Citi Trends Inc (CTRN) 2026 Q1 法說會逐字稿

Greetings Welcome to Citi Trends first quarter 2026 earnings conference call. (Operator Instructions) Please note, this conference is being recorded.

各位好，歡迎參加 Citi Trends 2026 會計年度第一季財報電話會議。（接線員指示）請注意，本次會議將被錄音。

I will now turn the conference over to Nitza McKee, Senior Associate at ICR. Thank you. You may begin..

我現在把會議交給 ICR 資深副理 Nitza McKee。謝謝。您可以開始了。

Thank you, and good morning, everyone. Thank you for joining us on Citi Trends' first quarter 2026 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.

謝謝，各位早安。感謝各位參加 Citi Trends 2026 會計年度第一季財報電話會議。今天與會者包括執行長 Ken Seipel，以及財務長 Heather Plutino。我們的財報新聞稿已於美東時間今天上午 6:45 發布。

If you have not received a copy of the release, it's available on the company's website under the Investors section at www.cititrends.com. You should be aware that prepared remarks made today during this call may contain non-GAAP information and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.

若您尚未收到新聞稿，可至公司網站 www.cititrends.com 的投資人（Investors）專區取得。請注意，今日電話會議中的事先準備發言可能包含非 GAAP 資訊，以及符合 1995 年《私人證券訴訟改革法》（Private Securities Litigation Reform Act of 1995）定義的前瞻性陳述。管理層也可能在回答各位提問時提出額外的前瞻性陳述。這些陳述不保證未來表現，因此您不應過度依賴這些陳述。

We refer you to the company's most recent report on Form 10-K 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.

我們建議您參閱公司最新的 Form 10-K 年報，以及向美國證券交易委員會（SEC）提交的其他後續文件，以更詳細了解可能導致實際結果與前瞻性陳述所述內容出現重大差異的因素。

I will now turn the call over to our Chief Executive Officer, Ken Seipel. Ken?

我現在把電話會議交給我們的執行長 Ken Seipel。Ken？

Thank you, Lisa. Well, good morning, everyone, and thank you for joining us today for our first quarter 2026 earnings call. Simply stated, we had an excellent quarter. Building on the powerful momentum from 2025, nearly every metric accelerated during Q1 2026, and we're seeing strong momentum early in Q2 as well with quarter-to-date comps in the high single digits, which is validating that our strategy is working and our execution is becoming increasingly consistent. As noted in our pre-release last week, in Q1, we generated $13.9 million of EBITDA, which is more than doubling last year's $6.4 million.

謝謝你，Lisa。各位早安，感謝大家今天參加我們 2026 會計年度第一季財報電話會議。簡單來說，我們本季表現非常出色。在 2025 年強勁動能的基礎上，2026 年第一季幾乎所有指標都加速成長；而且我們在第二季初也看到強勁動能，截至目前的同店銷售（comp）為高個位數成長，這驗證了我們的策略奏效，且執行力正變得愈來愈一致。如同我們上週的預先公告所述，第一季我們創造了 1,390 萬美元 EBITDA，較去年 640 萬美元增加逾一倍。

Our profit improvement was driven by exceptional comparable store sales growth of 13.9%, representing a two-year stack of 23.8% and also marking 21 consecutive months of sales growth for the company. Our performance was broad-based. Sales increases across all product divisions and all store climate zones. While a portion of the quarter benefited from tax refund timing, I would like to highlight that our sales trends before and after the tax refund period on a two-year basis is in the upper teens, consistent with the momentum we delivered in Q3 and Q4 of 2025 and in the upper, in the two-year upper teens growth trend has continued now in Q2. Our sales growth is being driven by refinements of trend, style and value of our core merchandising assortment.

獲利改善主要來自卓越的同店銷售成長 13.9%，兩年疊加（two-year stack）為 23.8%，同時也代表公司連續 21 個月銷售成長。我們的表現相當全面：所有產品部門與所有門市氣候區（store climate zones）皆有銷售提升。雖然本季部分受惠於退稅時點影響，但我想強調的是，以兩年基礎來看，退稅期間前後的銷售趨勢都在十幾%的高檔，與我們在 2025 年第三季與第四季所展現的動能一致；而且這個兩年基礎的高十幾%成長趨勢在第二季也持續延續。我們的銷售成長來自於對核心商品組合在流行趨勢、風格與價值上的持續精進。

Plus we also utilize extreme value deals periodically to add excitement to the treasure hunt for our customers. The strong performance of our core merchandising strategy gives us confidence in the durability and sustainability of our top line performance. Our gross margin rate expanded by 40 basis points, driven by improved merchandise margin rate, partially offset by increased fuel surcharge expense in the freight line. SG&A was well controlled and leveraged by 250 basis points versus last year. I was particularly encouraged by our transaction growth.

此外，我們也會不定期推出超值（extreme value）優惠，以提升顧客尋寶式購物（treasure hunt）的興奮感。核心商品策略的強勁表現，讓我們對營收表現的耐久性與可持續性更具信心。毛利率擴張 40 個基點，主要由商品毛利率改善帶動，但部分被運費項目中燃油附加費上升所抵銷。SG&A 控制良好，較去年槓桿改善 250 個基點。我尤其受到鼓舞的是我們的交易筆數（transaction）成長。

Consistent with 2025 performance, nearly 1/2 of our sales increase was driven by increased customer traffic, a key indicator that our product and brand are resonating. At the same time, we saw some meaningful improvement in our basket size, which is demonstrating that our customers are responding to the strength of our assortment and the compelling value that we're delivering. From a merchandise perspective, we saw disciplined execution across the business. Family footwear continued its momentum from Q4 with customers responding enthusiastically to expanded branded offerings at exceptional value across all genders. In footwear, off-price and extreme value strategy continues to gain momentum, driving both traffic and basket growth.

與 2025 年的表現一致，我們銷售增量近一半來自顧客來店人流增加，這是產品與品牌引起共鳴的重要指標。同時，我們也看到客單（basket size）出現顯著改善，顯示顧客正回應我們商品組合的強度與我們所提供的具吸引力價值。就商品面而言，我們在全業務範圍內展現了紀律性的執行。家庭鞋類延續第四季動能，顧客對我們在所有性別提供的擴大品牌商品、且具卓越價值的選擇反應熱烈。在鞋類方面，折扣（off-price）與超值策略持續增溫，同時帶動人流與客單成長。

Men's also delivered a very strong quarter, driven by increased relevance and streetwear trends for young men. Our updated strategy successfully balances trend-forward product for the younger customer while continuing to serve the style and preferences of our core male customer with updated styling, compelling values and improved in-stocks. Children's had another strong quarter, benefiting from improved in-stock levels and attention to the nail in product selection, which creates stronger value positioning. As I mentioned on the Q4 call, our children's business has become both a cornerstone of our company and a model of consistent disciplined execution. The team continues to deliver highly desired styles, consistent value and improved inventory and stock positioning.

男裝同樣交出非常強勁的一季，主要受年輕男性的潮流與街頭服飾趨勢帶動。我們更新後的策略，成功在提供更年輕客群的前瞻潮流商品（trend-forward product）與持續服務核心男性客群的風格偏好之間取得平衡，並透過更新的版型風格、具吸引力的價值與更佳的到貨率（in-stocks）來實現。童裝也再度表現強勁，受惠於到貨率提升，以及在商品選品上更聚焦於關鍵細節（attention to the nail），從而建立更強的價值定位。如同我在第四季電話會議提到的，我們的童裝業務已成為公司的基石之一，也是穩健且具紀律執行的典範。團隊持續提供高度受歡迎的款式、一致的價值，以及更佳的庫存與備貨配置。

Women's accessories also posted meaningful gains, which is reflecting early success in our assortment adjustments to a more branded trend-right product. And we were encouraged by customer response to improvements of our women's apparel business, especially in missing. Women's apparel represents a significant opportunity as we continue to reposition our women's business to fully capture the style, trend and sizing opportunities that we do see in the market. This product momentum is the result of continued refinement of our 3-tiered good, better and best strategy across all merchandising divisions. What's important to note here is that we're serving customers across a wide range of income levels, including a meaningful portion of middle and higher income consumers.

女用配件也取得顯著成長，反映我們將商品組合調整為更具品牌、且更符合趨勢（trend-right）的產品已初見成效。我們也對顧客對女裝業務改善的回應感到鼓舞，尤其是在缺碼（missing）方面。女裝代表一個重要機會，因為我們持續重新定位女裝業務，以充分掌握市場上我們所看到的風格、趨勢與尺碼機會。這股商品動能來自我們在所有商品部門持續精進「好／更好／最好」（good, better and best）的三層策略。值得注意的是，我們服務的顧客涵蓋廣泛的收入層級，其中也包含相當比例的中高收入消費者。

This creates a significant opportunity for us to expand our offering of recognizable brands at compelling prices that align with our style and trend expectations. At the opening price point, we continue to deliver strong value through our CityScore offering for budget-conscious customers. The foundation of our business remains the better tier, which is typically priced between $7 and $12, where we provide a broad assortment of trend-right product that drives consistency and loyalty. And at the top end, we're continuing to expand our best tier through both fashion-forward product and branded extreme value opportunities, often with extreme discounts of the 75% off MSRP. These product strategies, combined with improved discipline in our open-to-buy process and continued benefits from our AI-driven allocation systems are driving stronger inventory productivity and improved margin performance.

這為我們帶來顯著機會，得以擴大提供具辨識度的品牌，並以符合我們風格與趨勢期待的具吸引力價格銷售。在入門價位帶（opening price point），我們透過 CityScore 產品線持續為預算型顧客提供強勁價值。我們業務的基礎仍是「更好」（better）層級，通常定價在 7 至 12 美元之間，在此我們提供廣泛且符合趨勢的商品組合，帶來穩定性與忠誠度。而在高端，我們持續透過更具時尚前瞻的商品與品牌超值機會擴大「最好」（best）層級，常見折扣可達建議零售價（MSRP）的 75% off。這些商品策略，加上我們在採購額度（open-to-buy）流程上更佳的紀律，以及 AI 驅動的配貨系統（allocation systems）持續帶來效益，正推動更高的庫存生產力與更佳的毛利表現。

In marketing, our objective is to really deepen the connection with our customers and reinforce the role in the communities that we serve. In Q1, we extended the momentum from our highly successful holiday Joy Looks Good on You campaign by inviting customers to help modernize the Citi Trends Jingle. Engagement exceeded expectations, generating strong social reach and viral moments while also driving incremental store traffic. By quarter end, we have received a meaningful volume of customer submissions. And in Q2, we will select the finalist from the submissions with the winning Jingle expected to be deployed in the second half of the year.

在行銷方面，我們的目標是深化與顧客的連結，並強化我們在所服務社區中的角色。第一季，我們延續假期期間「Joy Looks Good on You」活動的成功動能，邀請顧客協助為 Citi Trends 的 Jingle 進行現代化改造。互動參與超出預期，帶來強勁的社群觸及與病毒式傳播時刻，同時也帶動額外的門市來客。至季末，我們已收到相當數量的顧客投稿。第二季，我們將從投稿中選出決選名單，預計在下半年推出得獎的 Jingle。

Now turning to operations. The SG&A leverage we delivered in the quarter reflects more consistent execution across the organization. As we improve execution, we are able to better leverage the fixed portion of our cost structure without adding commensurate expense as the business grows. I'm pleased with the progress across our stores, headquarters and our distribution centers in controlling costs and improving overall operating disciplines. From a store growth point of view, we opened 2 new stores during the quarter, one in St.

接著談營運。我们本季達成的 SG&A 槓桿改善，反映整個組織更一致的執行力。隨著執行力提升，當業務成長時，我們能更有效槓桿固定成本結構中的固定部分，而不需等比例增加費用。我很高興看到我們在門市、總部與配送中心在控管成本與提升整體營運紀律方面的進展。就門市成長而言，本季我們新開了 2 家門市，一家在聖

Louis and one in Baltimore. These 2 locations, along with the 3 new stores from last fall, are serving as test stores for us as we refine our processes and prepare for accelerating store growth. And I'm very pleased to report that our new stores are all performing above expectations. As a reminder here in stores, one of our primary points of differentiation is our neighborhood store locations, which are embedded in communities where we built trust over many, many years. The combination of these convenient proximity and strong word-of-mouth recommendations creates sustainable, powerful traffic drivers.

路易斯（St. Louis），另一家在巴爾的摩（Baltimore）。這兩個據點，加上去年秋季新增的 3 家門市，正作為我們的測試門市，用以在我們精進流程並為加速展店做準備時提供驗證。我也很高興報告，我們的新店表現都優於預期。提醒各位，在門市方面，我們主要差異化之一是鄰里型門市選址，深植於我們多年來建立信任的社區之中。這種便利的就近性與強勁的口碑推薦相結合，形成可持續且強大的來客驅動力。

Now I'll turn the call over to Heather to walk through the Q1 financial results in more detail as well as our updated 2026 outlook. And then I'll return after her remarks to discuss our priorities for the remainder of '26. Heather?

接下來我把電話會議交給 Heather，請她更詳細說明第一季財務結果以及我們更新後的 2026 年展望。之後我會在她發言後回來，討論 2026 年剩餘期間的優先事項。Heather？

Thanks, Ken, and good morning, everyone. I'm pleased to walk you through our first quarter results and our updated and improved outlook for 2026. We delivered a strong first quarter, driven by top line growth, gross margin expansion and disciplined expense management, resulting in adjusted EBITDA of $13.9 million. A $7.5 million increase over last year's Q1 adjusted EBITDA of $6.4 million. These results reflect the continued progress of our strategic transformation and the strength of our operating model.

謝謝你，Ken，各位早安。我很高興向各位說明我們第一季的業績，以及我們對 2026 年更新且更佳的展望。我們第一季表現強勁，受營收成長、毛利率擴張與費用紀律管理帶動，使調整後 EBITDA 達到 1,390 萬美元，較去年第一季調整後 EBITDA 640 萬美元增加 750 萬美元。這些結果反映我們策略轉型的持續進展，以及我們營運模式的強勁實力。

Total sales for the first quarter were $230.9 million, a 14.4% increase to Q1 2025. Comparable store sales increased 13.9%, ahead of our expectations, driven by both increased transactions and higher average basket. On a 2-year stack basis, comps increased 23.8% and Q1 2026 marks our seventh consecutive quarter and 21st straight month of comp sales growth. As Ken mentioned, our comp sales growth trend on a 2-year basis before and after the tax refund season has been consistently in the upper teens, including Q2 performance to date. In the quarter, gross margin increased 40 basis points versus last year to 40%, driven by improved merchandise margin, fueled by our strategic investments in allocation and loss prevention systems and updated processes.

第一季總銷售額為 2.309 億美元，較 2025 會計年度第一季成長 14.4%。同店銷售成長 13.9%，優於我們的預期，主要由交易筆數增加與平均客單價提升共同帶動。以兩年疊加（2-year stack）基礎計算，同店銷售成長 23.8%，而 2026 會計年度第一季也標誌著我們連續第七個季度、連續第 21 個月同店銷售成長。如 Ken 所提及，我們在退稅季前後、以兩年基礎衡量的同店銷售成長趨勢一直穩定維持在十幾個百分點的高檔區間，包含截至目前的第二季表現。本季毛利率較去年提升 40 個基點至 40%，主要受惠於商品毛利率改善，這得益於我們在配貨與損耗防治系統的策略性投資以及流程更新。

These tailwinds were partially offset by higher freight expense. Freight in the quarter was higher than planned due to rising fuel surcharges. We expect that headwind to continue throughout the year, and we've incorporated its impact into the updated outlook I'll walk you through shortly. First quarter adjusted SG&A expenses totaled $78.3 million compared to $73.4 million a year ago. The increase to last year was mainly driven by expenses to support higher sales.

上述利多部分被較高的運費支出所抵銷。本季運費高於原先規劃，原因是燃油附加費上升。我們預期這項逆風將持續全年，並已將其影響納入我稍後將說明的更新展望中。第一季調整後 SG&A 費用合計 7,830 萬美元，去年同期為 7,340 萬美元。較去年增加主要是為支援更高的銷售所需的費用。

In addition, we had higher store and corporate bonus accruals from improved performance. As a rate of sales, adjusted SG&A for the quarter was 33.9%, leveraging 250 basis points versus last year, demonstrating our ability to leverage our cost structure with higher sales. As I mentioned earlier, Q1 adjusted EBITDA grew $7.5 million over last year to $13.9 million with adjusted EBITDA margin, EBITDA as a rate of sales, expanding 280 basis points to 6%. During the quarter, we opened 2 stores and closed 1 location, ending the quarter with 591 stores. and we remodeled 25 stores, completing a significant portion of our full year program in time for the important Q1 tax refund season or taxis as we call it.

此外，因績效改善，我們的門市與公司端獎金提列也較高。以銷售額比率計，本季調整後 SG&A 為 33.9%，較去年槓桿改善 250 個基點，展現我們在銷售提升下有效槓桿化成本結構的能力。如我先前提到，第一季調整後 EBITDA 較去年增加 750 萬美元至 1,390 萬美元，調整後 EBITDA 利潤率（EBITDA 佔銷售比率）擴張 280 個基點至 6%。本季我們新開 2 家門市並關閉 1 個據點，季末門市數為 591 家；同時我們翻新 25 家門市，趕在重要的第一季退稅季（我們稱之為 taxis）前完成了全年計畫中的相當大一部分。

In early Q2, we remodeled an additional 26 locations, completing our remodel program. Now turning to the balance sheet. I'm pleased to say that we drove our 13.9% Q1 comp with quarter end total inventory up only 4.8% to last year, reflecting our ongoing inventory efficiency initiatives. Our balance sheet remains healthy with $81.1 million in cash at the end of the quarter, no debt and no drawings on our $75 million revolver. As we've said in several prior investor presentations, we expect our year-end cash balance to be approximately flat to last year's $66 million, reflecting investments in inventory and capital projects, particularly new stores and remodels over the balance of the year.

在第二季初，我們另外翻新了 26 個據點，完成了翻新計畫。接著談資產負債表。我很高興地表示，在第一季同店銷售成長 13.9% 的同時，季末總庫存僅較去年增加 4.8%，反映我們持續推動的庫存效率提升措施。我們的資產負債表仍然健康：季末現金 8,110 萬美元，無負債，且未動用 7,500 萬美元的循環信用額度（revolver）。如我們在先前多次投資人簡報中所述，我們預期年末現金餘額將大致與去年 6,600 萬美元持平，反映我們在庫存與資本專案上的投資，尤其是今年剩餘期間的新店與翻新。

Throughout the year, we expect to remain in a strong financial position, affording us the flexibility to pursue strategic alternatives. Turning to our guidance. With the results of our first quarter, we are updating our outlook for fiscal 2026 as follows: we expect comparable store sales growth of 8% to 10% for the year. With our Q1 comp results, this implies high single-digit comps for the balance of the year. Total sales are expected to grow in a range of 9% to 11%, gross margin is expected to expand approximately 50 to 70 basis points compared to 39.6% in fiscal 2025 as we continue to leverage new systems and processes to drive improvements in markdowns and shrink, partially offset by higher freight expense due to the fuel surcharges I mentioned earlier.

全年而言，我們預期將維持強健的財務狀況，使我們具備追求策略性選項的彈性。接著談財測。基於第一季的結果，我們將 2026 會計年度展望更新如下：我們預期全年同店銷售成長 8% 至 10%。以第一季同店表現推算，意味著今年剩餘期間同店將為高個位數成長。總銷售額預期成長 9% 至 11%；毛利率預期較 2025 會計年度的 39.6% 擴張約 50 至 70 個基點，因我們持續運用新系統與流程改善折扣（markdowns）與損耗（shrink），但部分將被我先前提到、因燃油附加費導致的較高運費所抵銷。

Our revised expectation for freight expense drove the decrease from our prior outlook of 100 basis points of margin rate expansion. We now expect adjusted SG&A leverage in the range of 140 to 160 basis points versus fiscal 2025, higher than previous outlook of 70 to 100 basis points of leverage due to the impact of higher sales as well as ongoing disciplined expense control. Adjusted EBITDA is expected to be in the range of $35 million to $40 million, with adjusted EBITDA margin expected to expand approximately 200 basis points over fiscal 2025. Our real estate plans are unchanged from previous outlook with plans to open approximately 25 new stores to close 4 locations and to remodel approximately 50 locations. Finally, full year capital expenditures are expected to be in the range of $35 million to $40 million, consistent with previous outlook.

我們對運費支出的修正預期，導致毛利率擴張幅度由先前展望的 100 個基點下調。我們目前預期調整後 SG&A 槓桿改善幅度為較 2025 會計年度 140 至 160 個基點，高於先前展望的 70 至 100 個基點，主要受更高銷售帶動以及持續嚴謹的費用控管所致。調整後 EBITDA 預期為 3,500 萬至 4,000 萬美元，調整後 EBITDA 利潤率預期較 2025 會計年度擴張約 200 個基點。我們的不動產計畫與先前展望一致：預計新開約 25 家門市、關閉 4 個據點，並翻新約 50 個據點。最後，全年資本支出預期為 3,500 萬至 4,000 萬美元，與先前展望一致。

In closing, Q1 represents a strong start to 2026, reflecting the operational foundation we built last year and the continued execution of our strategic priorities. We remain focused on driving sustainable, profitable growth through disciplined inventory management, operational efficiency and targeted investments in our business. We are confident in our long-term trajectory and our ability to deliver meaningful value for our shareholders. I want to thank our teams across the organization for their continued dedication and hard work, which is enabling this transformation. We look forward to updating you, our investors, on our progress next quarter.

總結而言，第一季為 2026 年帶來強勁開局，反映我們去年建立的營運基礎以及持續落實策略優先事項。我們仍專注於透過嚴謹的庫存管理、營運效率與對業務的精準投資，推動可持續且具獲利性的成長。我們對長期發展軌跡以及為股東創造有意義價值的能力充滿信心。我要感謝全體團隊持續的投入與辛勤付出，正是這些努力使這場轉型得以實現。我們期待在下個季度向各位投資人更新我們的進展。

With that, I'll hand the call back over to Ken. Ken?

接下來我把電話交回給 Ken。Ken？

All right. Well, thank you, Heather. So as we look ahead to the balance of 2026, we are firmly in the execute phase of our growth plan, focused on delivering against our customer brand promise. Our customers are discerning. They understand that value is more than just price, and they're willing to spend more when the style is right, the trend is relevant and quality meets their expectations.

好的。謝謝你，Heather。展望 2026 年剩餘期間，我們已堅定進入成長計畫的執行階段，聚焦於兌現對顧客的品牌承諾。我們的顧客很挑剔。他們明白價值不僅僅是價格；當款式到位、趨勢相關且品質符合期待時，他們願意花更多。

In short, value is not just price. Our brand promise is very clear. styles that see you, prices that amaze you and trends that tell your story. Our teams are focused every day on bringing that promise to life for our customers. To support this, we've established 3 clear priorities in 2026, consistent execution, strong sales flow to growth to profit and accelerated growth.

簡而言之，價值不只是價格。我們的品牌承諾非常清楚：看見你的風格、讓你驚豔的價格，以及訴說你故事的潮流。我們的團隊每天都專注於把這份承諾帶給顧客。為了支持這一點，我們在 2026 年確立了 3 項明確優先事項：一致且穩定的執行、強勁的銷售流轉帶動獲利成長，以及加速成長。

So first, consistent execution. As I mentioned earlier, our sales growth is being driven by refinements in trend, style and value of our everyday core merchandising assortment. Consistent execution of our merchandise strategy gives us confidence in achieving upper single-digit comparable store sales growth this year and in the foreseeable future. A key focus will be repositioning our women's business to fully capture the style, trend and sizing opportunities in the market across juniors, plus and missing. We're updating our product offerings to ensure trend-right merchandise is front and center for all female customers.

首先是一致且穩定的執行。如我先前提到，我們的銷售成長來自於對日常核心商品組合在趨勢、風格與價值上的精進。持續一致地執行商品策略，使我們有信心在今年以及可預見的未來達成同店銷售高個位數成長。關鍵重點之一是重新定位我們的女裝業務，以充分掌握市場在青少女（juniors）、加大尺碼（plus）以及缺碼（missing）等面向的風格、趨勢與尺碼機會。我們正在更新產品供給，確保符合趨勢的商品能在所有女性顧客面前成為焦點。

This represents a meaningful opportunity to drive both traffic and sales. Throughout '26, we'll maintain our disciplined focus on improved style, trend and value across all product categories, and we'll continue to apply the learnings from our strongest performing categories like men's and children's to elevate execution company-wide. Our product team has sharpened focus on trend identification, trend curation and style development. From opening price points to premium branded fashion, our merchant team translates these trends into compelling styles that deliver exceptional value to our customers and meaningful margin to the business. Each season, we're improving our product trend and style execution while leveraging AI to optimize product allocation to the correct store.

這代表一個可同時帶動來客數與銷售的重大機會。在 2026 年期間，我們將在所有品類維持對風格、趨勢與價值提升的嚴謹聚焦，並持續把男裝與童裝等表現最強品類的學習成果，應用到全公司以提升執行力。我們的產品團隊已更聚焦於趨勢辨識、趨勢策展與風格開發。從入門價位到高端品牌時尚，我們的採購團隊把這些趨勢轉化為具吸引力的款式，為顧客提供卓越價值，並為公司帶來有意義的毛利。每一季，我們都在提升產品趨勢與風格的執行，同時運用 AI 來最佳化商品配貨至正確的門市。

This creates a long runway of growth as we continue to develop and refine product execution. We've also have continued opportunity to expand off-price and extreme value buying capabilities, ensuring a steady flow of compelling brands and products at exceptional value. Extreme value product is driving both traffic and basket growth while supporting margin performance. The off-price market remains robust, allowing us to be highly selective, which is a key advantage for our model and core to our competitive advantage. We've already secured several strong deals that will support continued momentum into the back half of the year.

這為我們持續開發與精進產品執行創造了長期的成長跑道。我們也仍有機會擴大折扣通路（off-price）與極致價值（extreme value）的採購能力，確保能穩定提供具吸引力的品牌與產品，並以卓越價值呈現。極致價值商品同時帶動來客數與客單成長，並支撐毛利表現。折扣市場依然強勁，使我們能高度挑選，這是我們模式的關鍵優勢，也是我們競爭優勢的核心。我們已取得數筆強勁交易，將支撐今年下半年持續的動能。

On the marketing front, we're focused on consistent execution throughout the year. This includes expanding our social and influencer presence, deepening community engagement and ensuring that our brand is authentically represented in everything we do. As I said earlier, this is not just about visibility. It's about deepening relationships and reinforcing Citi Treatment to the communities we proudly serve. Our second priority is ensuring strong sales growth through flow-through to profit.

在行銷方面，我們專注於全年一致且穩定的執行。這包括擴大我們在社群與網紅（influencer）上的能見度、深化社區參與，並確保我們所做的一切都能真實呈現品牌。如我先前所說，這不只是曝光度的問題，而是要深化關係，並強化我們對所自豪服務之社區的 Citi Treatment。第二項優先事項是確保強勁的銷售成長，並透過流轉帶動獲利。

Incremental sales are going to translate into accelerated profit growth. Our plan in 2026 calls for about a 10% sales growth while more than doubling EBITDA, making this a pivotal year in the evolution of our profit profile. Foundational to profit flow-through is leveraging our highly fixed expense base as we grow. Best practices implemented during the repair phase and operational areas of the business are beginning to have a positive impact on our cost structure, enabling us to grow sales more efficiently. In addition, we have several tangible initiatives supporting this objective, including our AI-based allocation systems, enhanced store technologies to reduce shrink and our ongoing supply chain improvements to increase capacity and efficiency.

增量銷售將轉化為加速的獲利成長。我們 2026 年的計畫目標約為 10% 的銷售成長，同時 EBITDA 超過倍增，使今年成為我們獲利結構演進的關鍵一年。獲利流轉的基礎在於：隨著成長槓桿化我們高度固定的費用基礎。在修復階段於營運領域導入的最佳實務，正開始對我們的成本結構產生正面影響，使我們能更有效率地擴大銷售。此外，我們也有多項具體措施支援此目標，包括以 AI 為基礎的配貨系統、強化門市科技以降低損耗，以及持續的供應鏈改善以提升產能與效率。

And as I've highlighted on prior calls, we continue to leverage API dashboards across all functions to ensure we have disciplined execution. A benefit of our improved execution is our ability to absorb macroeconomic challenges, like increased fuel charges into our business while still achieving our profit flow-through objectives. Our third priority is accelerated growth, which will be disciplined, return-focused and strategic. First, beginning in July, we're going to launch our customer relationship management platform that we're calling the Insiders Club. The Insiders Club turns traffic into loyalty, loyalty into frequency and frequency into EBITDA.

正如我在先前的電話會議中所強調的，我們持續在各項職能中運用 API 儀表板，以確保我們能夠有紀律地執行。我們執行力提升的一項好處，是即使面臨總體經濟挑戰，例如燃油附加費上升，我們仍能將其吸收進業務之中，同時達成我們的利潤流轉（flow-through）目標。我們的第三項優先事項是加速成長，並將以有紀律、以回報為導向且具策略性的方式推進。首先，從 7 月開始，我們將推出客戶關係管理平台，稱為 Insiders Club。Insiders Club 能將人流轉化為忠誠度、將忠誠度轉化為消費頻率，並將頻率轉化為 EBITDA。

We're making a deliberate investment in owning our customer relationship and building a sustainable data-driven growth engine that compounds over time. The objective is to invest early to build customer relationships. And then as the CRM system learns and scales, it becomes a meaningful contributor to long-term shareholder value. The Insiders Club transforms Citi Trends from a transaction-based retailer into a relationship-driven brand. It allows us to know our customer, reward our customer and grow with our customer while reinforcing the treasure hunt excitement that makes shopping with us an experience.

我們正有意識地投資於掌握我們的客戶關係，並建立一個可隨時間複利成長、以數據驅動的永續成長引擎。目標是及早投資以建立客戶關係。接著，當 CRM 系統學習並擴展後，它將成為長期股東價值的重要貢獻者。Insiders Club 使 Citi Trends 從以交易為基礎的零售商，轉型為以關係為驅動的品牌。它讓我們能了解客戶、回饋客戶，並與客戶一同成長，同時強化「尋寶式」購物的興奮感，讓在我們這裡購物成為一種體驗。

We'll begin activation of the Insiders Club this July and expect the program to build momentum rapidly. We also remain on track with our store growth plans. As Heather mentioned, we've completed 51 remodels so far this year, and we expect to open a total of 25 new stores for the remainder of the year, while preparing to accelerate our expansion in '27. Our approach is grounded on data-driven site selection, local market expertise and disciplined financial criteria. Using AI tools, we've analyzed 3 years of actual transaction data from every store location, combined with comprehensive geolocation studies to understand the specific customer and market characteristics that drive success.

我們將於今年 7 月開始啟動 Insiders Club，並預期該計畫將迅速累積動能。我們的門市成長計畫也仍按進度推進。如 Heather 所提，我們今年迄今已完成 51 家改裝，並預期在今年剩餘期間合計開出 25 家新店，同時為在 2027 年加速擴張做準備。我們的方法以數據驅動的選址、在地市場專業，以及嚴謹的財務標準為基礎。透過 AI 工具，我們分析了每個門市據點 3 年的實際交易數據，並結合全面的地理位置研究，以了解推動成功的特定客戶與市場特徵。

This AI data-driven approach has demonstrated approximately a 90% accuracy in sales prediction, helping us to identify and replicate our most successful store profiles while minimizing risk as we expand our footprint. Beyond the analytics, we're applying strict financial criteria to every new store, decisioning targeting mature store averages of approximately $1.5 million in sales and mid-teens 4-wall contribution margins. Our early results from our newest stores are exceeding expectations, giving us the confidence in accelerating to approximately 40 new stores in 2027. Equally important to our growth initiatives is the growth of our people. We're a company that facilitates the continuous learning and development of all employees to transform adapt to changes and improve performance, positioning us to maximize growth opportunities as they arise.

這種以 AI 數據驅動的方法，在銷售預測上展現約 90% 的準確度，協助我們在擴大版圖時辨識並複製最成功的門市樣貌，同時將風險降到最低。除了分析之外，我們也對每一家新店採用嚴格的財務標準，在決策時以成熟門市平均約 150 萬美元的銷售額，以及約中十位數（mid-teens）的四牆貢獻毛利率（4-wall contribution margins）為目標。我們最新開出的門市初期成果超出預期，讓我們更有信心在 2027 年加速至約 40 家新店。同樣重要的是，我們成長計畫也包含人才的成長。我們是一家促進所有員工持續學習與發展的公司，協助大家轉型、適應變化並提升績效，使我們能在機會出現時把握並最大化成長機會。

And as a part of that initiative, we're focusing on succession planning for our key leadership roles to ensure continuity of the transformation plan while strengthening our bench talent. Our strong debt-free balance sheet enables us to explore multiple avenues of growth beyond our current 3-year plan. Our strategy is to build a strong organic growth foundation, accelerate expansion where the economics are compelling and selectively pursue transformational opportunities. We're beginning to evaluate synergistic acquisition opportunities that align with and complement our strategic priorities. We're committed to applying the same disciplined approach to our customer focus, product execution and financial returns that has driven our turnaround so far and has generated significant shareholder value creation.

作為該倡議的一部分，我們正聚焦於關鍵領導職位的接班規劃，以確保轉型計畫的延續性，同時強化我們的人才梯隊。我們強健且無負債的資產負債表，使我們能在現行 3 年計畫之外探索多種成長途徑。我們的策略是建立強健的有機成長基礎、在經濟效益具吸引力之處加速擴張，並有選擇性地追求具轉型意義的機會。我們已開始評估具協同效益的併購機會，使其能與我們的策略優先事項一致並形成互補。我們承諾將以同樣有紀律的方法，聚焦客戶、落實商品執行與財務回報；這些做法迄今推動了我們的轉虧為盈，並創造了顯著的股東價值。

So in closing, progress at Citi Trends is well underway. Our track record of consistent comparable store sales increases shows our strategy is working. Our execution is more consistent and our customer connection is stronger than ever. We're debt-free, disciplined and positioned for growth. We have a clear path to profitable expansion, stronger earnings and lasting shareholder value.

總結來說，Citi Trends 的進展已明顯展開。我們同店銷售持續成長的紀錄顯示，我們的策略正在奏效。我們的執行更一致，與客戶的連結也比以往更強。我們無負債、紀律嚴明，並已具備成長定位。我們有一條清晰的路徑，可實現獲利性擴張、更強的獲利能力，以及持久的股東價值。

We are clearly focused on our customer. The foundation is stronger and the opportunity ahead is significant, but we still have a lot of processes to refine, product categories to optimize, systems to build and growth opportunities to maximize. We're more than a retailer, we are a neighborhood destination for black families, delivering style, trend, value and trust that no one else can deliver. I'm confident in our strategy and our team's ability to execute. The foundation we've built positions us well for growth throughout 2026 and beyond.

我們顯然以客戶為核心。基礎更為穩固，前方機會也相當可觀，但我們仍有許多流程需要精進、商品品類需要最佳化、系統需要建置，以及成長機會需要最大化。我們不只是零售商，我們是黑人家庭的社區目的地，提供無人能及的風格、潮流、價值與信任。我對我們的策略以及團隊的執行能力充滿信心。我們所建立的基礎，使我們在 2026 年及其後的成長上具備良好定位。

Thank you all for your continued support. I'll turn it to the operator now for any questions.

感謝各位持續的支持。接下來我把時間交給接線員，進行提問。

(Operator Instructions)

（接線員指示）

Michael Baker, D.A. Davidson.

Michael Baker，D.A. Davidson。

Okay. So you kind of alluded to the impact of tax refunds, and it sounds like it probably helped, but certainly more to it than that. But you talked about the period before and after. But what do you consider the tax refund period? Or maybe some other way to ask is, can you just tell us your monthly trends?

好的。你剛才有稍微提到退稅的影響，聽起來它可能有所幫助，但當然不只如此。你談到退稅前後的期間。不過你們認為「退稅期間」是指哪一段？或者換個方式問，你能否告訴我們每月的趨勢？

Yes. Mike, probably the best way to think about the tax refund trend for us is really from about mid-February up to and this kind of right up to Easter period that for the most part, about 6 to 7 weeks there is what we would account for the majority of the tax refunds that flowed into the market. And so when we talk about sales trends prior. That includes a little bit of the January performance as well. But going into Feb 15 and then coming out after Easter and even into really even through last week, our trends have remained very consistent with what we experienced, as I mentioned, in Q3, Q4.

是的。Mike，對我們而言，思考退稅趨勢最好的方式，大約是從 2 月中旬一直到復活節前後這段期間；大致上約 6 到 7 週，我們會把市場上大部分流入的退稅金額歸在這段時間。因此當我們談到此前的銷售趨勢時，也包含了一部分 1 月的表現。但從 2 月 15 日前後開始，到復活節之後，甚至一直到上週，我們的趨勢都與我提到的第三季、第四季所經歷的情況非常一致。

So we've been very encouraged about the overall underlying health of the business. And as we noted in Q1, obviously, our sales spiked up to 23.8% on a two-year, which is better than we had been performing. So we believe that gap between our baseline and that upside is probably attributed dominantly to the tax refunds in that period, but very encouraged about the health on either side.

因此，我們對業務整體的基本面健康狀況感到非常鼓舞。正如我們在第一季所指出的，我們的銷售在兩年基礎上跳升至 23.8%，表現優於我們先前的水準。因此我們認為，基準表現與那段上行之間的差距，主要可歸因於該期間的退稅，但我們也對退稅前後兩側的健康狀況感到非常振奮。

Yeah. Okay. That makes sense. And then I guess I'll keep it to one question, one follow-up, and this does follow up on that. I think, Ken, I think I heard you say high single digits for the foreseeable future did I hear that right?

好的。明白了。那我就只問一個問題、再一個追問，而且確實是延伸剛才那點。我想，Ken，我好像聽到你說在可預見的未來會是高個位數成長，我聽得對嗎？

And what to you is foreseeable future?

那你所說的「可預見的未來」是指多長的時間？

Yeah. You actually didn't. That's a pretty good nuance in the script, Mike. That's a good catch. Yes, we did say that.

是的。你其實沒有聽錯。Mike，你抓到了一個很細微的點，這個腳本裡的措辭確實很講究，你抓得很好。是的，我們確實那樣說。

We, what we're talking about in the foreseeable future right now is our merchandising plans that we have in place all the way through the balance of this year through 2026. We're taking a hard look at 2027 right now, and that may moderate a little bit and get into more of the mid-singles as we go forward. But the point here is that we see a long runway of continued increases. I'm often asked by investors, can we continue to comp the comp, right? And we have a great deal of confidence in that.

我們目前所說的「可預見的未來」，指的是我們已制定的商品規劃，涵蓋今年剩餘期間一直到 2026 年。我們現在也正在仔細檢視 2027 年，屆時成長可能會稍微降溫，往中個位數（mid-singles）靠攏。但重點是，我們看到一條很長的跑道，能持續帶來成長。我常被投資人問：我們能不能持續在同店成長的基礎上再成長（comp the comp），對此我們非常有信心。

There are so many merchandising opportunities that we have on the table. We can kind of go store by store, category by category and take a look at various ways that we can continue to get better executing our 3-tiered assortment and delivering better value to the consumer. So we see a big ramp-up this year, and that will continue. And then we do see continued success beyond. But to be more clear, I was speaking very specifically about the foreseeable future being through the end of this year.

我們手上有非常多商品面的機會。我們可以幾乎逐店、逐品類地檢視各種方式，持續把我們的三層級（3-tiered）商品組合執行得更好，並為消費者提供更佳的價值。因此我們看到今年會有明顯的加速成長，而且這種動能會延續。我們也確實看到在更長期仍能持續成功。不過更明確地說，我剛才非常具體地指的是「可預見的未來」為今年年底之前。

Jeremy Hamblin, Craig-Hallum Capital Group.

Jeremy Hamblin，Craig-Hallum Capital Group。

On the strength of the business. So as a follow-up question in terms of you noted men's category very strong, children's very strong, women's accessories, footwear. In terms of thinking about where you see the biggest opportunities, not just the remainder of '26, but as we get into '27, what are the categories where you feel that you can really attack and improve? And what are the drivers of that? Is it more consistency of the merchandise?

關於業務的強勁表現。作為追問，你提到男裝品類非常強、童裝非常強，女裝配件、鞋類也很強。就你們認為最大的機會而言，不只是 2026 年剩餘時間，而是進入 2027 年後，你們覺得哪些品類是可以真正加大力道、提升改善的？其驅動因素是什麼？是商品一致性更高嗎？

Is it more national brands or kind of closeout off-price deals? Any color you might be able to share in terms of the merchandising strategy?

是更多國民品牌（national brands），還是更多清倉的折扣（closeout off-price）交易？在商品策略方面，你能否分享一些看法？

Yeah, for sure. We have done a good deal of analytics to really kind of think about what is the long-term opportunity for store productivity and which categories inside of our box really have an opportunity to provide outsized growth along that continuum. And you can kind of go through literally department by department and find significant opportunity across the board. For example, I called out our shoe department who has done a nice job the last two quarters, very pleased with their results. And they're at the very beginning, I think if the team around the table we're just getting started.

是的，當然可以。我們做了大量分析，去思考門市生產力的長期機會是什麼，以及在我們店內（box）哪些品類沿著那條成長曲線有機會帶來超額成長。你幾乎可以逐部門檢視，並在各方面都找到顯著機會。舉例來說，我特別提到我們的鞋類部門，過去兩個季度表現不錯，我對他們的成果非常滿意。而且他們才剛起步；我想如果你問在座的團隊，我們其實才正要開始。

We actually see a path there to probably more than double that department over time. And we've got quite a bit of work to do to get that done, but there's certainly significant growth there. And I can kind of go around the store and do that same sort of thing. But I would also step back and say that the other area of growth that's probably the most significant. It's just more broadly appealing to our higher income consumers.

我們確實看到一條路徑，隨著時間推進，該部門很可能會成長到超過目前的兩倍。我們還有相當多的工作要做才能達成，但那裡確實有顯著的成長空間。我也可以在店內各個區域用同樣的方式逐一說明。不過我也想退一步說，另一個可能最重要的成長領域，是它對我們較高收入消費者更具廣泛吸引力。

So they've been responding extremely well. And as we continue to reposition fashion and trend, we're getting good response. You might remember in Q4 last year, we launched young men's trend, highly successful and has continued into today, and we're just beginning to kind of understand how large that business can be. There's a significant opportunity there just to continue to mature what is a fairly new business for us. The same is true in our women's division, as I mentioned briefly on the call, we're just launching some trend.

因此他們的反應非常好。隨著我們持續重新定位時尚與趨勢，我們獲得了良好回饋。你可能還記得去年第四季我們推出了年輕男裝趨勢系列，非常成功並延續至今，而我們才剛開始理解那個業務規模可以有多大。那裡有很大的機會，讓我們持續把這個對我們而言仍相當新的業務做得更成熟。女裝部門也是如此，正如我在電話會議中簡要提到的，我們正要推出一些趨勢商品。

I'm very excited about the teams work for Q3. We've looked at it. The styles are right on, the trends are right on. We're making some different investments there. And there'll be a little bit of a breaking out moment, I think, for our women's fashion team.

我對團隊在第三季的工作非常興奮。我們已經看過了，款式很到位、趨勢也很到位。我們在那裡做了一些不同的投資。我認為，對我們女裝時尚團隊而言，將會有一個小小的突破時刻。

And then complementary to that, right, behind that, we're just exploring the implementation and now ultimately, the expansion of missy category of product. And I don't mean to take a the entire call going through here, but there's the point here is that there's a lot of significant opportunity just getting better doing what we're doing in our 3-tiered strategy, good, better, best around the store. And I speak from time to time about extreme value, and I'd like to talk about it because it's fun to talk about. But the reality is it's actually the icing on the cake for us. That's the stuff that drives the excitement, the treasure hunt and is really kind of compelling.

接著作為互補，在其後方，我們正在探索導入，並最終擴大 missy 類別的商品。我不想把整場電話會議都用來逐一說明，但重點是：在我們店內「好、更好、最好」的三層策略上，只要把我們正在做的事情做得更好，就有很多顯著的機會。我不時會談到「極致價值」（extreme value），我也喜歡談，因為很有趣。但現實是，對我們而言那其實是錦上添花。那類商品能帶動興奮感、尋寶感，確實很有吸引力。

It will drive traffic for us. But we're not reliant on that as our growth engine. That's complementary to our overall core merchandising strategy.

它會為我們帶來人流。但我們並不依賴它作為成長引擎。它是我們整體核心商品策略的補充。

Got it. And then switching gears to talk about unit growth. So you're starting to really exercise that muscle accelerating to mid-single digit and potentially beyond as we get into '27. I wanted to understand the cadence of openings. You opened 2 in Q1.

了解。接著換個話題談談店數成長。你們開始真正運用那個能力，把增速提升到中個位數，並且在進入 2027 年時可能更高。我想了解開店節奏。你們在第一季開了 2 家。

How should we be thinking about the remainder of the year? And then as you get into a more consistent unit growth algorithm, how should we be thinking about unit the timing of unit openings throughout the year?

今年剩下的時間我們應該怎麼看？另外，當你們進入更一致的店數成長模型時，我們應該如何看待一年之中各時點的開店時間安排？

Yeah. Perfect. I'll talk a little bit about the last part of your question, and I'll ask Heather to kind of fill in on the balance of 2026 for you. But how we're thinking about unit growth going forward, we're going to put our new store cycle on 3 cycles a year. Our goal here is to kind of open new stores up into peak periods so that we have our best foot forward in merchandising, we can invite new customers in and really kind of get the new stores off to a good start.

是的。很好。我先談你問題的後半段，然後請 Heather 幫你補充 2026 年剩餘期間的部分。就我們對未來店數成長的思考而言，我們會把新店開幕週期設定為一年 3 個週期。我們的目標是把新店開在旺季前，讓我們在商品陳列上能以最佳狀態出發，邀請新客進店，並真正讓新店有一個好的起步。

And so in our model, that would mean we're going to open up a block of stores in February in advance of the tax period. We're going to open up a block of stores in the summer, mostly mid-July in advance of back-to-school. And then we're going to open up again another block of stores in October in advance of going into holiday. And those 3 opening cycles will allow us to, a, number one, improve our execution and discipline of opening new stores. Secondarily, it will allow us to make sure that when we open up a store that we have our very best foot forward on new product going into a peak season.

因此在我們的模型中，這表示我們會在 2 月、報稅季前開一批店；夏季、主要在 7 月中旬、返校季前再開一批；然後在 10 月、進入假期旺季前再開另一批。這三個開店週期將使我們：第一，提升新店開幕的執行力與紀律；第二，確保我們開店時能以最好的新品狀態迎接旺季。

And we believe that we can use that as a springboard then to mature those stores at a much more rapid rate. In 2026, we're just getting started, obviously. So our opening cadence is a little bit irregular in 2026. I would not use that as a proxy. 2027 will be and beyond is what I just described.

我們相信，接著可以把這當作跳板，以更快的速度讓這些門店成熟。2026 年我們顯然才剛起步，所以 2026 年的開店節奏會有點不規則。我不會把它當作參考。2027 年及之後會如我剛才所描述。

So Heather, would you be able to fill in the blanks there for Jeremy relative to the remainder of the year opening cadence?

所以 Heather，你能否就今年剩餘時間的開店節奏，替 Jeremy 補上空白？

For sure. So we did the 2 in February and for Texas. We're thinking 3 to 5 in July period and then the balance in October this year. So again, that speaks to Ken's 2026 is not what we consider kind of "normal" for go-forward periods, but that's us getting our legs under us.

當然可以。我們在 2 月於德州開了 2 家。我們預計在 7 月期間開 3 到 5 家，然後今年其餘的會在 10 月開出。因此，這也呼應 Ken 所說的：2026 年並不是我們認為未來期間的「正常」節奏，而是我們正在把基礎打穩。

Great. That's helpful. And if I could just sneak one more in, just on some of the margin color. So you noted the fuel surcharges that we're seeing across the industry. Can you speak a little bit to your inventory shrink performance?

很好，這很有幫助。如果我可以再塞一個問題，關於毛利率的一些補充說明。你提到我們在全產業都看到燃油附加費。你能談談你們的庫存損耗（shrink）表現嗎？

And then given the really strong comps you're doing and comping the comp, can you give us some color on incentive compensation and whether or not accrual for that also went up for the year given the strong performance?

另外，考量你們同店表現非常強、而且是在高基期上再成長，你能否補充一下獎勵性薪酬（incentive compensation），以及在強勁表現下，今年相關的應計是否也提高了？

Yes. Ken, I'll grab the mic, if you don't mind. So two things. I'll start with the gross margin question. No doubt, fuel surcharges were not in our initial guide, certainly an industry issue.

可以。Ken，如果你不介意，我來回答。兩點。我先從毛利率問題開始。毫無疑問，燃油附加費不在我們最初的指引之中，這確實是產業性的問題。

We're not alone that caused our change in our outlook for gross margin from an expansion of 100 basis points to our updated guide, and that is entirely due to those fuel surcharges, okay? So we're seeing positive movement as expected from both markdowns and shrink. Those are the tailwinds I spoke about in my script. And then the offset is these fuel surcharges. So shrink is getting better, markdown is getting better because of the investments that we've made, and you've heard us speak about quite a bit in these calls about AI-based allocation systems, AI-based camera systems.

我們並不是唯一受到影響的公司；這也導致我們把毛利率展望從擴張 100 個基點調整為更新後的指引，而這完全是因為燃油附加費，好嗎？因此，我們如預期看到來自折價（markdowns）與損耗（shrink）的正向改善，這就是我在講稿中提到的順風。然後抵銷因素就是燃油附加費。損耗在改善、折價在改善，這得益於我們所做的投資；你也在這些電話會議中多次聽我們談到以 AI 為基礎的配貨系統、以 AI 為基礎的攝影機系統。

Both of those are driving goodness in the gross margin line. But fuel surcharges are real. And as I said, we expect that to continue for the balance of the year, and it's all incorporated in the guide. And then your second question, Jeremy, I'm sorry.

這兩者都在推動毛利率項目的改善。但燃油附加費是真實存在的。而且如我所說，我們預期這會在今年剩餘期間持續，並且已全部納入指引之中。至於你的第二個問題，Jeremy，不好意思。

On incentive comp, given the strong comp performance and profitability?

關於獎勵性薪酬，考量強勁的同店表現與獲利能力？

Yeah, we did something a little bit different this year, and we adjusted the incentive comp accrual in quarter one. You'll recall last year, we were chasing quite a bit throughout the year, and it caused catch-up accrual adjustments. So we decided we were going to take a hard look at it in the first quarter, which is much earlier than usual. So yes, we did adjust up the incentive comp accrual. We were at 100% when we started the year.

是的，我們今年做了一點不同的作法，我們在第一季就調整了獎勵性薪酬的應計。你會記得去年我們在全年期間一直在追趕，因此造成追溯補提的應計調整。所以我們決定在第一季就仔細檢視，這比以往早得多。因此，是的，我們確實上調了獎勵性薪酬應計。我們在年初是以 100% 開始。

Right now, we're at about 12% not mad about that, and I'm sure the whole team is pretty happy about that, too.

目前大約在 12%。我們對此並不不滿，我相信整個團隊也都對此相當高興。

There are no further questions at this time. I would like to turn the floor back over to Ken for closing remarks.

目前沒有其他問題。我想把時間交回給 Ken 作結語。

All right. Well, thank you again, everyone, for joining us for our call. We appreciate your continued support of our brand. Look forward to talking to you next quarter. Thank you.

好的。再次感謝各位參加我們的電話會議。我們感謝你們持續支持我們的品牌。期待下個季度再與各位交流。謝謝。

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

謝謝。今天的會議到此結束。您現在可以中斷連線，並感謝您的參與。