Joann Inc (JOAN) 2024 Q1 法說會逐字稿

Good day, and welcome to the JOANN's First Quarter Fiscal 2024 Earnings Conference Call. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Jason Wood, Vice President, Strategy and Corporate Responsibility. Please go ahead.

美好的一天，歡迎參加 JOANN 2024 財年第一季度收益電話會議。 （操作員說明）。請注意此事件正在被記錄。我現在想將會議交給戰略和企業責任副總裁賈森·伍德 (Jason Wood)。請繼續。

Thank you, and good afternoon. I'd like to remind everyone that the comments made today may include forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations.

謝謝你，下午好。我想提醒大家，今天發表的評論可能包括前瞻性陳述，這些陳述受到重大風險和不確定性的影響，可能導致公司的實際業績與管理層當前的預期存在重大差異。

These statements speak as of today, and the company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. Please review the cautionary statements and risk factors contained in the company's earnings press release and the recent filings with the SEC.

這些聲明截至今天，公司不承擔更新或修改任何前瞻性聲明以反映後續事件、新信息或未來情況的義務。請查看公司收益新聞稿和最近向 SEC 提交的文件中包含的警示性聲明和風險因素。

During the call today, management may refer to certain non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial measures can be found in the company's earnings press release, which was filed today with the SEC and posted to our Investor Relations section of JOANN's website at investor.joann.com.

在今天的電話會議中，管理層可能會參考某些非公認會計準則財務指標。 GAAP 和非 GAAP 財務指標之間的調節可以在公司的收益新聞稿中找到，該新聞稿今天向 SEC 提交，並發佈在 JOANN 網站 Investor.joann.com 的投資者關係部分。

On the call today from JOANN are the co-leaders of the interim office of the CEO, Chris DiTullio, Executive Vice President and Chief Customer Officer; and Scott Sekella, Executive Vice President and Chief Financial Officer. During the question-and-answer portion of the call, we will also be joined by Rob Will, Executive Vice President and Chief Merchant for JOANN. I will now turn the call over to Chris for his prepared comments.

今天參加 JOANN 電話會議的是首席執行官臨時辦公室的聯合領導、執行副總裁兼首席客戶官 Chris DiTullio；執行副總裁兼首席財務官 Scott Sekella。在電話問答部分，JOANN 執行副總裁兼首席商務員 Rob Will 也將加入我們。我現在將把電話轉給克里斯，徵求他準備好的意見。

Thank you, Jason. Good afternoon, and welcome to JOANN's First Quarter Fiscal 2024 Earnings Call. I want to start today by acknowledging the recent retirement of Wade Miquelon as JOANN's President and Chief Executive Officer; Wade spent 7 years at JOANN, serving as CFO before becoming President and Chief Executive Officer in 2019. During his time as CEO, Wade helped JOANN navigate periods of growth and challenge, including our initial public offering and our response to the COVID-19 pandemic.

謝謝你，傑森。下午好，歡迎參加 JOANN 的 2024 財年第一季度收益電話會議。首先，我要感謝 JOANN 總裁兼首席執行官 Wade Miquelon 最近退休； Wade 在 JOANN 工作了 7 年，擔任首席財務官，然後於 2019 年成為總裁兼首席執行官。在擔任首席執行官期間，Wade 幫助 JOANN 度過了增長和挑戰時期，包括我們的首次公開募股和我們對 COVID-19 大流行的應對。

On behalf of JOANN, I would like to thank Wade for his leadership during his time here and wish him the best as he moves on to his next chapter. Our Board of Directors has commenced a search to find a permanent replacement, and that effort is well underway. While that search is ongoing, Scott Sekella, our Chief Financial Officer; and I, have been appointed to lead the interim office of the Chief Executive Officer.

我謹代表喬安感謝韋德在此期間的領導，並祝愿他在進入下一個篇章時一切順利。我們的董事會已開始尋找永久替代者，目前工作正在順利進行。在尋找工作的同時，我們的首席財務官 Scott Sekella 表示：我和我已被任命領導臨時首席執行官辦公室。

In our role leading this office, we remain focused on delivering value for our shareholders. To do this, our focus in fiscal year 2024 is to deliver significant cash flow improvement and strengthen our top line by emphasizing the fundamentals that have made JOANN the nation's category leader in fabric and sewing and a strong competitor in the arts and crafts space.

在領導該辦公室的過程中，我們仍然專注於為股東創造價值。為此，我們 2024 財年的重點是顯著改善現金流，並通過強調使 JOANN 成為全國面料和縫紉領域領先者以及藝術和手工藝領域強大競爭對手的基本面來增強我們的營收。

This approach represents a back to basics mindset in which we are strengthening our focus on winning in our core selling and crafting categories, delivering a high-quality in-store and online experience with emphasis on driving operational excellence and efficiency.

這種方法代表了一種回歸基本的心態，在這種心態中，我們加強了對在核心銷售和工藝類別中獲勝的關注，提供高質量的店內和在線體驗，重點是推動卓越運營和效率。

To support this approach, we are leaning in on delivering innovative assortments with the strategic mix of owned, national and partner brands.

為了支持這種方法，我們致力於通過自有品牌、國內品牌和合作夥伴品牌的戰略組合來提供創新品種。

A significant piece of this strategy is the continued investment in our owned brands. By building our portfolio of owned brands, we can customize our product assortment using a customer-first lens, improved margins through direct sourcing and value engineering, all while exercising greater control over product quality and supply chain efficiency.

這一戰略的一個重要組成部分是對我們自有品牌的持續投資。通過建立我們的自有品牌組合，我們可以利用客戶至上的視角定制我們的產品種類，通過直接採購和價值工程提高利潤，同時對產品質量和供應鏈效率進行更好的控制。

Our investment over the past few years in owned brands, such as Place & Time, Big Twist, Top Notch and POP! is already delivering value. Owned brand sales, which represent nearly half of our total, outperformed the total company sales in the first quarter by nearly 500 basis points with gross margin impact between 400 to 600 basis points higher than the balance of our products.

過去幾年我們對自有品牌的投資，例如 Place & Time、Big Twist、Top Notch 和 POP!已經在創造價值。自有品牌銷售額占我們總銷售額的近一半，第一季度比公司總銷售額高出近 500 個基點，毛利率影響比我們的其他產品高出 400 至 600 個基點。

Owned brand penetration also increased 2% in the first quarter, and we expect this trend to build in the back half of fiscal year 2024. As we move forward, we believe our continued investment in owned brands combined with strategic national brand partnerships will enhance our innovative assortment and products and strengthen our position in both our core sewing and craft categories.

自有品牌滲透率在第一季度也增長了 2%，我們預計這一趨勢將在 2024 財年下半年形成。隨著我們的前進，我們相信我們對自有品牌的持續投資與戰略性全國品牌合作夥伴關係將增強我們的實力創新的品種和產品，鞏固了我們在核心縫紉和工藝類別中的地位。

As we look next at how we provide a differentiated in-store experience, we are focused on developing creative approaches to driving store productivity. This involves the holistic look at our stores to identify opportunities where new or relocated location makes sense or where a store refresh can help improve brand and customer experience, including better utilizing space for our core sewing and craft categories.

當我們接下來考慮如何提供差異化的店內體驗時，我們將專注於開發創新方法來提高商店生產力。這涉及對我們的商店進行整體審視，以確定新位置或搬遷地點有意義的機會，或者商店更新可以幫助改善品牌和客戶體驗的機會，包括更好地利用我們的核心縫紉和工藝品類別的空間。

That said, we recognize that physical space is only one part of a great in-store experience. As a result, we continue to look for ways to make it easier for our team members to deliver great service and truly be friendly clever allies to everyone who shops in our stores. This includes looking at ways to optimize our store labor hours to the key selling periods, delivering training support and simplifying the execution of our visual merchandising tactics, so that our team members are ready and available to engage with our customers and drive sales.

也就是說，我們認識到物理空間只是良好店內體驗的一部分。因此，我們不斷尋找方法，讓我們的團隊成員更輕鬆地提供優質服務，並真正成為每個在我們商店購物的人的友好聰明盟友。這包括尋找方法來優化我們商店關鍵銷售時段的工作時間、提供培訓支持以及簡化視覺營銷策略的執行，以便我們的團隊成員做好準備與客戶互動並推動銷售。

Recognizing that the way people shop our assortments also continues to evolve our broader strategic priorities in fiscal 2024 also include working to make the JOANN brand ubiquitous through seamless and engaging digital touch points and compelling omnichannel offerings. We are committed to reducing friction across all customer touch points, which includes working to optimize customer fulfillment by leveraging our network of stores and distribution centers more efficiently to maximize our e-commerce score rates and accelerate delivery time to customer.

認識到人們購買我們產品的方式也將繼續發展我們在 2024 財年更廣泛的戰略重點，還包括努力通過無縫且引人入勝的數字接觸點和引人注目的全渠道產品，使 JOANN 品牌無處不在。我們致力於減少所有客戶接觸點的摩擦，其中包括通過更有效地利用我們的商店和配送中心網絡來最大限度地提高我們的電子商務評分率並加快向客戶交付的時間，從而優化客戶滿意度。

Additionally, our customer continues to love our buy online, pick up in store or curbside options, as we enable a Shop Your Way service model. Our customer is responding and is evidenced by increasing engagement and shopping through our mobile app, which has over 15 million downloads and provides a fully omnichannel experience. Underlying this strategic focus is our continued effort to operate as effectively and efficiently as possible.

此外，我們的客戶仍然喜歡我們的在線購買、店內提貨或路邊選擇，因為我們啟用了 Shop Your Way 服務模式。我們的客戶正在做出回應，並通過我們的移動應用程序增加參與度和購物來證明這一點，該應用程序的下載量超過 1500 萬次，並提供完全的全渠道體驗。這一戰略重點的基礎是我們不斷努力盡可能有效和高效地運營。

This starts with our Focus, Simplify and Grow initiative. Launched in the back half of fiscal year 2023, this initiative is a critical tool as we look to reduce costs and drive cash flow improvements. When combined with other ongoing operational efficiency efforts, such as our continued emphasis on and utilization of a data-driven decision-making infrastructure. Focus, Simplify and Grow is an important driver of our ability to build for the future by reinvesting in our core strengths and growth strategies.

這始於我們的“專注、簡化和成長”計劃。該計劃於 2023 財年下半年啟動，是我們尋求降低成本並推動現金流改善的關鍵工具。與其他正在進行的運營效率努力相結合，例如我們持續強調和利用數據驅動的決策基礎設施。專注、簡化和成長是我們通過對核心優勢和增長戰略進行再投資來建設未來的能力的重要驅動力。

Our Focus, Simplify and Grow initiative targets, as a reminder, approximately $200 million of annualized cost savings in 3 general buckets, including approximately $100 million in supply chain costs, $60 million in our cost of goods sold and another $40 million in SG&A costs. Initially, we had planned for the identification of these cost savings to be completed by early fiscal year 2025.

提醒一下，我們的“聚焦、簡化和增長”計劃的目標是在 3 個一般類別中每年節省約 2 億美元的成本，其中包括約 1 億美元的供應鏈成本、6,000 萬美元的銷售成本以及另外 4,000 萬美元的 SG&A 成本。最初，我們計劃在 2025 財年年初完成這些成本節約的確定。

While Scott will speak to the specifics in greater detail, we have begun capturing significant supply chain cost savings through decreased domestic and international freight and through our vendor negotiations have clawed back some inflationary increases in our cost of goods with more to come.

雖然斯科特將更詳細地談論具體細節，但我們已經開始通過減少國內和國際貨運來節省大量供應鏈成本，並通過我們的供應商談判彌補了我們的商品成本中的一些通貨膨脹性增長，並且未來還會有更多。

Additionally, our investment in owned brands continues to help reduce product costs as well. Through this work and our ongoing efforts to reduce SG&A expenses, we now have full line of sight to the $200 million total and are leaving no stone unturned as we look for further cost reductions. As anticipated, these cost savings have supported significant improvement of $89 million in year-over-year free cash flow improvement in the first quarter of fiscal 2024 and will help move our adjusted EBITDA back towards historical levels in fiscal year of 2025.

此外，我們對自有品牌的投資也繼續有助於降低產品成本。通過這項工作以及我們為減少 SG&A 開支所做的持續努力，我們現在已全面了解 2 億美元的總額，並在尋求進一步削減成本時不遺餘力。正如預期的那樣，這些成本節省支持 2024 財年第一季度自由現金流同比顯著改善 8900 萬美元，並將幫助我們在 2025 財年調整後 EBITDA 回到歷史水平。

We believe that by delivering on these foundational strategic priorities, creating a differentiated in-store experience, making the JOANN brand ubiquitous across customer channels and continuing to drive operational efficiency and effectiveness, JOANN will be well positioned to create value in the near term and reinvest in the things that will drive long-term growth.

我們相信，通過實現這些基本戰略重點、創造差異化的店內體驗、使 JOANN 品牌在客戶渠道中無處不在並繼續提高運營效率和效益，JOANN 將處於有利地位，能夠在短期內創造價值並進行再投資那些能夠推動長期增長的事情。

Before getting into more detail about our first quarter performance, I do want to take a moment to recognize our team members. I could not be prouder of the dedicated professionals who work across all aspects of our company. The team members in our stores, distribution centers, omni fulfillment center and across our corporate offices truly are our greatest asset.

在詳細介紹我們第一季度的業績之前，我確實想花點時間來認識一下我們的團隊成員。我為在我們公司各個方面工作的敬業專業人員感到無比自豪。我們的商店、配送中心、全方位履行中心和公司辦公室的團隊成員確實是我們最大的資產。

As we move forward through fiscal year 2024, implementing our strategic priorities will require our more than 20,000 team members to display a passion, commitment and flexibility, they are known for, as we work to inspire creativity in our customers and ourselves and help everyone find their happy place with JOANN. With this approach as the foundation, I will now provide some highlights from our first quarter fiscal year 2024 performance.

在我們邁向 2024 財年的過程中，為了實現我們的戰略重點，我們的 20,000 多名團隊成員將展現出他們眾所周知的熱情、承諾和靈活性，因為我們致力於激發客戶和我們自己的創造力，並幫助每個人找到他們和喬安在一起的快樂之地。以這種方法為基礎，我現在將提供 2024 財年第一季度業績的一些亮點。

For the first quarter, we delivered net sales of $478.1 million, a decline of 4% compared to the same period last year. Gross margin on a GAAP basis was 52.1%, an increase of 380 basis points compared to the first quarter of fiscal 2023. Top line sales started strong in the quarter in February and early March. However, like many other retailers, we saw a decrease as we moved into and through April.

第一季度，我們實現淨銷售額 4.781 億美元，比去年同期下降 4%。按 GAAP 計算的毛利率為 52.1%，與 2023 財年第一季度相比增加了 380 個基點。2 月和 3 月初該季度的營收開始強勁。然而，與許多其他零售商一樣，隨著進入四月並持續整個四月，我們的銷量有所下降。

This deceleration coincided with the decline in consumer confidence driven by continuing inflationary pressures, rising interest rates and the accompanying concerns over potential recession. We will, obviously, continue to monitor consumer sentiment and the pressure it is putting on the discretionary portion of the economy, and we will strategically adjust as necessary.

這種減速與持續的通脹壓力、利率上升以及隨之而來的對潛在衰退的擔憂所導致的消費者信心下降同時發生。顯然，我們將繼續監測消費者情緒及其對經濟中可自由支配部分帶來的壓力，並根據需要進行戰略調整。

That said, we remain optimistic we will be able to deliver on our full year outlook, which Scott will walk through in a few minutes, due to healthy customer engagement in our core sewing and craft categories and our strategic focus on (inaudible) cost reductions. Our merchandise category performance across the quarter was mixed. On the positive side, our core sewing and craft businesses performed well during the first quarter.

也就是說，我們仍然樂觀地認為，我們將能夠實現全年展望，斯科特將在幾分鐘內完成這一展望，因為客戶對我們的核心縫紉和工藝類別的健康參與以及我們對（聽不清）成本降低的戰略重點。本季度我們的商品類別表現好壞參半。從積極的一面來看，我們的核心縫紉和工藝業務在第一季度表現良好。

We are seeing strength in our textiles-related sewing and craft businesses, along with the supplies that support those activities. This is critically important as it illustrates the effectiveness of our strategic focus on winning in our core categories and demonstrates that our core customer is also reengaged in the space.

我們看到與紡織品相關的縫紉和手工藝業務以及支持這些活動的供應品的實力。這一點至關重要，因為它說明了我們在核心類別中獲勝的戰略重點的有效性，並表明我們的核心客戶也重新參與了該領域。

It was also supported by the launch of DITTO in the first quarter. DITTO, to remind everyone, is our 50-50 joint venture with SINGER, Viking and PFAFF. This innovative product, which brings the pattern business into the digital age, is in its early stages of rollout at both JOANN and SINGER, Viking Gallery locations and is gaining attention with sewing enthusiasts across the country.

第一季度推出的 DITTO 也為其提供了支持。提醒大家，DITTO 是我們與 SINGER、Viking 和 PFAFF 50-50 的合資企業。這款創新產品將樣板業務帶入數字時代，目前在 JOANN 和 SINGER、Viking Gallery 地點推出，目前正處於推出的早期階段，並受到全國縫紉愛好者的關注。

On the merchandise headwind side, we do continue to see craft technology as our primary challenge to positive comparable sales. While our data indicates we're outperforming the industry, sales pressure from craft technology was significant in the quarter, accounting for a decline in comparable sales of 150 basis points. We expect this headwind to continue as we move deeper into fiscal year 2024.

在商品逆風方面，我們確實繼續將工藝技術視為我們實現積極可比銷售的主要挑戰。雖然我們的數據表明我們的表現優於行業，但本季度來自工藝技術的銷售壓力很大，導致可比銷售額下降了 150 個基點。我們預計，隨著 2024 財年的深入，這種逆風將持續下去。

Additionally, we have also made strategic pullbacks in higher-risk seasonal categories. And while currently a headwind to the top line, it's supporting higher overall gross margin and company profitability. We also continue to see strength in our e-commerce business. In terms of performance in the first quarter, our year-over-year change in e-commerce sales outpaced store walk-in sales and the company overall, declining at a more moderate rate of 1% compared to last year.

此外，我們還對高風險季節性類別進行了戰略性縮減。雖然目前對營收構成阻力，但它支撐著更高的整體毛利率和公司盈利能力。我們還繼續看到我們的電子商務業務的實力。就第一季度的業績而言，我們的電子商務銷售額同比變化超過了實體店銷售額和公司整體銷售額，與去年相比，下降幅度較為溫和，為 1%。

Overall, e-commerce sales accounted for 11.8% of revenue in the first quarter, a 30 basis point increase in the penetration rate over the same period last year. Much like the overall business, we saw positive sales growth in our core sewing and craft categories across the quarter, while craft technology, a business that is highly penetrated online was our primary headwind accounting for a 390 basis point decline in comparable e-commerce sales.

總體來看，一季度電商銷售佔收入的11.8%，滲透率較去年同期提升30個基點。與整體業務非常相似，本季度我們的核心縫紉和工藝品類別的銷售額出現了積極增長，而工藝品技術這一在線高度滲透的業務是我們的主要阻力，導致可比電子商務銷售額下降了 390 個基點。

With all of this in mind, we recognize there is work to be done. While we can't control macroeconomic uncertainty, we will remain focused on driving value for our shareholders. We're executing on the strategic priorities I've outlined today, including the execution of our Focus, Simplify and Grow initiative, along with our first quarter performance, gives us clear line of sight to not only delivering significant full year-over-year cash flow improvement, but also to hitting our fiscal year 2024 outlook.

考慮到所有這些，我們認識到還有很多工作要做。雖然我們無法控制宏觀經濟的不確定性，但我們將繼續專注於為股東創造價值。我們正在執行我今天概述的戰略優先事項，包括執行我們的“聚焦、簡化和增長”計劃，以及我們第一季度的業績，這使我們能夠清晰地認識到，不僅要實現顯著的同比增長現金流的改善，同時也實現了我們 2024 財年的展望。

With the great capabilities, commitment and passion of our team members. I'm confident we can build on our first quarter results and position JOANN for long-term success moving forward. With that, I will turn it over to our CFO, Scott Sekella, to give a more detailed rundown of our first quarter financial results and a forward look at fiscal 2024 before we wrap up to answer your questions.

憑藉我們團隊成員的強大能力、承諾和熱情。我相信我們能夠在第一季度業績的基礎上繼續前進，並為 JOANN 奠定長期成功的基礎。接下來，我將把它交給我們的首席財務官 Scott Sekella，在我們結束回答大家的問題之前，他會更詳細地介紹我們第一季度的財務業績，並對 2024 財年進行展望。

Thank you, Chris. As Chris discussed in his remarks, our strategic priorities in fiscal year 2024 remain centered on winning in our core sewing and craft categories, providing a great customer experience in our stores and online and continuing to find new ways to operate as efficiently as possible.

謝謝你，克里斯。正如克里斯在講話中所討論的那樣，我們 2024 財年的戰略重點仍然集中在贏得我們的核心縫紉和工藝類別，在我們的商店和網上提供良好的客戶體驗，並繼續尋找盡可能高效運營的新方法。

By emphasizing these fundamentals, which help make JOANN the nation's category leader in sewing, we believe that over the course of fiscal 2024, we will be able to meaningfully improve cash flow, strengthen our top line and begin expanding adjusted EBITDA towards more historical levels.

通過強調這些有助於使 JOANN 成為全國縫紉行業領導者的基本原則，我們相信在 2024 財年期間，我們將能夠顯著改善現金流，增強我們的營收，並開始將調整後的 EBITDA 擴大到歷史水平。

With that in mind, today, I'll provide a deeper recap of our first quarter results and provide details about our full year outlook for fiscal 2024. In the first quarter, net sales totaled $478.1 million, a decline of 4% compared to last year with total comparable sales also decreasing by 4%. Through the quarter, sales were strong in February and March, but decelerated in April.

考慮到這一點，今天我將更深入地回顧我們第一季度的業績，並詳細介紹我們對 2024 財年的全年展望。第一季度淨銷售額總計 4.781 億美元，比去年同期下降 4%年可比銷售額總額也下降了 4%。整個季度，2 月和 3 月的銷售強勁，但 4 月則有所放緩。

While this coincided with declining consumer confidence, we remain optimistic about our fiscal 2024 sales outlook due to healthy customer engagement in our core sewing and crafting businesses, our increased emphasis on our strategic priorities, which Chris discussed and the ability to optimize our promotional cadence to meet customer demand in the face of an uncertain macroeconomic environment.

雖然這恰逢消費者信心下降，但我們對 2024 財年的銷售前景保持樂觀，因為客戶對我們的核心縫紉和手工業務的健康參與，我們更加重視我們的戰略重點（克里斯討論過）以及優化我們的促銷節奏的能力面對不確定的宏觀經濟環境，滿足客戶需求。

On a GAAP basis, our gross profit in the first quarter was $249 million, an increase of 3.4% from the first quarter of last year. This year-over-year increase was driven largely by continuing improvement in import freight costs, which had a 500 basis point positive impact on our gross margin. We recognized $3.9 million of excess import freight costs during the first quarter.

按美國通用會計準則計算，我們第一季度的毛利潤為2.49億美元，比去年第一季度增長3.4%。這一同比增長主要是由於進口貨運成本的持續改善，這對我們的毛利率產生了 500 個基點的積極影響。我們在第一季度確認了 390 萬美元的超額進口運費。

This figure reflects a $25 million decrease to the same period last year as we continue to benefit from the improving conditions in the spot market. On a cash basis, in Q1, we realized $21.7 million of cash benefit from lower ocean freight rates. This was one of the drivers of our $89 million year-over-year free cash flow improvement in the quarter.

這一數字比去年同期減少了 2500 萬美元，因為我們繼續受益於現貨市場狀況的改善。按現金計算，第一季度，我們從較低的海運費中實現了 2170 萬美元的現金收益。這是我們本季度自由現金流同比改善 8900 萬美元的推動因素之一。

On a year-over-year basis, for the full fiscal year 2024, we anticipate excess import freight costs, which are treated as an add-back for non-GAAP measures, to be approximately $90 million less than last year and fully cycle out by the end of the second quarter. Our gross margin on a GAAP basis was 52.1% in the first quarter, an increase of 380 basis points from the first quarter of last year.

與去年同期相比，我們預計 2024 年整個財年的超額進口運費（被視為非 GAAP 措施的加回）將比去年減少約 9000 萬美元，並完全循環淘汰到第二季度末。我們第一季度按照 GAAP 計算的毛利率為 52.1%，比去年第一季度增加了 380 個基點。

This continued the trend of sequential improvement in our year-over-year GAAP basis gross margin comparisons. As described a moment ago, we continue to benefit from cycling the extremely high ocean freight costs that we faced last year. The year-over-year 380 basis point improvement was driven by the 500 basis point increase from continuing improvement in ocean freight costs and a 40 basis point increase from improved clearance activity.

這延續了我們按公認會計準則計算的毛利率同比連續改善的趨勢。正如剛才所述，我們繼續受益於去年面臨的極高海運成本。海運成本持續改善導致同比增長 500 個基點，清關活動改善導致同比增長 40 個基點，推動了同比增長 380 個基點。

These increases were partially offset by a 100 basis point decline in our merchandising margin, a 40 basis point decline due to the timing and cycling of capitalized domestic freight costs partially offset by improved carrier rates and 20 basis points of higher shrink, primarily in our stores, which has sequentially improved from the previous quarter.

這些增長被我們的商品利潤率下降 100 個基點部分抵消，由於資本化國內貨運成本的時間和周期而導致 40 個基點的下降，部分被承運人費率的提高以及主要在我們商店中的 20 個基點的較高損耗所抵消。 ，較上一季度有所改善。

To provide additional color on our first quarter merchandising margin, the decline of 100 basis points compared to the same period last year can be attributed to the continued lapping of some of the inflationary cost increases we experienced during the prior year. Our average unit costs were up 5.1% compared to the prior year period.

為了讓我們第一季度的商品利潤率更加生動，與去年同期相比下降了 100 個基點，這可以歸因於我們去年經歷的一些通脹成本增長的持續放緩。與去年同期相比，我們的平均單位成本上升了 5.1%。

We do expect our average unit cost comparisons to sequentially improve throughout the course of the year as we cycle these inflationary increases and begin to reap the benefits of the reduction in cost of goods sold negotiated with our vendors as part of the Focus, Simplify and Grow initiative. Average unit retail increased 2.7% relative to the same period last year.

我們確實預計我們的平均單位成本比較將在全年中持續改善，因為我們循環這些通脹增長，並開始獲得與供應商談判的商品銷售成本降低的好處，作為“聚焦、簡化和增長”的一部分倡議。平均單位零售量較去年同期增長 2.7%。

Turning to expenses. Our first quarter fiscal 2024 SG&A expenses increased by 1.5% from the first quarter of last year. This increase was driven by incremental costs related to incentive and stock-based compensation as well as inflationary pressures on labor, particularly at our store locations and other costs.

轉向開支。我們 2024 財年第一季度的 SG&A 費用比去年第一季度增長了 1.5%。這一增長是由與激勵和股票薪酬相關的增量成本以及勞動力的通脹壓力（特別是在我們的商店地點和其他成本）推動的。

With that being said, we were pleased with our ability to manage SG&A expenses despite these pressures through actions such as the strategic management of labor hours in our stores and our continued optimization of advertising spend as we shift to more digital channels as well as lower medical benefit costs.

話雖如此，儘管我們面臨著這些壓力，但我們仍對自己管理銷售及行政費用的能力感到滿意，我們通過對商店工時進行戰略管理等行動，以及隨著我們轉向更多數字渠道以及降低醫療費用而不斷優化廣告支出。效益成本。

We continue to assess for opportunities to optimize our SG&A expenses as part of our Focus, Simplify and Grow cost reduction initiative, and I will give more color on that shortly. Our net loss in the first quarter was $54.2 million compared to a net loss of $35.1 million in the same period last year.

作為我們聚焦、簡化和增長成本削減計劃的一部分，我們將繼續評估優化 SG&A 費用的機會，我將很快對此進行更多說明。我們第一季度的淨虧損為 5420 萬美元，而去年同期的淨虧損為 3510 萬美元。

Adjusted EBITDA in the first quarter was $3.5 million compared to $18.6 million in the first quarter of last year. Moving on to our balance sheet. Our cash and cash equivalents were $19.7 million at the end of the first quarter. As of April 29, 2023, we had $61.3 million of availability on our revolving credit facility, which is tied to a lower borrowing base due to our inventory optimization efforts including cycling higher excess import freight costs and our actions to strategically lower inventory receipts.

第一季度調整後 EBITDA 為 350 萬美元，而去年第一季度為 1860 萬美元。繼續我們的資產負債表。截至第一季度末，我們的現金和現金等價物為 1970 萬美元。截至 2023 年 4 月 29 日，我們的循環信貸額度有 6130 萬美元，這與較低的借款基礎有關，這是由於我們的庫存優化工作（包括循環較高的超額進口運費成本）以及我們採取的戰略性降低庫存收入的行動所致。

Our face value of debt, net of cash at the end of the fourth quarter was $1.033 billion. This reflects an increase of $109.4 million from the same period last year and a leverage ratio of 4.8x as measured by net debt and finance lease obligations relative to credit facility adjusted EBITDA on a trailing 12-month basis.

截至第四季度末，我們的債務面值（扣除現金）為 10.33 億美元。這反映了較去年同期增加了 1.094 億美元，以及按過去 12 個月的信貸安排調整後 EBITDA 的淨債務和融資租賃義務衡量的槓桿率為 4.8 倍。

Our inventory at the end of the first quarter was down 13% compared to the same period last year. This decline was driven by a $32.3 million year-over-year reduction in capitalized excess import freight costs as well as our plan to strategically lower inventory receipts. This approach allowed us to derisk in the right areas, primarily our seasonal categories, so that we can lean in on receipts to support our emphasis on winning in our core sewing and crafting businesses.

一季度末我們的庫存比去年同期下降了13%。這一下降的原因是資本化超額進口貨運成本同比減少了 3230 萬美元，以及我們戰略性降低庫存收入的計劃。這種方法使我們能夠在正確的領域（主要是季節性類別）消除風險，這樣我們就可以依靠收入來支持我們在核心縫紉和手工業務中獲勝的重點。

Fueled in part by the strategic inventory receipt reduction, we continue to maintain a low clearance inventory of less than 5% of total. Our inventory position remains clean, leaving us well positioned to capitalize on the evolving consumer demand environment as we leverage test, read and react capabilities. In conjunction with all this work, we remain laser-focused on meaningful cash improvement in fiscal year 2024.

在戰略性庫存收貨減少的推動下，我們繼續保持低於總庫存 5% 的低清倉庫存。我們的庫存狀況保持乾淨，使我們能夠利用測試、讀取和反應能力，充分利用不斷變化的消費者需求環境。結合所有這些工作，我們將繼續專注於 2024 財年現金的有意義的改善。

We have initiated multiple actions to support this focus, and these efforts have supported a significant $89 million year-over-year improvement in our first quarter free cash flow. This includes our Focus, Simplify and Grow cost reduction initiative, which, as Chris mentioned, targets $200 million of annual cost reductions in 3 broad categories across all areas of our business, including approximately $100 million of supply chain costs, approximately $60 million of product costs and another approximately $40 million of SG&A.

我們已採取多項行動來支持這一重點，這些努力使我們第一季度的自由現金流同比大幅改善了 8900 萬美元。這包括我們的“聚焦、簡化和增長”成本削減計劃，正如克里斯提到的，該計劃的目標是在我們所有業務領域的 3 大類別中每年削減 2 億美元的成本，其中包括約 1 億美元的供應鏈成本、約 6000 萬美元的產品成本成本和另外約 4000 萬美元的 SG&A。

Since launching this effort late in fiscal year 2023, we have worked diligently to identify cost reductions in all 3 buckets. We can safely say that we have identified the full targeted $200 million of annual cost reductions, and we are now focusing on implementing and executing these initiatives. This implementation includes taking proactive steps to solidify, and as possible, build on the significant positive impact of reduced ocean freight costs.

自 2023 財年末啟動這項工作以來，我們一直在努力降低所有 3 個方面的成本。我們可以有把握地說，我們已經確定了年度成本削減 2 億美元的全部目標，現在我們正專注於實施和執行這些舉措。這一實施包括採取積極措施，鞏固並儘可能利用降低海運成本所產生的重大積極影響。

We are finalizing new agreements with our ocean freight vendors that include favorable contract rates, putting us in a strong position to continue to benefit from these savings and potentially over-deliver our $100 million supply chain cost target. Additionally, we continue to identify product cost savings. Many of our RFPs are still in process, but we are confident about our ability to claw back the inflationary increases we saw last year.

我們正在與海運供應商敲定新協議，其中包括優惠的合同費率，使我們處於有利地位，能夠繼續從這些節省中受益，並有可能超額實現我們 1 億美元的供應鏈成本目標。此外，我們繼續尋求產品成本節約。我們的許多 RFP 仍在處理中，但我們對收回去年通脹上升的能力充滿信心。

In terms of SG&A, we are identifying ways to more efficiently deploy our resources to support value creation and drive top line activity. This includes optimizing store labor through [4-wall] work simplifications, optimizing our labor mix and reducing administrative dollars as well as driving greater efficiency in our information technology spend.

在SG&A方面，我們正在尋找更有效地部署資源的方法，以支持價值創造和推動營收活動。這包括通過 [4 牆] 工作簡化來優化商店勞動力、優化我們的勞動力結構、減少管理費用以及提高信息技術支出的效率。

As we take this approach, we are staying grounded in our strategic priority of delivering a differentiated in-store experience by looking at identifying efficiency gains that not only lower cost, but make it easier for our in-store team members to deliver the quality service our customers expect. While we have already identified the targeted $200 million of annual cost reductions and are now implementing these initiatives, as Chris said, we are leaving no stone unturned as we look for additional potential savings.

當我們採取這種方法時，我們始終堅持我們的戰略重點，即通過尋找效率提升來提供差異化的店內體驗，這不僅可以降低成本，而且可以讓我們的店內團隊成員更輕鬆地提供優質服務我們的客戶期望。正如 Chris 所說，雖然我們已經確定了每年 2 億美元成本削減的目標，並且現在正在實施這些舉措，但我們將不遺餘力地尋找額外的潛在節省成本。

With these identified cost reductions, the significant first quarter year-over-year improvement in free cash flow and the operational results we saw in the first quarter, we believe we have a clear line of sight to delivering on our full fiscal year 2024 outlook. In terms of our top line performance, we anticipate that net sales relative to fiscal year 2023 will be down between 1% and 4%.

憑藉這些已確定的成本削減、第一季度自由現金流同比顯著改善以及我們在第一季度看到的運營業績，我們相信我們對實現 2024 年整個財年前景有清晰的認識。就我們的營收業績而言，我們預計淨銷售額相對 2023 財年將下降 1% 至 4%。

This range is inclusive of a 53rd fiscal week in fiscal year 2024, which is worth approximately 2%. We believe the healthy customer engagement we are seeing in our core sewing and craft categories will aid in providing a buffer to our top line in light of the challenging and uncertain macroeconomic environment our customers continue to face.

該範圍包括 2024 財年的第 53 財週，價值約為 2%。我們相信，鑑於我們的客戶繼續面臨充滿挑戰和不確定的宏觀經濟環境，我們在核心縫紉和工藝類別中看到的健康的客戶參與將有助於為我們的營收提供緩衝。

As we previously mentioned, driving meaningful cash improvement is one of our key focuses for fiscal year 2024. In the first quarter, we delivered a significant year-over-year improvement in free cash flow, and we anticipate additional improvement as we move through the full fiscal year. We are projecting that over the full fiscal year 2024 we will see a year-over-year improvement in free cash flow between $150 million and $170 million.

正如我們之前提到的，推動有意義的現金改善是我們 2024 財年的重點之一。在第一季度，我們的自由現金流量同比顯著改善，並且我們預計，隨著我們進入整個財政年度。我們預計，在 2024 年整個財年，自由現金流將同比改善 1.5 億至 1.7 億美元。

The significant drivers of this forecasted improvement include the continued implementation of our Focus, Simplify and Grow cost reduction initiative as well as working capital and capital expenditure optimization actions. For fiscal year 2024, we are projecting capital expenditures net of landlord contributions between $40 million and $45 million.

這一預測改善的重要驅動因素包括繼續實施我們的“聚焦”、“簡化”和“增長”成本削減計劃以及營運資本和資本支出優化行動。對於 2024 財年，我們預計扣除房東捐款後的資本支出將在 4000 萬至 4500 萬美元之間。

While the cash benefit of Focus, Simplify and Grow initiative will be felt heavily in fiscal year 2024, the mostly annualized P&L benefit will not be realized until fiscal year 2025, due to the time it takes for inventory and related costs to cycle through our balance sheet. With that being said, we do anticipate adjusted EBITDA between $85 million and $95 million.

雖然“聚焦、簡化和增長”計劃的現金收益將在 2024 財年明顯體現出來，但由於庫存和相關成本需要時間才能在我們的餘額中循環，因此大部分年化損益收益要到 2025 財年才能實現床單。話雖如此，我們確實預計調整後的 EBITDA 在 8500 萬美元至 9500 萬美元之間。

Note that fiscal 2024 includes a headwind from reinstituting our incentive compensation program, which is partially offset by the benefit of the 53rd fiscal week. In conclusion, we remain focused on delivering value for our shareholders. As we move through fiscal year 2024, we are focused on delivering significant cash flow improvements and strengthening our top line by emphasizing the fundamentals that have made JOANN the nation's category leader in fabric and sewing with one of the largest assortments of arts and crafts products.

請注意，2024 財年包括重新制定激勵薪酬計劃帶來的阻力，但第 53 財週的收益部分抵消了這一阻力。總之，我們仍然專注於為股東創造價值。在進入 2024 財年時，我們的重點是顯著改善現金流，並通過強調使 JOANN 成為全國面料和縫紉領域領先者以及藝術和工藝品產品種類最多的產品之一的基本面來增強我們的營收。

While still facing an uncertain macroeconomic environment, we are executing on a series of strategic priorities that will help us deliver that value. Based on the factors we have discussed today, including the significant year-over-year improvement in our free cash flow, the continued implementation of our Focus, Simplify and Grow cost reduction initiative and our operational performance in the first quarter, we believe we have a clear line of sight to delivering on our full fiscal year 2024 outlook. With that, we'd be happy to take your questions. Operator?

儘管仍面臨不確定的宏觀經濟環境，但我們正在執行一系列戰略優先事項，這將有助於我們實現這一價值。根據我們今天討論的因素，包括我們的自由現金流同比顯著改善、我們的“聚焦、簡化和增長”成本削減計劃的持續實施以及我們第一季度的運營業績，我們相信我們已經實現 2024 財年全年展望的清晰目標。因此，我們很樂意回答您的問題。操作員？

(Operator Instructions). I believe David's line is muted. I still can't hear him. Can I move on to the next question? Our next question comes from (inaudible) with Guggenheim.

（操作員說明）。我相信大衛的線路是靜音的。我還是聽不到他的聲音。我可以繼續下一個問題嗎？我們的下一個問題來自（聽不清）古根海姆。

This is Rene Marin on for Steve Forbes I wanted to focus on the 2 million reactivated customers during 2022. Curious if you can discuss any incremental learnings from this cohort year-to-date. What strategies are in place to keep this consumer engaged for the remainder of the year?

這是雷內·馬林 (Rene Marin) 為史蒂夫·福布斯 (Steve Forbes) 所做的演講。我想重點關注 2022 年重新激活的 200 萬客戶。很好奇您能否討論今年迄今為止從該群體中獲得的任何增量學習成果。有哪些策略可以讓該消費者在今年剩餘時間內保持參與度？

This is Chris. I can take that answer. We're seeing really good engagement across our known customer database, including those reactivated last year, but also those that have been year-over-year. Our known customer database is the strongest portion of what the response we're seeing right now. Transactions, sales and customer counts are up across the board within our various known customer database segments.

這是克里斯。我可以接受這個答案。我們在已知的客戶數據庫中看到了非常好的參與度，包括去年重新激活的客戶數據庫，以及逐年恢復的客戶數據庫。我們已知的客戶數據庫是我們目前看到的反應中最有力的部分。在我們各個已知的客戶數據庫細分市場中，交易、銷售和客戶數量全面上升。

Great. And for my follow-up, I wanted to touch on the DITTO launch. Can you provide some additional color on the feedback you are getting from your dealer network and customers? We understand this is early in the stages, but perhaps you can discuss how this initiative is performing versus internal expectations? Are new customers engaging with DITTO as much as your core customer? Any additional color would be helpful.

偉大的。對於我的後續行動，我想談談 DITTO 的發布。您能否對從經銷商網絡和客戶那裡獲得的反饋提供一些額外的信息？我們知道這還處於早期階段，但也許您可以討論一下該計劃的執行情況與內部預期如何？新客戶與 DITTO 的互動程度是否與核心客戶一樣多？任何額外的顏色都會有幫助。

This is Rob. I want to be careful a little bit as this is a joint venture with SINGER, but I'm happy to report that in the early days, we've now launched DITTO in just over 300 of our JOANN stores, including 180 Viking Galleries that are lease owned within our stores by SINGER. We have been very happy with the results so far on the customer engagement.

這是羅布。我想小心一點，因為這是與 SINGER 的合資企業，但我很高興地向您報告，在早期，我們現在已在超過 300 家 JOANN 商店推出了 DITTO，其中包括 180 家 Viking Galleries，是 SINGER 在我們商店內的租賃所有權。迄今為止，我們對客戶參與度方面的結果非常滿意。

We're seeing really great results with downloads of individual patterns as well as the subscription service, and we're averaging about 4.5 to 4.8 stars on our reviews of the DITTO across both sites. The dealer network is starting to pick up. We have about 100 dealers that have picked up DITTO as well. But again, that's just launched in stores about 1.5 months ago.

我們在單個模式的下載以及訂閱服務方面看到了非常好的結果，並且我們在兩個網站上對 DITTO 的評論中平均獲得了大約 4.5 到 4.8 顆星。經銷商網絡開始復蘇。我們有大約 100 家經銷商也選擇了 DITTO。但同樣，該產品大約 1.5 個月前剛剛在商店推出。

Our next question comes from Peter Keith with Piper Sandler.

我們的下一個問題來自 Peter Keith 和 Piper Sandler。

I appreciate you guys putting out some context for guidance. So I was going to ask a question around that. I guess just thinking about the rest of the year, it looks like the sort of implied same-store sales is kind of, somewhere in the line, maybe a little bit worse than Q1. But at least in our model to get to the midpoint of the EBITDA guidance, you really need to start seeing that EBITDA margin run kind of even year-on-year or even up year-on-year.

我很感謝你們提供一些背景信息以供指導。所以我想問一個關於這個的問題。我想只要想想今年剩下的時間，看起來隱含的同店銷售額在某種程度上可能比第一季度差一些。但至少在我們的模型中，要達到 EBITDA 指導的中點，您確實需要開始看到 EBITDA 利潤率同比甚至同比增長。

So I was hoping if you could just kind of shape that dynamic for us as the year progresses. And help us understand the key drivers of the improvement. I think it's going to be freight in the merchandise margin, but I want to make sure we're catching everything.

所以我希望你能隨著這一年的進展為我們塑造這種活力。並幫助我們了解改進的關鍵驅動因素。我認為這將是商品利潤中的運費，但我想確保我們能抓住一切。

Peter, it's Scott. Yes, I think it's coming from a number of places. One, a little bit on the top line is where we saw sequential improvement in Q1, and we're confident that it's going to continue there, potentially be a little bit better as we go forward. But on top of that, to your point, freight is going to continue to be a tailwind.

彼得，這是斯科特。是的，我認為它來自很多地方。首先，我們在第一季度看到了連續改善，我們有信心這種情況將繼續下去，隨著我們的前進，可能會好一點。但最重要的是，就您而言，貨運將繼續成為推動因素。

I do think merchandising margin is going to get a little bit better as the year goes. But then the real big pieces that I'm excited about is on the SG&A side that as we touched on with the Focus, Simplify and Grow initiative, that's where in the back half, we're really going to start to see some of the SG&A savings as we implement these ideas.

我確實認為隨著時間的推移，商品利潤率將會有所改善。但真正令我興奮的是 SG&A 方面，當我們談到“聚焦、簡化和增長”計劃時，這就是後半部分，我們真的將開始看到一些當我們實施這些想法時，SG&A 可以節省。

And it's also the biggest area in the last 90 days from when we talked to you before that we've gotten the most traction on some of those initiatives. So really excited with what that's going to deliver to our full year adjusted EBITDA outlook.

這也是自我們之前與您交談以來的過去 90 天內最大的領域，我們在其中一些舉措中獲得了最大的關注。我們對這將為我們全年調整後 EBITDA 前景帶來的影響感到非常興奮。

Okay. And then just looking at that dynamic of cost inflation versus I guess -- I think you said a little over 2% in average unit retail, 2.7%, to be specific. So your costs have been up about 5%, but you've only taken up the prices by about 2.7%. And I guess your point is as the year progresses, the cost will kind of smooth out and that will no longer be a headwind?

好的。然後看看成本通脹的動態與我的猜測——我認為你說平均單位零售量略高於 2%，具體來說是 2.7%。因此，您的成本增加了約 5%，但價格只上漲了約 2.7%。我想你的觀點是，隨著時間的推移，成本會趨於平穩，而這將不再是一個阻力？

Yes. So keep in mind, when the costs first started increasing with our vendor base, we took the price up. So you saw the average unit retail increased first last year. Now we're cycling through those increases. We sell the product now, the higher cost that we started absorbing last year. But as the year goes, this is going to get sequentially better as we start lapping that. So our average unit cost increases will be a lot less in the back half than what we just saw in Q1.

是的。因此請記住，當我們的供應商基礎成本首次開始增加時，我們就提高了價格。所以你看到去年平均單位零售量首先增長。現在我們正在循環這些增長。我們現在銷售產品，去年我們開始吸收更高的成本。但隨著時間的推移，當我們開始圈速時，情況將會逐漸好轉。因此，我們後半段的平均單位成本增長將比我們剛剛在第一季度看到的要少得多。

Okay. Great. And then maybe just lastly on that. So at what point does your AUR, in effect, sort of smooth out from the inflationary pressures during the year?

好的。偉大的。也許最後就是這一點。那麼，您的 AUR 實際上會在什麼時候擺脫年內的通脹壓力呢？

I think you're going to continue to see it smooth out through the balance of the year. So there haven't been really any new AUR sort of price increases. It's a little bit of just mix movement. So you'll start to see it smooth out for the balance of the year.

我想你會在今年剩下的時間裡繼續看到它順利進行。因此，實際上並沒有出現任何新的 AUR 價格上漲。這只是混合運動。所以你會開始看到今年剩下的時間一切順利。

Our next question comes from Laura Champine with Loop Capital.

我們的下一個問題來自 Loop Capital 的 Laura Champine。

If we look at the guide for comp to be down this year or sales will be down this year, are the factors more macro? Is it category related? Is it competition? Like at this stage, kind of 3 years into the decline, so what's driving that this year?

如果我們看看今年的比較下降或今年的銷售額下降的指導，這些因素是否更加宏觀？與類別相關嗎？是競爭嗎？就像現階段一樣，衰退已經持續了 3 年，那麼今年是什麼推動了這種衰退呢？

Laura, it's Chris. We're really seeing that the craft tech component of our business is the primary headwind right now. I think we talked about that in the last quarter as well. And so that's going to continue to be a headwind. It was 150 basis points in the first quarter. We believe it will be upwards of 100 basis points for the balance of the year. So that's one factor.

勞拉，是克里斯。我們確實看到，我們業務的工藝技術部分是目前的主要阻力。我想我們在上個季度也討論過這個問題。因此，這將繼續成為一個阻力。第一季度為150個基點。我們認為今年餘下的時間裡這一數字將超過 100 個基點。這是一個因素。

And then we are seeing great strength and improving strength in our core sewing and craft categories. So that's really driving us to lean in there, which are the categories that we know the best and have the best history in. So that's really what we're seeing in the market competitively. Really pretty rational environment, I would say, but really driving to our core customer and our core sewing and craft businesses.

然後，我們在核心縫紉和工藝類別中看到了巨大的實力，並且實力不斷增強。因此，這確實促使我們向這些領域傾斜，這些是我們最了解且擁有最悠久歷史的類別。所以這確實是我們在市場上看到的競爭情況。我想說，環境確實非常理性，但真正推動了我們的核心客戶以及我們的核心縫紉和工藝業務。

Got it. So to summarize, it doesn't seem as if there's a deterioration in the macro. And is that fair to say given the sequential improvement that you called out?

知道了。總而言之，宏觀經濟似乎並沒有惡化。考慮到您所說的連續改進，這樣說公平嗎？

Yes, I would say that's right.

是的，我會說這是對的。

Our next question comes from Cristina Fernandez with Telsey Advisory Group.

我們的下一個問題來自特爾西諮詢小組的克里斯蒂娜·費爾南德斯。

So I wanted to follow up on Laura's question. I mean you mentioned that the core categories are strong, and it seems like they were positive and then the negative 150 basis points from consumer tech. So there's still a gap. Is that just a seasonal being down? Or I guess what else are you seeing? Like what else is the bigger source of the headwind on the reported comp?

所以我想跟進勞拉的問題。我的意思是，您提到核心類別很強勁，而且看起來它們是積極的，然後來自消費科技​​的消極 150 個基點。所以還是有差距的。這只是季節性下降嗎？或者我猜你還看到了什麼？就像所報告的比較中更大的逆風來源還有什麼？

Yes. The seasonal business, we strategically pulled back our purchases there, because that is inventory that has the most risk historically to margin and sell-through. So we did strategically pull back. That is a current headwind, but we believe that won't be as significant later in this fiscal year. The good news is, with those receipt reductions that we've made in seasonal, we now have the ability to be -- play more offense in terms of those core sewing and craft categories that are working well for us.

是的。對於季節性業務，我們戰略性地撤回了那裡的採購，因為這是歷史上利潤和銷售風險最大的庫存。所以我們確實戰略性地撤退了。這是當前的一個不利因素，但我們相信，在本財年晚些時候，這種情況不會那麼嚴重。好消息是，隨著我們季節性收入的減少，我們現在有能力在那些對我們來說運作良好的核心縫紉和工藝類別方面發揮更多的進攻作用。

That makes sense. And then a second question is on the -- with the consumer seemingly being more value-oriented, how are you thinking about pricing for your goods? Do you feel are competitive? And is there opportunity to lower prices as the year goes on?

這就說得通了。第二個問題是——隨著消費者似乎更加註重價值，您如何考慮商品的定價？你覺得有競爭力嗎？隨著時間的推移，是否有機會降低價格？

Sure. It's Rob. I'll take that one. So as we had mentioned, we're continuing to see success across our owned or private brands. And that is part of the work that we've been doing on COGS with our Focus, Simplify and Grow initiative as well. So we are seeing the cost of those products coming down, which will allow us to price some of that in as much of the assortment is focused on the good and better side of what we bring to market in those core categories.

當然。是羅布。我會接受那個。正如我們所提到的，我們的自有品牌或自有品牌繼續取得成功。這也是我們通過“聚焦、簡化和增長”計劃在 COGS 方面所做的工作的一部分。因此，我們看到這些產品的成本正在下降，這將使我們能夠對其中一些產品進行定價，因為大部分產品都集中在我們推向市場的這些核心類別產品的好的和更好的方面。

The one other thing I would just add in is bear in mind that our average unit retail is roughly $5 as well. So we really do believe that we provide a very competitive option in the retail environment for customers regardless of the income tier or where they stand within the economy.

我要補充的另一件事是請記住，我們的平均單位零售價也約為 5 美元。因此，我們確實相信，我們在零售環境中為客戶提供了非常有競爭力的選擇，無論他們的收入水平或在經濟中的地位如何。

Cristina, it's Scott. I would just add, we've set up some processes here internally to really be able to read and react how the consumer's behaving and so that we can meet them where they're looking for at the right price point. So we're trying to stay very nimble in this environment to be able to read and react.

克里斯蒂娜，這是斯科特。我想補充一點，我們在內部建立了一些流程，以便真正能夠讀取消費者的行為並做出反應，以便我們能夠以合適的價格滿足他們的需求。因此，我們試圖在這種環境中保持非常靈活，以便能夠閱讀和做出反應。

And then last question is, I appreciate the financial guidance for this year. Any comment on where you expect to end the year as far as your debt balance? And if the interest rate -- or the interest expense assumption of $100 million that you gave on the last call, still a good number for this year?

最後一個問題是，我很欣賞今年的財務指導。您對今年年底的債務餘額有何評論？如果您在上次電話會議中給出的利率或利息支出假設為 1 億美元，今年仍然是一個不錯的數字嗎？

Yes. From an interest expense standpoint, that's right around where we are. We kind of still think interest rates are going to tick up and that takes that into account and then maybe start to hopefully come back a little later in the year. In terms of net debt, not really giving any guidance, but I don't really see a meaningful change this year as we work to really improve our year-over-year cash flow and then really start to get positive cash flow in the out years.

是的。從利息支出的角度來看，這正是我們所處的情況。我們仍然認為利率將會上升，考慮到這一點，然後可能會在今年晚些時候開始出現回升。就淨債務而言，並沒有真正給出任何指導，但我並沒有真正看到今年有任何有意義的變化，因為我們努力真正改善逐年現金流，然後真正開始獲得正現金流年。

This concludes our question-and-answer session, and the conference is also now concluded. Thank you for attending today's presentation. You may all now disconnect.

我們的問答環節到此結束，會議也結束了。感謝您參加今天的演講。你們現在可以斷開連接了。