Duluth Holdings Inc (DLTH) 2022 Q4 法說會逐字稿

Good day, and welcome to the Duluth Holdings Fourth Quarter 2022 Earnings Conference Call.

美好的一天，歡迎來到德盧斯控股公司 2022 年第四季度收益電話會議。

(Operator Instructions)

（操作員說明）

Please note today's event is being recorded. I would now like to turn the conference over to Nitza McKee. Please go ahead.

請注意今天的活動正在錄製中。我現在想將會議轉交給 Nitza McKee。請繼續。

Thank you, and welcome to today's call to discuss Duluth Trading's fourth quarter and full year financial results. Our earnings release, which was issued this morning, is available on our Investor Relations website at ir.duluthtrading.com under Press Releases. I'm here today with Sam Sato, President and Chief Executive Officer; and Dave Loretta, Senior Vice President and Chief Financial Officer.

謝謝，歡迎來到今天的電話會議，討論 Duluth Trading 的第四季度和全年財務業績。我們今天上午發布的收益報告可在我們投資者關係網站 ir.duluthtrading.com 的新聞稿下獲取。我今天和總裁兼首席執行官 Sam Sato 一起來到這裡；高級副總裁兼首席財務官 Dave Loretta。

On today's call, management will provide prepared remarks, and then we will open the call to your questions. Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified by the use of words such as estimate, anticipate, expect and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in our most recent annual report on Form 10-K and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events.

在今天的電話會議上，管理層將提供準備好的評論，然後我們將打開電話以回答您的問題。在我們開始之前，我想提醒您，今天電話會議的評論將包含前瞻性陳述，這些陳述可以通過使用諸如估計、預期、期望和類似短語等詞語來識別。就其性質而言，前瞻性陳述涉及估計、預測、目標、預測和假設，並受風險和不確定性的影響，這些風險和不確定性可能導致實際結果或結果與前瞻性陳述中表達的結果大不相同。此類風險和不確定性包括但不限於我們最近的 10-K 表格年度報告和其他適用的 SEC 文件中描述的風險和不確定性。這些前瞻性陳述僅在本次電話會議之日發表，不應作為對未來事件的預測。

And with that, I'll turn the call over to Sam Sato, President and Chief Executive Officer. Sam?

有了這個，我將把電話轉給總裁兼首席執行官 Sam Sato。薩姆？

Thank you for joining today's call. I'm pleased to share an update on our business performance and review plans for 2023 that remain aligned with our strategic objectives of evolving Duluth Trading Company as a premier lifestyle platform of sub-brands focused on building great innovative product, meeting our customers' needs in the channels they want to engage with us in. The Duluth Training Company was founded on the belief that there's got to be a better way, a better way to solve, a better way to make, a better way to be. We're on a mission to build better harder working apparel and gear that helps enable everyone from the young to the young at heart to take on life with their own 2 hands and live on terms that are uniquely their own.

感謝您參加今天的電話會議。我很高興分享我們 2023 年業務績效和審查計劃的最新情況，這些計劃與我們將 Duluth Trading Company 發展為子品牌的主要生活方式平台的戰略目標保持一致，專注於打造出色的創新產品，滿足客戶的需求在他們希望與我們合作的渠道中。德盧斯培訓公司成立的信念是必須有更好的方法，更好的解決方法，更好的製作方法，更好的方法。我們的使命是打造更好的工作服和裝備，幫助每個人（無論是年輕人還是內心年輕的人）用自己的 2 隻手開始生活，並以自己獨特的方式生活。

Our secret sauce is anchored on better brands, better innovation, better marketing and better customer experiences. Duluth Trading is a brood of sub-brands, all bonded by the belief that you can accomplish anything that you put your mind and your own 2 hands too. We have a long, colorful history of product innovation and solution-based design. We create distinctive marketing made to break through the clutter. We pride ourselves on outstanding and engaging customer experiences.

我們的秘訣在於更好的品牌、更好的創新、更好的營銷和更好的客戶體驗。 Duluth Trading 是一系列子品牌，所有品牌都相信您可以完成您的想法和您自己的 2 隻手的任何事情。我們在產品創新和基於解決方案的設計方面有著悠久而豐富多彩的歷史。我們創造獨特的營銷，以打破混亂。我們以出色且引人入勝的客戶體驗而自豪。

We remain keenly focused on growing a lifestyle platform of sub-brands with a well-established, digitally led omnichannel business. We see multiple revenue growth opportunities led through 5 of our strategic Big Dam Blueprint pillars. And we're making strategic investments to support long-term EBITDA margin expansion that are funded with operating cash flows as we have a strong balance sheet. Fiscal 2022 was a dynamic and challenging year as we all face macroeconomic uncertainty and our industry was hit head on with a dramatic shift in consumer demand behavior earlier in the year as well as continued inflationary pressures and supply chain disruption.

我們仍然專注於通過成熟的、數字化主導的全渠道業務發展子品牌的生活方式平台。我們看到了通過 5 個戰略大壩藍圖支柱引領的多個收入增長機會。我們正在進行戰略投資，以支持長期的 EBITDA 利潤率擴張，這些擴張由運營現金流提供資金，因為我們擁有強大的資產負債表。 2022 財年是充滿活力和挑戰的一年，因為我們都面臨著宏觀經濟的不確定性，我們的行業在今年早些時候受到消費者需求行為的巨大轉變以及持續的通脹壓力和供應鏈中斷的打擊。

In the face of these crosscurrents, our teams remained agile and flexible navigating the turbulent year with an unwavering focus on servicing our customers day in and day out, while controlling the areas of the business that were in our control. I'm truly grateful for the hard work and dedication across our entire organization.

面對這些逆流，我們的團隊在動蕩的一年中保持敏捷和靈活，堅定不移地專注於日復一日地為我們的客戶提供服務，同時控制我們控制的業務領域。我真的很感謝我們整個組織的辛勤工作和奉獻精神。

We ended fiscal '22 with net sales of roughly $653 million and adjusted EBITDA of $43.5 million. Although we met our most recent guidance following our mid-January business update, we are not satisfied with our financial performance for the year. That said, we're pleased with the progress made on our brand positioning and execution of our strategic playbook. The initiatives outlined in our Big Dam Blueprint reflect steps we're taking to position our business for long-term success.

截至 22 財年，我們的淨銷售額約為 6.53 億美元，調整後的 EBITDA 為 4350 萬美元。儘管我們在 1 月中旬的業務更新後達到了最新的指導，但我們對今年的財務業績並不滿意。也就是說，我們對我們在品牌定位和戰略劇本執行方面取得的進展感到滿意。我們的 Big Dam 藍圖中概述的舉措反映了我們為使我們的業務取得長期成功而採取的步驟。

Having said that, key strategic milestones we achieved in 2022 include the launch of AKHG for women's, which added a new leg of growth in our multi-brand portfolio, new and exciting product innovations, hiring of talent and sourcing and material innovation, executing the replatform of our duluthtrading.com website to the next generation of e-commerce architecture, specifically tailored for site speed and mobile usability, Development of our store of the future concept to inform layout and design elements of future new stores and remodels and the on-time and on-budget progress of a fully automated fulfillment center in Adairsville, Georgia.

話雖如此，我們在 2022 年實現的關鍵戰略里程碑包括推出女裝 AKHG，這為我們的多品牌組合增加了新的增長點、令人興奮的新產品創新、人才招聘和採購以及材料創新、執行將我們的 duluthtrading.com 網站改造成下一代電子商務架構的平台，專為網站速度和移動可用性量身定制，開發我們未來概念的商店，以告知未來新商店和改建的佈局和設計元素以及上-佐治亞州阿代爾斯維爾的全自動履行中心的時間和預算內進度。

Our plans for 2023 build on the progress of these initiatives and further advanced key elements of our strategic road map. Now to our fourth quarter results. Today, we reported net sales of $242 million, adjusted EBITDA of $20.6 million and EPS of $0.23. As we shared in our holiday sales release, a softer consumer backdrop evolved during the fourth quarter, which was exasperated by a retail sector that was over inventoried, resulting in a highly promotional environment. We were not immune to the sector-wide deep discounting and we're more promotional than we historically have been. However, with a well-managed inventory position entering the peak holiday selling season, we remained competitive but made the near-term strategic decision to limit our discounting and not chase unprofitable sales.

我們的 2023 年計劃以這些舉措的進展為基礎，並進一步推進了我們戰略路線圖的關鍵要素。現在來看我們的第四季度業績。今天，我們公佈的淨銷售額為 2.42 億美元，調整後的 EBITDA 為 2060 萬美元，每股收益為 0.23 美元。正如我們在假日銷售發布中分享的那樣，第四季度消費者背景趨於疲軟，零售業庫存過剩激怒了這種情況，導致了高度促銷的環境。我們不能倖免於全行業的大幅折扣，而且我們比以往任何時候都更有促銷力度。然而，由於管理良好的庫存狀況進入了假日銷售旺季，我們保持了競爭力，但做出了近期戰略決策來限制我們的折扣，而不是追逐無利可圖的銷售。

Our focus was on maintaining integrity of our unique product and brand stories, and although, our decision may have resulted in a lower top line outcome, we held our gross margin rate above 51%, and as we firmly believe that price integrity of our offering is critical to the long-term health of our brands and business.

我們的重點是保持我們獨特產品和品牌故事的完整性，儘管我們的決定可能導致收入較低，但我們將毛利率保持在 51% 以上，並且我們堅信我們產品的價格完整性對我們品牌和業務的長期健康發展至關重要。

As the quarter progressed, our top line trend improved with January representing the strongest month in the quarter and the improving trends have continued into the first quarter. We ended the year in a well-balanced inventory position, up 26% to last year as we made a purposeful planning decision to bring spring goods in earlier to avoid any lingering supply chain constraints, which disrupted last year's transition from winter to spring. In fact, nearly half of our inventory growth year-over-year is in spring goods.

隨著本季度的進展，我們的收入趨勢有所改善，1 月份是本季度最強勁的月份，並且這種改善趨勢一直持續到第一季度。由於我們做出了有目的的計劃決定，提前將春季商品運入，以避免任何揮之不去的供應鏈限制，這破壞了去年從冬季到春季的過渡，我們在今年年底的庫存狀況非常平衡，比去年增加了 26%。事實上，我們庫存同比增長的近一半來自春季商品。

In light of the continued macroeconomic uncertainty entering 2023, we are planning our business prudently with a focus on driving profitable growth, leaving room to chase trend shifts as well as invest in strategic growth opportunities as they arise. Our plans call for appropriate management across inventories, expenses and capital outlays that align with our 2023 sales outlook falling for flattish growth compared to last year.

鑑於進入 2023 年的宏觀經濟仍存在不確定性，我們正在審慎規劃我們的業務，重點是推動盈利增長，為追逐趨勢變化留出空間，並在出現戰略增長機會時進行投資。我們的計劃要求對庫存、費用和資本支出進行適當的管理，這與我們 2023 年的銷售前景與去年相比增長持平。

We previously shared our perspective on where Duluth can generate new legs of growth in the outdoor recreation apparel segment, where we are seeing our AKHG sub-brands succeed today. The infrastructure investments we're making now will establish a strong foundation to support a multi-brand platform on which we can scale and nurture complementary brands through acquisition. With the strength of our balance sheet, we are uniquely positioned to go on the offense when the opportunity arises to advance elements of our strategic road map.

我們之前分享了我們對德盧斯可以在戶外休閒服裝領域產生新的增長點的看法，我們看到我們的 AKHG 子品牌今天在這個領域取得了成功。我們現在正在進行的基礎設施投資將為支持多品牌平台奠定堅實的基礎，我們可以在該平台上通過收購來擴大和培育互補品牌。憑藉我們資產負債表的實力，我們處於獨特的位置，可以在有機會推進我們戰略路線圖的要素時繼續進攻。

Over the near term, we will draw on our ability to flex when needed and drive growth in our target customer with new innovative products. We are balancing the near-term focus on our existing sub-brands with the potential to add complementary brands under the Duluth Trading umbrella. To further our brand's deep connection with our customers and capture the attention of new consumers, we're focused on delivering creative and distinctive marketing that cuts through the noise of an increasingly fragmented media landscape, tells our innovation and product stories with compelling articulation of features and functions, including durability, performance and problem-solving benefits and drives broader awareness, consideration and purchase behavior.

在短期內，我們將利用我們在需要時靈活調整的能力，並通過新的創新產品推動目標客戶的增長。我們正在平衡對現有子品牌的近期關注與在 Duluth Trading 旗下增加互補品牌的潛力。為了加深我們的品牌與客戶的深度聯繫並吸引新消費者的注意力，我們專注於提供富有創意和獨特的營銷，以消除日益分散的媒體環境的噪音，通過引人注目的功能闡述我們的創新和產品故事和功能，包括耐用性、性能和解決問題的好處，並推動更廣泛的認識、考慮和購買行為。

During our 2022 peak season, our best performance came from collections that had newness, product enhancements and compelling story lines such as our women's AKHG Meltwater and Puffin and first layer collections. We were able to realize leverage in our marketing spend in the fourth quarter and finished the year with an improvement in our 12-month buyer retention rate. Building on success factors such as these gives us confidence that the underpinnings of our brand health is strong and resilient.

在我們的 2022 年旺季，我們的最佳表現來自於具有新穎性、產品改進和引人入勝的故事情節的系列，例如我們的女性 AKHG Meltwater 和 Puffin 以及第一層系列。我們能夠在第四季度實現營銷支出的槓桿作用，並在 12 個月的買家保留率方面有所改善，從而在年底結束。建立在諸如此類的成功因素之上，讓我們相信我們品牌健康的基礎是強大而有彈性的。

Turning back to the fourth quarter merchandise performance, our women's business grew 1% overall, led by improvements in our new product expansions, the launch of AKHG in the spring of 2022 and overall improvement in our inventory position. Our women's first layer category, which includes the No-Yank Tank collection was up over 40% to last year. Our bra collection, including the recently introduced Line Tamer Bonded Bra grew 10% in the quarter, driven by new innovations in fabric and design, featuring soft and seamless construction to prevent lines and bulk. With the leveraging of proven technical materials such as our Armachillo Cooling and Dang Soft fabrics, as well as adding extended sizes we are building on our reputation as the destination for comfort and function within the women's intimate segment, and we see this as a tremendous growth opportunity.

回到第四季度的商品表現，我們的女性業務總體增長了 1%，這主要得益於我們新產品擴展的改善、AKHG 在 2022 年春季的推出以及我們庫存狀況的整體改善。我們的女性第一層類別，包括 No-Yank 背心系列，比去年增長了 40% 以上。我們的文胸系列，包括最近推出的 Line Tamer Bonded 文胸，在本季度增長了 10%，這得益於面料和設計的創新，採用柔軟無縫結構以防止線條和體積增大。通過利用經過驗證的技術材料，例如我們的 Armachillo Cooling 和 Dang Soft 面料，以及增加尺寸，我們正在建立我們作為女性貼身內衣領域舒適性和功能性目的地的聲譽，我們認為這是一個巨大的增長機會。

With our customers informing our innovation design decisions, we are gaining significant recognition in this segment for unique product enhancements. Our women's AKHG apparel collection represent sizable growth opportunity for Duluth expansion into the outdoor recreation space and the new fall/winter assortment was met with great response from our customers.

隨著我們的客戶告知我們的創新設計決策，我們在該細分市場中以獨特的產品增強功能獲得了廣泛認可。我們的女式 AKHG 服裝系列代表了 Duluth 擴展到戶外休閒空間的巨大增長機會，新的秋冬系列得到了客戶的熱烈反響。

In our 2023 women's assortment, we're elevating the multiyear success we've had in the garden category with new prints and styles while launching our new No Fly Zone technology as well as expanding into new short coverall silhouettes. These seasonal lighter weight items meet the shifting needs when temperatures start to rise or rain may be in the forecast. We have also supplemented this growing business with expanded garden gear, including new products such as our Fire Hose garden tool and our Heirloom Gardening Apron just in time for Mother's Day.

在我們的 2023 女裝系列中，我們通過新的印花和款式提升我們在花園類別中取得的多年成功，同時推出我們新的禁飛區技術並擴展到新的短款連體衣款式。當氣溫開始上升或預報可能會下雨時，這些季節性較輕的物品可以滿足不斷變化的需求。我們還通過擴大園藝設備來補充這一不斷增長的業務，包括新產品，例如我們的 Fire Hose 園藝工具和我們的 Heirloom 園藝圍裙，正好趕上母親節。

Our men's apparel segment was down to last year in the fourth quarter. However, we did see pockets of strength within our core offering, including our Double Flex denim pant, which was up high teens in the quarter and the expanded offering of men's underwear sales such as Armachillo, Dang Soft and Bullpen. Our newest product release in men's underwear, Temp Tamer, also did very well as did our fit expansion within our Longtail T program. Our customers continue to love and look forward to our fun and unique designs in underwear that celebrate holiday themes such as Christmas, Valentine's Day and St. Patrick's Day. We'll be expanding this assortment this year to feature some of the most iconic wear brands.

我們的男士服裝部門在第四季度下降到去年同期水平。然而，我們確實在我們的核心產品中看到了一些優勢，包括我們的 Double Flex 牛仔褲，該產品在本季度增長了十幾歲，以及男士內衣銷售的擴大，如 Armachillo、Dang Soft 和 Bullpen。我們在男士內衣中發布的最新產品 Temp Tamer 也表現出色，我們在 Longtail T 計劃中的版型擴展也取得了很好的成績。我們的客戶繼續喜歡並期待我們有趣和獨特的內衣設計，以慶祝聖誕節、情人節和聖帕特里克節等節日主題。今年我們將擴大這一類別，以展示一些最具標誌性的服裝品牌。

The launch of our spring swim collection for men and women is underway now and expands our AKHG Lost Lake collection with greater choice to mix and match tops and bottoms all with the purpose of providing the necessary sun protection, fast-drying fabrications and stylist patterns. During the fourth quarter, we worked to find the right balance of marketing investments and media channel mix. We prioritized an increased investment to drive greater brand awareness and measurable results. Web traffic and sales on mobile devices continue to increase as a percentage of the total at 68% and 52%, respectively, both realizing a 300 basis point increase year-over-year.

我們的男士和女士春季泳裝系列現已推出，並擴展了我們的 AKHG Lost Lake 系列，提供更多混搭上衣和下裝的選擇，所有這些都旨在提供必要的防曬、快乾面料和造型師圖案。在第四季度，我們努力在營銷投資和媒體渠道組合之間找到適當的平衡點。我們優先考慮增加投資以提高品牌知名度和可衡量的結果。移動設備上的網絡流量和銷售額佔總量的百分比繼續增長，分別達到 68% 和 52%，均實現了 300 個基點的同比增長。

This trend speaks to our intentional shift to a younger target customer who are more digitally native in how and where they consume content, browse and ultimately purchase products. We also prioritized targeting new customers in store geographies with digital and streaming audio tactics that helped drive an increase in retail conversion rate of over 200 basis points. Throughout the year, we also focused on reactivation and retention of customers. Through the end of 2022, our strength in retaining customers who are not new to the brand in the prior year continued and led to a 40 basis point increase in the full year retention rate overall.

這一趨勢表明我們有意轉向更年輕的目標客戶，他們在消費內容、瀏覽和最終購買產品的方式和地點方面更加數字化。我們還通過數字和流媒體音頻策略優先瞄準商店地區的新客戶，這有助於推動零售轉化率提高 200 多個基點。全年，我們還專注於客戶的重新激活和保留。到 2022 年底，我們在留住上一年對品牌不陌生的客戶方面的優勢仍在繼續，並導致全年整體留存率提高了 40 個基點。

Equally important, new buyers from years prior to 2021 are returning at a high single-digit rate of increase year-over-year. Personalized content was a key driver of our ability to engage lapsed customers and effort we will continue to focus on. Our plans for 2023 include continued investment in high-efficiency paid social and digital advertising tactics with content that prioritizes 3 objectives. It leans into our core Duluth brand tenets of innovative products that are durable and solve problems, it fuels the continued growth and momentum of our AKHG sub-brand and it drives increased overall brand awareness.

同樣重要的是，2021 年之前幾年的新買家正以高個位數的同比增長率回歸。個性化內容是我們吸引流失客戶的關鍵驅動力，也是我們將繼續關注的重點。我們 2023 年的計劃包括繼續投資高效付費社交和數字廣告策略，其內容優先考慮 3 個目標。它依賴於我們的核心 Duluth 品牌宗旨，即耐用和解決問題的創新產品，它推動了我們 AKHG 子品牌的持續增長和勢頭，並推動了整體品牌知名度的提高。

Speaking of AKHG, more of our advertising investments will be going to grow this brand through digital video, social platforms and with outdoor influencers. We also plan to focus on buyer conversion through paid search, Google Local and Google Shopping channels as well as cross-selling Duluth shoppers during key periods via e-mail, product recommendations and new buyer welcome offers.

說到 AKHG，我們更多的廣告投資將用於通過數字視頻、社交平台和戶外影響力來發展這個品牌。我們還計劃通過付費搜索、谷歌本地和谷歌購物渠道以及在關鍵時期通過電子郵件、產品推薦和新買家歡迎優惠交叉銷售德盧斯購物者來關注買家轉化。

To support our core Duluth brand, our investments will focus on expanding brand awareness, acquiring new customers and driving growth in both our men's and women's business. To further build brand awareness, we will focus national TV and streaming investments on high-impact cable placements during high visit programming like March Madness, the new Yellow Stone Season, and Live Sports. Coordinating visibility across media channels that index extremely well with our target customer during these events creates deeper impressions and higher probability of success.

為了支持我們的核心德盧斯品牌，我們的投資將集中在擴大品牌知名度、獲得新客戶以及推動我們男裝和女裝業務的增長上。為了進一步建立品牌知名度，我們將把國家電視和流媒體投資重點放在高訪問量節目中的高影響力有線電視節目中，例如瘋狂三月、新的黃石賽季和體育直播。在這些活動期間協調跨媒體渠道的可見性，這些渠道與我們的目標客戶建立了極好的索引，可以創造更深刻的印象和更高的成功概率。

In addition, introducing video and audio retargeting of recent browsers that leverages familiar content concepts drawn from national awareness ads further reinforces reasons to buy. We also intend to build on our success utilizing investments and influencers for both our Duluth Workwear and AKHG Outdoor recreation brands.

此外，利用從國家意識廣告中提取的熟悉的內容概念，引入最近瀏覽器的視頻和音頻重定向進一步增強了購買理由。我們還打算利用我們的 Duluth Workwear 和 AKHG Outdoor 休閒品牌的投資和影響力來取得成功。

And lastly, throughout our advertising placement activity, we will undertake media consumption surveys to ensure alignment of our spend through our target customer base and rigorous brand search and SEO optimization to maximize funnel conversion. During the fourth quarter, our retail store channel made progress on several key initiatives with sales and productivity trends improving as the quarter moved through the peak selling period. Heightened selling engagement and much better inventory positions in stores helped drive an increase in the units per transaction and strong conversion. We are also pleased with our fully operational mixed cart capabilities, allowing store sales associates to add products to the customer's cart at the time of checkout for items or sizes that may not be available in the store that day.

最後，在我們的廣告投放活動中，我們將進行媒體消費調查，以確保我們的支出與我們的目標客戶群、嚴格的品牌搜索和 SEO 優化保持一致，以最大限度地提高漏斗轉化率。在第四季度，我們的零售店渠道在幾項關鍵舉措上取得了進展，隨著本季度度過銷售高峰期，銷售和生產力趨勢有所改善。銷售參與度的提高和商店庫存狀況的改善有助於推動每筆交易的單位數量增加和強勁的轉化率。我們還對我們全面運作的混合購物車功能感到滿意，允許商店銷售人員在結賬時將當天商店可能沒有的商品或尺寸添加到客戶的購物車。

Our stores also continue to support our customers' desire to buy online and pick up in store, which generates incremental purchased items on roughly 25% of BOPIS orders. Additionally, the stores serve an important and strategic role during the peak season as they fulfill a large portion of direct orders. This past peak season, the stores fulfilled close to 20% of direct sales demand during the quarter. This omnichannel functionality is critical for clearing through seasonal and clearance goods in the stores inventory, making room for the transition to the new season and allows the customers who shop with us online to purchase items that may have been stranded in the store and otherwise unavailable to them.

我們的商店還繼續支持客戶在線購買和店內提貨的願望，這在大約 25% 的 BOPIS 訂單中產生了增量購買商品。此外，這些商店在旺季發揮著重要的戰略作用，因為它們會履行大部分直接訂單。在剛剛過去的旺季，門店在本季度滿足了近 20% 的直銷需求。這種全渠道功能對於清理商店庫存中的季節性商品和清倉商品至關重要，為過渡到新季節騰出空間，並允許在我們網上購物的顧客購買可能滯留在商店中的商品，否則無法購買他們。

During 2023, we plan to continue refining and building on our omni-channel capabilities focused heavily on delivering a frictionless experience while generating more reasons to visit the stores through community outreach and special events that draw in traffic. We recently made store layout changes in 20 of our stores to expand the women's assortment, and we completed a remodel of our St. Charles, Missouri store based on customer feedback.

在 2023 年期間，我們計劃繼續改進和構建我們的全渠道功能，重點關注提供無摩擦體驗，同時通過社區外展和吸引客流的特殊活動產生更多光顧商店的理由。我們最近對 20 家門店的店面佈局進行了調整，以擴大女裝品類，並根據客戶反饋完成了密蘇里州聖查爾斯門店的改造。

The learnings from these changes are being captured and will be used to inform future new stores and remodels. At this stage, we do not expect to open any new stores in 2023 but are actively engaged in a new site selection process that we expect will give us good options to gradually expand the store base beginning in 2024. I'd like to take a moment to recognize the teams involved with our contact and fulfillment center operations. We're pleased customers reaching out to our contact center were serviced at levels above our targets. And with the investments made to speed inbound receiving, improved sortation and cross-docking and keep our retail stores in stock, our teams did an outstanding job on all fronts. We're also excited to see the progress on our new fulfillment center in Adairsville, Georgia. This center equipped with automation technology by AutoStore, will enable high-velocity fulfillment, improved productivity and faster delivery to customer.

從這些變化中吸取的教訓正在被收集起來，並將用於為未來的新店和改造提供信息。在現階段，我們不希望在 2023 年開設任何新店，但我們正在積極參與新的選址過程，我們預計這將為我們提供良好的選擇，以便從 2024 年開始逐步擴大商店基礎。我想採取表彰參與我們聯繫和履行中心運營的團隊的時刻。我們很高興聯繫我們聯絡中心的客戶獲得了高於我們目標水平的服務。通過投資加快入站收貨、改進分揀和越庫配送以及保持零售店庫存，我們的團隊在各個方面都表現出色。我們也很高興看到我們在佐治亞州阿代爾斯維爾的新運營中心取得的進展。該中心配備了 AutoStore 的自動化技術，將實現高速履行、提高生產力和更快地向客戶交付。

With the planned go-live date for Q3 of 2023, our project remains on time and on budget. Once operational, we will have the ability to shift over half of our direct order fulfillment to Adairsville for the peak season in 2023 and realized cost per unit output that is roughly half the rate of our current centers. Dave will share more in our guidance for 2023, but we expect to realize significant cost savings and a reduction in peak hiring needs this year.

隨著計劃於 2023 年第三季度上線，我們的項目仍按時按預算進行。一旦投入運營，我們將能夠在 2023 年的旺季將一半以上的直接訂單履行轉移到 Adairsville，並實現單位產出成本大約是我們當前中心的一半。 Dave 將在我們 2023 年的指導意見中分享更多信息，但我們預計今年將實現顯著的成本節約和高峰招聘需求的減少。

I'll also add that while the investment is as large as any single project we've undertaken, we are funding the roughly $50 million initiative entirely from cash from operations leaving our balance sheet strong with no bank debt. As I mentioned earlier, our strategic flexibility is intact and our ability to leverage the new infrastructure to grow our current business and for potential acquisitions is underway. We're confident about the key investments we're making to strengthen our premier lifestyle platform of sub-brands as well as with the merchandising and marketing plans we have set for 2023 to support our growth. Our plans remain aligned with our Big Dam Blueprint, which is the foundation for our long-term success and gives us the confidence that Duluth Trading Company can forge ahead.

我還要補充一點，雖然投資與我們進行的任何單個項目一樣大，但我們完全從運營現金中為大約 5000 萬美元的計劃提供資金，使我們的資產負債表穩健，沒有銀行債務。正如我之前提到的，我們的戰略靈活性完好無損，我們利用新基礎設施發展當前業務和進行潛在收購的能力正在進行中。我們對我們為加強我們首要的子品牌生活方式平台所做的關鍵投資以及我們為支持我們的增長而製定的 2023 年銷售和營銷計劃充滿信心。我們的計劃與我們的大壩藍圖保持一致，這是我們長期成功的基礎，並讓我們相信德盧斯貿易公司能夠向前邁進。

Now I'll turn the call over to Dave to provide more details on our fourth quarter results and discussion of our outlook for fiscal 2023.

現在，我將把電話轉給戴夫，提供有關我們第四季度業績的更多詳細信息，並討論我們對 2023 財年的展望。

Thanks, Sam, and good morning. On today's call, I'll start with a brief overview of our fourth quarter and full year results for 2022, then I'll conclude with commentary on our outlook and guidance for 2023. For the fourth quarter, we reported net sales of $241.8 million, down 10.7% compared to $270.8 million last year. For the full fiscal year 2022, net sales were $653.3 million and were within the range of our recent guidance. Direct channel sales were down 12% from last year in the quarter, with slightly better trends for direct volume in store markets versus nonstore markets.

謝謝，山姆，早上好。在今天的電話會議上，我將首先簡要概述我們 2022 年第四季度和全年的業績，然後我將評論我們對 2023 年的展望和指導意見。第四季度，我們報告的淨銷售額為 2.418 億美元，與去年的 2.708 億美元相比下降了 10.7%。在整個 2022 財年，淨銷售額為 6.533 億美元，在我們最近的指導範圍內。本季度直接渠道銷售額比去年下降 12%，與非商店市場相比，商店市場的直接銷售量趨勢略好。

Our retail channel was down 8.2%, but turned to positive year-over-year growth in the month of January. Traffic conversion rate in our stores increased over 200 basis points based on our stores teams engaged selling efforts and better in-stock positions. Our fourth quarter gross profit margin was 51.2% compared to 53.8% last year and reflects the higher mix of promotional and clearance sales. Additionally, to keep seasonal goods moving and minimize clearance overhang heading into 2023, we proactively took action, ending the year in a healthy position. Looking forward, we anticipate the mix of our full price versus promotional business in the first half of 2023 will be relatively similar to what we experienced in the fourth quarter with an improving trend as we progress throughout the year.

我們的零售渠道下降了 8.2%，但在 1 月份轉為同比正增長。由於我們的門店團隊致力於銷售工作和更好的庫存狀況，我們門店的客流量轉化率增加了 200 多個基點。我們第四季度的毛利率為 51.2%，而去年為 53.8%，反映了促銷和清倉銷售的更高組合。此外，為了保持季節性商品流動並儘量減少進入 2023 年的清關過剩，我們積極採取行動，以健康的狀態結束了這一年。展望未來，我們預計 2023 年上半年我們的全價與促銷業務的組合將與我們在第四季度經歷的情況相對相似，並且隨著我們全年的進步而呈現出改善的趨勢。

For the full year of 2022, our gross profit margin decreased 140 basis points to 52.6% compared to 54% last year and represents our balanced and disciplined approach to meeting customers' pricing expectations while keeping inventory clean and protecting brand integrity. Turning to expenses. SG&A for the fourth quarter decreased 7% to $113.2 million or 46.8% of sales compared to $121.4 million last year or 44.9%. This included a decrease of $4.3 million in selling expenses, $4.1 million in advertising and marketing expenses, and an increase of $200,000 in general and administrative expenses.

2022 年全年，我們的毛利率從去年的 54% 下降 140 個基點至 52.6%，這代表了我們在保持庫存清潔和保護品牌完整性的同時滿足客戶定價預期的平衡和嚴謹的方法。談到開支。第四季度的 SG&A 下降 7% 至 1.132 億美元，佔銷售額的 46.8%，而去年同期為 1.214 億美元，佔銷售額的 44.9%。其中包括銷售費用減少 430 萬美元、廣告和營銷費用減少 410 萬美元以及一般和管理費用增加 200,000 美元。

Selling expenses as a percentage of net sales increased 10 basis points to 16.5% compared to 16.4% last year, and was the result of a slightly greater mix of store sales versus direct sales during the quarter. We controlled our variable expense as well during the quarter with our store and fulfillment center operations delivering labor efficiencies. Advertising and marketing costs were $29.8 million in the quarter compared to $33.9 million last year, and as a percent of sales decreased 20 basis points to 12.3% compared to 12.5% last year.

銷售費用占淨銷售額的百分比從去年的 16.4% 上升 10 個基點至 16.5%，這是本季度商店銷售與直銷的組合略有增加的結果。我們在本季度也控制了我們的可變費用，我們的商店和履行中心運營提供了勞動力效率。本季度廣告和營銷成本為 2980 萬美元，而去年為 3390 萬美元，佔銷售額的百分比下降 20 個基點至 12.3%，而去年為 12.5%。

An increase in the paid digital media channels was offset by a reduction in national TV placements as we pulled portions of that awareness spend into the third quarter to align with more normalized inventory flow this year. As Sam noted, the progress we're making on retaining and reactivating lapsed customers is being driven by our ability to personalize content and deliver targeted reengagement offers. General and administrative expenses during the fourth quarter were $43.4 million or 18% of net sales compared to $43.2 million or 16% last year.

付費數字媒體渠道的增長被全國電視投放的減少所抵消，因為我們將部分意識支出拉到了第三季度，以與今年更加正常化的庫存流保持一致。正如 Sam 指出的那樣，我們在保留和重新激活流失客戶方面取得的進展是由我們個性化內容和提供有針對性的重新參與優惠的能力推動的。第四季度的一般和管理費用為 4340 萬美元，占淨銷售額的 18%，而去年同期為 4320 萬美元，占淨銷售額的 16%。

Increased depreciation related to the technology and logistics projects as well as fixed costs for the new Southeast fulfillment center scheduled to go live in the third quarter were largely offset by lower personnel costs. As of today, our store count stands at 65 with currently no planned store openings in 2023. We continue to evaluate potential sites and leverage the learnings from our recent store remodel test and expanded women's floor plan in roughly 20 stores to inform our store of the future format for new store openings and remodels.

與技術和物流項目相關的折舊增加以及計劃於第三季度投入使用的新東南運營中心的固定成本在很大程度上被較低的人員成本所抵消。截至今天，我們的門店數量為 65 家，目前沒有計劃在 2023 年開設門店。我們繼續評估潛在地點，並利用我們最近的門店改造測試中的經驗教訓，並在大約 20 家門店擴大了女裝平面圖，以告知我們的門店新店開業和改造的未來格式。

Adjusted EBITDA for the fourth quarter was $20.6 million or 8.5% of sales and $43.5 million or 6.7% of net sales for the full year in 2022. Our net income for the fourth quarter was $7.5 million or $0.23 per diluted share and $2.2 million or $0.07 per diluted share for the full year, which is within our current range of guidance.

第四季度調整後的 EBITDA 為 2060 萬美元，佔銷售額的 8.5% 和 4350 萬美元，佔 2022 年全年淨銷售額的 6.7%。我們第四季度的淨收入為 750 萬美元，即攤薄後每股收益 0.23 美元，以及 220 萬美元，即 0.07 美元全年攤薄後的每股收益，這在我們目前的指導範圍內。

Moving on to the balance sheet. We ended the quarter with net working capital of $107.9 million, including $45.5 million in cash and zero outstanding on our $200 million line of credit. Our cash balance is down $31.5 million from last year end due to our decision to receive inventory in earlier before the end of the year and avoid the gap and seasonal transition receipts from last year's supply chain disruptions, plus an increase in our capital outlay for the new Southeast fulfillment center.

轉到資產負債表。本季度結束時，我們的淨營運資金為 1.079 億美元，其中包括 4550 萬美元現金和 2 億美元信貸額度中的零餘額。我們的現金餘額比去年年底減少了 3150 萬美元，原因是我們決定在年底前提前接收庫存，避免去年供應鏈中斷造成的缺口和季節性過渡收入，加上我們的資本支出增加新的東南運營中心。

I'll provide more shortly regarding our financial outlook for 2023. But I do want to share our objective that we expect our cash from operations will fund the increase in our capital expenditures in 2023, and we expect to be flat to slightly up in our cash balance at the end of fiscal 2023. Our inventory balance ended the year 26% up from last year and ends in a healthier position with more timely receipt of both year-round and seasonal goods. In fact, roughly 45% of our spring season goods were received by the end of January versus less than 10% last year. Our current balance of clearance goods is also in a good spot for this time of year. Our capital expenditures for the year were $31.5 million, including the cost of software implementation and are reduced from our previous guidance of $35 million.

我將在短期內提供更多有關 2023 年財務前景的信息。但我確實想分享我們的目標，即我們預計我們的運營現金將為 2023 年資本支出的增加提供資金，並且我們預計我們的支出將持平或略有上升2023 財年末的現金餘額。我們的庫存餘額在年底比去年增加了 26%，並且由於更及時地收到全年和季節性商品而處於更健康的狀態。事實上，到 1 月底我們收到了大約 45% 的春季商品，而去年這一比例不到 10%。我們目前的清關貨物餘額在每年的這個時候也處於良好狀態。我們今年的資本支出為 3150 萬美元，包括軟件實施成本，低於我們之前 3500 萬美元的指導。

We reprioritized our technology investments to focus on the web platform upgrade, warehouse management systems in connection with the expansion of our fulfillment network and the go-live of first phases of our merchandise planning system. Our capital expenditure plan of $55 million in 2023 will largely be focused on the completion of the Southeast fulfillment center which is progressing well and on schedule to be fully operational in the third quarter.

我們重新調整了技術投資的優先順序，將重點放在網絡平台升級、與我們的履行網絡擴展相關的倉庫管理系統以及我們商品規劃系統第一階段的上線。我們 2023 年 5500 萬美元的資本支出計劃將主要集中在完成東南運營中心，該中心進展順利，並按計劃在第三季度全面投入運營。

We expect that meaningful cost savings will be realized once the new automated facility is up and running from lower cost per unit processed lower outbound freight expenses for more efficient packaging and lower parcel weights, and we'll be reaching a greater portion of our direct customer base in 3 days or less, enhancing the service and speed of delivery.

我們預計，一旦新的自動化設施啟動並運行，將實現有意義的成本節約，降低每單位處理成本，降低出境運費，提高包裝效率，降低包裹重量，我們將接觸到更多的直接客戶在 3 天或更短時間內建立基地，提高服務和交貨速度。

Our multiyear technology road map to support strategic growth objectives will address critical foundational needs for scale. We are focused on replatforming our data systems to drive foundational improvements across our technology investments and completing the WMS upgrades across our logistics network.

我們支持戰略增長目標的多年技術路線圖將解決關鍵的規模基礎需求。我們專注於重新構建我們的數據系統平台，以推動我們技術投資的基礎改進，並完成我們物流網絡的 WMS 升級。

Moving to our outlook for fiscal year 2023. Our full year net sales guidance is $645 million to $660 million, with the first half of the year slightly down to flat compared to prior year and the back half flat to slightly up. We expect sales trends between our direct channel and retail channel to be similar, reflecting no change in the number of store locations and our omnichannel marketing approach designed to drive traffic in both channels.

轉向我們對 2023 財年的展望。我們的全年淨銷售額指引為 6.45 億美元至 6.6 億美元，上半年與上年相比略有下降或持平，下半年則持平或略有上升。我們預計我們的直接渠道和零售渠道之間的銷售趨勢相似，這反映出商店位置的數量沒有變化，我們的全渠道營銷方法旨在推動兩個渠道的流量。

We expect gross profit margin for the full year to be up 20 to 40 basis points with the gains beginning in the second quarter. Advertising expenses are planned at roughly 10.5% of sales for 2023 and leverage being gained throughout the year with flexible adjustments between traditional linear TV, streaming, audio and digital media. In aggregate, these media channels comprise roughly 80% of our advertising and marketing expenses.

我們預計全年毛利率將上升 20 至 40 個基點，並從第二季度開始增長。廣告費用計劃在 2023 年佔銷售額的 10.5% 左右，並通過在傳統線性電視、流媒體、音頻和數字媒體之間進行靈活調整，在全年獲得槓桿作用。總體而言，這些媒體渠道約占我們廣告和營銷費用的 80%。

Selling expenses comprised of outbound shipping costs and hourly labor in the stores, customer service and the fulfillment operations are expected to leverage over 2022 in the range of 10 to 30 basis points as a percentage of total sales. Our general and administrative expenses will increase in 2023, primarily from incremental depreciation on technology and logistics investments, plus the fixed costs related to the new Southeast fulfillment center and additional personnel costs. As a percentage of sales, our general and administrative expenses are expected to increase and is reflected in the total SG&A expenses deleveraging up to 50 basis points.

預計到 2022 年，銷售費用（包括出境運輸成本和商店的小時工、客戶服務和履行業務）佔總銷售額的比例將達到 10 至 30 個基點。我們的一般和行政費用將在 2023 年增加，主要來自技術和物流投資的增量折舊，加上與新東南運營中心相關的固定成本和額外的人員成本。作為銷售額的百分比，我們的一般和行政費用預計會增加，並反映在去槓桿化高達 50 個基點的 SG&A 總費用中。

Our interest expense, which includes cost of borrowings on our line of credit as well as imputed interest on finance lease liabilities are expected to increase $700,000 to $1.3 million year-over-year. Our depreciation and amortization expense, including software subscription and implementation costs are expected to be roughly $37 million. Our full year adjusted EBITDA guidance is $47 million to $49 million and EPS of $0.02 to $0.08. This includes estimated diluted shares of $33 million and a tax rate of 25%.

我們的利息支出，包括我們信貸額度的借款成本以及融資租賃負債的估算利息，預計將同比增加 700,000 美元至 130 萬美元。我們的折舊和攤銷費用，包括軟件訂閱和實施成本，預計約為 3700 萬美元。我們全年調整後的 EBITDA 指引為 4700 萬美元至 4900 萬美元，每股收益為 0.02 美元至 0.08 美元。這包括估計攤薄後的 3300 萬美元股份和 25% 的稅率。

In closing, we are confident that the investments we're making for the long-term and scale are balanced well given the current backdrop of consumer uncertainty. The steps taken last year to bolster our balance sheet liquidity and ongoing actions to prudently manage inventory and expenses will allow us to continue to achieve our customer-focused strategy and brand positioning objectives.

最後，我們相信，鑑於當前消費者不確定性的背景，我們為長期和規模所做的投資是平衡的。去年為加強我們的資產負債表流動性而採取的措施以及為審慎管理庫存和費用而採取的持續行動將使我們能夠繼續實現以客戶為中心的戰略和品牌定位目標。

And with that, we'll open the call to questions.

有了這個，我們將開始提問。

(Operator Instructions)

（操作員說明）

Today's first question comes from Jonathan Komp at Baird.

今天的第一個問題來自 Baird 的 Jonathan Komp。

Yes. I want to ask just firstly that the recent sales trend you're seeing. Could you comment on what your full price sales look like? I think last year, you had low clearance inventory. So I just want to understand the underlying trends you're seeing? And then when you think about the back half revenue projection, could you just comment on what you need in terms of a volume or unit growth perspective improvement just given any changes in pricing? And then last year, you'll be cycling also some elevated discounting. So just curious what drivers you see supporting the back half guidance? .

是的。我想首先問一下你看到的最近的銷售趨勢。你能評論一下你的全價銷售情況嗎？我想去年，你們的清倉庫存很低。所以我只想了解您所看到的潛在趨勢？然後，當您考慮後半部分收入預測時，您是否可以根據定價的任何變化，就銷量或單位增長前景改進方面的需求發表評論？然後在去年，你也會騎自行車一些更高的折扣。所以很好奇你看到哪些驅動程序支持後半部分指導？ .

John, this is Dave. Our sales trend that we articulated here, improving coming out of the fourth quarter, still down to last year. But relative to our holiday sales not down nearly as much. So improving. And that's what's continued into the first part of the first quarter here. So -- but tied to that is really the mix of sales between full price and promotion, which continues to be in the same general direction as what we had before. We're not immune to deep discounting in this environment. And so we're going to be -- the promotional environment is driving that.

約翰，這是戴夫。我們在這裡闡明的銷售趨勢從第四季度開始有所改善，但仍低於去年。但相對於我們的假期銷售額，降幅幾乎沒有那麼大。所以改進。這就是這裡持續到第一季度第一部分的內容。所以 - 但與此相關的是全價和促銷之間的銷售組合，它繼續與我們之前的總體方向保持一致。在這種環境下，我們無法避免大幅折扣。所以我們將成為——促銷環境正在推動這一點。

But I think what we're pleased about is that inventory levels are in a good spot, only a small portion of the increase in inventory at the end of the year relates to clearance goods. Most of it is pull forward spring, a lion's share if it is women's. And so that sets us up well for not having to take aggressive pricing action, but the environment is continuing.

但我認為我們感到高興的是庫存水平處於良好狀態，年底增加的庫存中只有一小部分與清倉商品有關。大部分是 pull forward spring，如果是女款則佔很大一部分。因此，這使我們不必採取激進的定價行動，但環境仍在繼續。

Okay. That's helpful. And then maybe 1 more, just as you think about the performance of the core men's business for the Duluth brand, can you just comment on the trend you're seeing there? And if you've been able to isolate any factors that have led to some of the weakness? And then maybe just broader strategy as you talk about adding new brands to the platform over time. Why does that make sense when the core brand is not performing up to your expectations? .

好的。這很有幫助。然後也許還有 1 個，就像您考慮 Duluth 品牌的核心男裝業務的表現一樣，您能否評論一下您在那裡看到的趨勢？如果您能夠找出導致某些弱點的任何因素？然後，當您談論隨著時間的推移向平台添加新品牌時，可能只是更廣泛的戰略。當核心品牌沒有達到您的預期時，為什麼這樣做有意義？ .

Yes. Jonathan, it's Sam. So yes, men's apparel segment was challenged this last quarter. But as I said in my prepared remarks, we saw some pretty good pockets of strength, specifically with products like our Double Flex denim, which was up high teens for the quarter as well as the expansion into some new technologies within our big men's unders program was equally great. Our big program around men's woven bottoms underperformed our expectations.

是的。喬納森，是山姆。所以是的，男裝部門在上個季度受到了挑戰。但正如我在準備好的發言中所說，我們看到了一些相當不錯的實力，特別是像我們的 Double Flex 牛仔布這樣的產品，該產品在本季度增長了十幾歲，並且在我們的 big men's unders 計劃中擴展了一些新技術同樣很棒。我們圍繞男式梭織褲的大型項目的表現低於我們的預期。

But what we're really doing is shifting as trends and consumer demand shift, we're shifting our investments into some of these higher-demand items like that Duluth flex denim pant so that we start to ramp that up to meet the current demand and what we expect is going to be the future demands of the business as well as shifting our marketing initiatives to focus on some of these emerging hero products, I guess, as I would put it.

但我們真正在做的是隨著趨勢和消費者需求的轉變而轉變，我們正在將投資轉移到一些需求更高的項目上，比如 Duluth flex 牛仔褲，這樣我們就可以開始增加它以滿足當前的需求，我們期望的是業務的未來需求以及將我們的營銷計劃轉移到專注於這些新興英雄產品中，我想，正如我所說的那樣。

And then in terms of our longer-term strategy, we think that the infrastructure investments we've made and what we're making that enables our business to score -- to scale is not just about growing the current Duluth business, but it is about continuing to evolve the Duluth Trading Enterprise into a platform of sub-brands. And so we'll focus on a multitude of initiatives that help us grow long term.

然後就我們的長期戰略而言，我們認為我們已經進行的基礎設施投資以及我們正在做的事情使我們的業務能夠得分 - 規模化不僅僅是為了發展當前的德盧斯業務，而是關於繼續將德盧斯貿易企業發展成為一個子品牌平台。因此，我們將專注於幫助我們長期發展的眾多舉措。

And so near-term focus is around the Duluth Trading company business. It's around the AKHG business and holistically our women's growth. And then as we potentially see an acquisition as an opportunity for us to further our strategic road map, then we'll do that. But make no mistake, our priorities are on growing the current business, but ensuring that we're keeping an eye on the long-term opportunities for us to scale the business.

因此，近期的重點是德盧斯貿易公司的業務。它圍繞 AKHG 業務以及我們女性的整體成長。然後，當我們可能將收購視為我們進一步推進戰略路線圖的機會時，我們就會這樣做。但請不要誤會，我們的首要任務是發展當前業務，但要確保我們密切關注擴大業務規模的長期機會。

Okay. And maybe last 1 just for me, if I could. The gross margin and they move down to the low 50s in the last couple of years. Could you just comment, is there anything in the current view that's more temporary in nature from the gross margin? And then as you think about some benefits from the investments you've made and any other drivers over time. Is there any path to get back to meaningfully higher gross margin more in the mid- to high 50s as we think about the margin potential for the business over time? .

好的。如果可以的話，也許最後 1 只適合我。在過去的幾年裡，毛利率和他們下降到 50 年代的低點。您能否評論一下，從毛利率來看，目前的觀點中有什麼更暫時的嗎？然後當你考慮你所做的投資的一些好處以及隨著時間的推移任何其他驅動因素。當我們考慮隨著時間的推移業務的利潤潛力時，是否有任何途徑可以在 50 年代中期到更高的水平上恢復到有意義的更高毛利率？ .

Yes. Jonathan, this is Sam again. I'll address the kind of future viewpoint. So as we invest in different elements of our infrastructure as well as our organization, and I'll remind you of 2 specifically. So the investment in Adairsville into this fully automated fulfillment center, we believe we'll drive meaningful cost efficiencies. In fact, once operational, the fulfillment center in the Southeast on a CPU basis, will be close to half of what it is in the current network. And so in addition to speed to market and accuracy, we're going to get much more cost efficient around the input cost to flow through merchandise, both to our retail stores and our consumers. So that leads to some improved flow-through.

是的。喬納森，這又是山姆。我將討論未來的觀點。因此，當我們投資於基礎設施和組織的不同元素時，我會特別提醒您 2。因此，在 Adairsville 投資這個全自動履行中心，我們相信我們將推動有意義的成本效率。事實上，一旦投入運營，以 CPU 為基礎的東南部履行中心將接近當前網絡中的一半。因此，除了加快上市速度和準確性之外，我們還將在商品流通的投入成本方面獲得更高的成本效益，包括我們的零售店和我們的消費者。因此，這導致了一些改進的流程。

And then at a higher level, we recently announced the hiring of an executive to oversee our sourcing and materials innovation. And we believe that, that starts to open up the door for us to expand our IMUs as we move forward. And so as we think about that group and what they'll be able to deliver we really think that we'll start to see some of that improvement as we head into 2024.

然後在更高的層面上，我們最近宣布聘請一位高管來監督我們的採購和材料創新。我們相信，隨著我們的前進，這開始為我們擴大 IMU 敞開大門。因此，當我們考慮這個團隊以及他們將能夠提供什麼時，我們真的認為我們將在進入 2024 年時開始看到一些改進。

Okay. That's helpful. And certainly, would welcome any quantification of some of those benefits as you get more color over time, just given the level of gross margin that would be appropriate for a premium direct brand, so any color over time there would be helpful. But that's it for me today.

好的。這很有幫助。當然，隨著時間的推移你會獲得更多的顏色，歡迎對其中一些好處進行任何量化，只要考慮到適合優質直銷品牌的毛利率水平，那麼隨著時間的推移任何顏色都會有所幫助。但今天對我來說就是這樣。

And our next question then comes from Jim Duffy at Stifel.

然後我們的下一個問題來自 Stifel 的 Jim Duffy。

Two lines of questioning for me guys. The first, more strategic. So to return to growth, you either need more customers or more velocities in dollar per customer, which of those 2 do you think is more important for Duluth to get back on a growth path? And how are you kind of managing the business accordingly?

兩行問題對我來說。第一，更具戰略性。因此，要恢復增長，您要么需要更多的客戶，要么需要更快的每位客戶的美元速度，您認為這兩個中哪一個對於德盧斯重回增長道路更為重要？您如何相應地管理業務？

Yes, this is Sam. I don't know that I would say either is more important than the other. I think they're equally important. And again, I would point you to some of my prepared remarks around our focus certainly what it has been and where we're going to continue to drive focus through our marketing and advertising initiatives. A big chunk of that is on opening up broader brand awareness. And certainly, I spoke a lot about our focus and success last year and what we'll continue to focus on this year in terms of reengagement and retention. So the new customer and maintaining our current customers are really important for sure. .

是的，這是山姆。我不知道我會說哪個比另一個更重要。我認為它們同樣重要。再一次，我會向你指出我準備好的關於我們的重點的一些評論，當然它已經是什麼，以及我們將通過我們的營銷和廣告計劃繼續推動重點的地方。其中很大一部分是為了擴大品牌知名度。當然，我談了很多關於我們去年的重點和成功，以及我們今年將在重新參與和保留方面繼續關注的內容。因此，新客戶和維護現有客戶確實非常重要。 .

And then your second point was on...

然後你的第二點是......

No, that was it. No, you've covered it. Second question was more related to cost, but I do have a follow-up on just the multi-branded strategy as it relates to more customers or dollars per customer. Sam, is -- how do you ensure that with the media mix spread across multiple brands, that's not spreading the dollars too thin?

不，就是這樣。不，你已經覆蓋了它。第二個問題與成本更相關，但我確實對多品牌戰略進行了跟進，因為它與更多客戶或每位客戶的美元有關。山姆，是——你如何確保媒體組合分佈在多個品牌上，這不會分散美元？

Yes. So it's kind of a combination of things. What we're doing is we're being really, really strategic about where we place those dollars. So at a high level, as we look at ensuring that we're investing against the growth of each of the brands in an increasingly fragmented marketplace, more and more of our consumer insight research is telling us where we're getting the highest engagement from our target customer, and we're really going to place bets there. And that means that there's going to be some channels that may be important to our customer, but they're lower on the priority list in terms of how much they engage or how much content they consume there. And so we're going to just -- we're going to start from the top in terms of where we get the biggest visibility and eyeballs, and we're going to place bigger bets there.

是的。所以這是一種組合。我們正在做的是，我們在放置這些美元的位置上非常非常具有戰略意義。因此，在更高的層面上，當我們著眼於確保我們在日益分散的市場中針對每個品牌的增長進行投資時，我們越來越多的消費者洞察研究告訴我們我們從哪裡獲得最高參與度我們的目標客戶，我們真的要在那裡下注。這意味著會有一些渠道對我們的客戶來說可能很重要，但就他們參與的程度或他們在那裡消費的內容而言，它們在優先級列表中的位置較低。因此，我們將 - 我們將從獲得最大知名度和眼球的地方開始，我們將在那裡下更大的賭注。

Okay. And then, Dave, this one for you. It's on Adairsville and the cost savings opportunity, $50 million investment, a big number. Can you talk about how you get to comfort on the ROI for that? You talked about the cost per unit half the rate of what it is currently. Can you help us isolate what that cost component translates to in benefit to margin? .

好的。然後，戴夫，這個給你。它在 Adairsville 和節省成本的機會，5000 萬美元的投資，一個很大的數字。你能談談你是如何對投資回報率感到滿意的嗎？你談到了單位成本是目前的一半。您能否幫助我們分離出成本構成對利潤率的影響？ .

Yes, sure, Jim. The cost savings on cost per unit as part of the pick pack and ship process is going to be very compelling. And as we're planned to get volume up to almost half of our volume of direct outbound orders in the back half of this year that will translate into savings. That's reflected in the 10 to 30 basis points of selling expense margin for the year. Now heading forward, we certainly expect that to continue and get the full year benefit and it will continue to be refined. But that 10 to 30 basis points easily would be slightly larger next year in '24 and ongoing help offset cost increases in fulfillment operations from wage rates et cetera.

是的，當然，吉姆。作為揀選包裝和運輸過程的一部分，單位成本的成本節約將非常引人注目。由於我們計劃在今年下半年將數量提高到直接出境訂單量的近一半，這將轉化為節省。這反映在當年 10 到 30 個基點的銷售費用利潤率上。現在向前邁進，我們當然希望這種情況能繼續下去並獲得全年收益，並將繼續完善。但這 10 到 30 個基點很容易在明年的 24 年略微增加，並且持續幫助抵消工資率等方面的履行業務成本增加。

So we're seeing this as our first test in automating the fulfillment outbound facilities and see that, that's going to be a meaningful improvement in the P&L cost structure for us going forward.

因此，我們將此視為我們在自動化履行出站設施方面的第一個測試，並且看到，這將對我們未來的損益成本結構進行有意義的改進。

Okay. So we should think about that fulfillment expense just continuing to lever in '24 and '25 based on benefits from Adairsville? .

好的。因此，我們應該考慮根據 Adairsville 的收益在 24 和 25 年繼續增加履行費用嗎？ .

Certainly, in '24, we'll see incremental increase in '25. We will see. That's a bit far out, and we haven't given much more color around that period of time.

當然，在 24 年，我們將看到 25 年的增量增長。我們會看到。那有點太遠了，在那段時間我們沒有給出更多的顏色。

And our next question today comes from Janine Stichter with BTIG.

我們今天的下一個問題來自 BTIG 的 Janine Stichter。

I was hoping you could comment in light of just taking a pause on opening new stores this year, any updated thoughts on expanding wholesale? Just curious how those tests are going. And then I was wondering if there's anything else you can share on the initial earnings from the 20 stores that you've reconfigured?

我希望你能就今年暫停開設新店發表評論，關於擴大批發的最新想法是什麼？只是好奇這些測試是如何進行的。然後我想知道關於您重新配置的 20 家商店的初始收益，您是否還有其他可以分享的？

Janine, and welcome to the call. Thanks for the question. This is Sam. Yes, as we've said on previous calls, the physical stores really important piece of our omnichannel strategy for a number of different reasons. And we want to make sure that we're doing the right level of deep dives around the consumer, where importantly, our brand would resonate from a physical store perspective. So we're in the middle of a pretty intense site selection process, and we think we've got a few locations potentially nailed down for '24.

珍妮，歡迎來電。謝謝你的問題。這是山姆。是的，正如我們在之前的電話會議上所說，出於多種不同的原因，實體店確實是我們全渠道戰略的重要組成部分。我們希望確保我們圍繞消費者進行適當程度的深入研究，重要的是，我們的品牌會從實體店的角度引起共鳴。所以我們正處於一個非常緊張的選址過程中，我們認為我們已經確定了一些可能在 24 年舉行的地點。

But the pause was really just about us as we came out of COVID and making sure that we kind of reset ourselves in terms of our priorities and where we are going to invest in the business. And while, again, stores really, really important to our long-term omnichannel strategy, we had some of the priorities like the automated fulfillment center that we thought made more sense for us to tackle ahead of opening new stores. But our plan is to gradually expand the store base as we move into '24 and beyond.

但是，當我們從 COVID 中走出來並確保我們在我們的優先事項和我們將投資於業務的地方方面重新設定自己時，暫停真的只是關於我們。同樣，雖然商店對我們的長期全渠道戰略非常非常重要，但我們有一些優先事項，例如我們認為在開設新商店之前解決自動化履行中心對我們來說更有意義。但我們的計劃是隨著我們進入 24 世紀及以後，逐步擴大商店基礎。

Great. And any update on how wholesale is performing? .

偉大的。關於批發表現如何的任何更新？ .

Yes. Wholesale, we've got a small test with Tractor Supply, and that continues as we learn more and they learn more and give us good insights. We're adjusting assortments and quantities and store base and whatnot. And so that's going well. Wholesale, we see as clearly an opportunity for us. I think that, that's a little bit down the line as it requires some enablement. The DC in the Southeast will be one of those things that allow us, I think, to potentially be in a better position to do that. And then there's a whole organizational investment that we've got to make. And again, while we see that as an opportunity, it's a little bit lower on the priority list just as we're building other infrastructure capabilities to drive and scale the current business and any other potential business we might consider adding.

是的。批發，我們對 Tractor Supply 進行了一次小測試，隨著我們了解更多，他們了解更多並給我們提供良好的見解，這種測試仍在繼續。我們正在調整分類和數量以及商店基礎等等。所以一切進展順利。批發，我們清楚地看到了我們的機會。我認為，這有點落後，因為它需要一些支持。我認為，東南部的 DC 將成為讓我們能夠更好地做到這一點的事情之一。然後是我們必須進行的整個組織投資。再一次，雖然我們將其視為一個機會，但它在優先級列表中的位置略低，因為我們正在構建其他基礎設施功能來推動和擴展當前業務以及我們可能考慮添加的任何其他潛在業務。

Great. And then maybe just a follow-up on marketing. I think you said leveraging to 10.5% of sales this year. Just curious on the thoughts of how you arrived at that level? Is that kind of where you see it sitting sustainably for the business? Or is there a situation where perhaps you consider putting more into marketing, let's say, the environment starts to improve, and you want to make sure you're capturing market share? .

偉大的。然後可能只是市場營銷的後續行動。我想你說槓桿佔今年銷售額的 10.5%。只是好奇你是如何達到那個水平的？您認為它是為企業可持續發展的那種地方嗎？還是在某種情況下，您可能會考慮在營銷方面投入更多資金，比方說，環境開始改善，並且您想確保自己正在佔領市場份額？ .

Yes. Janine, the 10.5% is a point in time that we feel is appropriate given the environment. And as we shared in the fourth quarter, we did reduce some of the spend as -- just as soft business was playing out and not wanting to throw dollars away. So it's a balance with the current environment, the marketing mix that Sam referred to and looking at where the most efficiency is. Longer term, we continue to see improvements in the efficiency in digital media. And that, longer term, should allow us to potentially leverage further. But on the other hand, in this environment where we're planning at 10.5%, we -- if we see some opportunity to invest deeper, then we'll also consider that because we can see that it can drive profitable growth.

是的。珍妮，10.5% 是我們認為適合環境的時間點。正如我們在第四季度分享的那樣，我們確實減少了一些支出——就像軟業務正在發揮作用並且不想浪費美元一樣。因此，這是與當前環境、Sam 提到的營銷組合以及尋找效率最高的地方的平衡。從長遠來看，我們將繼續看到數字媒體效率的提高。從長遠來看，這應該讓我們有可能進一步發揮作用。但另一方面，在我們計劃 10.5% 的環境下，如果我們看到一些更深入投資的機會，那麼我們也會考慮這一點，因為我們可以看到它可以推動盈利增長。

So it's -- the beauty of the marketing mix right now is it's more flexible than it ever has been with less dependent on upfront buys on TV and catalog circulation. So we're a lot more nimbler on that investment and we're finding our ability to kind of reach the customer, whether retain or new with those channels is being even more granular and precise. So that's how we're thinking about marketing spend going forward.

所以它 - 現在營銷組合的美妙之處在於它比以往任何時候都更加靈活，更少依賴電視和目錄發行的前期購買。因此，我們在這項投資上更加靈活，我們發現我們接觸客戶的能力，無論是通過這些渠道保留還是新客戶，都更加精細和精確。這就是我們考慮未來營銷支出的方式。

Janine, I wanted to get back to, you also asked about the women's expansion, and I didn't mean to overlook that question. So we had 20 stores where we expanded our women's assortment. And in those 20 stores, we're obviously pleased with the greater assortments in those stores. And I had mentioned on our last earnings call that new customers coming to our brand now are split 50-50 between men and women. So we're really focused and dialed in on growing this women's part of the business.

珍妮，我想回過頭來，你也問過女性的擴張，我並不是想忽略這個問題。因此，我們擁有 20 家商店，擴大了我們的女裝品類。在這 20 家商店中，我們顯然對這些商店中種類更多的商品感到滿意。我在上次財報電話會議上提到，現在來到我們品牌的新客戶在男性和女性之間的比例為 50-50。因此，我們真正專注於發展女性業務的一部分。

So the women's expansion, those 20 stores over our measure period have all outperformed the rest of the chain, the company average, the store-based company average that is. And yes, they're doing well, and we continue to make tweaks and adjustments as we get greater and greater feedback from her. But yes, we're pleased with that, and we're going to continue to drive the women's business.

因此，女性的擴張，在我們衡量期間的那 20 家商店的表現都優於其他連鎖店，即公司平均水平，即以商店為基礎的公司平均水平。是的，他們做得很好，隨著我們從她那裡得到越來越多的反饋，我們會繼續進行調整和調整。但是，是的，我們對此感到滿意，我們將繼續推動女性業務。

We had about a 200 basis point increase in overall penetration of our business to now be about 28%. And our kind of longer-term goal is we think it could be in the high 30s, even touching 40% of the business. So as we look to '23, our focus is to continue to improve that penetration percentage and make our way towards that high 30s, potentially 40% penetration rate.

我們的業務整體滲透率提高了約 200 個基點，目前約為 28%。我們的長期目標是我們認為它可能達到 30 多歲，甚至觸及 40% 的業務。因此，當我們展望 23 年時，我們的重點是繼續提高滲透率，並朝著 30 多歲、可能達到 40% 的滲透率邁進。

And our next question today comes from Dylan Carden with William Blair.

我們今天的下一個問題來自 Dylan Carden 和 William Blair。

Just kind of curious on the guide, just top line, I guess, for now. Last year, really, I think a lot was predicated on sort of new inventory flow. This year, it doesn't seem like you're talking as much about that. So if you're sort of breaking down the components of your comfort level, there's still presumably some -- not insignificant acceleration here in the first quarter, given kind of where trends feel like they are and where you kind of expect to land the front half. Is that easier comparisons, mixed with sort of a more targeted marketing and then maybe some efficiency born from better retail online integration that's kind of hear more -- what I hear you guys speaking of this year?

只是對指南有點好奇，我想現在只是頂線。去年，真的，我認為很多都是基於某種新的庫存流。今年，你似乎沒有那麼多地談論這個。因此，如果你在某種程度上分解你的舒適度的組成部分，那麼在第一季度這裡可能仍然有一些 - 不是微不足道的加速，考慮到趨勢的感覺以及你期望落在前面的地方一半。這是否更容易比較，結合更有針對性的營銷，然後可能從更好的零售在線整合中產生一些效率，這有點聽到更多 - 我今年聽到你們談論的是什麼？

Well, yes, Dylan, certainly, inventory positioning out of the gate here is a benefit for us relative to last year. But the headwind is still a soft consumer backdrop and softer trends that we're seeing in the consumer. So that's why we're cautious in how we're going to plan the business this year. I think we've gotten through the thick of it coming out of last fourth quarter. And the trends are now improved.

嗯，是的，迪倫，當然，與去年相比，這裡的庫存定位對我們來說是一個好處。但逆風仍然是疲軟的消費者背景和我們在消費者中看到的更疲軟的趨勢。所以這就是為什麼我們對今年的業務計劃持謹慎態度。我認為我們已經度過了上個第四季度的困境。現在趨勢有所改善。

But we simply -- as much as we've got the inventory in position. We've got great new products coming out for spring. They're already out there. And we've got a marketing plan that's going to support product focused messaging the consumer is still not where they were a year ago. And so we're just planning around that aspect more than the other factors that will help lift us when that backdrop kind of lifts itself. So that's how we're thinking about the sales plan.

但我們只是 - 只要我們有庫存就可以了。我們為春季推出了很棒的新產品。他們已經在那裡了。我們有一個營銷計劃，將支持以產品為中心的消息傳遞，消費者仍然不在一年前的位置。因此，我們只是圍繞這一方面進行規劃，而不是其他因素，當這種背景自我提升時，這些因素將有助於提升我們。這就是我們考慮銷售計劃的方式。

And as your kind of thinking about margins, and I get that a lot, sort of is it in your control as it relates to the consumer. But to the extent you're sort of just purchased above breakeven net income margin. I mean do you -- if you -- is there more downside risk should sales sort of not come in where you expect or do you have confidence that you can kind of maintain certain aspects of the model to make sure they don't dip into sort of negative earnings territory?

正如你對利潤率的思考，我得到了很多，因為它與消費者有關，所以它在你的控制之下。但在某種程度上，你只是在盈虧平衡淨利潤率之上購買。我的意思是你 - 如果你 - 如果銷售沒有達到你預期的水平，是否會有更多的下行風險，或者你是否有信心可以維護模型的某些方面以確保它們不會陷入困境某種負收益領域？

Yes. Running a profitable business is certainly a core tenet of ours, and that's what we would intend to do if sales trends were to worsen on us, we do have flexibility and model to make adjustments as we kind of approved last year and even the pandemic year. So yes, I think that paramount gives us not only a stability in positive earnings, but helps maintain our access to liquidity as well. So that's important to navigate through the period we're in right now. .

是的。經營有利可圖的業務當然是我們的核心宗旨，如果銷售趨勢對我們不利，這就是我們打算做的事情，我們確實有靈活性和模型來進行調整，因為我們去年甚至大流行年都獲得了批准.所以，是的，我認為最重要的不僅給了我們穩定的正收益，而且還有助於維持我們獲得流動性的途徑。因此，度過我們現在所處的時期非常重要。 .

Well, would a big piece of that being Georgia opening up? I mean, has that kind of been, I guess, how much of a weight has that been on the P&L? .

好吧，喬治亞州的很大一部分會開放嗎？我的意思是，我猜，這種情況對損益表的影響有多大？ .

That definitely has some of the capital costs that we're starting to realize and the fixed cost of owning the building or renting the building. But that's such a strategic benefit, and we're going to see realization of value as early as 6 months from now. So yes, that is in the near term, weighing on the P&L as I called out in my remarks. And it's got a long-term return on investment there, but it's core to adding the foundation for us to be a larger and scale brand and house of brands. So we think that's important. And we've chosen to prioritize that over other things that we have pushed off and decided to wait on in terms of investments. .

這肯定有一些我們開始意識到的資本成本以及擁有建築物或租用建築物的固定成本。但這是一個戰略利益，我們將在 6 個月後看到價值的實現。所以是的，這是在短期內，正如我在發言中所說的那樣，對損益表進行了權衡。它在那裡有長期的投資回報，但它是為我們成為更大、更大規模的品牌和品牌之家奠定基礎的核心。所以我們認為這很重要。我們選擇將其優先於我們已經推遲並決定在投資方面等待的其他事情。 .

And to that point, I mean, it sounds like -- how do you think about if you become -- that allows for a different channel distribution, wholesale obviously supporting more stores. To the extent that you add another brand here maybe in '24, '25. Do you feel like Georgia just kind of gives you enough headroom to kind of lay out what you're talking about here? Or will there be sort of more needed '24, '25, particularly as you sort of grow a portfolio strategy?

就這一點而言，我的意思是，這聽起來像是——如果你成為——你會怎麼想——允許不同的渠道分銷，批發顯然支持更多的商店。在某種程度上，您可能會在 24 年、25 年在這裡添加另一個品牌。你覺得 Georgia 是否給了你足夠的空間來表達你在這裡談論的內容？還是會有更多需要 24 歲、25 歲的人，特別是當你發展投資組合策略時？

Yes. No, that will address -- provide significant more capacity for us to support stores, direct order and wholesale or another brand. We still have our 3 other centers that we've invested automation and not the same kind of automation, but more inbound, sortation and outbound efficiencies so they operate very efficiently. But as a network, we've got now with Adairsville coming live, we'll have the capacity to handle our volume for the next few years and then to look forward beyond that. But that's a big needle mover for us in terms of strategic flexibility and capacity increase.

是的。不，這將解決——為我們提供更多的能力來支持商店、直接訂購和批發或其他品牌。我們還有其他 3 個中心，我們投資了自動化，但不是同一種自動化，而是更高的入站、分揀和出站效率，因此它們運行非常高效。但作為一個網絡，我們現在已經有了 Adairsville 的上線，我們將有能力在未來幾年處理我們的流量，然後展望未來。但就戰略靈活性和產能增加而言，這對我們來說是一個巨大的推動力。

Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

謝謝。女士們，先生們，我們的問答環節到此結束。我想將會議轉回給管理團隊，聽取任何最後的評論。

No, nothing here. We're excited about the new year and look forward to sharing more with you on the next call.

不，這裡什麼都沒有。我們對新的一年感到興奮，並期待在下次通話中與您分享更多信息。

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

謝謝你，先生。今天的電話會議到此結束。感謝大家出席今天的演講。您現在可以斷開線路，度過美好的一天。