JJill Inc (JILL) 2023 Q3 法說會逐字稿

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the J. Jill Third Quarter 2023 earnings conference call. On today's call are Claire Spofford, President and Chief Executive Officer; and Mark Webb, Executive Vice President, Chief Financial Officer, and Chief Operating Officer. (Operator Instructions)

早安.我叫克里斯塔，今天我將擔任你們的會議接線生。此時此刻，我歡迎大家參加 J. Jill 2023 年第三季財報電話會議。出席今天電話會議的有總裁兼執行長克萊爾‧斯波福德 (Claire Spofford)；執行副總裁、財務長兼營運長馬克‧韋伯 (Mark Webb)。 （操作員說明）

Before we begin, I need to remind you that certain comments made today made during These remarks may constitute forward looking statement and are made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and J. Jill's SEC filings.

在我們開始之前，我需要提醒您，今天在這些言論中發表的某些評論可能構成前瞻性陳述，並且是根據經修訂的1995 年《私人證券訴訟改革法案》的安全港條款並在其含義範圍內做出的。此類前瞻性陳述受到已知和未知的風險和不確定性的影響，可能導致實際結果與此類陳述有重大差異。這些風險和不確定性在新聞稿和 J. Jill 向 SEC 提交的文件中進行了描述。

The forward looking statements made on this press release on this recording are as of December fifth, 2023, and just to update these forward looking statements. Finally, J. Jill may refer to certain adjusted or non-GAAP financial measures during today's remarks are reconciled creation schedule showing GAAP versus non-GAAP financial measures is available in the press release issued December fifth, 2023. If you do not have a copy of today's press release, you may obtain one by visiting the Investor Relations page of the website at J. Jill.com. I will now turn the call over to Claire.

本新聞稿中關於此錄音的前瞻性陳述截至 2023 年 12 月 5 日，僅供更新這些前瞻性陳述。最後，J. Jill 在今天的演講中可能會提到某些調整後或非GAAP 財務指標，並在2023 年12 月5 日發布的新聞稿中提供了顯示GAAP 與非GAAP 財務指標的協調創建時間表。如果您沒有副本您可以透過造訪 J. Jill.com 網站的投資者關係頁面來取得今天的新聞稿。我現在將把電話轉給克萊爾。

Thank you, operator, and hello, everyone. Thank you for joining us this morning. I will begin our discussion by reviewing highlights from our third-quarter performance and will then provide an update on a few of our strategic initiatives before turning the call over to Mark to review our financial performance and outlook in more detail.

謝謝接線員，大家好。感謝您今天早上加入我們。我將首先回顧我們第三季度業績的亮點，然後介紹我們的一些戰略舉措的最新情況，然後再將電話轉給馬克，讓他更詳細地回顧我們的財務業績和前景。

We're pleased with our third quarter performance and our continued strong execution of our disciplined operating model, which enabled us to deliver sales and adjusted EBITDA above our expectations. We saw particular strength earlier in the quarter, supported by solid customer reception to our transitional product as we entered the fall season throughout the quarter, we continued to deliver collections that were versatile, modern and that appeal to our loyal customer base.

我們對第三季的業績以及我們對嚴格營運模式的持續強勁執行感到滿意，這使我們能夠實現高於預期的銷售額和調整後的 EBITDA。我們在本季早些時候看到了特別的優勢，隨著整個季度進入秋季，客戶對我們的過渡產品的認可度很高，我們繼續提供多功能、現代且吸引我們忠實客戶群的系列。

This product flow drove nice growth in our core assortment in the third quarter, highlighted by particular strength in sweaters as well as wovens. As a result with a full price performed well across both our retail and direct channels. We were pleased with the sequential top-line improvement we delivered within direct compared to the prior quarter.

這種產品流推動了我們第三季核心品種的良好成長，尤其是毛衣和梭織品的強勁成長。因此，全價在我們的零售和直銷通路中表現良好。與上一季相比，我們對直接交付的收入連續改善感到滿意。

As we have discussed on prior calls, we're leveraging aspects of our assortment to not only celebrate the totality of women everywhere and fuel their journey with join and ease, but to build strength and momentum across our customer file.

正如我們在之前的電話會議中所討論的那樣，我們利用我們產品系列的各個方面，不僅是為了慶祝世界各地的女性整體並輕鬆地加入她們的旅程，而且是為了在我們的客戶檔案中建立力量和動力。

In Q3, we continued to see growth in new-to-brand customers across both channels, with particular strength in direct. Our size and productivity initiatives and wherever sub-brand are continuing to support our acquisition of new-to-brand customers for younger than our average customer, but consistent with our target demographic.

在第三季度，我們繼續看到兩個管道的新品牌客戶都在成長，其中直接管道的成長尤為強勁。我們的規模和生產力計劃以及任何子品牌都將繼續支持我們收購新品牌客戶，這些客戶比我們的平均客戶更年輕，但與我們的目標群體一致。

During the third quarter, we successfully anniversaried the launch of our size inclusivity initiative from last year and delivered growth across all extended sizes. Despite the tougher comparison, we were also pleased or wherever works capsule collection, which lunch right after Labor Day and highlighted versatile pieces that customers could wear to work and the way carry them throughout their day. As we look ahead, we will continue to periodically launch capsules lean into opportunities, both from a top-line growth perspective as well as providing an avenue for broadening our brand awareness and fueling the health of our customer file.

在第三季度，我們成功慶祝了去年推出的規模包容性計劃，並在所有擴展規模上實現了成長。儘管進行了更艱難的比較，但我們還是很高興或無論在哪裡工作膠囊系列，該系列在勞動節後午餐，並強調了顧客可以穿著去上班的多功能單品以及全天攜帶它們的方式。展望未來，我們將繼續定期推出抓住機會的膠囊，無論是從營收成長的角度來看，還是為擴大我們的品牌知名度和促進客戶檔案的健康提供途徑。

Throughout the quarter, we successfully leveraged our digital and influencer strategies and are pleased with the efficiencies these tactics have driven as well as giving exposure to new customer audiences. These marketing efforts, along with the benefit from the enhancements we made to the online customer experience earlier this summer help support the sequential improvement in our direct channel this quarter compared to Q2.

在整個季度中，我們成功地利用了我們的數位和影響力策略，並對這些策略所帶來的效率以及接觸新客戶受眾的效率感到滿意。這些行銷努力，加上我們今年夏天早些時候對線上客戶體驗進行的增強所帶來的好處，有助於支持本季我們的直接管道與第二季度相比的連續改善。

Well, we're seeing an impact again from elevated return rates as the customer has become more discerning with their spend, particularly in certain categories. We believe through the actions we've taken with our updated fit guide and shop the model features, we've been able to partially mitigate the impact by ensuring that our customer understands and can find the right fit for her.

嗯，我們再次看到退貨率上升的影響，因為客戶對他們的支出變得更加挑剔，特別是在某些類別中。我們相信，透過更新版型指南和購買型號功能所採取的行動，我們已經能夠透過確保客戶理解並找到適合她的款式來部分減輕影響。

While we cannot control all external factors, we continue to operate with discipline in order to effectively manage all elements within our control. And we are investing in both channels in order to drive balanced growth. As mentioned previously, we implemented a new POS system this year, which is already yielding a more efficient and positive customer experience in stores. We are also embarking on an OMS project that we expect will enable more productive omnichannel capabilities. We look forward to updating you on this important initiative in the future.

雖然我們無法控制所有外部因素，但我們將繼續遵守紀律，以有效管理我們控制範圍內的所有因素。我們正在對這兩個管道進行投資，以推動平衡成長。如前所述，我們今年實施了新的 POS 系統，該系統已經在商店中帶來了更有效率、更積極的客戶體驗。我們也著手開展 OMS 項目，預計該項目將實現更有效率的全通路功能。我們期待未來向您通報這項重要舉措的最新情況。

In summary, we continue to operate with discipline, which has yielded better than expected results this quarter and supported our strong cash flow generation. We have a great brand with a wonderful loyal customer, and we are continuing to invest across our channels to enhance their experience wherever and whenever she chooses to shop with us.

總而言之，我們繼續嚴格運營，本季度取得了好於預期的業績，並支持了我們強勁的現金流生成。我們擁有一個偉大的品牌，擁有一群忠實的客戶，我們將繼續在我們的管道上進行投資，以增強他們選擇在我們這裡購物的任何時間和地點的體驗。

We've continued to say that our customers resilient, but not impervious to macro uncertainty. And as I mentioned, we did see some pullback in spend later in the third quarter, which continued into the start of the fourth quarter with some strengthening over the promotional Black Friday, Cyber Monday period.

我們繼續說，我們的客戶具有彈性，但並非不受宏觀不確定性的影響。正如我所提到的，我們確實看到第三季度晚些時候的支出有所回落，這種情況一直持續到第四季度初，並且在促銷黑色星期五和網絡星期一期間有所加強。

As a reminder, the fourth quarter is historically our smallest period from a sales and profitability perspective, positioning us differently for many of our retail appears. And while we are maintaining a prudent outlook for the remainder of the year. Given the current trends and the recent customer survey work, we believe we remain well positioned to achieve our objectives for this year.

提醒一下，從銷售額和獲利能力的角度來看，第四季是我們歷史上最小的時期，這使得我們對許多零售業務的定位有所不同。儘管我們對今年剩餘時間保持審慎的前景。鑑於當前的趨勢和最近的客戶調查工作，我們相信我們仍然有能力實現今年的目標。

I will now turn the call over to Mark to review our results and outlook in more detail. Mark?

我現在將把電話轉給馬克，以更詳細地審查我們的結果和前景。標記？

Thank you, Claire, and good morning, everyone. Our results again show the strength of the J.Jill brand and the benefits of our disciplined purposeful operating model, especially in this dynamic macro environment. Sales and adjusted EBITDA, both actualized above guided levels as customers responded well to new floor sets, particularly early in the quarter. In addition, cash flow was once again strong in the quarter and disciplined inventory management resulted in clean end-of-quarter inventory levels.

謝謝克萊爾，大家早安。我們的業績再次證明了 J.Jill 品牌的實力以及我們嚴格、有目的的營運模式的優勢，尤其是在這個動態的宏觀環境中。由於客戶對新樓層反應良好，特別是在本季度初，銷售額和調整後的 EBITDA 均高於指導水準。此外，本季現金流再次強勁，嚴格的庫存管理導致季末庫存水準保持乾淨。

Total company comparable sales for the third quarter increased 1.9% compared to last year's negative 1.2% comp. Total company sales for the quarter were $150 million, flat compared to Q3 2022. Store sales for Q3 were flat versus Q3 2022 on about 1% fewer stores. Higher average retails in the channel were offset by lower units sold per transaction, driven primarily by fewer mark down in units sold.

第三季公司可比銷售總額成長 1.9%，而去年則為負 1.2%。該季度公司總銷售額為 1.5 億美元，與 2022 年第三季持平。第三季的門市銷售額與 2022 年第三季持平，門市數量減少了約 1%。該通路平均零售額的增加被每筆交易銷售量的減少所抵消，這主要是由於銷售量降價減少所致。

Direct sales as a percentage of total sales were 45% in the quarter. Compared to the third quarter of fiscal 2022, direct sales were down 0.5%, representing a sequential improvement compared to Q2. Q3 total company gross profit was $108 million, up $2.8 million compared to Q3 2022. Q3 gross margin was 71.8%, up 190 basis points versus Q3 2022, as favorability in freight costs and underlying first cost AUCs, strong full price selling, and lower promotions all contributed.

本季直接銷售佔總銷售額的比例為 45%。與 2022 財年第三季相比，直接銷售額下降 0.5%，與第二季相比較上季有所改善。第三季公司總毛利為1.08 億美元，較2022 年第三季成長280 萬美元。第三季毛利率為71.8%，較2022 年第三季成長190 個基點，原因是貨運成本和基本首次成本AUC 有利、全價銷售強勁以及較低促銷活動都有貢獻。

SG&A expenses were $85.7 million compared to $84.9 million last year as increases in selling costs and general overhead, primarily due to wage inflation, were partially offset by lower depreciation and amortization. Adjusted EBITDA was $28.3 million in the quarter, up 3% compared to $27.5 million in Q3 2022. Please refer to today's press release for reconciliation of adjusted EBITDA.

SG&A 費用為 8,570 萬美元，而去年為 8,490 萬美元，主要是由於工資上漲導致的銷售成本和一般管理費用的增加，部分被折舊和攤提的減少所抵消。本季調整後 EBITDA 為 2,830 萬美元，比 2022 年第三季的 2,750 萬美元成長 3%。請參閱今日的新聞稿，以了解調整後 EBITDA 的調節表。

Turning to cash flow. Third quarter marked another strong quarter, generating $21 million of cash from operations and ending with $64 million in cash and zero borrowings against the [ABL]. Inventories at end of Q3 were down 6% compared to the end of Q3 2022. As mentioned last quarter, we have now anniversaried the supply chain disruption experienced in the first half of 2022. And as a result, our year-over-year comparisons are more normalized.

轉向現金流。第三季又是一個強勁的季度，營運產生 2,100 萬美元現金，最終現金為 6,400 萬美元，[ABL] 借款為零。與2022 年第三季末相比，第三季末的庫存下降了6%。正如上季度所提到的，我們現在已經迎來了2022 年上半年供應鏈中斷的周年紀念日。因此，我們的同比比較更加規範化。

As we look forward to the end of the year, we expect the 53rd week to impact reported inventory levels as we ship spring goods that week, resulting in higher in-transit inventories at the end of the year. As a result of this impact, we expect total reported inventory at the end of Q4 to be up compared to last year.

當我們展望年底時，我們預計第 53 週將影響報告的庫存水平，因為我們在該週發貨春季貨物，導致年底在途庫存增加。由於這一影響，我們預計第四季度末報告的總庫存將比去年增加。

Capital expenditures in the quarter were about $4 million compared to about $3 million last year. We neither closed or opened stores and ended the quarter was 245 stores. We are pleased to have completed the rollout of our new POS system during the third quarter. The new system will improve the efficiency of transactions and store at mobile line busting capabilities and is the first step in a broader plan to enhance enterprise on the omnicustomer fulfillment opportunities.

本季的資本支出約為 400 萬美元，而去年約為 300 萬美元。我們既沒有關閉也沒有開設商店，本季末我們有 245 家商店。我們很高興在第三季完成了新 POS 系統的推出。新系統將提高交易效率，並在行動線路上進行存儲，這是增強企業全客戶履行機會的更廣泛計劃的第一步。

The next step in that plan is kicking off now with a project to replace and upgrade our legacy order management system or OMS. We continue to train our staff on the capabilities of the new POS and are excited to begin work on OMS. I want to take a moment and congratulate and thank the incredible the team that executed the POS replacement. They worked hard with professional pride and dedication to make this project a success. So to the IS, corporate and store teams, thank you and congratulations.

該計劃的下一步正在啟動一個項目，以替換和升級我們的舊訂單管理系統或 OMS。我們將繼續對員工進行關於新 POS 功能的培訓，並很高興能開始 OMS 的工作。我想花一點時間祝賀並感謝執行 POS 更換的出色團隊。他們以職業自豪感和奉獻精神努力工作，使這個計畫成功。向 IS、企業和商店團隊表示感謝和祝賀。

Turning now to our outlook. We continue to operate in a dynamic environment. As Claire mentioned, we saw softness at the end of the third quarter that carried into the start of the fourth quarter before strengthening somewhat on Black Friday Cyber Monday, albeit at elevated levels of promotion. Given this, we believe it prudent to take a cautious approach with respect to our outlook for the remainder of the year.

現在轉向我們的展望。我們繼續在充滿活力的環境中運作。正如克萊爾所提到的，我們看到第三季末的疲軟一直持續到第四季度初，然後在黑色星期五網路星期一有所加強，儘管促銷水平較高。有鑑於此，我們認為對今年剩餘時間的前景採取謹慎態度是明智的。

For fourth quarter, we expect sales be approximately flat versus Q4 2022 and adjusted EBITDA to be in the range of $11 million to $13 million. And for the full year, we are maintaining our outlook for adjusted EBITDA to be down in the low single digits compared to last year. As a reminder, fourth quarter and the full year include an approximate $2 million adjusted EBITDA benefit from the 53rd week.

我們預計第四季度的銷售額與 2022 年第四季大致持平，調整後的 EBITDA 將在 1,100 萬美元至 1,300 萬美元之間。就全年而言，我們維持調整後 EBITDA 與去年相比下降至較低個位數的預期。提醒一下，第四季和全年包括第 53 週的約 200 萬美元調整後 EBITDA 收益。

Regarding store count, we still expect to close two stores in the fourth quarter to end 2023 store count flat to last year. And with respect to full-year capital, we expect to spend about $18 million with investments focused on technology, stores and facilities capital, and the POS and OMS projects.

就門市數量而言，我們仍預計第四季將關閉兩家門市，以至 2023 年末門市數量與去年持平。就全年資本而言，我們預計將花費約 1800 萬美元，重點投資於技術、商店和設施資本以及 POS 和 OMS 項目。

In summary, we continue to operate a very disciplined operating model and remain on track to deliver another strong year of cash flow generation, positioning us well to continue investing in the business and evaluating opportunities to drive profitable growth and total shareholder returns.

總而言之，我們將繼續採用非常嚴格的營運模式，並繼續實現另一個現金流強勁的一年，這使我們能夠繼續投資業務並評估推動獲利成長和股東總回報的機會。

Thank you, and I will now hand it back to the operator for questions.

謝謝您，我現在將其交還給接線員以供提問。

(Operator Instructions) Jeff Lick, B. Riley Financial.

（操作員指示）Jeff Lick，B. Riley Financial。

Good morning, Claire and Mark. Congrats on a nice quarter. I was wondering if you could just you referenced the third quarter we ended the quarter weakness and then obviously into the fourth quarter, but the Black Friday pickup. I wonder if you could unpack that a little bit. And then also you referenced the customer survey work to maybe you could wrap what you've learned there with the observation you're seeing at the end of the third quarter into the fourth quarter and the Black Friday kind of promotional period.

早上好，克萊爾和馬克。恭喜您度過了一個美好的季度。我想知道您是否可以參考我們結束季度疲軟的第三季度，然後顯然進入第四季度，但黑色星期五的提振。我想知道你是否可以稍微解開一下。然後，您還提到了客戶調查工作，也許您可以將您在第三季末、第四季和黑色星期五促銷期間看到的觀察結果與所學到的內容結合。

Sure. Thanks, Jeff. We did say sort of slowdown coming out of Q3, which we attributed to sort of more discernment on the part of the customer. We do every quarter, at least on the pulse survey just to understand kind of where our customer's mind is relative to purchase intent, macro environment has you feeling about out things in general, and we did see that there is there's a level of concern there, which is understandable given the macro uncertainty.

當然。謝謝，傑夫。我們確實說過第三季出現了某種程度的放緩，我們將其歸因於客戶方面的更多洞察力。我們每季都會進行一次，至少在脈搏調查中，只是為了了解客戶的想法與購買意圖的關係，宏觀環境讓您對總體事物有感覺，我們確實看到存在一定程度的擔憂考慮到宏觀不確定性，這是可以理解的。

So we pay attention to that. And we did see softness coming out of Q3. As we enter Q4, we continued to see that trend. We held our powder on the promotional levels, unlike I think some of the some of the macro or some of the competitive environment where people were initiating their Black Friday level promotions earlier, we did not do that. And we did continue to see some softness coming into Q4 as we moved into the promotional period over the Black Friday, Cyber Monday weekend, we did see her respond to those promotions.

所以我們對此很關注。我們確實看到第三季出現疲軟。當我們進入第四季度時，我們繼續看到這種趨勢。我們在促銷層面上保持熱情，與我認為的一些宏觀或競爭環境不同，人們早些時候開始了黑色星期五級別的促銷活動，我們沒有這樣做。隨著我們進入黑色星期五、網路星期一週末的促銷期，我們確實繼續看到第四季度出現一些疲軟，我們確實看到她對這些促銷活動的反應。

So that's just a little bit more color. And then we're obviously continuing to watch her behavior very carefully. And I think that cautiousness is reflected in our guide for the fourth quarter.

所以這只是多一點顏色。然後我們顯然會繼續非常仔細地觀察她的行為。我認為這種謹慎態度反映在我們第四季的指南中。

And then the one for Mark, what the gross Q3 gross margins continued to show. And especially if you're looking at it relative to two or three years ago, your guidance would imply -- your 4Q guidance would imply you will have some room there for the promotional environment that we just talked about. I was wondering if you could comment on the then also just wrap in anything with the POS that's now in place and the OMS that's getting in place to where there might be some benefits from the P&L for that.

然後是馬克的第三季毛利率繼續表現出來的情況。特別是如果你相對於兩三年前來看待它，你的指導將意味著——你的第四季度指導將意味著你將為我們剛才談到的促銷環境留出一些空間。我想知道您是否可以對當時的情況發表評論，也可以將現在已到位的 POS 和即將到位的 OMS 納入其中，以便從損益表中可能獲得一些好處。

Sure, Jeff. Thanks. I think the drivers of the gross margin in Q3, and it continues to be another hallmark of the operating model, just the strength in the gross margin, and we are pleased with it in Q3. The drivers were afraid that we've indicated gets freight is a diminishing benefit throughout this year. So that will continue to be less of a benefit -- a small benefit, less of a benefit into Q4. We cited underlying First Class AUCs that's really targeting, which we've talked a bit about, but on the price growth on cotton late last year, and we're starting to see that benefit come in that is going to be a tailwind for us as we go forward.

當然，傑夫。謝謝。我認為第三季毛利率的驅動因素，它仍然是營運模式的另一個標誌，就是毛利率的強勁，我們對第三季的毛利率感到滿意。司機們擔心我們已經表明今年全年貨運收益正在遞減。因此，這將繼續帶來較小的好處——一個小好處，到第四季度的好處會更少。我們引用了真正針對的基礎一流 AUC，我們已經對此進行了一些討論，但去年年底棉花價格增長，我們開始看到收益的出現，這將成為我們的順風車當我們前進時。

The the other two drivers, really a function of the operating environment with full price selling and a little more promotional environment. Again, happy with how that played out over the course of Q3, though, obviously, as Clair just mentioned in response to your question, the end was a bit softer then start. But that AUC benefit does create the opportunity for us as we go forward to continue to deploy some of it if needed into promotions.

另外兩個驅動因素，實際上是全價銷售和多一點促銷環境的營運環境的函數。再次，我對第三季度的表現感到滿意，但顯然，正如克萊爾剛剛在回答你的問題時提到的那樣，結束比開始要柔和一些。但 AUC 優勢確實為我們創造了機會，因為我們將在需要時繼續將其中的一些優勢用於促銷活動。

And I think as we mentioned in the guide and the cautious approach, we're expecting it to be a promotional environment. It certainly has started to be with Black Friday, Cyber Monday, and this is the time of year for promotions. So we stand ready to do that.

我認為正如我們在指南中提到的和謹慎的態度，我們預計這將是一個促銷環境。當然，黑色星期五和網路星期一已經開始了，這是一年中促銷的時候。因此，我們隨時準備好這樣做。

And then you mentioned POS, LMS -- sorry, you want to follow-up.

然後你提到了 POS、LMS——抱歉，你想跟進。

You've got the go-ahead no is going to have, but then also you would be great if maybe you could just compare and contrast some of the lessons you add in your previous life of the gap was done all this because, you know, I think maybe what you're doing here is underappreciated.

你已經得到了拒絕的許可，但如果你能比較和對比你在前世的間隙中添加的一些教訓，那麼你也會很棒，因為，你知道，我想也許你在這裡所做的事情沒有得到充分重視。

Well, let me -- So POS, LMS. Super happy to have gotten the full fleet deployed in Q3. When you roll out a new system, it is a great saying that the store staff, the customers have noticed the new technology. We are still learning a new technology also that's going to continue. We're excited for the to really take an existing customer experience and enhance it and improve it, drive conversion by really making it a more seamless transaction within the store with respect to returns, with respect to exchanges. And then initially with POS with respect to store purchase of an online good and in-store purchase of an item from on our website.

好吧，讓我——那麼 POS、LMS。非常高興在第三季部署了完整的機隊。當你推出一個新系統時，商店員工、顧客都注意到了新技術，這是一個很好的說法。我們仍在學習一項新技術，而這種技術將持續下去。我們很高興能夠真正利用現有的客戶體驗並增強和改進它，透過真正使其成為商店內退貨和換貨方面更加無縫的交易來推動轉換。然後最初使用 POS 來商店購買線上商品和在我們網站上店內購買商品。

So that's that is all enhanced with the new POS rollout. Excited to get OMS underway. OMS sort of completes the rest of the enterprise inventory picture and does enable us to be more efficient in the operations just because the technology that we're replacing is aged and getting the technology in will help streamline some of the technology handoffs. And then it also enables omnicapabilities with respect to shipping from store and buying online, picking up in store, all of those things that are out in the marketplace that we feel we are as a fast follower on and a good place for us to be and looking forward to getting those benefits in the years to come.

這就是新 POS 推出後的全部增強。很高興 OMS 啟動。 OMS 可以說是完成了企業庫存情況的其餘部分，並且確實使我們能夠提高營運效率，因為我們要更換的技術已經過時，而採用該技術將有助於簡化一些技術交接。然後，它還實現了從商店發貨、網上購買、商店提貨等所有市場上的功能，我們認為我們是市場上的快速追隨者，也是我們的好地方，期待在未來幾年獲得這些好處。

Awesome. Thank you very much and congrats on a great quarter.

驚人的。非常感謝並祝賀您度過了一個美好的季度。

Ryan Meyers, Lake Street Capital Markets.

瑞安·邁耶斯（Ryan Meyers），湖街資本市場。

Good morning, guys. Thanks for taking my question. First one for me. Obviously another quarter of really strong cash flow generation. I'm just wondering if you guys can provide us with some detail on what your capital allocation strategy is going forward.

早上好傢伙。感謝您提出我的問題。對我來說第一個。顯然，又一個季度的現金流產生非常強勁。我只是想知道你們能否提供我們一些關於你們未來的資本配置策略的細節。

Sure, Ryan. We've been pretty consistent. We were super pleased to be able to refinance our debt earlier this year. Tough market to do so. But feel like we've got a good piece of paper in place with tenor and a lower quantum and feel like that was a good result for us. As we continue to execute our operating model that cash flow generation is a big part of the story. And we feel like that cash creates the opportunity for us to invest in the business and drive profitable growth.

當然，瑞安。我們一直都非常一致。我們非常高興能夠在今年稍早為我們的債務再融資。市場很難做到這一點。但感覺我們已經有了一張好的紙，有男高音和較低的量程，感覺這對我們來說是一個很好的結果。當我們繼續執行我們的營運模式時，現金流生成是故事的重要組成部分。我們認為現金為我們投資業務並推動獲利成長創造了機會。

Claire mentioned several examples about in her remarks and has spoken before about it. And it allows us to enhance the foundational systems of the company, which we're doing with POS and OMS. And then there's still cash leftover. So what we've said before, and we continue to evaluate is how best to deploy that cash to obtain the ultimate objective of driving total shareholder returns.

克萊爾在她的演講中提到了幾個例子，並且之前也談過。它使我們能夠增強公司的基礎系統，我們正在透過 POS 和 OMS 來實現這一點。然後還有剩餘的現金。因此，我們之前說過，我們將繼續評估如何最好地部署這些現金，以實現推動股東總回報的最終目標。

More to come on that as time progresses, I would imagine, but nothing more to say at this point on that, other than that is our objective.

我想，隨著時間的推移，還會有更多這樣的事情發生，但目前沒有什麼好說的，除此之外，這是我們的目標。

Okay. That makes sense. And then obviously, you're going to talk about that for Q4 margin, a lot of that's going to be coming from the promotional environment. Obviously, we had one month here of this running promotions in this environment. And what have you seen some increased spending from the customers on the blends and these promotions? Or how has the normal course of this more promotional environment in Q4? How do you think customers responded to that so far?

好的。這就說得通了。顯然，您將談論第四季度的利潤率，其中很大一部分將來自促銷環境。顯然，我們在這種環境下進行了一個月的促銷活動。您是否看到客戶在混合飲料和這些促銷活動上的支出增加？或者第四季這種更多促銷環境的正常進程如何？您認為到目前為止客戶對此有何反應？

Yeah. Thanks, Ryan. We, as we mentioned before, reflected in our guidance the room to promote appropriately in order to achieve our objectives of driving sales, moving through our inventory and coming out of the year in the position we want to from an inventory perspective. Obviously, we are a brand and the business that tries to not promote more than we have to. And so we tried to total line as much as we can, but recognize that the fourth quarter is a very promotional quarter.

是的。謝謝，瑞安。正如我們之前提到的，我們在指導中反映了適當促銷的空間，以實現我們推動銷售、清理庫存並從庫存角度達到我們想要的位置的目標。顯然，我們是一個品牌，也是一家企業，我們盡量不做不必要的宣傳。因此，我們嘗試盡可能匯總產品線，但認識到第四季度是一個非常促銷的季度。

As I mentioned in my remarks, it is also our smallest quarter from a top line and EBITDA standpoint. So we're navigating, we're staying close, and we're pulling the levers that we need to pull to achieve those objectives of the sales and clean inventory position while maintaining our margin profile to the extent possible. Then all that is rolled into our guide for the fourth quarter. And we, as always, feel great about our brand, feel great about our product, and feel great about our customer. And we're just navigating but consistent with what we've been managing the business all year.

正如我在演講中提到的，從營收和 EBITDA 的角度來看，這也是我們最小的季度。因此，我們正在航行，我們保持密切聯繫，我們正在拉動我們需要拉動的槓桿來實現這些銷售目標和清理庫存狀況，同時盡可能保持我們的利潤狀況。然後所有這些都將納入我們的第四季指南中。我們一如既往地對我們的品牌、我們的產品和我們的客戶感覺良好。我們只是在導航，但與我們全年管理業務的方式保持一致。

Okay. Thank you for taking my questions.

好的。感謝您回答我的問題。

Dana Telsey, Telsey Group.

達納‧特爾西，特爾西集團。

Hi. Good morning, everyone, and nice to see the progress. As you think about on the gross margin side, the AUC opportunity going forward, where are we in that path of AUC and how does how does that work? And then you mentioned, Claire, about some of the categories. Anything you saw on the pure Jill or wherever collection is compared to the core categories and what you saw the customer responding to or how the return rates deflating by category? And lastly, you've talked about capturing the younger customer. Anything that you saw this quarter from the customer and they're buying preferences compared to the core? Thank you.

你好。大家早安，很高興看到進展。當您考慮毛利率方面、未來 AUC 機會時，我們在 AUC 路徑上處於什麼位置以及它是如何運作的？克萊爾，然後你提到了一些類別。您在純吉爾或其他系列上看到的任何內容與核心類別進行了比較，以及您看到客戶的反應或退貨率如何按類別縮小？最後，您談到如何吸引年輕客戶。本季您從客戶那裡看到了什麼以及他們與核心產品相比的購買偏好？謝謝。

Sure. I'll answer the latter two, Dana, and I now hand it over to Mark to address the AUC question. So from a category standpoint, in Q3, we really saw a nice strength in our core assortment. We saw growth there. I think a couple of things in particular, we had a robust them refresh in August, which performed very well. And we had a really nice transition into fall and some nice response to our transitional product, which we feel like we've got right from a from a silhouette standpoint, from a color palette change standpoint, and some nice response to all of that.

當然。我將回答後兩個問題，Dana，現在我將其交給 Mark 來解決 AUC 問題。因此，從類別的角度來看，在第三季度，我們確實看到了我們的核心品種的強大優勢。我們在那裡看到了增長。我認為有幾件事特別重要，我們在八月進行了一次強勁的更新，表現非常好。我們在秋季進行了非常好的過渡，並對我們的過渡產品做出了一些很好的反應，我們覺得從輪廓的角度，從調色板變化的角度來看，我們已經得到了正確的結果，並對所有這些做出了一些很好的反應。

In the core assortment in particular, we saw strength in sweaters and wovens, particularly woven tops where print and pattern were very strong and we saw some strength in denim as well. From a sub-brand standpoint, this was a quarter where wherever was really the shining star from a sub brands standpoint. As you know, we've been leaning into wherever for the work usage occasion for our customers. And we've been seeing nice traction there in attracting new younger -- as a younger, but still consistent with our target demographic customers.

特別是在核心品種中，我們看到了毛衣和梭織品的優勢，特別是印花和圖案非常強烈的梭織上衣，我們也看到了牛仔布的一些優勢。從子品牌的角度來看，這個季度無論從子品牌的角度來看都是真正閃亮的明星。如您所知，我們一直致力於為客戶提供工作使用場合。我們已經看到了吸引新年輕人的良好吸引力——雖然年輕，但仍然符合我們的目標客群客戶。

Post Labor Day, we had a capsule called wherever works, which was kind of the ultimate expression of that. I'm slightly higher price points, a little bit more kind of waste interest and a little bit more sophistication and refinement, which we really aimed at the wear to work usage occasion. And we saw a really nice response to that as well. So that's a that's a concept and a capital that we will continue to lean into over the course of the coming months and quarters.

勞動節後，我們有一個名為“無論工作在哪裡”的膠囊，這是這一點的最終表達。我的價格稍微高一點，多一點浪費的興趣，多一點複雜和精緻，我們真正針對的是工作場合的穿著。我們也看到了對此的非常好的回應。因此，這是我們將在未來幾個月和幾季繼續依賴的概念和資本。

And that workwear at it as well as our size inclusivity initiative were both continued to be a great avenue for us in terms of new-to-brand customer acquisition and new-to-brand customers that were a little bit on the younger side of our target and also from a size inclusivity initiatives that we lapped in Q3 versus the launch last year. And we continue to see the acquisition of really valuable customers onto the file.

工作服以及我們的尺寸包容性舉措對於我們來說仍然是一個很好的途徑，可以吸引新品牌客戶和年輕的品牌新客戶。目標以及我們在第三季度實施的規模包容性舉措（與去年的推出相比）。我們繼續看到真正有價值的客戶的獲得記錄在案。

So all of that, we felt some nice traction in Q3 and forward.

因此，我們在第三季及以後感受到了一些良好的牽引力。

And Dana, with AUCs, as I mentioned previously, it's really the go forward tailwind that I would point to is related to raw materials and cotton. And I would expect that tailwind to continue. It started a little bit last quarter. So probably continue forward for maybe through the first half of next year, where are some on the horizon pressures coming from other crops that are out there, flax and women, et cetera. So we're always watching the crop reports that can have tugs and pulls on AUC for us. But overall, expect that cotton based benefit to continue.

正如我之前提到的，達納（Dana）的 AUC 確實是與原料和棉花有關的前進順風。我預計這種順風將持續下去。上個季度就開始了。因此，可能會持續到明年上半年，其中一些即將到來的壓力來自其他作物，例如亞麻和女性等。因此，我們一直在關注可以對我們的 AUC 產生影響的作物報告。但總體而言，預計以棉花為基礎的受益將持續下去。

We've said before at the margin rates that we're achieving are very healthy for us as a business. We don't necessarily need to expand them anymore for our business model. And so view those tailwinds why it's good to have them as an opportunity for us to deal within our disk from an operating model, comfortable making the investments that we've talked about, which inherently do carry in their inception a little bit more risk and allow us to go into those with a bit more comfort.

我們之前說過，我們所實現的利潤率對我們的企業來說非常健康。我們不一定需要為了我們的商業模式而擴展它們。因此，請看待這些順風因素，為什麼將它們作為我們從營運模式處理磁碟的機會是件好事，讓我們能夠輕鬆地進行我們所討論的投資，這些投資本質上在其開始時確實會帶來更多的風險，並且讓我們更輕鬆地討論那些問題。

So that's how we're thinking about the underlying AUCs right now.

這就是我們現在思考基本 AUC 的方式。

Got it. But any thoughts or breaking down by channel stores and online, what the drivers were this quarter? And lastly, any thoughts on store openings for next year as you are beginning to dip your toe in the world a little bit? Thank you .

知道了。但有什麼想法或按通路商店和線上細分，本季的驅動因素是什麼？最後，當您開始涉足世界時，對明年開店有什麼想法嗎？謝謝 。

Sure. We've said, Dana, that we expect next year that to be a year where we would return to some level of store growth. That's, of course, dependent upon successful negotiations with our landlords and getting the right deals. But we work through much of the fleet and feel like we're at a place where we can start to think about returning to some that in some net store growth.

當然。達納，我們已經說過，我們預計明年我們的商店成長將恢復到一定水平。當然，這取決於與房東的成功談判並獲得正確的交易。但我們對大部分機隊進行了研究，感覺我們現在可以開始考慮恢復一些網店成長。

As far as in the quarter channels that the channels and the drivers, we were pleased to see direct improve sequentially. Channel has had some investments Claire mentioned in her remarks that have helped to drive that channel. And it's one that that we feel good about. The stores, there wasn't a lot of geographical difference in the drivers through the quarter. The lifestyle centers continue to perform better from a truck perspective than malls. And I know we'll differentials on a on a large scale across the rest of the geographies.

就本季的通路和驅動因素而言，我們很高興看到直接連續改善。克萊爾在演講中提到頻道進行了一些投資，這些投資有助於推動頻道的發展。這是我們感覺良好的一個。就商店而言，整個季度的司機沒有太大的地域差異。從卡車的​​角度來看，生活中心的表現仍然比購物中心更好。我知道我們將在其他地區進行大規模的差異化。

Thank you. You may have no further questions in queue at this time. And with that, that concludes today's conference call. Thank you for your participation, and you may now disconnect.

謝謝。此時您可能沒有其他問題了。今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。