Levi Strauss & Co (LEVI) 2023 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Levi Strauss & Company Third Quarter Earnings Conference Call for the period ended August 27, 2023. (Operator Instructions) This conference call is being recorded and may not be reproduced in whole or in part without written permission from the company. This conference call is being broadcast over the Internet, and a replay of the webcast will be accessible for one quarter on the company's website, levistrauss.com.

女士們、先生們，美好的一天，歡迎參加Levi Strauss & Company 截至2023 年8 月27 日的第三季度收益電話會議。（操作員說明）本次電話會議正在錄音，未經許可不得全部或部分複製。公司的書面許可。本次電話會議正在透過網路進行廣播，並且可以在公司網站 levistrauss.com 上重播四分之一的網路廣播。

I would now like to turn the call over to Aida Orphan, Vice President of Investor Relations at Levi Strauss & Company.

我現在想將電話轉給李維斯公司投資者關係副總裁 Aida Orphan。

Thank you for joining us on the call today to discuss the results for our third fiscal quarter of 2023. Joining me on today's call are Chip Bergh, our President and CEO; Michelle Gass, our President; and Harmit Singh, our Chief Financial and Growth Officer. We have posted complete Q3 financial results in our earnings release on the IR section of our website, investors.levistrauss.com. The link to the webcast of today's conference call can also be found on our site. We'd like to remind you that we will be making forward-looking statements on this call, which involve risks and uncertainties.

感謝您今天參加我們的電話會議，討論 2023 年第三財季的業績。參加今天的電話會議的是我們的總裁兼首席執行官 Chip Bergh；米歇爾·加斯，我們的總裁；以及我們的財務和成長長 Harmit Singh。我們已在我們網站 Investors.levistrauss.com 的 IR 部分的收益發布中發布了完整的第三季度財務業績。今天電話會議的網路廣播連結也可以在我們的網站上找到。我們想提醒您，我們將在本次電話會議中做出前瞻性陳述，其中涉及風險和不確定性。

Actual results could differ materially from those contemplated by our forward-looking statements. Please review our filings with the SEC, in particular, the Risk Factors section of our Form 10-K and information included in our Quarterly Report on Form 10-Q that we filed today for the factors that could cause our results to differ. Also note that the forward-looking statements on this call are based on information available to us as of today, and we assume no obligation to update any of these statements. During this call, we will discuss certain non-GAAP financial measures.

實際結果可能與我們前瞻性陳述中預期的結果有重大差異。請查看我們向SEC 提交的文件，特別是我們今天提交的10-K 表的風險因素部分以及我們今天提交的10-Q 表季度報告中包含的信息，以了解可能導致我們的結果出現差異的因素。另請注意，本次電話會議的前瞻性陳述是基於我們今天掌握的信息，我們不承擔更新任何這些陳述的義務。在本次電話會議中，我們將討論某些非公認會計準則財務指標。

These non-GAAP measures are not intended to be a substitute for our GAAP results. Reconciliations of our non-GAAP measures to their most comparable GAAP measures are included in today's press release. Finally, this call is being webcast on our IR website, and a replay of this call will be available on the website shortly. Please note that Chip, Michelle and Harmit will be referencing constant currency numbers, unless otherwise noted. Today's call is scheduled for one hour so please limit yourself to one question at a time to give others the opportunity to have their questions addressed.

這些非公認會計準則衡量標準無意取代我們的公認會計準則結果。我們的非公認會計原則衡量標準與最具可比性的公認會計原則衡量標準的調節結果包含在今天的新聞稿中。最後，該電話會議正在我們的 IR 網站上進行網路直播，並且很快將在該網站上提供該電話會議的重播。請注意，除非另有說明，Chip、Michelle 和 Harmit 將引用固定貨幣數字。今天的電話會議預計持續一小時，因此請一次只回答一個問題，以便其他人有機會得到解決。

And now I'd like to turn the call over to Chip.

現在我想把電話轉給奇普。

Thank you, Aida. Good afternoon, everyone, and thank you for joining us. I'm delighted to have Michelle joining us on the call today. I'll start with some high-level comments overall on the business before passing it to Michelle, who will share her impressions and thoughts on the business after 9 months. Harmit will then take you through the financials and guidance, and I will wrap up before Q&A. Overall, we had a solid quarter despite the challenging environment. Reported revenues were flat to prior year and down 2% on a constant currency basis as the strong double-digit growth of our direct-to-consumer business was offset by continued softness in the wholesale channel, particularly in the U.S.

謝謝你，阿依達。大家下午好，感謝您加入我們。我很高興米歇爾今天加入我們的電話會議。我將首先對業務進行一些總體的高層評論，然後將其傳遞給米歇爾，米歇爾將在 9 個月後分享她對業務的印象和想法。然後，哈米特將向您介紹財務狀況和指導，我將在問答之前結束。總體而言，儘管環境充滿挑戰，但我們的季度表現還是不錯的。報告營收與上年持平，以固定匯率計算下降 2%，因為我們的直接面向消費者業務強勁的兩位數成長被批發管道（尤其是美國）的持續疲軟所抵消。

Gross margins exceeded our outlook even as we continue to make excellent progress on inventory, with inventory growth now roughly in line with revenue on a comparable basis. Our disciplined execution, combined with the margin upside enabled us to deliver EPS consistent with our expectations. There are three main points I want to make about the quarter and our business overall. One, the Levi's brand continues to go from strength to strength and arguably is the strongest it has ever been. This is backed up by several proof points. First, AURs continue to grow despite the pricing action we took in the U.S. wholesale at the end of Q3, primarily driven by mix. We continue to grow share with the higher income consumer and see strength in our full-price mainline business with strong sales momentum of our Tier 1 and Tier 2 products.

儘管我們在庫存方面繼續取得出色進展，但毛利率超出了我們的預期，目前庫存成長與可比較收入大致一致。我們嚴格的執行力，加上利潤率的上升，使我們能夠實現符合我們預期的每股盈餘。關於本季和我們的整體業務，我想談三個要點。第一，李維斯品牌不斷壯大，可以說是有史以來最強大的品牌。這有幾個證據點支持。首先，儘管我們在第三季末在美國批發市場採取了定價行動，但 AUR 仍在繼續成長，這主要是由混合推動的。我們繼續擴大在高收入消費者中的份額，並看到我們的全價主線業務的實力以及我們的一級和二級產品的強勁銷售勢頭。

In addition, the Levi's brand continues to gain U.S. market share up in men's, women's and our core 18- to 30-year-old age group. Finally, we continue to see strength in our brand equity metrics, growing our brand consideration and unaided awareness in denim across key markets. As we look forward to the holiday season in 2024, we have an exciting pipeline of product initiatives and collaborations to build upon the strength of the brand, including partnerships with Crocs, Kenzo, DENIM TEARS, the K-Pop Band NewJeans and more. Our Other Brands segment also shows strength. Together, Dockers and Beyond Yoga are now generating nearly $0.5 billion in annual revenue.

此外，Levi's 品牌在男裝、女裝以及 18 至 30 歲核心年齡層的美國市場份額持續增加。最後，我們繼續看到我們的品牌資產指標的實力，提高我們在主要市場的牛仔布品牌考慮度和獨立意識。在我們展望 2024 年假期季節之際，我們有一系列令人興奮的產品計劃和合作，以增強品牌實力，包括與 Crocs、Kenzo、DENIM TEARS、韓國流行樂隊 NewJeans 等的合作。我們的其他品牌細分市場也顯示出實力。 Dockers 和 Beyond Yoga 目前的年收入總計接近 5 億美元。

Beyond Yoga had a very strong quarter, up 25% versus prior year. Despite the impairment charge we took on Beyond Yoga, which Harmit will explain in more detail, we remain very bullish about this brand long-term. We will finish this fiscal year with six retail stores, including our first store outside of California in Chicago. Two, our strategies are right. They are working, and they're driving our results. I just covered our first strategic priority of driving our brands and being brand-led. Our second priority is to strategically focus on DTC, which both Michelle and Harmit will discuss further.

Beyond Yoga 的季度表現非常強勁，比去年同期成長了 25%。儘管我們對 Beyond Yoga 收取了減損費用（哈米特將對此進行更詳細的解釋），但我們仍然非常看好這個品牌的長期發展。在本財年結束時，我們將開設六家零售店，其中包括位於芝加哥的加州以外的第一家商店。第二，我們的策略是正確的。他們正在工作，他們正在推動我們取得成果。我剛剛介紹了我們的首要策略重點：推動我們的品牌並以品牌為主導。我們的第二個優先事項是策略性地關注 DTC，米歇爾和哈米特將進一步討論這一點。

The DTC business grew 13% in Q3 versus prior year and comped positively in every region and across mainline, outlet and e-commerce. Comp traffic was also up in every region and in every channel, underscoring the strength of the Levi's brand. Our e-commerce results have accelerated with 18% growth this quarter on top of the 16% growth in the prior year quarter. In the U.S., our DTC business grew 10% and U.S. mainline, which sells our most premium product comped double digit versus year ago. While DTC is our channel priority and will continue to be a key growth driver for the company, our wholesale business remains important.

第三季 DTC 業務比去年同期成長 13%，並且在每個地區以及主線、直銷店和電子商務領域都取得了積極的進展。每個地區和每個通路的競爭流量也有所增加，凸顯了李維斯品牌的實力。我們的電子商務業績在去年同期成長 16% 的基礎上，本季成長了 18%。在美國，我們的 DTC 業務成長了 10%，而銷售我們最優質產品的美國幹線業務則與去年同期相比成長了兩位數。雖然 DTC 是我們的通路優先事項並將繼續成為公司的主要成長動力，但我們的批發業務仍然很重要。

It amplifies our brands, creates access for consumers and contributes to the bottom line. However, wholesale will continue to be a smaller part of our mix over time as we drive outsized growth in DTC. Global wholesale was the drag on our business in Q3, down 10% this quarter compared to up 6% in the prior year. We're focused on the controllables to stabilize this channel and wholesale is showing sequential improvement from the prior quarter. Early indications from the pricing actions we took in U.S. wholesale late in Q3 are positive. Exiting the quarter, we also began to see the impact of our lower inventories and improved fill rates.

它擴大了我們的品牌，為消費者創造了機會並有助於提高利潤。然而，隨著時間的推移，隨著我們推動 DTC 的大幅成長，批發業務將繼續在我們的產品組合中佔據較小的一部分。全球批發拖累了我們第三季的業務，本季下降了 10%，而去年同期則成長了 6%。我們專注於穩定該通路的可控因素，批發業務較上一季呈現連續改善。我們在第三季末在美國批發市場採取的定價行動的初步跡像是積極的。在本季結束時，我們也開始看到庫存減少和填充率提高的影響。

We expect sequential improvement in U.S. wholesale trends behind the impact of the surgical pricing actions in August and customer fill rates normalizing in Q4. This will also ensure greater newness on the floor as we head into the critical holiday period. Our third key strategic priority is to continue to diversify the company, driving growth in international women's and tops. Our International business continued to outpace the total company growing plus 5%, excluding Russia. Asia was again the standout with strong double-digit growth in our three largest Asian markets, India, China and Japan. Our women's business was up, driven by a 5% increase in Levi's women's bottoms.

我們預計，受 8 月份手術定價行動和第四季度客戶填充率正常化的影響，美國批發趨勢將持續改善。當我們進入關鍵的假期期間，這也將確保地板上有更多的新鮮感。我們的第三個關鍵策略重點是繼續實現公司多元化，推動國際女裝和上衣業務的成長。我們的國際業務持續以超過公司整體成長 5% 的速度成長（不包括俄羅斯）。亞洲再次表現出色，印度、中國和日本這三個最大的亞洲市場實現了兩位數的強勁成長。在李維斯 (Levi's) 女式下裝成長 5% 的推動下，我們的女裝業務有所成長。

We continue to see a shift to low rise and ongoing strength in loose fits where we continue to expand and [evolve] the assortment. Tops revenue also grew, driven by strength in Wovens, Non-Graphic Tees, Outerwear dresses and Polos. Finally, three, we have a strong team around the world to deliver on the strategy and our long-term goals. A big reason for my confidence in the future is my successor. I knew when we hired Michelle late last year that she was going to be a great leader for our company, as she brings 30 years of retail experience, including five years as a CEO. After working very closely together for the last 9 months, I'm even more convinced that she is a great choice. One of my top priorities for this year has been to set us up for a successful and seamless succession. Michelle has been a quick study and as you will hear, clearly sees the opportunities ahead of us, which will allow us to achieve our long-term goals.

我們繼續看到向低層和寬鬆款式的持續轉變，我們繼續擴大和[發展]品種。由於梭織衫、無圖案 T 卹、外套連身裙和 Polo 衫的強勢推動，上衣收入也有所增長。最後，第三，我們在世界各地擁有一支強大的團隊來實現策略和我們的長期目標。我對未來充滿信心的一個重要原因是我的繼任者。當我們去年底聘用 Michelle 時，我就知道她將成為我們公司的出色領導者，因為她擁有 30 年的零售經驗，其中包括 5 年擔任執行長的經驗。經過過去 9 個月的密切合作，我更確信她是個不錯的選擇。我今年的首要任務之一是為我們的成功和無縫的繼任做好準備。米歇爾學習很快，正如您所聽到的，她清楚地看到了我們面前的機遇，這將使我們能夠實現我們的長期目標。

Now it's time you hear from her about her impressions and how she is seeing the future. Michelle?

現在是時候聽聽她的感受以及她對未來的看法了。米歇爾？

Thanks, Chip, and welcome, everyone. Since I joined the company in January, I have fully immersed myself in our business, getting to know our company, our customers, our consumers and our employees around the globe. We have a vibrant global business, phenomenal brand, a fantastic culture and heritage and amazing people. It's an honor and privilege to be part of this incredible organization. Over the past decade, the company has made great progress, and I see tremendous opportunity to build on this strong foundation in the years ahead. I joined LS & Co. because of the global potential of our business and our brands, particularly the iconic Levi's brand as well as the company's long-standing commitment to profits through principles and doing right by our employees and consumers.

謝謝奇普，歡迎大家。自從一月加入公司以來，我完全沉浸在我們的業務中，了解我們的公司、我們的客戶、我們的消費者和我們在全球的員工。我們擁有充滿活力的全球業務、非凡的品牌、精彩的文化和遺產以及出色的員工。能夠成為這個令人難以置信的組織的一員是一種榮幸。在過去的十年裡，公司取得了巨大的進步，我看到了在未來幾年建立在這個堅實基礎上的巨大機會。我加入 LS & Co. 是因為我們的業務和品牌的全球潛力，特別是標誌性的 Levi's 品牌，以及該公司透過原則以及員工和消費者正確行事來實現利潤的長期承諾。

Now nine months in, my optimism and conviction has only grown as I've learned more about the strength of the brand and our growth opportunities. After seeing this business up close and working with our talented team, I believe now more than ever that our strategic choices and goals introduced during our Investor Day in 2021 being brand-led, taking a DTC-first approach and diversifying our portfolio are the right ones to generate long-term value for all of our stakeholders. Today, we are at an important inflection point and by leaning into our strength I have strong conviction that we will unlock the next decade of profitable growth for our company.

九個月過去了，隨著我對品牌的實力和我們的成長機會有了更多的了解，我的樂觀情緒和信念只增不減。在近距離觀察這項業務並與我們才華橫溢的團隊合作後，我現在比以往任何時候都更加相信，我們在2021 年投資者日期間提出的戰略選擇和目標是正確的，即以品牌為主導、採取DTC 優先的方法以及使我們的投資組合多樣化為我們所有利害關係人創造長期價值。今天，我們正處於一個重要的轉折點，透過發揮我們的優勢，我堅信我們將為公司開啟下一個十年的獲利成長之路。

As part of our strategic pillars, I've observed three key areas that will be instrumental in helping us achieve our ambition to become a $9 billion to $10 billion company. First, accelerating international growth; second, becoming a denim apparel lifestyle business; and third, transforming our operating model into a best-in-class DTC-first organization. First, I'll start with the growth potential internationally. Levi's is the number one denim brand in the world, bigger than the next three global competitors combined. The Levi's brand has wide appeal with leadership across all generations, is increasingly relevant with a younger and more diverse generation and is solidifying the next generation of Levi's fans.

作為我們策略支柱的一部分，我觀察到了三個關鍵領域，它們將有助於幫助我們實現成為一家價值 90 億至 100 億美元的公司的雄心壯志。第一，加速國際化成長；第二，成為牛仔服飾生活風格企業；第三，將我們的營運模式轉變為一流的 DTC 優先組織。首先，我將從國際成長潛力開始。李維斯 (Levi's) 是世界第一牛仔品牌，規模比位居其後的三個全球競爭對手的總和還要大。 Levi's 品牌在各個世代中都具有廣泛的吸引力和領導力，與更年輕、更多元化的世代越來越相關，並且正在鞏固下一代 Levi's 的粉絲。

We've done this by constantly putting Levi's at the center of culture, driving a strong connection and building brand love with consumers around the world through leading products and impactful marketing. This year, Chip, Harmit and I visited a dozen markets abroad. And in each one, I've been inspired by how the Levi's brand transcends cultures and demographics and is beloved across markets. Over the last decade, our International business has grown more than 50%, and we've become the number one player in many markets where we've invested in growth. And given the immense opportunity we see looking ahead, we are confident in our ability to sustain high single-digit growth in our International business over the long-term.

為此，我們不斷將 Levi's 置於文化中心，透過領先的產品和有影響力的行銷，與世界各地的消費者建立牢固的聯繫並建立品牌喜愛度。今年，奇普、哈米特和我參觀了十幾個國外市場。在每一件作品中，我都受到李維斯品牌如何超越文化和人口統計並在各個市場中受到喜愛的啟發。在過去十年中，我們的國際業務成長了 50% 以上，在我們投資成長的許多市場中，我們已成為排名第一的參與者。鑑於我們看到未來的巨大機遇，我們對國際業務長期維持個位數高成長的能力充滿信心。

Levi's is not just an iconic American brand, but has become one of the most iconic brands in the world. And today, while we are in 110 countries, there is great opportunity to grow in markets where we already have a strong, long-standing presence as well as in new and emerging markets. Let me give you two examples: Mexico and India. Mexico is the company's largest market after the U.S. Sales have grown nearly 40% versus pre-pandemic levels, while generating strong profitability. Today, Mexico boasts the highest brand equity in the world. We have done this through strong execution across brand building, locally relevant product assortment, great real estate decisions and DTC and wholesale momentum.

李維斯 (Levi's) 不僅是一個標誌性的美國品牌，而且已成為世界上最具代表性的品牌之一。如今，雖然我們的業務遍及 110 個國家/地區，但在我們已經擁有強大、長期業務的市場以及新興市場中，我們仍有很大的發展機會。讓我舉兩個例子：墨西哥和印度。墨西哥是該公司繼美國之後最大的市場，其銷售額較疫情前水準成長了近 40%，同時產生了強勁的獲利能力。如今，墨西哥擁有世界上最高的品牌資產。我們透過在品牌建立、本地相關產品分類、出色的房地產決策以及 DTC 和批發勢頭方面的強大執行力來實現這一目標。

Our team does a great job keeping our eyes on emerging trends in the market and capitalizing on center of culture moment, enabling us to connect with authenticity to the local consumer. For instance, we recently opened a House of Strauss in the Mexico City neighborhood in the heart of the action with a booming design, art, music and architecture community. We opened our first House of Strauss nearly two decades ago in L.A. as a dedicated place to build relationships with creative and entertainment communities and interact with those that drive culture and shape future fashion trends that become mainstream.

我們的團隊做得很好，時刻關注市場的新興趨勢並利用文化中心時刻，使我們能夠與當地消費者建立真實的聯繫。例如，我們最近在墨西哥城附近開設了一家史特勞斯之家，這裡是設計、藝術、音樂和建築社區蓬勃發展的中心地帶。大約二十年前，我們在洛杉磯開設了第一家施特勞斯之家，作為一個專門的場所，與創意和娛樂社區建立關係，並與那些推動文化和塑造成為主流的未來時尚趨勢的人們互動。

Our House in Mexico City has already generated [tons of buds] and high engagement with billions of impressions on social media so far. Next month, we'll also be front and center at Corona Capital, the largest music festival in Mexico with an exclusive product release featuring a range of stylish pieces, including limited edition trucker jackets and graphic tees, driving tons of energy through local relevance and overall excitement around the brand. We know there's an opportunity to deploy the same playbook, constantly keeping the brand at the cultural center around the world, and our success in Mexico has provided us with great learnings we plan to use at scale moving forward.

到目前為止，我們位於墨西哥城的房子已經在社交媒體上產生了[大量的芽]和高參與度，獲得了數十億的印象。下個月，我們還將成為墨西哥最大的音樂節Corona Capital 的焦點，發布獨家產品，其中包括一系列時尚單品，包括限量版卡車司機夾克和圖案T 卹，透過當地相關性和活力激發大量能量。圍繞該品牌的整體興奮感。我們知道有機會部署相同的策略，不斷地將品牌保持在世界各地的文化中心，而我們在墨西哥的成功為我們提供了很好的經驗教訓，我們計劃在未來大規模使用。

India is another country that not only highlights our successful regional expansion playbook, but also demonstrates our ability to deliver a true denim lifestyle offering. One of the most exciting consumer markets, India is the fastest-growing major economy in the world in 2023. And with more than half the population under the age of 30, we see India as one of our significant growth opportunities at the company. The Levi's brand has increased nearly 50% in this important market compared to pre-pandemic revenue levels, becoming our sixth largest country and now the largest in Asia. India is primarily a franchise market and the strong growth is largely a reflection of the conviction of our partners and the power of our brands.

印度是另一個不僅凸顯了我們成功的區域擴張策略，而且還展示了我們提供真正牛仔生活方式產品的能力的國家。印度是最令人興奮的消費市場之一，到2023 年，印度將成為全球成長最快的主要經濟體。印度一半以上的人口年齡在30 歲以下，我們將印度視為公司的重要成長機會之一。與疫情大流行前相比，Levi's 品牌在這個重要市場的收入水準成長了近 50%，成為我們的第六大國家，目前是亞洲最大的國家。印度主要是一個特許經營市場，強勁的成長很大程度上反映了我們合作夥伴的信念和我們品牌的力量。

For example, during the pandemic, our franchisees doubled the Levi's brand square footage in Tmalls across India to take advantage of the long-term opportunity they see. When I visited the market earlier this year, I was energized hearing from our consumers about their optimism for the future and how excited they are about the Levi's brand and how they see Levi's not just as a denim brand, but as a full lifestyle brand. In India, the team has done a great job curating a diverse product assortment across tops and bottoms, driven both by our global design engine as well as our local product capability. In fact, India has our highest tops penetration in the world, selling on top for every bottom.

例如，在大流行期間，我們的特許經營商將李維斯品牌在印度各地天貓的面積增加了一倍，以利用他們看到的長期機會。當我今年早些時候訪問市場時，我很高興聽到消費者對未來的樂觀態度，他們對李維斯品牌的興奮，以及他們如何看待李維斯不僅是一個牛仔品牌，而且是一個完整的生活方式品牌。在印度，在我們的全球設計引擎和本地產品能力的推動下，團隊出色地策劃了上衣和下裝的多樣化產品種類。事實上，印度的上衣滲透率是世界上最高的，每條下衣的銷售量都是上衣的。

We are further strengthening our connections with the useful Indian consumer through local collaborations and brand building, such as our partnership with Bollywood superstar Deepika Padukone, who has been our brand ambassador since 2021 and has become one of the biggest celebrities in the country and worldwide. We see similar brand resonance across many emerging markets and plan to expand our presence in a similar way. My second observation, building on our diversification strategy is that we have an incredible opportunity to evolve from being known as a great Jeans brand into a true apparel lifestyle brand.

我們正在透過本地合作和品牌建設進一步加強與有用的印度消費者的聯繫，例如我們與寶萊塢巨星迪皮卡·帕度柯妮(Deepika Padukone) 的合作，她自2021 年以來一直擔任我們的品牌大使，現已成為印度和全球最知名的名人之一。我們在許多新興市場看到了類似的品牌共鳴，並計劃以類似的方式擴大我們的業務。我的第二個觀察是，在我們的多元化策略的基礎上，我們有一個難以置信的機會，從一個偉大的牛仔褲品牌發展成為一個真正的服裝生活方式品牌。

As I referenced earlier, Levi's is the unequivocal global leader in jeans and by a big margin. And we can take this denim leadership into head-to-toe denim dressing across skirts, dresses and more tops. We can and will become the market share leader in all aspects of denim dressing, which is an untapped market for us today. Recognizing this opportunity earlier this year, we chased into denim skirts and dresses for the summer and fall using a new agility capability we're building. While it's still a small business for us today, we are seeing promising results with dresses and skirts up nearly 40% in Q3. And looking forward, we have chased into more products just in time for the holidays, and I'm excited about what's coming in 2024.

正如我之前提到的，李維斯 (Levi's) 是牛仔褲領域無可爭議的全球領導者，而且遙遙領先。我們可以將這種牛仔風格的領導力運用到從頭到腳的牛仔裝中，包括裙子、連身裙和更多上衣。我們能夠而且將會成為牛仔服飾各個方面的市場份額領導者，這對我們來說是一個尚未開發的市場。今年早些時候，我們認識到了這個機會，利用我們正在建立的新敏捷能力，推出了夏季和秋季的牛仔裙和連身裙。雖然今天這對我們來說仍然是一項小生意，但我們看到了可喜的業績，第三季連身裙和裙子增長了近 40%。展望未來，我們趕在假期期間推出了更多產品，我對 2024 年即將推出的產品感到興奮。

We are also uniquely positioned to extend our authority in bottoms to categories beyond denim. For example, we are seeing great success with platforms like the XX Chino, which grew over 40% in Q3. We are continuing to develop this category, and we have some exciting new fabric innovations coming next year that we look forward to sharing in the coming months. And while we have made steady progress over the past few years growing our Tops business to over $1 billion annually with staples like our Signature Tees and Truckers, the opportunity remains much larger. Over the last year, the team has spent time sharpening our strategy on how we can build a more differentiated Casual Tops business.

我們還具有獨特的優勢，可以將我們在下裝領域的權威擴展到牛仔布以外的類別。例如，我們看到 XX Chino 等平台取得了巨大成功，該平台在第三季度成長了 40% 以上。我們正在繼續開發這個類別，明年我們將推出一些令人興奮的新布料創新，我們期待在未來幾個月與大家分享。雖然我們在過去幾年中取得了穩步進展，憑藉我們的招牌 T 恤和卡車司機等主打產品，將我們的上衣業務增長到每年 10 億美元以上，但機會仍然要大得多。在過去的一年裡，團隊花了很多時間來完善我們的策略，以打造更具差異化的休閒上衣業務。

We are investing in design and product development capabilities, reducing our speed to market and expanding our vendor base to become more competitive. This work is underway, and I'm excited about what is coming in tops and outerwear for Q4 and especially about what is in the pipeline for 2024. Finally, my third area to emphasize is the importance of our transformation into a world-class DTC first company. Over the last decade, the company has made phenomenal progress, more than doubling our direct-to-consumer revenue while engaging consumers with the highest expression our brand in our stores. And we see a clear line of sight to the mid-teens DTC growth rate target of our long-term financial algorithm.

我們正在投資設計和產品開發能力，降低上市速度並擴大供應商基礎，以提高競爭力。這項工作正在進行中，我對第四季度上衣和外套的推出感到興奮，尤其是 2024 年即將推出的產品。最後，我要強調的第三個領域是我們轉型為世界級 DTC 的重要性第一家公司。在過去的十年中，該公司取得了驚人的進步，我們的直接面向消費者的收入增加了一倍多，同時在我們的商店中以最高的品牌表現力吸引消費者。我們對長期財務演算法中的 DTC 成長率目標有清楚的認知。

With this strong momentum in consumer permission, now is the time to accelerate our transition to DTC, where we will evolve our culture and operating model and our consumer centricity will drive every aspect of how we operate. As I have visited many stores around the world, I have been impressed by the passion and commitment of our team, how they have driven consistent strong comp growth over the last few years and how they serve our millions of Levi's fans all over the world. However, I've also observed that we have many opportunities to drive greater productivity and enhance the consumer experience.

憑藉消費者許可的強勁勢頭，現在是加速向 DTC 轉型的時候了，我們將發展我們的文化和運營模式，而我們以消費者為中心的理念將推動我們運營方式的各個方面。當我參觀過世界各地的許多商店時，我們團隊的熱情和奉獻精神、他們在過去幾年中如何推動持續強勁的業績增長以及他們如何為世界各地數百萬李維斯粉絲提供服務，給我留下了深刻的印象。然而，我也發現我們有很多機會來提高生產力和增強消費者體驗。

It starts with thinking like a merchant and mastering retail fundamentals like having key items always in stock, elevating our in-store storytelling, adopting a chase mentality and broadening our assortment to drive traffic and increase shopping frequency. We also have the opportunity to streamline our backroom operations so that our store teams can focus even more time on serving customers and less time on administrative and operational tasks. Unlocking further productivity in our stores is a critical enabler to driving overall profitable growth and to accelerate further new store expansion opportunities globally. I also see tremendous upside in our e-commerce business.

首先要像商人一樣思考並掌握零售基礎知識，例如關鍵商品始終有庫存、提升店內故事講述、採取追逐心態以及擴大我們的品種以增加客流量和增加購物頻率。我們還有機會簡化後台運營，以便我們的商店團隊可以將更多時間集中在服務客戶上，而減少管理和運營任務的時間。進一步釋放我們商店的生產力是推動整體利潤成長和加速全球新店擴張機會的關鍵推動因素。我還看到了我們的電子商務業務的巨大優勢。

We have a great team in place that is focused on addressing the fundamentals, driving quick wins in areas like search and navigation. We are already seeing the benefit today in our results as e-commerce comps are accelerating. Looking forward, we are focused on expanding our offer to our broadest, best of Levi's assortment as well as enhancing the site experience. We're also focused on expanding and evolving our successful loyalty program, which gained nearly 2 million members in the third quarter to reach 28 million members globally. This successful program is helping us forge deeper consumer connections while developing valuable insights from our most loyal fans.

我們擁有一支優秀的團隊，專注於解決基本問題，在搜尋和導航等領域推動快速獲勝。隨著電子商務競爭的加速，我們今天已經在業績中看到了好處。展望未來，我們的重點是擴大我們的產品範圍，提供最廣泛、最好的 Levi's 產品系列，並增強網站體驗。我們也致力於擴大和發展我們成功的忠誠度計劃，該計劃在第三季度獲得了近 200 萬會員，全球會員數量達到 2800 萬。這個成功的計劃正在幫助我們建立更深層的消費者聯繫，同時從我們最忠實的粉絲那裡獲得寶貴的見解。

On the path of becoming a DTC-driven company, our wholesale business remains an important part of our business and a driver of consumer connections. Wholesale amplifies our DTC strategy and extends consumer reach. We have strong decade-long relationships with our key wholesale partners. And while the recent year has been challenging, I am looking forward to working with our partners to stabilize and return this channel to growth.

在成為 DTC 驅動型公司的道路上，我們的批發業務仍然是我們業務的重要組成部分，也是消費者聯繫的驅動力。批發擴大了我們的 DTC 策略並擴大了消費者範圍。我們與主要批發合作夥伴有著長達十年的牢固關係。儘管近年來充滿挑戰，但我期待與我們的合作夥伴合作，穩定該管道並使之恢復成長。

Near-term opportunities include improving our supply chain execution, ensuring the continued success of our pricing optimization plan and delivering more newness and innovation. The work we are doing today and in the years ahead will help us further drive sustainable, profitable long-term growth. I could not be more excited to be here at LS & Co., working with this amazing team to build upon our legacy, fuel the momentum we have built over the past 10 years and guide the company to the next phase of growth.

近期機會包括改善我們的供應鏈執行、確保我們的定價優化計劃持續成功以及提供更多新穎和創新。我們今天和未來幾年所做的工作將幫助我們進一步推動可持續、獲利的長期成長。我非常高興能夠來到 LS & Co.，與這個出色的團隊合作，繼承我們的傳統，推動我們過去 10 年建立的勢頭，並引導公司進入下一階段的成長。

Now, I'll turn it over to Harmit to walk through the financials for the quarter.

現在，我將把它交給哈米特來詳細介紹本季的財務狀況。

Welcome, everyone. I will begin my comments today by sharing three key observations about our business and our results before diving into the numbers. First, we are achieving strong progress in our areas of strategic focus. In the third quarter, we sustained prior year revenues by driving growth in our direct-to-consumer and International businesses. We are seeing our strong momentum in these businesses continue, and we exited both July and August with positive overall growth as a company. I can also share that we are seeing our business in the U.S. improve relative to quarter three, driven by an improvement in U.S. wholesale.

歡迎大家。今天，我將首先分享有關我們業務和業績的三個關鍵觀察結果，然後再深入研究數字。首先，我們在戰略重點領域取得強勁進展。第三季度，我們透過推動直接面向消費者和國際業務的成長，維持了去年的收入。我們看到這些業務的強勁勢頭仍在繼續，並且我們在 7 月和 8 月結束時都以公司整體的積極成長為目標。我還可以分享的是，在美國批發業改善的推動下，我們在美國的業務相對第三季有所改善。

Second, our operating discipline is driving results. In Q3, we brought inventory growth down to just 1% on a comparable basis, but not at the expense of gross margin, which exceeded our expectations for quarter three and enable us to deliver adjusted EBIT in line with our outlook. Finally, as Michelle mentioned, over the coming year, we will accelerate our transition to a DTC-driven business by creating a more nimble and consumer-centric organization to support our evolution into a global powerhouse in retail and e-commerce while supporting a low-growth wholesale business.

其次，我們的營運紀律正在推動成果。在第三季度，我們將可比庫存成長降至僅1%，但不以犧牲毛利率為代價，這超出了我們對第三季度的預期，並使我們能夠提供符合我們前景的調整後息稅前利潤。最後，正如Michelle 所提到的，在未來的一年裡，我們將透過創建一個更靈活、以消費者為中心的組織來加速向DTC 驅動型業務的轉型，以支持我們發展成為零售和電子商務領域的全球強國，同時支援較低的成本。- 批發業務的成長。

Given the strategic acceleration to DTC and a smaller U.S. wholesale business, we have initiated a broad-based review of our overall operating model and our entire cost structure. We expect this review will result in material cost and working capital savings, including increased profitability and productivity of our DTC business. As we have demonstrated in the past, we are confident that these efforts will solidify a long-term adjusted EBIT margin goal, and we plan to share more details about the impact of this initiative next quarter. Now let's turn to our third quarter results. Our DTC channel posted 13% growth, lapping high single-digit growth in Q3 '22, with continued broad-based positive comp sales growth across geographies and all channels driven by higher traffic and volumes.

鑑於 DTC 的策略加速和美國批發業務規模的縮小，我們已開始對我們的整體營運模式和整個成本結構進行廣泛的審查。我們預計此次審查將節省材料成本和營運資金，包括提高 DTC 業務的獲利能力和生產力。正如我們過去所證明的那樣，我們相信這些努力將鞏固長期調整後的息稅前利潤目標，並且我們計劃在下個季度分享有關該舉措影響的更多細節。現在讓我們來看看第三季的業績。我們的 DTC 通路成長了 13%，在 22 年第 3 季實現了高個位數成長，在流量和銷量增加的推動下，跨地區和所有通路的銷售持續廣泛的積極成長。

Comp sales have been positive since 2022, reflecting six consecutive quarters of growth. We view our franchisees as a complementary extension of our own direct business enabling us to present our brands in the best light while driving strong returns. Along with our franchisee partners, we have opened 61 [net stores] year-to-date, excluding Russia. And together, our DTC and franchise business comprised almost 50% of total net revenues in Q3, up from 44% in the prior year. Adjusted gross margin of 55.6% came in better than our expectations, driven by the favorable mix shift to DTC. Versus prior year, gross margin contracted 130 basis points, yet was 260 basis points above Q3 '19. Overall, the contraction was driven by lower full price sales, higher product costs and strategic pricing actions to drive volume and capture market share, partially offset by favorable channel and geographic mix, lower airfreight and FX.

自 2022 年以來，同類產品銷售額一直保持正值，連續六個季度實現成長。我們將特許經營商視為我們自己的直接業務的補充延伸，使我們能夠以最好的方式展示我們的品牌，同時帶來豐厚的回報。今年迄今為止，我們與特許經營合作夥伴一起開設了 61 家[網店]（不包括俄羅斯）。我們的 DTC 和特許經營業務合計佔第三季總淨收入的近 50%，高於前一年的 44%。受 DTC 有利組合轉變的推動，調整後毛利率為 55.6%，優於我們的預期。與去年相比，毛利率收縮了 130 個基點，但比 19 年第三季高了 260 個基點。總體而言，收縮是由全價銷售下降、產品成本上升以及旨在推動銷售和占領市場份額的策略定價行動推動的，但部分被有利的通路和地理組合、較低的空運和外匯所抵消。

Adjusted SG&A expenses in the quarter were $702 million, up 4% to last year, in line with our guidance. The increase was entirely driven by DTC expansion with company-operated store count up 9%. Adjusted EBIT margin was 9.1%, and adjusted diluted EPS was $0.28, both in line with our expectations. Our adjusted diluted EPS excludes a $90 million non-cash charge related to the impairment of the Beyond Yoga acquisition in conjunction with our annual testing. The impairment was due to strategically investing in the brand and team and slowing previously anticipated expansion in response to the current macroeconomic conditions as well as an increase in discount rates.

本季調整後的 SG&A 費用為 7.02 億美元，比去年增長 4%，與我們的指導方針一致。這一增長完全是由 DTC 擴張推動的，公司自營商店數量增加了 9%。調整後息稅前利潤率為 9.1%，調整後稀釋每股收益為 0.28 美元，均符合我們的預期。結合我們的年度測試，我們調整後的稀釋每股收益不包括與 Beyond Yoga 收購減損相關的 9,000 萬美元非現金費用。減損是由於對品牌和團隊進行策略性投資，以及為應對當前宏觀經濟狀況以及折現率上升而放緩先前預期的擴張。

Despite the accounting impact to EPS, Beyond Yoga continued to perform well, up 25% in Q3 and 21% year-to-date. We are being disciplined with our approach to growing the brand and remain committed to driving its long-term profitable growth. Here are the key highlights by segment with all revenue growth in constant currency. In the Americas, net revenues declined 7% on top of 3% growth a year ago. DTC's strength with growth of 11% was broad-based on top of 8% growth in the prior year. Latin America saw continued growth, up 7%, driven by all markets led by Mexico and Brazil.

儘管每股盈餘受到會計影響，Beyond Yoga 仍然表現良好，第三季成長 25%，年初至今成長 21%。我們正在嚴格遵守品牌發展的方法，並繼續致力於推動其長期獲利成長。以下是各細分市場的主要亮點，所有營收成長均以固定匯率計算。在美洲，淨收入在一年前成長 3% 的基礎上下降了 7%。 DTC 的強勁勢頭在上一年 8% 的基礎上實現了 11% 的成長。在以墨西哥和巴西為首的所有市場的推動下，拉丁美洲持續成長，成長了 7%。

While Europe was down 3%, excluding Russia, we saw sequential improvement as we move through the quarter with both July and August up versus prior year. Despite record temperatures this summer DTC momentum continued with the channel up 11%, excluding Russia, driven by broad-based growth across countries and a particularly strong performance in our Mainland business. Strength in DTC was offset by wholesale softness as customers broadly remain cautious with their open to buy. While we are continuing to focus on accelerating our DTC business, we are also working closely with our wholesale partners to ensure they have the right assortment and deliver newness, including lighter weight denim, more dresses and tops.

雖然歐洲下降了 3%（不包括俄羅斯），但隨著本季的進展，我們看到了環比改善，7 月和 8 月均較去年同期有所上升。儘管今年夏季氣溫創歷史新高，但在各國廣泛成長以及我們大陸業務表現尤其強勁的推動下，DTC 的勢頭仍在繼續，增長了 11%（不包括俄羅斯）。 DTC 的強勢被批發疲軟所抵消，因為客戶普遍對購買持謹慎態度。在我們繼續專注於加速我們的 DTC 業務的同時，我們也與批發合作夥伴密切合作，確保他們擁有正確的品種並提供新穎的產品，包括更輕的牛仔布、更多的連身裙和上衣。

Asia again saw strong growth, up 18%, while lapping very high 53% growth last year driven by continued strength across all channels, particularly DTC and almost all markets. Asia's top markets, India, China and Japan were all up strong double digits as were Turkey, Thailand and several others. Asia's operating margin also expanded 330 basis points to 12.3% due to strong leverage. Now looking to our balance sheet and cash flow; we achieved strong progress on our inventory goal in Q3. Reported inventory dollars increased 6%. However, more than two-thirds of the year-to-year increase was driven by the modification of supplier terms with us now taking ownership of inventory for goods being brought into the Americas closer to the point of shipment rather than destination.

亞洲再次出現強勁成長，成長 18%，去年在所有通路（尤其是 DTC 和幾乎所有市場）持續強勁的推動下實現了 53% 的高成長。亞洲主要市場印度、中國和日本均實現了兩位數的強勁成長，土耳其、泰國和其他幾個市場也是如此。由於槓桿作用強勁，亞洲的營業利潤率也擴大了 330 個基點至 12.3%。現在來看看我們的資產負債表和現金流；我們在第三季的庫存目標上取得了巨大進展。報告庫存增加 6%。然而，超過三分之二的同比增長是由供應商條款的修改推動的，我們現在擁有了運往美洲的貨物的庫存所有權，這些貨物更接近裝運點而不是目的地。

This is consistent with existing terms for goods sent to Europe and Asia. This change is enabled by the recent upgrade of our ERP and simplifies our global ways of working with suppliers in line with industry standards. Adjusting for this change, inventory increased just 1%, representing a 17 point deceleration from last quarter. Inventory in the U.S. is already below last year's level, and we expect to continue to make progress in Q4 with overall inventory below prior year levels by year-end on a comparable basis. Though inventories are now in line with expected revenue growth and by Q4 end will be down year-over-year we are working to further optimize inventories and improve turns and working capital.

這與發往歐洲和亞洲的貨物的現有條款一致。這項變更是透過我們最近升級的 ERP 實現的，並根據行業標準簡化了我們與供應商合作的全球方式。調整此變更後，庫存僅成長 1%，較上季下降 17 個百分點。美國的庫存已經低於去年的水平，我們預計第四季將繼續取得進展，到年底整體庫存可比水準將低於去年同期水準。儘管庫存目前符合預期的收入成長，並且到第四季末將同比下降，但我們正在努力進一步優化庫存並提高週轉率和營運資本。

Adjusted free cash flow was a negative $21 million in the quarter, down from $12 million in the third quarter last year. As we continue to improve our inventory through the year, we also expect to end the year with positive free cash flow. We're confident in our cash flow position and have now fully repaid this outstanding ABL borrowing. In the quarter, we returned approximately $48 million in capital to shareholders via dividends, which were in line with Q3 last year. For quarter four '23, we've declared a dividend of $0.12 per share in line with last quarter.

本季調整後自由現金流為負 2,100 萬美元，低於去年第三季的 1,200 萬美元。隨著我們全年繼續改善庫存，我們也預計年底將實現正的自由現金流。我們對我們的現金流狀況充滿信心，現在已經全額償還了這筆未償還的 ABL 借款。本季度，我們透過股息向股東返還了約 4,800 萬美元的資本，與去年第三季持平。 23 年第四季度，我們宣布派發每股 0.12 美元的股息，與上季一致。

Now turning to our outlook; while reported revenue was flat for the third quarter, as mentioned earlier, we exited quarter three with continued momentum in our global DTC business and improving trends in U.S. wholesale in September. However, given the ongoing uncertainty in the macro environment, we are taking a cautious approach to our outlook for the fourth quarter. For the full year, we are now guiding revenues flat to up 1%. By segment, we continue to expect a low single-digit decline in the Americas despite continued strength in U.S. DTC and in Latin America. Europe's growth is still expected within the previously guided range of up low-single digits, excluding Russia.

現在轉向我們的展望；儘管如前所述，第三季度的報告收入持平，但我們在第三季度結束時，全球 DTC 業務保持持續增長勢頭，並且 9 月份美國批發趨勢有所改善。然而，鑑於宏觀環境持續存在不確定性，我們對第四季的前景持謹慎態度。對於全年，我們目前的指導收入持平至成長 1%。以細分市場來看，儘管美國 DTC 和拉丁美洲持續走強，但我們仍預期美洲地區將出現低個位數下降。預計歐洲經濟成長仍處於先前指導的低個位數成長範圍內（不包括俄羅斯）。

And for Asia, we continue to expect growth in the low teens. For the fourth quarter, this implies a low- to mid-single-digit revenue increase. We continue to expect adjusted gross margin to contract approximately 90 basis points from prior year's 57.6%. This translates to approximately 300 basis points versus 2019 for the full year and the fourth quarter. We continue to expect a full year mid-single-digit increase in SG&A dollars, yielding an adjusted EBIT margin of up to 9% for the full year and approximately 12% for the fourth quarter. Given these factors, we are narrowing our EPS outlook to the low end of our previous range of $1.10 to $1.20. Lastly, we expect the Q4 tax rate in the high-single digits and inventory levels below prior year by quarter end on a comparable basis.

對於亞洲，我們繼續預期成長幅度將在十幾歲以下。對於第四季度，這意味著收入將出現低至中個位數的成長。我們繼續預計調整後的毛利率將從上年的 57.6% 下降約 90 個基點。與 2019 年全年和第四季相比，這相當於約 300 個基點。我們繼續預計全年 SG&A 美元將出現中個位數成長，全年調整後息稅前利潤率將高達 9%，第四季約為 12%。考慮到這些因素，我們將 EPS 前景縮小至先前區間 1.10 美元至 1.20 美元的下限。最後，我們預計第四季度的稅率將達到高個位數，並且以可比較基礎上季度末的庫存水準將低於去年同期。

I will now turn it back over to Chip for closing remarks before opening up the call for Q&A.

現在，我將把它轉回給 Chip 進行結束語，然後再開始問答環節。

We continue to control the controllables while navigating an environment with a heightened level of macro uncertainty around the world. We're confident in the strength of our brand and the newness and innovation pipeline we have coming. Our actions to stabilize U.S. wholesale are working, and our continued strong performance in global DTC underscores the strength of our brand and deep connection with consumers and is enabling us to deliver near-term results while laying the foundation for sustainable, profitable growth in the years ahead.

我們持續控制可控因素，同時應對全球宏觀不確定性加劇的環境。我們對品牌的實力以及我們即將推出的新穎和創新管道充滿信心。我們穩定美國批發的行動正在發揮作用，我們在全球DTC 的持續強勁表現凸顯了我們品牌的實力以及與消費者的深厚聯繫，使我們能夠實現短期業績，同時為未來幾年的可持續盈利增長奠定基礎先。

And as you heard from Michelle and Harmit, given our momentum, now is the time for us to accelerate our transition to a DTC-driven business by advancing the organizational structure to support our ambition. My confidence in our leadership and our team remains extremely high, and we're focused on executing with discipline and rigor on our priorities.

正如您從 Michelle 和 Harmit 那裡聽到的那樣，鑑於我們的勢頭，現在是我們透過推進組織結構來支持我們的雄心壯志，加速向 DTC 驅動型業務轉型的時候了。我對我們的領導層和團隊仍然充滿信心，我們專注於嚴格執行我們的優先事項。

Latif, with that, you can open the floor to Q&A.

拉蒂夫，這樣，您就可以開始問答了。

(Operator Instructions) Our first question comes from the line of Bob Drbul of Guggenheim.

（操作員說明）我們的第一個問題來自古根漢的鮑伯‧德布爾（Bob Drbul）。

Michelle, welcome. I guess if I could, just like to focus a couple of questions for Michelle. Two-part one question. What surprised you in your first 9 months at Levi so far? And I guess the second part of it would be, just given your background, what steps do you think are necessary to really stabilize the wholesale business?

米歇爾，歡迎。我想如果可以的話，我想向米歇爾集中回答幾個問題。兩部分一題。到目前為止，在 Levi 的頭 9 個月裡，什麼讓您感到驚訝？我想第二部分是，鑑於您的背景，您認為要真正穩定批發業務需要採取哪些步驟？

Thanks Bob. Thank you for the questions. So first, in terms of being surprised, well, I'd first say that I just couldn't be more excited to be here. It is an incredible company. It's one of the most iconic brands in the world, awesome opportunities for growth ahead and an amazing team. And so it really is just an honor and privilege to be here. I'd say what's been most surprising is I think back to the seat I held before, and I knew Levi's much more as a U.S. wholesale bottoms business. And I spent the last 9 months traveling around the world with Chip and Harmit and others of the team, and I've just honestly been blown away by the power of our brand internationally.

謝謝鮑勃。謝謝你的提問。首先，就驚訝而言，我首先要說的是，我對來到這裡感到非常興奮。這是一家令人難以置信的公司。它是世界上最具標誌性的品牌之一，擁有絕佳的未來發展機會和出色的團隊。因此，能夠來到這裡確實是一種榮幸。我想說最令人驚訝的是，我回想起我之前擔任的職位，我對李維斯的了解更多是作為一家美國批發下裝企業。在過去的 9 個月裡，我與 Chip 和 Harmit 以及團隊的其他成員一起環遊世界，說實話，我對我們品牌的國際影響力感到震驚。

The DTC presence, how our brand shows up much more as a lifestyle brand, candidly, in many of the markets outside of the U.S., how premium we are, the resonance with (inaudible) Center of Culture, we are across all of our markets. We have got the power of the global brand, but then how the local markets adapt to be highly relevant. And while we're investing and growing the brand, our partners are, too. I mean, as you know, we've got many franchisee partners around the world and through our travels have had the opportunity to hear from a number of them. And they are really passionate, really committed and they too are investing.

DTC 的存在，我們的品牌如何在美國以外的許多市場中更多地展現為生活方式品牌，我們的高端程度，與（聽不清楚）文化中心的共鳴，我們遍布所有市場。我們擁有全球品牌的力量，但當地市場如何適應是高度相關的。在我們投資和發展品牌的同時，我們的合作夥伴也在投資和發展品牌。我的意思是，如您所知，我們在世界各地有許多特許經營合作夥伴，透過我們的旅行，我們有機會聽到其中一些人的意見。他們非常熱情，非常投入，而且他們也在投資。

I mentioned India on the call where they invest a lot of dollars during the pandemic to dramatically grow our stores and grow our footprint. So yeah -- so I'd say for me, one of the biggest takeaways has been that. And I just see a ton of growth potential. As I mentioned in my remarks, and I'll just hit these very quickly. But beyond international, this pivot to DTC is really incredible. And we're talking about international. The U.S. market is still clearly very important. We're seeing DTC growth, as we talked about earlier on the call across all channels of DTC so a lot of upside there.

我在電話中提到了印度，他們在大流行期間投入了大量美元，以大幅增加我們的商店並擴大我們的足跡。所以，是的——所以我想說，對我來說，最大的收穫之一就是這一點。我只看到了巨大的成長潛力。正如我在演講中提到的，我很快就會談到這些內容。但除了國際以外，這種轉向 DTC 的做法確實令人難以置信。我們正在談論國際。美國市場顯然仍然非常重要。我們看到 DTC 的成長，正如我們之前在 DTC 所有管道的電話會議上談到的那樣，因此有很大的上升空間。

And then lastly, I'd just hit on and then maybe more questions on this, but this opportunity to continue to build on the work the team has done to really pivot the brand from a jeans brand to a denim apparel lifestyle and happy to entertain further questions on that. But that's head-to-toe denim with everything from denim tops to denim skirts to denim dresses and beyond. And there's a lot of untapped opportunity there. And then lastly, I'd say the team [at Levi's is bar none], just an incredibly talented team, deep bench and then not only with the great talent we have in place, but we're bringing in new talent to complement the capabilities we have here today.

最後，我想順便問一下，也許還有更多問題，但有機會繼續以團隊所做的工作為基礎，真正將品牌從牛仔褲品牌轉向牛仔服裝生活方式，並樂於娛樂對此有進一步的疑問。但這是從頭到腳的牛仔布，從牛仔上衣到牛仔裙再到牛仔連身裙等等。那裡還有很多未開發的機會。最後，我想說的是，[李維斯的團隊是無與倫比的]，這是一支非常有才華的團隊，有很深的替補陣容，不僅擁有我們現有的優秀人才，而且我們還引進了新的人才來補充我們的團隊。我們今天在這裡擁有的能力。

We talked about before we brought in a new Chief Digital Officer. We have a new Chief Marketing Officer and then most recently, a new Head of Logistics and Distribution. So we're really set up with the team to drive our agenda. So part two of your question is around wholesale, which, indeed, I do have some familiarity with. And while as we look ahead, DTC will be significant growth, wholesale still really important to our business. It's an incredibly important channel. It's big, it's profitable. And I think strategically and importantly, it extends our reach with consumers. We're not going to show up in every single town across America and across the world.

我們在引入新的首席數位長之前就談到了這一點。我們任命了一位新的首席行銷官，最近又任命了一位新的物流和分銷主管。因此，我們確實與團隊一起推動了我們的議程。所以你問題的第二部分是關於批發的，事實上，我確實對批發有一定的了解。雖然我們展望未來，DTC 將顯著成長，但批發對我們的業務仍然非常重要。這是一個極為重要的管道。規模大了，利潤也大。我認為從策略上講，這也很重要，它擴大了我們與消費者的接觸範圍。我們不會出現在美國和世界各地的每一個城鎮。

And so our partnerships are really instrumental in extending our brand and product reach. We have long relationships with these customers. We are important to them and they are important to us. And I'm really excited and met with many of them during my time here. It's not the year that any of us anticipated. There are clearly headwinds, but we have our arms around the issues. I'd point to three things. One is the macro issues we're all familiar with. Second is some value concerns that our customers were talking to us about some of our fits, which we've addressed. And then third, we have faced over the course of the year, some congestion in our DCs, which are largely behind us.

因此，我們的合作夥伴關係對於擴大我們的品牌和產品範圍確實發揮了重要作用。我們與這些客戶有著長期的合作關係。我們對他們很重要，他們對我們也很重要。我真的很興奮，在我在這裡期間見到了他們中的許多人。這不是我們任何人預期的一年。顯然存在一些阻力，但我們已經解決了這些問題。我想指出三件事。一是我們都熟悉的宏觀問題。其次是我們的客戶與我們談論我們的一些適合的一些價值問題，我們已經解決了這些問題。第三，在這一年中，我們的資料中心遇到了一些擁堵，但這些擁堵基本上已經過去了。

As we've addressed these issues, we have seen sequential improvement. I think Chip mentioned that earlier on the call. And so each month across the quarter improved. And then even in the early days of this quarter, we are continuing to see improvement there. I think beyond that, though, so addressing, I call it, the fundamentals of the value equation and executing our shipments, it's about product and it's about innovation. And we talk about just having this lifestyle expression of our brand in our own stores (technical difficulty), and we can do a better job there with our wholesale partners and so whether that's head-to-toe denim dressing, bringing more fashion, bringing more innovation.

當我們解決這些問題時，我們已經看到了連續的改進。我想奇普在電話會議早些時候提到過這一點。因此，本季每個月都有所改善。即使在本季初期，我們也繼續看到這方面的改善。但我認為除此之外，我稱之為價值方程式的基本原理並執行我們的發貨，這與產品和創新有關。我們談論的是在我們自己的商店中表達我們品牌的生活方式（技術難度），我們可以與我們的批發合作夥伴一起做得更好，所以無論是從頭到腳的牛仔裝，帶來更多時尚，帶來更多創新。

And you're going to see some of that as early as this fall and holiday, where I believe we're really set up. But I think importantly, as we look into 2024, we have a very deep pipeline. We've been presenting to customers. We have a new innovation platform that we've already started to tease out there. I'll talk about that at some point in the future. But we've got a lot in front of us to believe that we can stabilize and ultimately reinstate growth in this important channel.

最早在今年秋天和假期你就會看到其中的一些，我相信我們已經真正準備好了。但我認為重要的是，當我們展望 2024 年時，我們有一個非常深入的管道。我們一直在向客戶展示。我們已經開始醞釀一個新的創新平台。我會在將來的某個時候談論這個問題。但我們還有很多事情要做，相信我們能夠穩定並最終恢復這個重要管道的成長。

Please standby for our next question which comes from the line of Jay Sole of UBS.

請等待我們的下一個問題，來自瑞銀集團的 Jay Sole。

Great. Harmit, you mentioned going through an overview of the cost structure. Can you maybe outline a little bit more or elaborate a little bit more on what you mean in terms of quantifying the impact that you see and maybe if you put it into context of the adjusted EBIT margin guidance of 15% that was given as part of the long-term actual targets at the Investor Day in June '22. That would be super helpful.

偉大的。哈米特，您曾提到成本結構的概述。您能否詳細概述一下或詳細說明您在量化您所看到的影響方面的含義，也許您可以將其納入調整後的15% 的息稅前利潤率指導（該指導作為15% 的一部分）的背景下。22 年 6 月 投資者日的長期實際目標。那會非常有幫助的。

Sure, Jay. Michelle talked about how we're making this faster pivot to DTC, and we believe that will accelerate our growth. While it's early, we recognize that this company has a lot of opportunities to be faster, more agile, to be efficient including shorter go-to-market calendar. So let me give you an example. Before Michelle arrived, we didn't have dresses and skirts (technical difficulty) this year -- you've got it, right? That is acting more like a vertical retailer versus a wholesaler who has a go-to-market (technical difficulty) of over 12 to 15 months.

當然，傑伊。米歇爾談到了我們如何更快地轉向 DTC，我們相信這將加速我們的成長。雖然現在還為時過早，但我們意識到這家公司有很多機會變得更快、更敏捷、更有高效，包括縮短上市日曆。讓我舉個例子。在米歇爾來之前，我們今年沒有連身裙和裙子（技術難度）——你已經拿到了，對吧？這更像是垂直零售商，而不是上市時間（技術難度）超過 12 至 15 個月的批發商。

We're going to take a hard look at our assortment and drive more productivity. Like a lot of companies, we also have a lot of tail, but the tail doesn't move as fast. So taking a hard look at that, I think, is critical. So we are looking at all processes. We're looking at go-to-market, and we are going to be a lot more consumer-centric. In terms of areas, we think this drives more productivity in our DTC operations and profitability. We think it does drive a better SG&A structure. It improves our supply chain operations, including COGS and clear working capital improvements as we drive higher turns because we're not satisfied. While we get to below inventory levels, below last inventory levels at the end of the year, we think there's a lot more opportunity.

我們將認真審視我們的產品組合併提高生產力。和很多公司一樣，我們也有很多尾巴，但尾巴移動得沒有那麼快。因此，我認為認真審視這一點至關重要。所以我們正在關注所有流程。我們正在考慮進入市場，我們將更加以消費者為中心。就領域而言，我們認為這會提高我們 DTC 營運的生產力和獲利能力。我們認為它確實推動了更好的銷售及管理費用結構。它改善了我們的供應鏈運營，包括銷貨成本和明顯的營運資本改善，因為我們不滿意，所以我們提高了周轉率。雖然我們的庫存水準低於去年年底的庫存水平，但我們認為還有更多的機會。

And I know -- I really understand if I was in your shoes you want us to quantify this fairly quickly. But what I will tell you is that -- give us through the end of quarter four when we release our expectations for next year (technical difficulty) impact. To your question about the 15% EBIT margins, we are completely behind that. We are going to be a company that has 15% EBIT margins over time. This focus, we're looking at the entire cost structure of the company, just solidifies our part to get there and get there the right way and get there during the timeframe that we believe is acceptable to our long-term shareholders. So we're committed to the 15%. This helps get us there, certainly amplifies our way and then really make this company a lot more efficient and agile.

我知道——我真的理解如果我處於你的立場，你希望我們盡快量化這一點。但我要告訴你的是——在第四季末我們發布對明年（技術難度）影響的預期時。對於你關於 15% 息稅前利潤率的問題，我們完全支持這一點。隨著時間的推移，我們將成為一家息稅前利潤率為 15% 的公司。我們著眼於公司的整個成本結構，這一重點鞏固了我們的部分，以正確的方式實現這一目標，並在我們認為長期股東可以接受的時間範圍內實現這一目標。所以我們致力於 15%。這有助於我們實現這一目標，當然會擴大我們的方式，然後真正使這家公司更有效率和敏捷。

Please stand by for our next question. Our next question comes from the line of Matthew Boss of J.P. Morgan.

請等待我們的下一個問題。我們的下一個問題來自摩根大通的馬修·博斯。

Great. So Chip, maybe on global health of the brand and category. Could you just elaborate on the sequential sales improvement and speak to current demand trends that you're seeing across channels in North America and Europe today? And then for Harmit, could you speak to inventory health across distribution channels? And just the puts and takes that are embedded in your fourth quarter gross margin outlook relative to three months ago?

偉大的。所以 Chip，也許是關於品牌和類別的全球健康狀況。您能否詳細說明一下連續銷售的改善情況，並談談您今天在北美和歐洲各個管道看到的當前需求趨勢？那麼哈米特，您能談談分銷管道的庫存健康狀況嗎？與三個月前相比，僅包含在第四季度毛利率展望中的看跌期權和看跌期權？

Sure. First of all, Matt, I'll try not to be too repetitive with what was in the prepared remarks. But we're seeing a dramatic or stark contrast between the results in our direct-to-consumer business versus wholesale. So direct-to-consumer up pretty strong double digits up in every region, up in mainline outlet and e-commerce plus we comped positively in each chain in each region -- in each channel in each region. So really strong results there during the quarter and wholesale down pretty soft. And as we've kind of been digging into this, one of the things to consider is our DTC assortment is very, very broad -- tops, bottoms, men's, women's, we can also be pretty agile in responding to it.

當然。首先，馬特，我會盡量不要對準備好的發言內容進行太多重複。但我們看到直接面向消費者的業務與批發業務的結果之間存在著戲劇性或鮮明的對比。因此，直接面向消費者的業務在每個地區都實現了相當強勁的兩位數增長，在主線直銷店和電子商務方面都有增長，而且我們在每個地區的每個連鎖店、每個地區的每個管道中都取得了積極的進展。因此，本季的業績非常強勁，而批發量下降相當疲軟。當我們深入研究這個問題時，需要考慮的事情之一是我們的 DTC 品種非常非常廣泛——上衣、下裝、男裝、女裝，我們也可以非常靈活地對其做出反應。

We're going to work on becoming even more agile, as Michelle said. But it's been a pretty hot summer, as everybody knows, and you all have known me for a long time. I rarely talk about the weather report when I'm talking about our business results. But I think there's no doubt that our wholesale business was somewhat impacted by the really, really hot summer because the wholesale assortment is pretty much denim bottoms. We did take the pricing action late in Q3. So we announced it. We first talked about it on this call. We announced it to our customers and it went into effect in early August.

正如米歇爾所說，我們將努力變得更加敏捷。但眾所周知，這是一個非常炎熱的夏天，而且你們都認識我很久了。當我談論我們的業績時，我很少談論天氣預報。但我認為毫無疑問我們的批發業務受到了非常非常炎熱的夏季的影響，因為批發品種幾乎都是牛仔褲。我們確實在第三季末採取了定價行動。所以我們宣布了這一點。我們首先在這次電話會議上討論了這個問題。我們向客戶宣布了這項消息，並於八月初生效。

Every customer kind of executes it on their own timing and they executed their own way and that kind of happened throughout the month of August. So what impact we did see on those six items where we took pricing actions here in the U.S. was late in the quarter. But I will say that we are optimistic with what we're seeing. We are seeing an improvement in trends on those items in those customers where we have seen the pricing reflected and that gives us confidence that we did pick the right items. I'll also say, you all remember, we did not take pricing down on a number of items, 501s being one [specifically] and the 501s were up this past quarter.

每個客戶都按照自己的時間和方式執行，這種情況在整個八月都發生了。因此，我們在本季末在美國採取定價行動時確實看到了對這六種產品的影響。但我要說的是，我們對所看到的情況感到樂觀。我們看到這些商品的趨勢有所改善，我們已經看到了定價的反映，這讓我們相信我們確實選擇了正確的商品。我還要說，你們都記得，我們​​沒有降低許多商品的價格，501 就是其中之一，而且 501 在上個季度上漲了。

So I think we really -- we're very surgical and very strategic. We're optimistic about that. Our wholesale trends, so they were down 10%. They were better than they were in the previous quarter, and our expectation is that they're going to be better in the fourth quarter in part because of the pricing actions that we've taken, having a full quarter's impact of that, in part because this inventory situation that we've had for multiple quarters is now cleaned up and are getting back to more normalized customer fill rates, that's going to help build a pipeline where there have been out of stocks, that's going to help get new product out on to the floor.

所以我認為我們真的——我們非常有外科手術精神，而且非常具有戰略意義。我們對此持樂觀態度。我們的批發趨勢，因此下降了 10%。他們比上一季度更好，我們的預期是他們在第四季度會更好，部分原因是我們採取的定價行動，部分原因是整個季度的影響因為我們多個季度的庫存情況現在已經得到清理，並且正在恢復到更正常化的客戶填充率，這將有助於在缺貨的情況下建立一條管道，這將有助於推出新產品到地板上。

As Michelle said, both in the prepared remarks and in the earlier Q&A, we've got a pretty strong pipeline coming for the holiday and into Q1. So we're cautiously optimistic. The category was soft. The best data that we have is in the U.S. That's where we get really good concrete data on a quarterly basis. It was down mid-single digits. So Apparel was down mid-single digits. Again, consumer being pressured, that combination of that with the hot weather did have a negative impact on the category but having said that, we grew share. And we grew share on men's, we grew share our women's, we grew share with the critical 18- to 30-year old. So the brand is absolutely strong and where we're in control of it in our own direct-to-consumer channels, we're killing it right now. And the issue is fundamentally the wholesale channel. And as I said, we're making sequential improvements there, and I think it's going to help.

正如米歇爾所說，無論是在準備好的發言中還是在先前的問答中，我們在假期和第一季都有相當強大的管道。所以我們持謹慎樂觀的態度。該類別很軟。我們擁有的最好的數據來自美國。我們在那裡每季獲得非常好的具體數據。下降了個位數中間。因此，服裝業的股價下跌了個位數。同樣，消費者面臨壓力，再加上炎熱的天氣，確實對該類別產生了負面影響，但話雖如此，我們的份額有所增長。我們在男性、女性、關鍵 18 至 30 歲人群中的份額都在增長。因此，這個品牌絕對強大，我們可以透過自己的直接面向消費者的管道控制它，我們現在正在消除它。問題根本在於批發通路。正如我所說，我們正在那裡進行連續改進，我認為這會有所幫助。

And Matt, to your question, I think you asked two questions. One was inventory and the second was gross margins for Q4. So on inventory (technical difficulty) at the end of the quarter better than where we thought we would be. The U.S. is actually down relative to last year already, which is great given the large wholesale presence here. Look -- we also look at trade inventory in terms of number of months of our key wholesale customers, and that is better than a quarter ago. So that inventory situation is getting better. Inventory in Europe is in a good spot because Europe was a little soft.

馬特，對於你的問題，我認為你問了兩個問題。一是庫存，二是第四季的毛利率。因此，本季末的庫存（技術難度）比我們預期的要好。美國的銷量實際上已經比去年有所下降，考慮到這裡有大量的批發業務，這很好。我們還根據主要批發客戶的月數來查看貿易庫存，這比一個季度前要好。因此庫存狀況正在好轉。歐洲的庫存狀況良好，因為歐洲有點疲軟。

So I think overall, largely because a large piece of our assortment is core and we sell a lot of core. I think we are in a good spot from that perspective. To your question about gross margins, which are getting to the business, we beat gross margin expectations in quarter three, largely driven by the continued strength in our direct-to-consumer business. If you think of the puts and takes, I know it's a key question that my friend (inaudible) and you ask which is -- so what drove gross margins relative to expectation, largely the growth in DTC, which is structural and here to stay.

所以我認為總體而言，很大程度上是因為我們的產品種類中有很大一部分是核心產品，而且我們銷售了大量核心產品。我認為從這個角度來看我們處於一個很好的位置。對於您關於毛利率的問題，我們在第三季的毛利率超出了預期，這主要是由於我們的直接面向消費者業務的持續強勁推動的。如果你想到看跌期權和看跌期權，我知道這是我的朋友（聽不清）和你問的一個關鍵問題，那麼是什麼推動了毛利率相對於預期的增長，主要是DTC 的增長，這是結構性的，並且會持續下去。

I think relative to a favorable channel mix, favorable FX and lower air freight were the tailwinds. The headwinds were largely the pricing actions that we've initiated and lower full price sales relative to a year ago. Thinking about quarter four, quarter four, we expect to be ahead than last year in gross margin, still ending the year slightly down, but quarter four, as I said in the prepared remarks, gross margin should be 300 basis points higher than 2019. And so what are the puts and takes is the tailwinds on gross margins in quarter four product costs a little better, largely because commodities have come back and you feel -- start seeing this benefit essentially in '24, lower airfreight and lower promotions relative to a year ago.

我認為相對於有利的通路組合，有利的外匯和較低的航空運費是有利因素。不利因素主要是我們發起的定價行動以及與一年前相比降低的全價銷售。考慮到第四季度，第四季度，我們預計毛利率將高於去年，但年底仍略有下降，但第四季度，正如我在準備好的演講中所說，毛利率應比2019 年高出300個基點。因此，看跌期權和看跌期權是第四季度產品成本好一點的毛利率的推動因素，這主要是因為大宗商品已經回升，你會覺得——基本上在24 年開始看到這種好處，相對於2019 年，空運價格較低，促銷活動也較少。一年前。

I mean, quarter four last year was very promotional. But our expectation is that since trade inventory is in a better spot, our inventory is in a better spot. Michelle talked about us having our -- a better pipeline as we head into our holiday season across both channels, that should drive a lot more innovation interest. So I think those are the factors that we think really help lift gross margins year-over-year in quarter four.

我的意思是，去年第四季的促銷活動非常多。但我們的預期是，由於貿易庫存處於更好的位置，我們的庫存也處於更好的位置。米歇爾談到，當我們跨兩個管道進入假期季節時，我們擁有更好的管道，這應該會激發更多的創新興趣。因此，我認為這些是我們認為真正有助於提高第四季毛利率的因素。

Our next question comes from the line of Oliver Chen of TD Cowen.

我們的下一個問題來自 TD Cowen 的 Oliver Chen。

Hi Chip, Harmit, Michelle. Our question was about capabilities and the capabilities you may need to prioritize as you become more of a lifestyle brand with non-denim execution as well and that likely ties into your thinking around the agility and chasing capabilities, which will be very powerful. A follow-up was on fill rates. It sounded like fill rates are where you want them to be. What's happening there, and you don't expect any more changes there? Are you happy with that? Because it's been a work in progress for the past few quarters.

嗨，奇普，哈米特，米歇爾。我們的問題是關於能力，以及當你成為一個具有非牛仔執行力的生活方式品牌時，你可能需要優先考慮的能力，這可能與你對敏捷性和追逐能力的思考有關，這將是非常強大的。後續行動是關於填充率。聽起來填充率就在你想要的位置。那裡正在發生什麼，您不希望那裡發生更多變化嗎？你對此滿意嗎？因為過去幾季這項工作一直在進行中。

Hey Oliver. Great to hear. It's Michelle here. So I'll take the first part of the question on capabilities, and then I'll hand it over to Harmit on fill rates. So yeah, like I said, I'm super excited about the opportunities we have. I'd say both -- well, all of the opportunities we have, whether that's growing our international business, it's DTC and then, of course, category expansion. And we're building capability across all fronts, candidly. I think related to I'd put DTC together with the lifestyle category piece in that in both cases, to operate like a vertical retailer, you need speed and agility.

嘿奧利佛。很高興聽到。米歇爾在這裡。因此，我將回答關於能力的問題的第一部分，然後將其交給哈米特關於填充率的問題。所以，是的，就像我說的，我對我們擁有的機會感到非常興奮。我想說的是，我們擁有的所有機會，無論是發展我們的國際業務，還是 DTC，當然還有品類擴張。坦白說，我們正在各個方面建立能力。我認為與我將 DTC 與生活方式類別放在一起有關，在這兩種情況下，要像垂直零售商一樣運營，您需要速度和敏捷性。

And we talk about more broadly making this pivot, it's operational and it's cultural. It's how we use data to drive real-time decisions. Capability-wise, (technical difficulty) two fronts. One, as it relates to products, which I think was largely around your question. It's really end-to-end. So we start with our go-to-market timeline, it's too long today. It builds over years highly successful, but was built to serve a U.S. wholesale bottoms business that can move a lot slower than if you're a direct-to-consumer global denim lifestyle business. And there should be multiple tracks of timelines across different products. For example, as you know, tops and especially fashion tops operate on a much faster timeline than say your core 501 denim bottom.

我們更廣泛地討論如何打造這一點，它具有可操作性和文化性。這就是我們如何使用數據來推動即時決策。能力方面，（技術難度）兩方面。一，因為它與產品有關，我認為這很大程度上是圍繞著你的問題。這確實是端到端的。所以我們從上市時間表開始，今天太長了。它多年來一直非常成功，但其目的是為美國批發下裝業務提供服務，而與直接面向消費者的全球牛仔生活方式業務相比，該業務的發展速度要慢得多。不同產品之間應該有多個時間表。例如，如您所知，上衣，尤其是時尚上衣的運行時間比您的核心 501 牛仔下裝要快得多。

Not saying we're going to become fast fashion. In fact, we're not going to. But getting inside of a 12-month timeline is imperative for us to both drive relevance in these categories and then make sure we get the kind of turns that we need in a DTC business. So there's lots of teams working on kind of unpacking and refining what this new go-to-market process will be, and there's already been a lot of great progress. Secondly, as it relates to capability, it's design, it's product development, it's our vendor base. Again, I'd say over my time here, there's already been tremendous progress.

並不是說我們要成為快時尚。事實上，我們不會這麼做。但是，對於我們而言，必須遵守 12 個月的時間表，以推動這些類別的相關性，然後確保我們獲得 DTC 業務所需的轉變。因此，有許多團隊正在致力於解析和完善這個新的上市流程，並且已經取得了許多重大進展。其次，因為它涉及能力、設計、產品開發、我們的供應商基礎。我想說，在我在這裡的這段時間裡，已經取得了巨大的進步。

We have deep capabilities today in design and product development. We're supplementing that. We're bringing in new talent across these fronts. And I've been really excited to see, again, in my short time how we've expanded our vendor base to bring in vendors who have key capabilities and expertise in areas like tops or dresses, etcetera. And then to your point, from an end-to-end supply chain, when you're in direct-to-consumer whether it's at your stores or in e-comm, you want to be able to have the flexibility to chase into things that are working really well or pull back if they're not.

如今，我們在設計和產品開發方面擁有深厚的能力。我們正在對此進行補充。我們正在這些領域引進新人才。我非常高興再次看到我們如何在短時間內擴大我們的供應商基礎，引入在上衣或連身裙等領域擁有關鍵能力和專業知識的供應商。然後就你的觀點而言，從端到端的供應鏈，當你直接面向消費者時，無論是在商店還是在電子商務中，你希望能夠靈活地追逐事物那些工作真的很好，或者如果不工作就撤退。

And so that's in the supply chain side of things, but it's literally like on the floor. So the last thing I'd say is really excited about the capabilities we're building to run a retail organization. So what's happening with our stores, our people, training, really putting the stores in our e-comm channel at the center and giving our stores the empowerment to run their business so a lot to do. I think a lot of good progress already underway. And then Harmit, over to you.

這是供應鏈方面的事情，但它實際上就像在地板上一樣。因此，我要說的最後一件事是對我們正在建立的營運零售組織的能力感到非常興奮。那麼我們的商店、我們的員工、培訓方面正在發生什麼，真正將商店置於我們的電子商務管道的中心，並賦予我們的商店經營業務的能力，所以有很多事情要做。我認為已經取得了很多良好的進展。然後是哈米特，交給你了。

On fill rates, Oliver, let me just start by saying we really have a lot of great people, a lot of good talent running our DCs around the world and a shout out to them. It's been tough largely because we had more inventory. And we really have been working collectively as a team to try and decongest our DCs so that we could start servicing our customers and our stores. And so as -- and that sequentially improved as we exited quarter three. It's got a lot better in September.

關於填充率，奧利佛，首先我要說的是，我們確實有很多優秀的人才，有很多優秀的人才在世界各地運作我們的 DC，並向他們致敬。這很困難，主要是因為我們有更多的庫存。我們確實一直在作為一個團隊共同努力，努力緩解配送中心的擁擠問題，以便我們能夠開始為我們的客戶和商店提供服務。隨著我們退出第三季度，這種情況逐漸改善。九月就好多了。

And our view is that by the end of end of quarter four, this issue is behind us from that perspective. We are also -- a couple of things. We have opened a new DC, a digital DC in the East Coast, and that is to service our e-commerce platform. That makes a difference because we have more capacity. And our focus right now is to service our full price SKUs to service DTC and ensure that as we get ready for the holiday season, the newness is on the floor. And so I think to your point, (technical difficulty) every day, and the teams are committed to ensure that we don't miss a sale.

我們的觀點是，到第四季末，從這個角度來看，這個問題已經成為過去。我們還有一些事情。我們在東海岸開設了一個新的DC，一個數位DC，就是為我們的電子商務平台服務的。這很重要，因為我們有更多的能力。我們現在的重點是為我們的全價 SKU 提供服務，為 DTC 提供服務，並確保當我們為假期做好準備時，新鮮感就會出現。因此，我認為就你的觀點而言，（技術難度）每天都有，團隊致力於確保我們不會錯過任何一次銷售。

Our next question comes from Laurent Vasilescu of BNP Paribas.

我們的下一個問題來自法國巴黎銀行的洛朗·瓦西萊斯庫。

And Michelle, great to have your voice on the call. Chip, Harmit, I would love to ask about the strategic pricing actions you took in your Tier 3 distribution in the U.S. Just a little bit more color around just what you saw in terms of price elasticity. Are you confident that it's really -- it should be isolated in the Tier 3 distribution or would you potentially revisit this across other silhouettes, styles and points of distribution? And then maybe just another question, if I may. I would love to hear, Harmit if we go back to 2020, '21, you talked about $200 million of gross savings. I know you're not necessarily prepared to talk about it, but could we see some kind of magnitude of that type of savings as you think about 2024 and beyond?

米歇爾，很高興您在電話中發聲。 Chip、Harmit，我很想問你們在美國的第 3 級分銷中採取的策略定價行動。只是圍繞你們在價格彈性方面看到的內容多一點色彩。您是否確信它確實應該在第 3 級分佈中被隔離，或者您是否有可能在其他輪廓、風格和分佈點中重新審視這一點？如果可以的話，也許還有一個問題。我很想聽聽哈米特，如果我們回到 2020 年，21 年，您談到了 2 億美元的總節省。我知道您不一定準備好談論它，但當您考慮 2024 年及以後時，我們能否看到此類節省的某種程度？

I'll take the first question on pricing. And again, I'll try not to be too repetitive, and I'll keep it pretty brief because the data is still pretty fresh. As I said, we announced the price increase in early August. Each customer implemented it on their own timing because it was based on sell-in. So the timing has kind of been rolled out or weighed [out] customer-by-customer. But where we have seen customers take pricing on these six items we have seen the trend on those items inflect. We have seen a distinct change in trends.

我將回答關於定價的第一個問題。再說一次，我會盡量不要過度重複，而且我會保持簡短，因為數據仍然很新鮮。正如我所說，我們在八月初宣布了漲價。每個客戶都根據自己的時間實施它，因為它是基於銷售的。因此，這個時機已經是逐一推出或權衡的。但是，當我們看到客戶對這六種商品進行定價時，我們就看到這些商品的趨勢發生了變化。我們看到了趨勢的明顯變化。

It's still really, really early though. I mean -- and we still have some customers -- we have one customer that just put the price into place, the reduced price into place this past week so it is still really early days. And that's why I'm trying to temper this with a little bit of not getting too excited about it but I will say we were very, very disciplined in trying to really understand what were the most price-sensitive items in the line and adjusting the price on those items and those items only. And I feel pretty confident that we picked the right items and that we're not going to have to go any further along.

不過現在還非常非常早。我的意思是——我們仍然有一些客戶——我們有一個客戶剛剛將價格落實到位，降價在上週落實到位，所以現在還為時過早。這就是為什麼我試圖緩和這一點，不要對此太興奮，但我會說，我們非常非常自律地試圖真正了解該系列中對價格最敏感的產品是什麼，並調整價格這些商品的價格以及僅限這些商品的價格。我非常有信心，我們選擇了正確的項目，我們不必再繼續下去。

I know that, that was a big concern that many had. I think we've done a good job of isolating where we are really, really vulnerable and we've addressed the price value equation on those items. And our stronger items, as I said, the 501, (technical difficulty) and we didn't touch the pricing on 501s. So I think we're in a pretty good place right now. My mother said, never say never. So we're not saying we'll never take the prices down. But at the same time, I've got a pretty high degree of confidence that we're in a good place right now.

我知道，這是許多人的一個大擔憂。我認為我們在隔離我們真正非常脆弱的方面做得很好，並且我們已經解決了這些物品的價格價值方程式。我們更強的產品，正如我所說，501（技術難度），我們沒有觸及 501 的定價。所以我認為我們現在處於一個非常好的位置。我媽媽說，永遠不要說永遠。所以我們並不是說我們永遠不會降低價格。但同時，我非常有信心我們現在處於一個好的位置。

Yeah. And Laurent, to your direct question, I'm not going to get into the numbers. But the fact that we're speaking in the call, the fact that I've said is material should indicate to you that this is an important piece of our initiative that the entire company is focused on. The difference between this and the last time we did it, and we've done it once or twice before, in fact, two times, and it's made a difference on operating margins. So we have history supporting us.

是的。勞倫特，對於你直接提出的問題，我不會談論這些數字。但我們在電話會議中發言的事實，我所說的重要事實應該向您表明，這是我們整個公司都關注的舉措的重要組成部分。這次和我們上次這樣做之間的區別是，我們之前已經這樣做過一兩次，事實上，兩次，這對營業利潤率產生了影響。所以我們有歷史支持我們。

But I think the difference in this case is that it's towards this pivot to DTC. So we are focused on how to drive more productivity (technical difficulty) is focused on how to drive more of an improvement in working capital for inventory turns and looking at the cost. And so there is a difference. This is probably going to be (technical difficulty) past but something that will sustain itself and really directed at strategically the evolution of this company into more of a DTC company.

但我認為這個案例的不同之處在於它是轉向 DTC 的。因此，我們的重點是如何提高生產力（技術難度），重點是如何推動庫存週轉和成本的營運資金的更多改善。所以這是有差別的。這可能會成為（技術困難）過去的事情，但它會自我維持，並真正致力於從戰略上將這家公司演變成一家更像是 DTC 公司的公司。

At this time, I'd like to turn the floor back over to the company for any closing remarks.

現在，我想將發言權轉回公司進行總結發言。

All right. Well, I want to thank everybody. We went over by just a little bit, but thank everyone for hanging in there. Thank you for your questions. I wish everybody believe it or not, a happy holiday because the next time we are with you will be in late January when we close Q4 and report our Q4 and Annual Results. Looking forward to that. And have a good holiday, and we'll talk to you all soon. Thank you very much.

好的。嗯，我要感謝大家。我們只是稍微超越了一點，但感謝大家堅持不懈。謝謝您的提問。不管你信不信，我希望每個人都有一個快樂的假期，因為下次我們和你們在一起的時候將是一月下旬，屆時我們將結束第四季度並報告我們的第四季度和年度業績。對此充滿期待。祝您假期愉快，我們很快就會與大家交談。非常感謝。

Thank you. This concludes today's conference call. Please disconnect your lines at this time.

謝謝。今天的電話會議到此結束。此時請斷開您的線路。