Duluth Holdings Inc (DLTH) 2025 Q1 法說會逐字稿

Good day and welcome to the Duluth Holdings Inc., first-quarter 2025 conference call and webcast. (Operator Instructions) Please note, this event is being recorded. I would not like to turn a conference call to Ms. Nitza McKee. Ms. McKee, the floor is yours, ma'am.

大家好，歡迎參加 Duluth Holdings Inc. 2025 年第一季電話會議和網路廣播。（操作員指示）請注意，此事件正在被記錄。我不想將電話會議轉給 Nitza McKee 女士。麥基女士，現在請您發言。

Thank you and welcome to today's call to discuss Duluth Trading first-quarter financial results. Our earnings release, which was issued this morning, is available on our Investor Relations website at ir.duluthtrading.com under press releases.

謝謝您，歡迎參加今天的電話會議，討論 Duluth Trading 第一季財務業績。我們的收益報告已於今天上午發布，可在我們投資者關係網站 ir.duluthtrading.com 的新聞稿欄位查閱。

I'm here today with Stephanie Pugliese, President and Chief Executive Officer; and Heena Agrawal, Senior Vice President and Chief Financial Officer. On today's call, management will provide prepared remarks and then open the call for questions.

今天和我一起來這裡的還有總裁兼執行長 Stephanie Pugliese 和資深副總裁兼財務長 Heena Agrawal。在今天的電話會議上，管理層將提供準備好的發言，然後開放提問。

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 risk and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

在我們開始之前，我想提醒您，今天電話會議上的評論將包括前瞻性陳述，可以透過使用諸如估計、預期、期望和類似短語來識別。前瞻性陳述本質上涉及估計、預測、目標、預報和假設，並受風險和不確定性的影響，可能導致實際結果與前瞻性陳述中表達的結果有重大差異。

Such risk 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.

此類風險和不確定性包括但不限於我們最近的 10-K 表年度報告和其他適用的 SEC 文件中所描述的風險和不確定性。這些前瞻性陳述僅代表本次電話會議召開之日的觀點，不應被視為對未來事件的預測。

And with that, I will turn the call over to Stephanie Pugliese, President and Chief Executive Officer. Stephanie.

接下來，我將把電話轉給總裁兼執行長 Stephanie Pugliese。史蒂芬妮。

Good morning, everyone, and thank you for joining us today. First, I want to thank Steve Schlecht not only for his leadership but for his unwavering commitment to the Duluth brand over many years. His vision and passion have been a driving force behind this extraordinary company, and I am truly honored to once again have his support as I return to lead Duluth Trading.

大家早安，感謝大家今天加入我們。首先，我要感謝史蒂夫·施萊希特，不僅感謝他的領導能力，還感謝他多年來對 Duluth 品牌的堅定承諾。他的遠見和熱情一直是這家非凡公司的驅動力，我很榮幸能再次得到他的支持並重新領導 Duluth Trading。

I'm back at Duluth because of my belief in this brand and its potential. Our customers have a deep affection for Duluth, and they genuinely want us to succeed.

我回到了德盧斯，因為我相信這個品牌及其潛力。我們的客戶對德盧斯有著深厚的感情，他們真心希望我們能成功。

What sets us apart in the marketplace is our unique blend of high-quality, solution-based products infused with our brand attributes: authentic, humorous, hardworking, and humble. Our products and our brand evoke an emotional connection that is truly distinctive in today's crowded retail landscape.

我們在市場上脫穎而出的原因是，我們獨特的融合了高品質、基於解決方案的產品和我們的品牌屬性：真實、幽默、勤奮和謙遜。我們的產品和品牌喚起了一種情感聯繫，這在當今擁擠的零售環境中確實與眾不同。

Returning to Duluth has been really energizing. I've been reconnecting with familiar faces who have a long-standing commitment to this brand and continue to drive excellence, while also discovering new talent throughout the organization. This team gives me confidence as we build on our strengths and implement initiatives necessary to deliver sustainable, profitable growth.

回到德盧斯確實讓我充滿活力。我一直在與那些長期致力於這個品牌並繼續追求卓越的熟悉面孔重新建立聯繫，同時也在整個組織中發現新的人才。這個團隊給了我信心，因為我們將發揮自身優勢，實施必要的舉措，實現可持續的獲利成長。

I am leading with a sense of urgency, clarifying direction, and taking action. Our operating model and processes need to be simplified quickly to restore financial health in the business. We will then position Duluth for longer-term profitable growth.

我以緊迫感引領，明確方向，採取行動。我們的營運模式和流程需要迅速簡化，以恢復業務的財務健康。然後，我們將使德盧斯實現長期獲利成長。

There are ultimately three key areas we will focus on to drive our business forward. First, brand awareness, reinvigorating our distinctive voice and storytelling capabilities that have historically differentiated Duluth in the marketplace to drive customer acquisition and retention.

最終，我們將重點放在三個關鍵領域來推動我們的業務發展。首先，品牌知名度，重振我們獨特的聲音和講故事的能力，這些能力歷來使德盧斯在市場上脫穎而出，從而推動客戶獲取和保留。

Second, solution-based products and product innovation. Our year-round core product is foundational to our business, enhanced by new innovative solutions. This quarter, we saw success in products like Men's DuluthFlex Fire Hose HD, Wrinklefighter Shirts, the introduction of women's NoGA Air, and new innovations in AKHG.

第二，解決方案型產品和產品創新。我們全年的核心產品是我們業務的基礎，並透過新的創新解決方案得到增強。本季度，我們看到了男士 DuluthFlex Fire Hose HD、Wrinklefighter 襯衫等產品的成功，女士 NoGA Air 的推出以及 AKHG 的新創新。

We know that when we clearly communicate the solutions we offer, we win. That is why going forward, we will drive to a more focused product assortment that resonates clearly with our customers.

我們知道，當我們清楚地傳達我們提供的解決方案時，我們就會成功。這就是為什麼我們今後將致力於提供更集中的產品組合，以引起客戶的共鳴。

We will narrow our assortment breadth with at least a 20% reduction of SKUs by spring 2026 while innovating in growth areas including core men's and women's workwear and adjacencies such as first layer and outdoor. This will create productivity gains in the assortment and enhance our ability to be more efficient in inventory purchases and marketing activities.

到 2026 年春季，我們將縮小產品種類範圍，將 SKU 數量減少至少 20%，同時在核心男女工作服以及第一層和戶外等相鄰領域進行創新。這將提高產品組合的生產效率，並增強我們更有效地進行庫存採購和行銷活動的能力。

And third, customer service, specifically, leveraging our omnichannel model, balancing e-commerce and physical retail to create long-term value and meet customers where they prefer to shop, executing with excellence on our promise to deliver a great customer experience. These focus areas form the foundation upon which everything else will be built.

第三，客戶服務，具體來說，利用我們的全通路模式，平衡電子商務和實體零售，創造長期價值，並在客戶喜歡的購物場所滿足客戶需求，出色地履行我們提供卓越客戶體驗的承諾。這些重點領域構成了其他一切建構的基礎。

But to be clear, before we can fully execute these initiatives, we must get back on track. We are taking decisive actions to get this great company and unique and powerful brand back on the path to profitability and growth.

但要明確的是，在我們能夠全面實施這些措施之前，我們必須回到正軌。我們正在採取果斷行動，讓這家偉大的公司和獨特而強大的品牌重回盈利和成長的道路。

We have actioned an expense savings initiative to begin to right-size the business and to protect against potential top line headwinds, which will result in annualized savings of approximately $15 million of which at least $10 million of cost benefits will be realized in the current fiscal year. These expense actions are designed to reduce complexity in the business and increase our focus on innovation and our brand enablers.

我們已經採取了一項費用節約計劃，開始調整業務規模並防止潛在的營業收入逆風，這將帶來約 1500 萬美元的年度節約，其中至少 1000 萬美元的成本效益將在本財政年度實現。這些費用行動旨在降低業務的複雜性，並增加我們對創新和品牌推動因素的關注。

We are also embracing a holistic approach to our overall expense structure, which we know is higher than it needs to be. We are taking a hard look at processes, systems, and team structures across the organization with a goal of further reducing our expense base, while becoming more efficient and effective in everything that we do.

我們也對我們的整體支出結構採取了一種整體方法，我們知道我們的整體支出結構已經高於實際需求。我們正在認真審視整個組織的流程、系統和團隊結構，目標是進一步降低我們的開支基礎，同時使我們所做的每一件事都更有效率和更有效。

These efforts are directly aligned with my philosophy to simplify our operations as we shift our focus and the majority of our time and energy to brand awareness, solution-based product and product innovations, and exceptional customer service. This approach isn't about starting over. It's about building on the progress made over the past few years in systems, sourcing, distribution, and real estate strategy.

這些努力與我的理念一致，即簡化我們的運營，因為我們將把重點和大部分時間和精力轉移到品牌知名度、基於解決方案的產品和產品創新以及卓越的客戶服務上。這種方法並不是重新開始。這是在過去幾年系統、採購、分銷和房地產策略方面取得進展的基礎上進行的。

Let me spend a moment on the work that was in flight when I arrived, and that will continue. Our direct-to-factory sourcing initiative is yielding great results, which not only reduce our cost of goods but enable us to better innovate and bring that innovation faster to market. We will continue to leverage this strategic initiative as we adjust our product assortment and more clearly define our go-to market strategy.

請允許我花一點時間談談我到達時正在進行的工作，這些工作將繼續進行。我們的直接工廠採購計畫取得了巨大的成果，這不僅降低了我們的商品成本，還使我們能夠更好地創新並將創新更快地推向市場。我們將繼續利用這項策略舉措，調整我們的產品組合併更明確地定義我們的市場策略。

We expect that over time the flow through of margin improvement will be further enhanced by the resetting of promotional activity, which we started in Q1 and has shown some early signs of success. The optimization of our fulfillment network has yielded automation and cost per unit savings, as well as faster click to delivery times.

我們預計，隨著時間的推移，透過重新調整促銷活動，利潤率的提高將進一步增強，我們在第一季開始的促銷活動已經顯示出一些成功的早期跡象。我們的履行網路的最佳化實現了自動化和單位成本的節省，以及更快的交貨時間。

We have rationalized our fulfillment network, but there is more work to do here. Importantly, we have made progress on the backlog issues we experienced over this past holiday season as we continue on our path to enhance operational protocols and planning processes.

我們已經合理化了我們的履行網絡，但還有更多工作要做。重要的是，隨著我們繼續加強營運協議和規劃流程，我們在解決過去這個假期遇到的積壓問題方面取得了進展。

And finally, we will continue to reinvigorate and optimize our real estate footprint. With nearly 25% of store leases up for renewal through the end of 2026, each renewal is undergoing rigorous evaluation for remodel, relocation, or closure.

最後，我們將繼續重振和優化我們的房地產足跡。近 25% 的商店租約將於 2026 年底續約，每次續約都會經過嚴格的評估，以確定是否進行改造、搬遷或關閉。

We are also looking at underperforming stores beyond near-term lease expirations. We have closed one location this fiscal year and are on track to open two new stores in the fall in priority markets.

我們也正在關注近期租約到期後業績不佳的商店。本財年我們關閉了一家門市，並計劃在秋季在重點市場開設兩家新店。

We know that we need to leverage our investments as efficiently and effectively as possible. Go forward, we will be focused on building our brand awareness, expanding our solution-based product and product innovation pipeline, and elevating our omnichannel service, all with the goal of attracting new loyal Duluth brand customers and reactivating lapsed customers.

我們知道我們需要盡可能有效率、有效地利用我們的投資。展望未來，我們將專注於建立我們的品牌知名度，擴展我們的基於解決方案的產品和產品創新管道，並提升我們的全通路服務，所有這些都是為了吸引新的忠實的 Duluth 品牌客戶並重新激活流失的客戶。

While we have substantial work ahead, I am confident in our path forward. Our commitment to elevating and celebrating what sets Duluth apart in the marketplace, coupled with decisive actions to right-size our expense structure and sharpen our focus on brand and product enablers, is our path to future success.

儘管我們還有很多工作要做，但我對我們的前進道路充滿信心。我們致力於提升和慶祝德盧斯在市場上的獨特優勢，並採取果斷行動調整我們的費用結構，加強對品牌和產品推動因素的關注，這是我們走向未來成功的道路。

With that, I will turn it over to Heena for a review of our financial results for the first quarter and thoughts on our outlook for fiscal 2025.

接下來，我將把時間交給 Heena，讓她回顧我們第一季的財務業績，並思考我們對 2025 財年的前景。

Thanks, Stephanie, and welcome back. In 2025, our key priorities are to reset promotions, restore price integrity, improve inventory management, and strengthen operational execution. I will provide an update on our first quarter progress in these areas, as well as discuss the impact of tariffs, our mitigation strategies, the right sizing of our cost structure, and the steps we've taken to manage cash and liquidity amidst macroeconomic uncertainty.

謝謝，史蒂芬妮，歡迎回來。2025年，我們的重點任務是重新設定促銷活動、恢復價格完整性、改善庫存管理並加強營運執行。我將介紹我們在這些領域第一季的進展，並討論關稅的影響、我們的緩解策略、我們成本結構的正確規模，以及我們在宏觀經濟不確定性中管理現金和流動性所採取的措施。

Today we reported first quarter 2025 net sales of $102.7 million, down 12% versus last year. Our reported EPS loss is $0.45, and adjusted EPS loss is $0.32. Adjustments to EPS totaled $4.5 million, including a $4.1 million increase in our deferred tax valuation allowance and $0.4 million in net impairment expenses. Adjusted EBITDA for the quarter was minus $3.8 million.

今天我們報告 2025 年第一季淨銷售額為 1.027 億美元，較去年下降 12%。我們報告的每股盈餘虧損為0.45美元，調整後的每股盈餘虧損為0.32美元。每股盈餘調整總計450萬美元，其中包括遞延所得稅評估準備金增加410萬美元，以及淨減損費用40萬美元。本季調整後的 EBITDA 為負 380 萬美元。

Starting with the top line, our Q1 net sales declined 12% and declined 10.2%, excluding the wholesale shipment shift from Q1 to Q2 versus last year. As part of resetting promotions, we reduced the number of days on promotion by 35% and reduced the depth of promotions from 25% to 20% on average.

從營業收入開始，我們的第一季淨銷售額下降了 12%，不包括從第一季到第二季的批發出貨量變化，與去年相比下降了 10.2%。作為重置促銷活動的一部分，我們將促銷天數減少了 35%，並將促銷深度平均從 25% 降低到 20%。

Direct channel sales, excluding wholesale, fell 14.6% as web traffic declined, with conversion being roughly flat, partially offset by higher AOV. Mobile sales penetration increased by 200 basis points, and mobile conversion continued to trend upwards.

由於網路流量下降，不包括批發的直接通路銷售額下降了 14.6%，轉換率基本上持平，但 AOV 的提高部分抵消了這一影響。行動銷售滲透率提升200個基點，行動轉換率持續呈上升趨勢。

Retail store sales and profitability trends improved as we pulled back on promotions. Retail sales declined 2.6% as lower traffic was partially offset with improved shopper conversion. While we are continuing to fine tune and reduce the frequency of promotions, we are seeing success with shallower promotions driven by higher AOV and improved retail sales trends and profitability.

隨著我們減少促銷，零售店的銷售和獲利趨勢有所改善。零售額下降了 2.6%，因為客流量的下降被購物者轉換率的提高部分抵消。雖然我們正在繼續微調和減少促銷的頻率，但我們看到，在更高的 AOV 和改善的零售銷售趨勢和盈利能力的推動下，較淺的促銷活動取得了成功。

Gross profit margin rate declined by 80 basis points to last year from greater clearance penetration and deeper discounting during February's Big Dam clearance event. In March and April combined, gross margin improved by over 300 basis points versus last year, as we saw the benefit of reduced costs from our direct-to-factory sourcing strategy further enhanced by resetting the depth and frequency of promotions.

由於 2 月大壩清理活動期間清理滲透率提高以及折扣力度加大，毛利率較去年同期下降了 80 個基點。3 月和 4 月合計，毛利率較去年同期提高了 300 多個基點，因為我們看到直接向工廠採購策略帶來的成本降低效益，而透過重新調整促銷的深度和頻率，這一效益得到了進一步增強。

Reported SG&A spent was $65.7 million and adjusted SG&A was $65.2 million, which was $5.4 million lower than last year but deleveraged as a percent of sales by 290 basis points due to lower sales and higher shipping and fulfillment costs. Advertising came in at 9.8% of sales, leveraging by 50 basis points as we rebalanced our upper and lower funnel spend.

報告的銷售、一般及行政費用為 6,570 萬美元，調整後的銷售、一般及行政費用為 6,520 萬美元，比去年低 540 萬美元，但由於銷售額下降以及運輸和履行成本上升，銷售額的百分比下降了 290 個基點。由於我們重新平衡了上層和下層漏斗支出，廣告佔銷售額的 9.8%，槓桿率提高了 50 個基點。

Inventory was $176.1 million, increasing by $39.7 million, or 29% versus last year compared to Q4 ending inventory, which was up 32% versus prior year. The key drivers of the year-on-year increase were approximately half or $20 million of the increase was in core year-round products. Roughly a quarter, or approximately $10 million is a combination of pack-and-hold from fall winter inventory, an inventory for wholesale shipments that are moving from Q1 to Q2.

庫存為 1.761 億美元，比去年同期增加了 3,970 萬美元，增幅為 29%，而第四季期末庫存則比去年同期增加了 32%。同比成長的主要驅動力是，約一半或 2000 萬美元的成長來自核心全年產品。大約四分之一，或約 1000 萬美元是秋冬庫存的包裝和持有量，以及從第一季到第二季度的批發發貨庫存。

We ended the quarter with a current inventory mix of 91% and clearance inventory mix of 9%. This compares to clearance inventory mix of 7% at the end of Q1 last year and an improvement versus 10% at the beginning of this quarter.

本季結束時，我們的目前庫存組合為 91%，清倉庫存組合為 9%。相較之下，去年第一季末的清倉庫存比例為 7%，而本季初的清倉庫存比例為 10%，有所改善。

We ended the quarter with cash and cash equivalents of $8.6 million and borrowing of $64 million on our credit facility versus $11 million last year. We are beginning to realize the benefit of rebalancing our inventory receipts to sales plans and expect our peak borrowing to be behind us. Our net liquidity was $45 million at the end of the quarter.

本季末，我們的現金和現金等價物為 860 萬美元，信貸額度為 6,400 萬美元，而去年同期為 1,100 萬美元。我們開始意識到重新平衡庫存收據和銷售計劃的好處，並預計我們的借貸高峰期已經過去。本季末我們的淨流動資金為 4500 萬美元。

In late April 2025, we finalized a successful transition of our line of credit to an asset-based lending agreement. This new agreement extends to 2030, providing a $100 million limit with improved borrowing rates and increased flexibility compared to a previous revolver contract, which was set to expire in 2027.

2025 年 4 月下旬，我們成功完成了信用額度向資產抵押貸款協議的過渡。這項新協議的有效期延長至 2030 年，提供 1 億美元的限額，與先前將於 2027 年到期的循環信貸合約相比，借款利率有所提高，靈活性也有所提高。

Now turning to our outlook for fiscal year 2025, we are maintaining our fiscal year 2025 financial guidance. The adjusted EBITDA range of $20 million to $25 million considers several factors, including first, our ability to offset the current tariff rate with targeted price increases, vendor negotiations, and management of future receipts.

現在談到我們對 2025 財年的展望，我們維持 2025 財年的財務指引。調整後的 EBITDA 範圍為 2000 萬美元至 2500 萬美元，考慮了多種因素，首先包括我們透過有針對性的價格上漲、供應商談判和未來收入管理來抵消當前關稅稅率的能力。

Second, we are reducing expenses in part to protect from the top line headwinds as we continue to reset promotions, as well as recognition of the current uncertain macroeconomic and customer environment. Lastly, we are continuing to revitalize our store portfolio under which we closed one low performing store in May 2025, renewed leases on stores that met our higher hurdle rates, and are on track to open two new stores in the second half.

其次，我們削減開支的部分原因是為了在繼續重新調整促銷活動的同時，避免收入受到不利影響，同時也是為了認識到當前不確定的宏觀經濟和客戶環境。最後，我們將繼續重振我們的門市組合，我們於 2025 年 5 月關閉了一家業績不佳的門市，續簽了符合更高最低收益率的門市的租約，並預計在下半年開設兩家新店。

The above does not include additional tariff impacts beyond the current 30% on China and 10% on the rest of the world. Elaborating on tariffs, we currently anticipate approximately $14 million in additional product costs from the 10% tariffs implemented in April 2025.

以上不包括目前對中國徵收 30% 和對世界其他國家徵收 10% 以外的額外關稅影響。詳細說明關稅，我們目前預計，2025 年 4 月實施的 10% 關稅將導致產品成本增加約 1400 萬美元。

Our exposure to China is minimal, with less than 1% of current year receipts impacted. We will be implementing targeted price increases in select categories and items based on price elasticity and key price thresholds to recover the increase in cost. We are also partnering with vendors to share in the cost impacts.

我們對中國的依賴很小，受影響的當年收入不到 1%。我們將根據價格彈性和關鍵價格門檻，對選定的類別和項目實施有針對性的提價，以彌補成本的增加。我們也與供應商合作，分擔成本影響。

Finally, given our current inventory position, especially in year-round goods, we are further managing the timing of future receipt of goods. As we right size the organization and manage the revenue impact of price and promotional adjustments in a changing economic landscape, we've secured over $10 million in cost reductions for the current year as we better align our organizational expenses with the current scale of our business.

最後，鑑於我們目前的庫存狀況，特別是全年庫存，我們正在進一步管理未來收貨的時間。透過調整組織規模並在不斷變化的經濟狀況下管理價格和促銷調整對收入的影響，我們確保了本年度成本削減超過 1000 萬美元，因為我們可以更好地將組織費用與當前業務規模相結合。

As Stephanie mentioned, we will be undertaking additional measures to simplify the business, reduce complexity and cost in multiple areas. We are rationalizing our assortment and focusing our innovation and inventory on core men's and women's workwear, and first-player, and outdoor adjacencies.

正如史蒂芬妮所提到的，我們將採取額外措施來簡化業務，降低多個領域的複雜性和成本。我們正在合理化我們的產品組合，並將我們的創新和庫存重點放在核心男女工作服、第一位球員和戶外相關產品上。

We are on track to reduce apparel SKUs by more than 5% in fall 2025 and by more than 20% in spring, summer 2026. We are also on track to reduce SKU count in the non-apparel hard goods portfolio by double digits starting in fall 2025.

我們計劃在 2025 年秋季將服裝 SKU 減少 5% 以上，在 2026 年春季和夏季將服裝 SKU 減少 20% 以上。我們還計劃從 2025 年秋季開始將非服裝耐用品組合中的 SKU 數量減少兩位數。

Next, we are actively refining our store portfolio, focusing on underperforming locations to improve overall productivity. Finally, we are evaluating additional actions to optimize our fulfillment center network to reduce cost and complexity and improve service.

接下來，我們正在積極優化門市組合，並專注於表現不佳的門市，以提高整體生產力。最後，我們正在評估其他措施，以優化我們的履行中心網絡，降低成本和複雜性並改善服務。

Now an update on our balance sheet and capital expenditures. First and foremost, we expect inventory levels to normalize in the second half of the year with the rebalancing of sales and inventory receipts. We anticipate end-of-the-year inventory to be down double digits compared to prior year. As a result of the reduced and right sized receipts, we anticipate being past our peak borrowing levels.

現在更新我們的資產負債表和資本支出。首先，我們預計隨著銷售額和庫存收貨的重新平衡，庫存水準將在下半年恢復正常。我們預計年底庫存將比去年同期下降兩位數。由於收入減少且規模合適，我們預計借款水準將超過高峰。

Next, we have reduced our capital expenditure plan by $3 million mainly in systems investments to approximately $17 million. We are continuing to fund store openings, Manhattan Omni fulfillment software, and regular maintenance. Finally, we have successfully transitioned our revolving credit facility to an asset-based lending facility with lower borrowing rates and higher flexibility in maintaining liquidity and access to cash.

接下來，我們將資本支出計畫減少了 300 萬美元（主要用於系統投資），降至約 1,700 萬美元。我們將繼續為商店開業、曼哈頓 Omni 履行軟體和定期維護提供資金。最後，我們成功地將循環信貸工具轉變為資產抵押貸款工具，借款利率更低，在維持流動性和現金取得方面具有更高的靈活性。

To summarize, we are cognizant that we are operating in an uncertain environment and are therefore keenly focused on managing all aspects of our business prudently. We are making progress as we reset promotions to restore price integrity, enhance inventory management, and strengthen operational execution.

總而言之，我們認識到我們在一個不確定的環境中運營，因此我們非常注重審慎管理業務的各個方面。我們正在重新調整促銷活動以恢復價格完整性、加強庫存管理並加強營運執行，從而取得進展。

These efforts will enable us to fully realize the benefits of the progress on our strategic initiatives and structural enhancements over time. We are being agile in offsetting the impact of tariffs, taking decisive action to right size our expense structure, and under Stephanie's leadership, sharpening our focus on brand and product enablers.

這些努力將使我們能夠充分實現策略性舉措和結構改進的進展所帶來的好處。我們正在靈活地抵消關稅的影響，採取果斷行動來調整我們的費用結構，並在史蒂芬妮的領導下，更加重視品牌和產品推動因素。

With that, we will now open up the call for questions.

現在，我們將開始提問環節。

(Operator Instructions) Janine Stichter, BTIG.

（操作員說明）Janine Stichter，BTIG。

I was hoping you could speak a bit more about one of the first things you mentioned around building brand awareness. I think you said marketing leverage during the quarter, but how should we think about marketing going forward? Could we potentially see some of the savings that you're finding in other areas reinvested back into marketing and just maybe some more color on broadly how you think about driving brand awareness?

我希望您能多談談您提到的有關建立品牌知名度的第一件事。我認為您曾說過本季的行銷槓桿作用，但我們應該如何看待未來的行銷？我們是否可以看到您在其他領域節省下來的部分資金重新投資到行銷中，或者也許您能更詳細地了解您如何提高品牌知名度？

Sure so I think one of the biggest things that we're starting to evaluate and starting to see some initial success with is the investment in the marketing funnel overall, particularly, in the upper part of the funnel, which is driving brand awareness. An example, just recently yesterday, we were featured on Good Morning America for Father's Day. So those opportunities to get our name and our voice and our products, quite frankly, out a little bit further than even some of the traditional marketing ways, are places that we are looking to utilize and invest in.

當然，我認為我們開始評估並開始看到一些初步成功的最大事情之一是對整個行銷漏斗的投資，特別是漏斗上部的投資，這可以提高品牌知名度。例如，就在昨天，我們登上了《早安美國》父親節節目。因此，坦白說，這些讓我們的名字、我們的聲音和我們的產品得到更廣泛的傳播的機會比一些傳統的營銷方式更進一步，是我們希望利用和投資的地方。

The team has started that work. We started to see a little bit of the progress that's being made. We're doing more testing in second quarter as we look at driving not only awareness but visits to both our website and our stores.

該團隊已開始這項工作。我們開始看到正在取得的一些進展。我們將在第二季度進行更多測試，因為我們不僅希望提高知名度，還希望增加我們網站和商店的訪問量。

And ultimately phase one of that is re-evaluating the marketing funnel to be able to create that awareness. And then as we continue to find savings and expense reductions in other areas of the business and see the return on the marketing investment improve, that's where we'll start to ship those dollars, but we're just at the beginning of that phase.

最終，第一階段是重新評估行銷管道，以便能夠創造這種意識。然後，隨著我們繼續發現業務其他領域的節約和開支減少，並看到行銷投資回報率提高，我們就會開始投入這些資金，但我們才剛剛處於這個階段的開始。

Great, that's helpful. And then maybe one more just around the promotional reduction you're seeing, maybe speak a bit more about what you're seeing from the consumer as you pull back on promotions, I think you said in March and April into May. And then you try to think about what kind of price increases we might be seeing and your expectations around how the consumer will respond to that.

太好了，很有幫助。然後也許您再問一個關於促銷減少的問題，也許您可以多談談在取消促銷活動時您從消費者那裡看到的情況，我想您說過在三月、四月到五月。然後，您嘗試思考我們可能會看到什麼樣的價格上漲，以及您對消費者對此有何反應的預期。

Sure so what we saw as we kind of came through first quarter was sequential improvement in our gross margin rate and really in the months of March and April was where we started to see the beginning benefits, if you will, of the promotional pullback. From a customer perspective, one of the things that we continue to look at is how we maximize customer retention and acquisition not only through our marketing activities but also through the promotional cadence that we have.

當然，我們看到第一季的毛利率連續提高，而實際上在三月和四月，我們開始看到促銷回撤帶來的初步好處。從客戶的角度來看，我們持續關注的事情之一是如何不僅透過我們的行銷活動而且透過我們的促銷節奏來最大限度地保留和獲取客戶。

As Heena mentioned, we haven't pulled back dramatically on promotions. We've pulled back on some of the length of time of promotions and to a certain extent the depth of promotions, but we'll continue to balance that. Watch not only the top line and gross margin results but also the customer retention and acquisition results, and continue to pull different levers whether that is promotional activity, things like free shipping, and/or upper to lower funnel marketing activities to maximize across both financial results and customer file results if you will.

正如 Heena 所提到的，我們並沒有大幅削減促銷。我們已經縮短了促銷活動的時間長度，並在一定程度上減少了促銷活動的深度，但我們會繼續保持平衡。不僅要專注於營業額和毛利率結果，還要專注於客戶保留和獲取結果，並繼續利用不同的槓桿，無論是促銷活動、免費送貨等活動，還是從上到下的漏斗行銷活動，以最大限度地提高財務結果和客戶檔案結果。

In terms of the pricing -- the increase in prices, we are mitigating some of the expected tariff implications with select price increases. They are in areas where we know that we have unique product in the marketplace that obviously you can only get within our own channels. And so we're selecting those products that we feel like we have the pricing elasticity to do so.

在定價方面－價格上漲，我們透過選擇性提價來減輕一些預期的關稅影響。我們知道，我們在這些地區的市場上擁有獨特的產品，而且顯然您只能透過我們自己的管道獲得這些產品。因此，我們選擇那些我們認為具有定價彈性的產品。

That said, we're being really cognizant of the fact of continuing to offer a good portion of our product assortment that is in value prices. And particularly when you consider the innovation and the quality that we put behind our products, we believe that value equation will help us as we balance our pricing in the future.

話雖如此，我們確實意識到要繼續以優惠的價格提供我們產品系列中的很大一部分產品。特別是當您考慮到我們產品背後的創新和品質時，我們相信價值等式將有助於我們在未來平衡價格。

Yeah, and just to add on the promotions, please. Janine, we are seeing a lot of green shoots, especially as we reduce the depth of the offers. We're seeing positive trends in conversion, in higher full price sales. And especially on our store channel, we are seeing better trends both in terms of top line and profitability.

是的，請補充一下促銷訊息。珍妮，我們看到了很多復甦的跡象，特別是當我們降低報價的深度時。我們看到轉換率呈現正面趨勢，全價銷售額有所提高。特別是在我們的商店管道，我們看到營業額和獲利能力都呈現更好的趨勢。

When it comes to frequency, we are refining it. And as we refine the frequency, we are seeing better sequential trends as we go from March to April to May.

當談到頻率時，我們正在對其進行改進。隨著我們不斷優化頻率，我們看到從三月到四月再到五月的連續趨勢越來越好。

Perfect. Thanks so much and best of luck.

完美的。非常感謝，祝你好運。

I'm not sure if we've lost the line. We are having some difficulty hearing, so I'm assuming that there are no more questions and just wanted to share some closing remarks for everyone.

我不確定我們是否已經失去聯繫。我們聽不清楚，所以我假設沒有其他問題，只是想跟大家分享一些結束語。

So in closing we're approaching our work in phases. First, taking decisive actions to simplify the business, reduce our expense structure, and continue to optimize the investments we've made in infrastructure. And then second, we're focusing on the key areas of brand awareness, solution-based products and product innovation, and customer service.

因此，最後我們將分階段進行工作。首先，採取果斷行動簡化業務，減少費用結構，並繼續優化我們在基礎設施方面的投資。其次，我們重點關注品牌知名度、基於解決方案的產品和產品創新以及客戶服務等關鍵領域。

I will be conducting an in-depth review of our brand and product portfolio as we look to invigorate the Duluth business overall, and in the longer-term, capture the full potential of the brand. As we move forward, our priority will be to execute with a simplified framework.

我將對我們的品牌和產品組合進行深入審查，以期全面振興 Duluth 業務，並從長遠來看充分發揮品牌的潛力。隨著我們不斷前進，我們的首要任務是採用簡化的框架來執行。

I'm confident that by clarifying our priorities and doubling down on what makes Duluth truly special, which is our solution-based products and customer-centric philosophy, that we can once again achieve profitable growth and deliver value to our shareholders over the long-term. I'm thrilled to work alongside this talented team to write the next chapter for Duluth as I look forward to sharing more details on our progress on future calls, but for right now, I'm focused on aligning our organization around these priorities to drive our sustainable results.

我相信，透過明確我們的優先事項並加倍重視 Duluth 的真正特色，即基於解決方案的產品和以客戶為中心的理念，我們可以再次實現盈利增長並為我們的股東帶來長期價值。我很高興能與這支才華橫溢的團隊一起為德盧斯譜寫新的篇章，我期待在未來的電話會議上分享更多有關我們進展的細節，但就目前而言，我專注於圍繞這些優先事項調整我們的組織，以推動我們的可持續成果。

Thank you all for your continued interest and support, and I look forward to updating you on our progress in the quarters ahead. Thank you.

感謝大家一直以來的關注和支持，我期待在未來幾季向大家通報我們的進展。謝謝。

And we thank you, ma'am, for your time today also. The conference call is now concluded. At this time, you may disconnect your lines. Thank you. Take care and have a great day, everyone.

女士，我們也感謝您今天抽出時間。電話會議現已結束。此時，您可以斷開線路。謝謝。大家保重，祝大家有個愉快的一天。