four stores in Jacksonville, Florida, and in support of these new stores and remodels, we added local marketing which included wrapping city buses with the City Trends brand message.

第三季度，我們在佛羅裡達州傑克遜維爾、南卡羅來納州哥倫比亞和喬治亞州班布里奇開設了三家新店，使我們的門市數量達到 593 家，遍布 33 個州。此外，我們也翻新了南卡羅來納州哥倫比亞市的五家門市和佛羅裡達州傑克遜維爾市的四家門市。為了支持這些新店和翻新店的開業，我們增加了本地行銷活動，包括用 City Trends 品牌訊息包裹城市公車。

These openings are part of our pilot market backfill approach, which we are opening new stores in conjunction with remodeling existing locations to increase market share by strengthening our store presence and reinvigorating our brand. In the first few weeks of business, the new stores and markets have responded above expectations. I look forward to giving you a more thorough update on our next call after we have a full holiday season of results in these markets.

這些新店開業是我們試點市場填補策略的一部分，我們正在開設新店，同時翻新現有門市，以加強門市佈局和重振品牌，從而提高市場份額。開幕頭幾週，新店和市場的業績就超出了預期。我期待在假期結束後，也就是這些市場公佈完整的業績報告後，在下次電話會議上向您提供更詳細的最新情況。

These market investment tests will inform our approach as we accelerate growth in 2026 when we plan to open about 25 new stores, followed by at least 40 stores per year in 2027 and onward. This expansion strategy will take our store count to around 650 stores by the end of 2027, focusing on backfilling existing markets where our brand awareness and performance are proven while selectively entering new markets with strong demographic alignment to our customer base.

這些市場投資測試將為我們2026年加速成長提供參考，屆時我們計劃開設約25家新店，隨後在2027年及以後每年至少開設40家新店。這項擴張策略將使我們的門市數量在 2027 年底達到約 650 家，重點是填補現有市場空白，在這些市場中，我們的品牌知名度和業績已得到證明；同時，有選擇地進入與我們的客戶群人口結構高度契合的新市場。

Our positioning of city trends for strategic new store growth is guided by a disciplined data approach. Our new store expansion combines advanced AI-driven analytics, local market expertise, and strict financial criteria. Using AI tools, we have analyzed three-years of actual transaction data from every store location combined with comprehensive geolocation studies to understand the specific market characteristics that drive our success.

我們以嚴謹的數據方法為指導，對城市發展趨勢進行定位，以實現策略性的新店擴張。我們新的門市擴張計畫結合了先進的人工智慧驅動分析、本地市場專業知識和嚴格的財務標準。我們利用人工智慧工具，分析了過去三年每個門市的實際交易數據，並結合全面的地理位置研究，以了解推動我們成功的具體市場特徵。

This data-driven approach has demonstrated about 90% accuracy in predicting sales, helping us identify and replicate our most successful store profiles while minimizing risk. We're applying disciplined financial hurdles to every new store decision targeting mature store averages of about $1.5 million and mid-teens four wall contribution.

這種數據驅動的方法在預測銷售額方面表現出約 90% 的準確率，幫助我們識別和複製最成功的門市模式，同時最大限度地降低風險。我們對每項新店決策都設定了嚴格的財務門檻，目標是使成熟門市的平均銷售額達到約 150 萬美元，四面牆貢獻達到十幾萬美元。

Looking ahead, we continue remodeling about 50 stores per year as a part of our ongoing fleet maintenance and market investment strategies. This disciplined approach allows us to progressively upgrade our store base while achieving planned returns on invested capital and positioning us to expand intelligently while minimizing return on investment, -- while maximizing return on investment. Longer-term growth in early October.

展望未來，作為我們持續的車隊維護和市場投資策略的一部分，我們將繼續每年翻新約 50 家門市。這種嚴謹的方法使我們能夠逐步升級我們的門市基礎，同時實現計劃的投資回報，並使我們能夠在最大限度地減少投資回報的同時，以明智的方式進行擴張。10月初出現長期成長。

And we had a chance to share our multi-year growth plan at an investor conference. The presentation we shared is available on our investor relations website, but I do want to take a minute just to review some of the key objectives of our long range plan. The first objective is to grow sales to $900 million or more in fiscal 2027 with consistent comp store sales growth, plus the addition of about 25 new stores in fiscal 2026 and 40 stores in 2027.

我們有機會在投資者大會上分享了我們的多年增長計劃。我們分享的簡報已發佈在我們的投資者關係網站上，但我想花一點時間回顧我們長期計劃的一些關鍵目標。首要目標是在 2027 財年實現 9 億美元或以上的銷售額，同時維持同店銷售額的持續成長，並在 2026 財年新增約 25 家門市，在 2027 財年新增 40 家門市。

We plan to achieve a gross profit rate of 42%, a 400 basis point expansion compared to fiscal 2024, and we plan to leverage expenses by 200 basis points to a rate of approximately 37% or less. The Resulting EBITDA is expected to be $45 million or more in fiscal 2027, a $60 million improvement to 2024, and an EBITDA margin rate of approximately 5%.

我們計劃實現 42% 的毛利率，比 2024 財年增長 400 個基點，併計劃將費用槓桿率提高 200 個基點，使費用率達到 37% 或更低。預計 2027 財年 EBITDA 將達到 4,500 萬美元或更多，比 2024 年提高 6,000 萬美元，EBITDA 利潤率約為 5%。

These are not distant goals. They are achievable outcomes driven by the actions we are actively executing to drive the turnaround of this important business and with our fiscal 2025 results today. I think it's fair to say that we're off to a pretty good start.

這些並非遙遠的目標。這些是可實現的成果，這得益於我們正在積極執行的各項行動，以推動這項重要業務的扭虧為盈，以及我們今天公佈的 2025 財年業績。我認為可以說我們開局相當不錯。

With that, I'd like to turn the call over to Heather to discuss our financial performance for the quarter in more detail and our outlook for the fourth quarter. I'll return after Heather for some closing remarks.

接下來，我想把電話交給 Heather，讓她更詳細地討論我們本季的財務表現以及我們對第四季的展望。Heather發言結束後，我會回來做一些總結發言。

Heather.

希瑟。

Thank you, Ken, and good morning, everyone.

謝謝你，肯，大家早安。

I'm pleased to walk you through the details of our third quarter performance which demonstrates once again the consistency and effectiveness of our transformation strategy. That clear strategy plus the foundational improvements made to date have created remarkable momentum across the business, and we are delivering measurable progress across key operational metrics. Starting with the top-line, Q3 total sales were $197.1 million up 10.1% compared to Q3 2024. Comparable store sales increased 10.8%, 16.5% on a two-year stack basis. Ken said this already, but it's so good it warrants repeating. Our Q3 performance marks our fifth consecutive quarter and 15th straight month of strong comp growth, a remarkable feat, particularly in the current retail environment.

我很高興向大家詳細介紹我們第三季的業績，這再次證明了我們轉型策略的一致性和有效性。這項清晰的策略加上迄今為止所做的基礎性改進，為整個業務創造了顯著的發展勢頭，我們在關鍵營運指標方面取得了可衡量的進展。先來看營收，第三季總銷售額為 1.971 億美元，比 2024 年第三季成長 10.1%。同店銷售額成長了 10.8%，兩年累計成長了 16.5%。Ken 已經說過這​​句話了，但它太好了，值得再說一遍。第三季業績標誌著我們連續第五個季度和連續第十五個月實現強勁的同店銷售成長，這是一項了不起的成就，尤其是在當前的零售環境下。

We delivered strong comps in each month of the quarter and saw consistent year over year growth in both traffic and basket as our revised merchandise assortment, including off-price deals and more branded extreme value products, continues to resonate strongly with our customers, enabling us to gain market share. We also saw positive results across all climate zones, across all store volume groups, and across all product categories, demonstrating the broad-based nature of our improving results.

本季每個月我們都實現了強勁的同店銷售成長，客流量和客單價均實現了持續的同比增長。這得歸功於我們調整後的商品組合，包括折扣商品和更多品牌超值商品，這些商品繼續受到顧客的強烈歡迎，使我們能夠獲得市場份額。我們也看到所有氣候區、所有門市銷售組和所有產品類別都取得了積極成果，這表明我們不斷改善的成果具有廣泛的基礎。

Third quarter gross margin was 38.9%, while 90 basis points lower than Q3 2024, these results were in line with our expectations. Recall that in the second quarter of last year we incurred significant markdowns from our strategic inventory reset, allowing us to exit aged and slow moving product while freeing up Open to buy for our revised product strategy to fuel our top-line growth. As a result, markdowns and shrink in Q3 of last year were unnaturally low, creating an unfavorable comparison for the current year period.

第三季毛利率為 38.9%，雖然比 2024 年第三季低 90 個基點，但這些結果符合我們的預期。回想一下，去年第二季度，我們透過策略性庫存調整實現了大幅降價，這使我們能夠淘汰過時和滯銷產品，同時騰出採購資金，用於我們修訂後的產品策略，從而推動收入成長。因此，去年第三季的降價幅度和損耗量異常低，導致今年同期業績與去年同期相比有不利差異。

As Ken mentioned early in the third quarter, we decided to shift inventory and related freight expense from Q4 into Q3 to better manage freight flow for the distribution centers. Doing so drove additional freight expense in Q3, about a 40% basis point impact to margin rate, while accomplishing the smoothing we wanted to achieve, protecting the holiday and delighting our customers with earlier access to holiday goods. Importantly, product margin was consistent with results from the first half of the year due to the hard work of our merchant teams, as Ken remarked on earlier.

正如 Ken 在第三季度初提到的那樣，我們決定將庫存和相關貨運費用從第四季度轉移到第三季度，以便更好地管理配送中心的貨運流量。這樣做導致第三季貨運費用增加，對利潤率產生了約 40 個基點的影響，同時實現了我們想要達到的平滑效果，保障了假期，並讓我們的客戶更早地獲得節日商品，從而感到滿意。重要的是，由於我們採購團隊的辛勤工作，產品利潤率與上半年的業績保持一致，正如 Ken 之前提到的那樣。

Third quarter adjusted SG&A expense totaled $79.5 million compared to $74.6 million in the prior year period. The increase to last year was driven by $3.2 million of higher incentive compensation accrual and store in DC expenses to process higher sales. As we've shared in previous calls, we reinstated an incentive compensation accrual at the beginning of this fiscal year after incurring very minimal related expense in fiscal 2024, causing the bonus to no bonus comparison again in the third quarter.

第三季調整後的銷售、一般及行政費用總計為 7,950 萬美元，而去年同期為 7,460 萬美元。與去年相比，成長的原因是激勵性薪酬提列增加 320 萬美元，以及為處理更高的銷售額而增加的 DC 門市費用。正如我們在先前的電話會議中分享的那樣，由於在 2024 財年產生了非常小的相關費用，我們在本財年年初恢復了激勵性薪酬的計提，導致第三季度獎金再次與去年同期無獎金進行比較。

In addition, due to improved expected financial results for the year, we set the bonus accrual to the max payout, driving a catch-up accrual in the third quarter. On a rate basis, Q3 adjusted SG&A was 40.4%, 130 basis points lower than last year. Adjusted EBITA for the quarter was a loss of $2.9 million in line with management expectations and better than a loss of $3.3 million a year ago.

此外，由於今年的財務業績預計有所改善，我們將獎金計提設定為最高支付額，從而在第三季度實現了追趕性提列。以利率計算，第三季調整後的銷售、一般及行政費用率為 40.4%，比去年同期下降 130 個基點。本季調整後的 EBITA 虧損 290 萬美元，符合管理階層預期，優於去年同期的虧損 330 萬美元。

Before turning to the balance sheet, let me provide a few details on our performance through the 1st 9 months of fiscal 2025. Comparable store sales for the first nine months increased 10% with a two-year comp stack of 12.3%. Comps were driven by a 6% increase in transactions. This is the metric we're most proud of as it is evidence that our loyal customers are responding positively to the changes we've made in our assortment strategy and to the in-store experience.

在分析資產負債表之前，先簡單介紹一下我們在 2025 財年前 9 個月的表現。前九個月的同店銷售額成長了 10%，兩年的同店銷售額成長了 12.3%。同店銷售成長主要得益於交易量成長了 6%。這是我們最引以為傲的指標，因為它證明我們的忠實顧客對我們在商品組合策略和店內體驗方面所做的改變給予了正面的回饋。

Adjusted nine month EBITDA was a loss of $0.1 million an increase of more than $21 million to last year. EBITDA growth was driven by more than $47 million in incremental sales, 290 basis point margin rate expansion, and 100 basis points of SG&A leverage, so improvement across the board.

調整後的前九個月 EBITDA 虧損 0.1 百萬美元，比去年同期增加了 2,100 多萬美元。EBITDA 成長主要得益於超過 4,700 萬美元的增量銷售額、290 個基點的利潤率擴張以及 100 個基點的銷售、管理及行政費用槓桿率，因此各方面均有所改善。

Now turning to the balance sheet. Total inventory dollars at quarter end decreased 3.1% compared to last year, with average in-store inventory up 4.5% as we strategically positioned ourselves for holiday sales, including the pull forward of inventory receipts from Q4 into Q3. As Ken mentioned, our success in driving double-digit sales increases with a modest increase in in-store inventory reflects our work to improve inventory efficiency through higher turns and improvements in supply chain speed.

現在來看資產負債表。與去年同期相比，季度末總庫存金額下降了 3.1%，而平均店內庫存則增長了 4.5%，因為我們為假日銷售做好了戰略準備，包括將第四季度的庫存提前到第三季度。正如 Ken 所提到的，我們在店內庫存適度增加的情況下，實現了兩位數的銷售額增長，這反映了我們透過提高庫存週轉率和改善供應鏈速度來提高庫存效率的努力。

As we enter the important Q4 holiday selling season, we remain pleased with our inventory level, composition, and freshness. At the end of the third quarter, we remained in a healthy financial position with a strong balance sheet including no debt, no drawings on our $75 million revolver, and $51 million in cash. This financial strength continues to give us the flexibility to invest in our growth initiatives while ensuring operational stability throughout our transformation.

隨著重要的第四季度假日銷售旺季的到來，我們對庫存水準、產品組成和新鮮度仍然感到滿意。第三季末，我們維持了健康的財務狀況，資產負債表穩健，沒有債務，沒有動用 7,500 萬美元的循環信貸額度，並且擁有 5,100 萬美元的現金。這種財務實力使我們能夠靈活地投資於我們的成長計劃，同時確保轉型過程中的營運穩定性。

Now turning to our fiscal 2025 outlook. Based on our results through the third quarter and our confidence that the effectiveness of our turnaround plan will continue through the fourth quarter, we are pleased to update our outlook for 2025 as follows. With sales momentum of the first nine months of the year continuing into early Q4, we now expect full year (inaudible) sales growth of high single-digits at the high end of our previous outlook.

現在來看看我們2025財年的展望。根據我們第三季的業績以及我們對扭虧為盈計畫的有效性將在第四季度繼續保持的信心，我們很高興將 2025 年的展望更新如下。前九個月的銷售動能延續到第四季初，我們現在預計全年銷售額將實現接近兩位數的成長，達到我們先前預期的上限。

We now expect full year gross margin expansion of approximately 230 basis points versus 2024, also at the high end of previous outlook due to continued progress on inventory efficiency and planned supply chain improvements. 2025 SG&A is expected to leverage approximately 90 basis points versus last year, reflecting continued expense control. Once again, this is at the high end of our previous outlook of 60 basis points to 90 basis points leverage versus '24.

由於庫存效率的持續提高和供應鏈改進計劃的推進，我們現在預計全年毛利率將比 2024 年增長約 230 個基點，這也處於先前預期的高端。預計 2025 年銷售、一般及行政費用將比去年降低約 90 個基點，反映出持續的費用控制。這再次處於我們之前預期的 60 至 90 個基點槓桿率（相對於 2024 年）的高端水平。

With these updates, we now expect full year EBITDA to be in the range of $10 million to $12 million and increase to the $7 million to $11 million range in prior guidance. The revised guidance is $24 million to $26 million above fiscal 2024 results. There is no change to our expected affected -- expected effective tax rate of approximately 0% for the year.

根據這些更新，我們現在預計全年 EBITDA 將在 1,000 萬美元至 1,200 萬美元之間，高於先前預期的 700 萬美元至 1,100 萬美元。修訂後的業績預期比 2024 財年業績高出 2,400 萬美元至 2,600 萬美元。預計受影響人群的稅率不會改變——預計本年度實際稅率約為 0%。

For the year, we will open three new stores and we'll remodel 62 locations. Both of these targets have been achieved as of the end of the third quarter. In addition, we are planning to close four stores in the fiscal year just above our previous guidance of three closures. And finally, full year capital expenditures are now expected to be approximately $23 million at the lower end of our previous outlook of $22 million to $25 million.

今年我們將開設三家新店，並翻新 62 家門市。截至第三季末，這兩個目標均已實現。此外，我們計劃在本財年關閉四家門市，略高於我們先前預期的三家。最後，全年資本支出預計約為 2,300 萬美元，處於我們先前預測的 2,200 萬美元至 2,500 萬美元的下限。

Well, we don't provide quarterly guidance given where we are in the fiscal year, we want to offer our thoughts on our expectations for the fourth quarter. Q4 comps are expected to be up high single-digits with a two-year stack in the mid-teens. Q4 gross margin is expected to be in the range of 40% to 41% up to prior year. SG&A is expected to be approximately $82 million and Q4 EBITDA is expected to be in the range of $10 million to $12 million.

鑑於目前財年所處階段，我們不提供季度業績指引，但我們想分享我們對第四季的預期。預計第四季同店銷售額將達到接近兩位數的成長，兩年累計成長率將達到十幾個百分點。預計第四季毛利率將與去年同期持平，介於 40% 至 41% 之間。銷售、一般及行政費用預計約為 8,200 萬美元，第四季 EBITDA 預計在 1,000 萬美元至 1,200 萬美元之間。

Before I turn the call back to Ken, I want to emphasize that our third quarter results reflect more than just three months of strong execution. They demonstrate the durability of our business model, the effectiveness of our strategic initiatives, and most importantly, are a continuation of the improvement we've achieved across the last several quarters.

在把電話轉回給 Ken 之前，我想強調一下，我們第三季的業績不僅僅反映了三個月來的強勁執行力。它們證明了我們商業模式的持久性、我們策略舉措的有效性，最重要的是，它們延續了我們在過去幾季所取得的進步。

As we look toward the fourth quarter and into fiscal 2026, we remain committed to our disciplined approach while maintaining the flexibility that has served us well throughout this transformation. The foundation we've built gives us confidence in our ability to deliver sustainable, profitable growth while continuing to create shareholder value. I'm excited about the opportunities ahead as we continue to execute against our strategic plan.

展望第四季和 2026 財年，我們將繼續秉持嚴謹的態度，同時保持靈活性，這種靈活性在整個轉型過程中都對我們大有裨益。我們所建立的基礎使我們有信心實現可持續的獲利成長，同時繼續為股東創造價值。我對我們繼續執行戰略計劃所帶來的機會感到興奮。

With that, I'll turn the call back to Ken. Ken.

這樣，我就把電話轉回給肯了。肯。

Thank you, Heather.

謝謝你，希瑟。

Before I turn the call back to the operator to facilitate Q&A, I do want to emphasize that the transformation of City Trends is well underway. We remain guided by our three phase framework to deliver, designed to deliver sustainable profit growth. The first phase, repair, is about restoring fundamentals and establishing a strong foundation for growth. The second phase, execute, focuses on hardening consistent best practices to drive reliable, predictable performance. And the final phase, optimized, leverages the work of the first two phases to accelerate our EBITDA growth.

在我將電話轉回給接線員進行問答之前，我想強調一下，City Trends 的轉型正在順利進行中。我們將繼續遵循三階段框架進行交付，旨在實現可持續的利潤成長。第一階段是修復，旨在恢復基本面，為發展奠定堅實的基礎。第二階段，即執行階段，重點在於強化一致的最佳實踐，以實現可靠、可預測的性能。最後階段經過最佳化，利用前兩個階段的工作成果來加速我們的 EBITDA 成長。

As a result of our efforts in the first two phases of this transformation, we've made meaningful improvements, including an improved product assortment strategy, a better in-store-- shopping experience for our customers, and improvements in many processes and systems. Our five consecutive quarters of comp store growth is a proof point that our strategy is working, our execution is getting better, and our customer connection is stronger than ever as we firmly establish ourselves as a leading off-price retailer for our customers.

經過我們在轉型前兩個階段的努力，我們取得了顯著的進步，包括改進產品組合策略、為顧客提供更好的店內購物體驗，以及改進許多流程和系統。我們連續五個季度實現同店銷售成長，這證明我們的策略正在奏效，我們的執行力正在不斷提高，我們與客戶的聯繫也比以往任何時候都更加緊密，我們正穩步確立自己作為領先的折扣零售商的地位。

While we're proud of our results so far, we fully recognize there is significant opportunity ahead. I want to emphasize that we're in the early stages of this transformation. There's still work to do, processes to refine, categories to optimize, and systems to build, but the path forward is clear. We are confident in our ability to deliver continued transformation, drive shareholder value, and expand our role as the leading neighborhood retailer for African American families.

雖然我們對目前所取得的成績感到自豪，但我們也充分認識到，未來還有巨大的發展機會。我想強調的是，我們正處於這場變革的早期階段。還有很多工作要做，流程需要改進，類別需要最佳化，系統需要構建，但前進的方向是明確的。我們有信心繼續推動轉型，提升股東價值，並擴大我們作為非裔美國家庭領先社區零售商的地位。

I want to thank the entire City Trends team for executing with discipline, driving quickly toward our stated goals, and most of all for delivering results. The team is doing the hard day to day work to unlock sustainable growth and shareholder value, and we are just getting started.

我要感謝 City Trends 團隊全體成員，感謝他們嚴謹執行，迅速朝著既定目標邁進，最重要的是，感謝他們取得了成果。團隊正在日復一日地努力工作，以實現永續成長和股東價值，而我們才剛起步。

Thank you, everyone, and now I'd like to turn it over to the operator for questions.

謝謝大家，現在我把時間交給接線員，回答大家的問題。

Thank you. And I'll be conducting a question-and-answer session. (Operator Instructions)

謝謝。我也會進行問答環節。（操作說明）

Michael Baker, DA Davidson.

麥可貝克，地方檢察官戴維森。

Great, thanks. Great quarter. So, if I think about the twoyear plan to get to about $900 million, probably implies another $85 million or so in sales growth in '26 and '27. You talked a lot about some merchandizing opportunities. And categories, but a little bit more detail on where the biggest holes or opportunities in your merchandizing right now either by product category or by good, better, best or however you want to articulate, where does that, those incremental sales come from?

太好了，謝謝。很棒的季度。所以，如果我考慮兩年內達到約 9 億美元的目標，可能代表 2026 年和 2027 年的銷售額還需要成長約 8,500 萬美元。你談到了很多關於商品銷售的機會。還有品類，但更詳細說明一下，目前你的商品銷售中最大的差距或機會在哪裡，無論是按產品類別還是按好、更好、最好，或者你想怎麼表達，這些增量銷售額來自哪裡？

Yeah, for sure, Mike, thanks.

當然，麥克，謝謝。

We, as I mentioned in the script, we are seeing broad-based growth throughout all the categories. And so at the top level for all categories we've really sharpened our focus on better trend product and we've seen good reaction to that this year and continued reaction. I mentioned briefly that we have just implemented a young men's category. That's actually just setting in the stores right now. We're seeing good reaction to that and as we begin to understand a little bit more about that dynamic, there's significant opportunity there.

正如我在腳本中提到的，我們看到所有類別都實現了全面成長。因此，在所有類別中，我們真正加強了對更優質潮流產品的關注，並且今年我們看到了良好的反響，並且這種反響還在持續。我之前簡要地提到過，我們剛剛設立了青年男子組。實際上，這件商品現在才剛在商店上架。我們看到市場對此反應良好，隨著我們對這種動態了解更多，其中蘊藏著巨大的機會。

Equally across the aisle in our women's category, we've always had a pretty strong juniors business, but we recognize that there's a missing component of that as well as plus size that needs to be fully matured. And then on top of that overlay trend product in those categories as well. And so that's a little bit of a new business for us relative to those two categories getting reset.

同樣，在女裝領域，我們的青少年服裝業務一直相當強勁，但我們也意​​識到，青少年服裝業務以及大尺碼服裝業務都存在一些缺失，需要進一步發展成熟。此外，也疊加了這些類別中的趨勢產品。因此，相對於這兩個類別的重新調整，這對我們來說算是一個小小的新業務。

And then across the fleet, we're just getting going in shoes in our footwear category. The team, as I remarked, had a pretty good Q3 in women's. We're off to a good start there, but we have significant opportunity, multiple millions of dollars of opportunity to grow our shoe business back to even historical levels, let alone to catch up to where we are in the overall store. So there's significant opportunity there.

然後，在整個船隊中，我們才剛開始在鞋類產品中推出鞋子。正如我之前提到的，這支隊伍在女子組第三輪比賽中表現相當不錯。我們在這方面開局不錯，但我們還有巨大的機會，數百萬美元的機會，讓我們的鞋類業務恢復到歷史水平，更不用說趕上我們在整個商店的水平了。所以那裡蘊藏著巨大的機會。

And then I would highlight, and I don't mean to make this so broad-based, but it really truly is how we're looking at it. In kids, for example, as we continue to build that business, it gets stronger and stronger and stronger. We've been executing quite well in kids, but as we continue to invest in inventory, we see it grow. So there's areas throughout the store that we see that it just offers tremendous opportunities for growth. And then I guess I'll put at the punch line for all this.

然後我想強調一點，我並不是想把這個問題擴大到如此廣泛的範圍，但這確實是我們看待這個問題的方式。例如，在兒童領域，隨著我們不斷發展這項業務，它變得越來越強大。我們在童裝領域一直做得相當不錯，但隨著我們不斷增加對庫存的投入，我們看到它還在增長。因此，我們看到商店裡有很多地方都蘊藏著巨大的發展機會。然後我想我應該把這一切的笑話說出來。

The other piece of it, don't forget that we have the extreme value opportunity and we're doing a fairly small percentage of our business in extreme value right now. It's working quite well and we see significant growth there. All of that actually totals up to, in my mind, a very obtainable $900 million.

另一方面，別忘了我們還有超高價值市場的機會，而我們目前在超高價值市場的業務佔比相當小。目前效果相當不錯，我們看到了顯著的成長。在我看來，所有這些加起來實際上就是9億美元，這是一個非常容易實現的金額。

Great, thanks, for the detail on that. If I could ask a follow-up, I suppose by virtue of the 10.8% comp, your trends are probably consistent throughout the month. You talked about consistency by product category and store cohort. Can you talk about the pace through the quarter and if there was any impact from the government shutdown, snap, any, anything during those, few weeks? Thanks.

太好了，謝謝你提供的詳細資訊。如果我能追問一下，我想根據 10.8% 的佣金率，你們的業績趨勢可能在整個月內都保持穩定。您談到了按產品類別和門市群體劃分的一致性問題。能否談談本季的發展節奏，以及政府停擺、突發事件或其他任何因素是否對那幾週造成了影響？謝謝。

Yeah, I'll make some high level comments and Heather can fill in the specifics here, but you know the good news about our consumer right now, they've shown remarkable resiliency with all of the macro changes around government SNAP and different programs like that, and candidly, we've really seen no major impact.

是的，我會做一些概括性的評論，Heather 可以補充具體細節，但你知道，我們消費者目前的好消息是，他們面對政府 SNAP 和其他類似項目的宏觀變化，表現出了驚人的韌性，坦白說，我們真的沒有看到任何重大影響。

The shopping patterns have remained consistent throughout the quarter. As I mentioned, we got off to a really good start, in August. August was tremendous for us, led by our kids' division. All divisions did well, but kids really had a tremendous back to school period. And then I was really pleased with how we finished the quarter. October, particularly the last three weeks of, October really accelerated quite well. When I mentioned in the script that we advanced some of our freight from Q4 into Q3, when that hit our stores, we actually saw a really strong consumer reaction.

本季購物模式保持穩定。正如我之前提到的，我們在八月開局非常順利。八月對我們來說是碩果累累的一年，這主要歸功於我們兒童部門的出色表現。各年級都表現不錯，但孩子的返校期尤其精彩。我對我們本季的收尾工作非常滿意。十月份，特別是最後三週，發展動能非常強勁。我在劇本中提到，我們將部分貨物從第四季度提前到第三季度交付，當這些貨物到達我們的門市時，我們確實看到了消費者非常強烈的反應。

Yeah, and like the only thing I would add to that is that it was a pretty tight band, looks a little bit like a barbell, stronger in the beginning, first month, third month, middle month was a little softer, but the range is like 9.5 to 12, so it's not like a severe dip in the middle or severe spike. So, yeah, pretty consistent.

是的，我唯一要補充的是，這條彈力帶很緊，看起來有點像槓鈴，一開始比較強，第一個月、第三個月都比較強，中間一個月稍微軟一些，但範圍在 9.5 到 12 之間，所以中間不會出現明顯的下降或上升。是的，相當穩定。

Great, thanks. I'll pass it on to someone else.

太好了，謝謝。我會把它轉交給其他人。

Jeremy Hamblin, Craig Hallam.

傑里米·漢布林，克雷格·哈勒姆。

Thanks and congrats on the impressive results. I wanted to just come back to the point, Ken, that you were making on some of these extreme value deals which, we saw some of those drop towards the end of the quarter, some notable deals with products like Hoka, Timberland brands, Jordan brand, etc. And that did seem to be a big driver of your strong traffic, but where are you in terms of, extreme value as kind of a portion of the product inventory and sales today, and I think you mentioned that you're expecting over the next couple of years to get that up to about 10%. How do you expect that to progress over time? And you know what type of visibility do you have on continuing to drive deal flow, across, kind of major name brands?

謝謝，恭喜你們取得如此優異的成績。肯，我想回到你剛才提到的那些超值優惠活動，我們看到其中一些在季度末有所減少，包括Hoka、Timberland、Jordan等品牌的優惠活動。這些活動似乎確實是你們網站流量強勁的主要原因，但目前超值商品在你們的產品庫存和銷售額中所佔的比例是多少呢？我記得你提到過，你們預計未來幾年內會將這個比例提高到10%左右。你認為隨著時間的推移，情況會如何發展？你知道你對持續推動與主要品牌之間的交易流程有多大的了解嗎？

Yeah, thanks, Jeremy.

謝謝你，傑瑞米。

I appreciate it. Yeah, a couple of things in our current status extreme value deal flow, as I mentioned, continues to be very robust for the team, and we're being pretty discerning about what's being brought into the business right now. Many, I guess we probably passed on 3 to 3:1 ratio of adoption of deals that come across the desk, maybe even more, and as a result of that, the current sales performance of extreme value deals is probably in the 2% to 3% of business range, and that'll just give you a broad range right now. It varies a little bit by category and back to your point, we've seen a path to getting that closer to 10% as we continue to mature. So, there's a significant opportunity there and we're learning a lot as we're bringing some of these deals in. Many of them have really responded much better than anticipated. If you've been a little bit slower than anticipated, a lot of it has to do with consumer acceptance and reaction of it. But as we're getting better and understanding how to do extreme value deals, particularly with our supply chain processing, we see that, and I believe that remains to be a competitive weapon for us going forward, so.

謝謝。是的，正如我之前提到的，我們目前的超高價值交易流程對團隊來說仍然非常強勁，而且我們現在對引入業務的項目也相當謹慎。我猜想，我們可能錯過了 3 到 3:1 的交易採納率，甚至可能更高，因此，目前超值交易的銷售業績可能只佔業務的 2% 到 3%，這只是目前一個比較寬泛的範圍。不同類別的情況略有不同，回到你剛才說的，隨著我們不斷成熟，我們已經看到了將這一比例提高到 10% 的途徑。所以，這裡蘊藏著巨大的機遇，我們在促成這些交易的過程中也學到了很多。他們中的許多人的反應都比預期的要好得多。如果你比預期慢了一些，很大程度是因為消費者對產品的接受度和反應。但隨著我們不斷進步，並逐漸了解如何進行超高價值的交易，尤其是在供應鏈處理方面，我們看到，而且我相信，這仍然是我們未來保持競爭力的武器。

Thanks for the call. And then switching gears here to talking about the store fleet, and as you are rolling out stores for '26 and seeing a nice uptick in your unit growth, what do you expect the cadence of openings to be in '26 and then you mentioned 2027. Is that going to be, kind of consistent in terms of, store openings now that you've got, visibility on, the number of units that you're planning to open?

謝謝你的來電。然後我們換個話題來談談門市數量，鑑於你們正在為 2026 年推出新店，並且看到門市數量增長勢頭良好，你們預計 2026 年的開業節奏會是怎樣的？然後你又提到了 2027 年。既然你們已經清楚計劃開設的門市數量，那麼門市開業的數量是否會保持相對穩定？

Yes, I'll give you a little bit of color on the process going forward into 2027. Our real estate team right now is working on a number of deals in the pipeline, and our goal will be going forward to open up our stores really at three distinct times of the year. We'll be opening up stores in early spring, going into the spring period, the tax season. We'll be opening up stores in July, going into back to school, and we'll open up a group of stores in October going into the holiday.

是的，我會簡單介紹一下2027年之前的發展。我們房地產團隊目前正在推動多個交易項目，我們未來的目標是每年在三個不同的時間開設門市。我們將在初春，也就是春季報稅季期間開店。我們將在7月開店迎接返校季，10月還會開一批門市迎接假期。

And so I would expect of that of that fleet going forward, the 40 stores that I mentioned earlier, you can probably divide that equally by three into those time frames and probably have a really good view of how we're looking at the business from our side. In 2026 we'll have lighter openings in the spring. We're just getting caught up there. Most of those openings will be more in July and August, probably equally split, or excuse me, July and October, equally split between those two months to give you an idea as we get caught up and get this engine moving forward in new store growth.

因此，我預計未來這支車隊，也就是我之前提到的 40 家門市，可以平均分成三份，分別進入這三個時間段，這樣就能很好地了解我們這邊是如何看待這項業務的。2026年春季開幕的店鋪數量將會減少。我們只是被困在那兒了。大部分新店開幕時間會集中在 7 月和 8 月，可能各佔一半，或者更準確地說，是 7 月和 10 月，這兩個月各佔一半，這樣可以讓你了解一下，在我們趕上進度並推動新店增長引擎向前發展的過程中，情況會如何。

Great. And then just, one more for me. I know that you've, you, you've got a lot of initiatives that are going on, a lot of technology initiatives, but I wanted to ask about your shrink mitigation efforts. I know this is something that you've been working on, very diligently and I think you had a pretty decent GAAP to close of where you wanted to get that to, but any color you can share on the progress on those efforts, what the impact is to, your gross margin and what you expect to pick up from that, kind of in 2026.

偉大的。然後，就再給我來一杯。我知道你們有很多正在進行的項目，很多技術項目，但我還是想問你們在減少損耗方面所做的努力。我知道這是你一直在努力做的事情，而且非常努力，我認為你已經取得了相當不錯的GAAP成績，達到了你想要的目標，但是你能否分享一下這些努力的進展情況，這對你的毛利率有什麼影響，以及你預計在2026年能從中獲得什麼？

Hey, Jeremy, I'm going to grab that one.

嘿，傑里米，我要去拿那個。

So we've rolled out, new camera systems in about a third of our stores in 2025, and these new camera systems, not only provide what you would expect visibility into the store, but they're AI capable and allow for our loss prevention team to, use facial recognition, which you can imagine is helpful not only to Protect our stores, but to engage with local law enforcement and to help the community, not just our city trend stores. So we're excited about that. Those cameras also have outside of loss prevention and shrink prevention, they have heat mapping capability which will help us understand customer shopping patterns, and they have traffic counting capability, which obviously is an important component as well.

因此，我們在 2025 年在大約三分之一的門市推出了新的攝影機系統。這些新的攝影機系統不僅提供了您所期望的門市視覺性，而且還具備人工智慧功能，使我們的防損團隊能夠使用臉部辨識技術。您可以想像，這不僅有助於保護我們的門市，還有助於與當地執法部門合作，並幫助社區，而不僅僅是我們的城市潮流門市。我們對此感到很興奮。除了防損和防損耗功能外，這些攝影機還具有熱力圖功能，可以幫助我們了解顧客的購物模式，並且具有客流量統計功能，這顯然也是一個重要的組成部分。

So we're excited about that we're going to roll out to. To more than 2 times that number of stores into 2026 so that we can leverage that very quickly. You and I talked about this, before, but our shrink rate in 2025, it still remains what I understand to be in line with, averages for retail, but we're not satisfied in that, and that means that it's less than 1.5% of sales, right?

所以我們對即將推出的這項服務感到非常興奮。到 2026 年，門市數量將增加兩倍以上，以便我們能夠迅速利用這一優勢。你我之前也討論過這個問題，但據我了解，我們 2025 年的損耗率仍然與零售業的平均水平相符，但我們對此並不滿意，這意味著損耗率低於銷售額的 1.5%，對嗎？

So, still higher than we want it to be, less worried about the rate than. I am about the dollars. I think we still have a few million to give back to the company on shrink mitigation over time. Now if I look at 2026, our plan assumes a decrease in both dollars and rate in 2026 based on technology, based on talent, we are upgrading and updating our talent in our loss prevention teams and based on processes we are, training regularly our store, management teams and our district managers on shrink mitigation. So all of that comes together to say that we expected a decrease in 2026 and a further decrease in 2027.

所以，雖然仍然高於我們預期，但我們對利率的擔憂卻減少。我眼裡只有錢。我認為我們仍然可以分期向公司返還數百萬美元，用於減少損耗。現在，展望 2026 年，我們的計畫假設 2026 年的金額和比率都會下降，這得益於技術和人才的提升。我們正在升級和更新防損團隊的人才，並改善流程，定期培訓門市、管理團隊和區域經理，以減少損失。綜上所述，我們預計 2026 年將出現下降，2027 年將進一步下降。

Fantastic. Last one for me, so you also noted, the implementation of, technology improving, CRM. Can you elaborate at all in terms of, how you plan to use that, as the company. Continues to gravitate to using a bit more, digital marketing efforts. Are there, is there a thought, around, kind of loyalty, program that, you're leaning into, but any more color you might be able to share on, kind of the timing of when the CRM, update is happening and. In what you expect the outcome to be from that.

極好的。對我來說，最後一個問題，正如你所提到的，是技術改進型客戶關係管理（CRM）的實施。您能否詳細說明一下，作為公司，您計劃如何使用這項技術？繼續傾向於更多地運用數位行銷手段。你們有沒有考慮過推出某種忠誠度計畫？能否再透露一些關於 CRM 更新時間安排的資訊？你預期會得到怎樣的結果？

Yeah, for sure, Jeremy, we are in the process, as I mentioned, of really getting it out and testing and developing the systems and the processes that go along with that. Our goal will be to launch a CRM in Q1 of this next year, and we don't have an exact date yet. We're still trying to pin down some stuff on the technology and its readiness and so forth, but think about a phase 1 implementation in Q1, and then there'll be a phase 2 implementation in the fall of 2026.

是的，傑里米，正如我剛才提到的，我們正在著手把它推向市場，並測試和開發相關的系統和流程。我們的目標是在明年第一季推出客戶關係管理系統（CRM），但目前還沒有確切的日期。我們仍在努力確定該技術及其準備等一些細節，但預計第一階段的實施將在第一季進行，第二階段的實施將在 2026 年秋季進行。

The way I want you to think about CRM and loyalty for our business is we're actually going to be calling it quote unquote the insiders Club. We'll have a much better title I'm sure by the time we get to it, but it's effectively going to be a way for our customers to tap into emerging trends and deals. You think about the value of being a part of our loyalty club.

我希望你們這樣理解我們公司的客戶關係管理和忠誠度：我們實際上會稱它為「內部人士俱樂部」。我相信到時候我們會想出一個更好的標題，但它實際上將成為我們的客戶了解新興趨勢和優惠訊息的一種方式。您想想加入我們會員俱樂部的價值。

And being one of the first ones to know about some of these amazing extreme value deals that are coming down the pipeline. Well, we have the ability to notify our best customers. They can kind of come in and shop first and best and be kind of in the know, if you will, around emerging deals that are coming to the store. We believe that there will be a significant interest in that, and that actually has the ability then to drive incremental traffic for some of our best and most loyal consumers. And beyond that we're also trying to build in additional tools to make the shopping experience easier for our best customers. As an example, one of the things that they'll gain is actually the ability to have electronic receipts and so quickly they can have that stored and be on their phone and eventually we'll have an app on there that they can just simply access that.

而且，我還是第一批知道即將推出的一些超值優惠活動的人之一。我們有能力通知我們最重要的客戶。他們可以第一時間進店選購，搶先一步，了解店內即將推出的優惠活動。我們相信大家會對此非常感興趣，而且這實際上有可能為我們一些最優秀、最忠誠的客戶帶來額外的流量。除此之外，我們也正在努力開發更多工具，以方便我們最好的客戶享受更輕鬆的購物體驗。例如，他們將獲得的功能之一是能夠獲得電子收據，他們可以快速地將收據存儲在手機上，最終我們會在手機上安裝一個應用程序，方便他們隨時訪問這些收據。

Also layaway programs and things of that nature will have digital access. So the goal here is to make it an insider's club and then to find ways to make the shopping experience a little bit easier and more convenient for our consumer. And then, as you mentioned, the intangible value for us is we're going to have a pretty significant database of consumers that are highly engaged that we can speak to with regularity via these marketing ideas.

此外，分期付款計劃及類似服務也將提供數位化存取。因此，我們的目標是將其打造成為內部人士俱樂部，然後想辦法讓我們的消費者獲得更輕鬆、更方便的購物體驗。而且，正如您所提到的，對我們來說，無形價值在於我們將擁有一個相當龐大的、高度活躍的消費者資料庫，我們可以透過這些行銷理念定期與他們溝通。

Great, thanks for all the color and best wishes.

太好了，謝謝你送來的美好祝福。

Thanks, Jeremy, I appreciate it.

謝謝你，傑里米，非常感謝。

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

謝謝。我們的問答環節到此結束。我想把發言權交還給各位，請大家再做總結發言。

I'd like to thank everybody for attending today's call. We look forward to talking to you next quarter.

感謝各位參加今天的電話會議。我們期待下個季度與您再次洽談。

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議到此結束。現在您可以斷開線路了，祝您有美好的一天。感謝您今天的參與。