Children's Place Inc (PLCE) 2023 Q1 法說會逐字稿

Good morning, and welcome to The Children's Place First Quarter 2023 Earnings Conference Call.

早上好，歡迎來到 Children's Place 2023 年第一季度收益電話會議。

On the call today are Jane Elfers, President and Chief Executive Officer; Sheamus Toal, Chief Financial Officer; Maegan Markee, Senior Vice President, Digital Marketing; and Josh Truppo, Vice President, Financial Planning and Analysis.

今天接聽電話的是總裁兼首席執行官 Jane Elfers； Sheamus Toal，首席財務官； Maegan Markee，數字營銷高級副總裁； Josh Truppo，財務規劃和分析副總裁。

(Operator Instructions)

（操作員說明）

The Children's Place issued its first quarter 2023 earnings press release earlier this morning, and a copy of the release and presentation materials have been posted to the Investor Relations section of the company's website. Before we begin, let me remind you that statements made on this conference call and in the company's earnings release and presentation materials about the company's outlook, plans and future performance are forward-looking statements.

Children's Place 今天上午早些時候發布了 2023 年第一季度收益新聞稿，新聞稿和演示材料的副本已發佈到公司網站的投資者關係部分。在我們開始之前，讓我提醒您，在本次電話會議以及公司收益發布和演示材料中關於公司前景、計劃和未來業績的陳述均為前瞻性陳述。

Actual results may differ materially from those projected. For a discussion of factors that could cause actual results to vary from those contained in the forward-looking statements, please refer to the company's most recent annual and quarterly reports filed with the Securities and Exchange Commission and the presentation materials posted on the company's website.

實際結果可能與預測結果存在重大差異。有關可能導致實際結果與前瞻性陳述中包含的結果不同的因素的討論，請參閱公司最近向美國證券交易委員會提交的年度和季度報告以及公司網站上發布的演示材料。

On this call, the company will reference various non-GAAP financial measurements. A reconciliation of these non-GAAP financial measurements to the GAAP financial measurements is provided in the company's earnings release and presentation materials.

在這次電話會議上，公司將參考各種非 GAAP 財務衡量標準。公司的收益發布和演示材料中提供了這些非 GAAP 財務衡量指標與 GAAP 財務衡量指標的對賬。

Also, today's call is being recorded. It is now my pleasure to turn the call over to Jane Elfers.

另外，今天的通話正在錄音中。現在我很高興將電話轉給 Jane Elfers。

Thank you, and good morning, everyone. Our Q1 results were negatively impacted by the ongoing macro tensions, which resulted in outsized pressure on our core consumer by limiting their purchasing power. With respect to monthly cadence, February was the strongest month. March was below expectations and April further decelerated post-Easter.

謝謝大家，早上好。我們的第一季度業績受到持續的宏觀緊張局勢的負面影響，這通過限制他們的購買力給我們的核心消費者帶來了巨大壓力。就每月節奏而言，二月是最強的月份。 3 月低於預期，4 月在復活節後進一步減速。

For Q1 our e-commerce top-line trend was significantly better than our stores trend. Quarter-to-date top-line retail trends have decelerated from April with continuing inflationary pressure on our lower income consumer. Based on what we believe will continue to be a difficult macro environment, we have tempered both our top and bottom line expectations for the balance of the year. I'll provide more detail on how we're thinking about the back half of the year after I provide a brief update on our strategic pillars.

對於第一季度，我們的電子商務收入趨勢明顯好於我們的商店趨勢。由於我們的低收入消費者持續面臨通脹壓力，本季度至今的最高零售趨勢從 4 月份開始放緩。基於我們認為將繼續困難的宏觀環境，我們降低了對今年餘下時間的最高和最低預期。在我簡要介紹了我們的戰略支柱之後，我將提供更多關於我們如何考慮下半年的細節。

Starting with our first strategic pillar product. Our Easter dress-up product across both TCP and Gymboree were the highlights of the quarter. Starting with TCP, no one in the kids space compares to our assortment of family matching dress-up product for the holidays and Easter was no exception. With respect to Gymboree, customer demand for our Easter dress-up product was outstanding, resulting in sell-outs of many of the styles from our Mandy Moore Easter collection, which provided us with some excellent learnings for next year, not only with respect to depth of ownership, but also with respect to the top-line power of our spot on celebrity partnerships.

從我們的第一個戰略支柱產品開始。我們在 TCP 和 Gymboree 的複活節裝扮產品是本季度的亮點。從 TCP 開始，在兒童領域沒有人能與我們為假期和復活節提供的家庭配套裝扮產品相提並論。就金寶貝而言，客戶對我們的複活節裝扮產品的需求非常旺盛，導致我們曼迪摩爾復活節系列中的許多款式都銷售一空，這為我們明年提供了一些很好的經驗，不僅是關於所有權的深度，也與我們在名人合作夥伴關係上的頂級影響力有關。

Moving on to our second pillar, digital transformation. Digital represented 46% of our retail sales in Q1 versus 45% last year. After accounting for the artificially inflated February store sales and traffic compare, due to the Omicron surge from last year, Digital represented 49% of retail sales in March and April.

繼續我們的第二個支柱，數字化轉型。數字佔第一季度零售額的 46%，而去年為 45%。在考慮到人為誇大的 2 月商店銷售額和流量比較後，由於 Omicron 去年的激增，Digital 佔 3 月和 4 月零售額的 49%。

We continue to deliver industry-leading digital penetration and our highest operating margin channel supported by marketing initiatives focused on optimizing our channel results. We are clearly the leader in the digital space among kids' retailers and our customer continues to prove that you prefer shopping online versus traveling to stores.

我們繼續提供行業領先的數字滲透率和我們最高的運營利潤率渠道，這些渠道受到專注於優化渠道結果的營銷計劃的支持。我們顯然是兒童零售商數字領域的領導者，我們的客戶繼續證明您更喜歡在線購物而不是去商店購物。

Approximately 56% of our acquisition came through our Digital channel in Q1, further demonstrating how important Digital is to our core millennial customer. Our millennial mom's clear preference for the ease and convenience of shopping for her kids online is here to stay. And we believe that our rapid and successful shift to digital, as our #1 acquisition channel, puts us years ahead of our competition and gives us an important competitive advantage as we work to acquire and retain millennial moms and begin to market to the oldest of the Gen Z cohort, who are now starting to become our next generation of customers.

第一季度，我們大約 56% 的收購來自我們的數字渠道，進一步證明了數字對我們的核心千禧一代客戶的重要性。我們的千禧一代媽媽明顯偏愛為她的孩子在線購物的輕鬆和便利，這一點將持續下去。我們相信，我們迅速成功地轉向數字化，作為我們排名第一的獲取渠道，使我們領先於競爭對手數年，並在我們努力獲取和留住千禧一代媽媽並開始向最年長的媽媽推銷產品時為我們提供重要的競爭優勢Z 世代群體，他們現在正開始成為我們的下一代客戶。

As stores become less and less relevant to Millennial customers, who continue their historic shift to online and mass channels, we are laser-focused on digital growth opportunities and our highest operating margin channel. And based on the success of our digital transformation, the strength of our Digital business and our increased investments in our Digital channel, Digital is projected to represent over $1 billion in sales by full year 2025 or over 60% of our total retail sales versus 33% of our retail sales in 2019, doubling our digital penetration in 6 years and further cementing our successful transition to a digital-first retailer.

隨著商店與千禧一代客戶的相關性越來越低，他們繼續向在線和大眾渠道進行歷史性轉變，我們專注於數字增長機會和我們最高的營業利潤率渠道。基於我們數字化轉型的成功、我們數字業務的實力以及我們對數字渠道投資的增加，預計到 2025 年全年數字銷售額將超過 10 億美元，占我們零售總額的 60% 以上，而 33占我們 2019 年零售額的百分比，使我們的數字滲透率在 6 年內翻了一番，並進一步鞏固了我們向數字優先零售商的成功轉型。

Moving on to our third strategic pillar, alternate channels of distribution. Our Amazon business continued to outperform our projections in Q1. Amazon is a key growth engine and in Q1, we further strengthened our Amazon partnership. Amazon is our second highest operating margin channel, a significant contributor to our top and bottom line and an important customer acquisition vehicle with many of these customers having higher income levels than our core customers. Amazon represents a major growth opportunity in 2023 and beyond.

繼續我們的第三個戰略支柱，替代分銷渠道。我們的亞馬遜業務在第一季度的表現繼續優於我們的預期。亞馬遜是一個重要的增長引擎，在第一季度，我們進一步加強了與亞馬遜的合作夥伴關係。亞馬遜是我們第二高的營業利潤率渠道，是我們收入和利潤的重要貢獻者，也是重要的客戶獲取工具，其中許多客戶的收入水平高於我們的核心客戶。亞馬遜代表著 2023 年及以後的重大增長機會。

And with respect to our fourth and final pillar, fleet optimization. As we shared on our last call, we are anticipating to close approximately 100 more stores with the bulk of the store closures occurring in 2023. This will leave us with an optimized fleet of approximately 500 stores as we enter 2024. Our fleet optimization strategy has been a critical part of our company's structural reset and very clearly aligns with our current and future customer's digital shopping preferences. The data is clear.

關於我們的第四個也是最後一個支柱，車隊優化。正如我們在上次電話會議上分享的那樣，我們預計將關閉大約 100 家門店，其中大部分門店關閉發生在 2023 年。這將使我們在進入 2024 年時擁有約 500 家門店的優化車隊。我們的車隊優化策略已經是我們公司結構重組的關鍵部分，並且非常清楚地符合我們當前和未來客戶的數字購物偏好。數據很清楚。

Millennials have a strong preference for online shopping, and this is projected to continue to increase with Gen Z parents. I think it's important to note that we have a single-digit penetration in our newborn and baby business. So our customers are overwhelming younger millennial and Gen Z self-purchasers versus other retailers, who still rely heavily on their stores for their customer acquisitions and who have a much larger share of Gen X and baby boomer customers than we do, including grandparents and gifters. Many of whom, for example, still prefer an in-store experience as they drive to the store to pick-up the perfect baby gift.

千禧一代對在線購物有著強烈的偏好，預計隨著 Z 世代父母的加入，這一趨勢將繼續增加。我認為重要的是要注意我們在新生兒和嬰兒業務中的滲透率是個位數。因此，與其他零售商相比，我們的客戶絕大多數是年輕的千禧一代和 Z 世代自購者，他們仍然嚴重依賴商店來獲取客戶，並且 X 世代和嬰兒潮一代客戶的份額比我們大得多，包括祖父母和送禮者.例如，他們中的許多人在開車去商店挑選完美的嬰兒禮物時仍然更喜歡店內體驗。

We believe that our projected fleet size of approximately 500 stores will help us to avoid the costly mistakes that come with having too many stores at a time, when Millennial and Gen Z customers have been aggressively migrating to the online and mass channels, since the beginning of the pandemic. We believe that our optimized fleet will allow us to maximize our omnichannel capabilities, while growing our industry-leading digital penetration and servicing our young, digitally-savvy customers, where they prefer to shop with us, which is online in our highest operating margin channel.

我們相信，當千禧一代和 Z 世代客戶從一開始就積極遷移到在線和大眾渠道時，我們預計約 500 家門店的車隊規模將幫助我們避免因一次擁有太多門店而導致的代價高昂的錯誤大流行的。我們相信，我們經過優化的車隊將使我們能夠最大限度地發揮我們的全渠道能力，同時提高我們行業領先的數字滲透率，並為我們年輕、精通數字的客戶提供服務，他們更願意在我們這裡購物，這是我們最高營業利潤率的在線渠道.

As I mentioned earlier, I think, it's important to share more detail regarding our underlying assumptions for the back half. We anticipate that Q3 and Q4 top line net trends will improve from first half levels driven by growth in Digital and Amazon, supported by strong marketing and branding initiatives with stores continuing their secular declines in both sales and traffic for the balance the year. So let's focus on our Digital and wholesale opportunities.

正如我之前提到的，我認為，重要的是要分享更多關於我們對後半部分的基本假設的細節。我們預計，在 Digital 和 Amazon 增長的推動下，第三季度和第四季度的收入淨趨勢將比上半年的水平有所改善，這得益於強大的營銷和品牌計劃，商店在今年餘下時間的銷售額和客流量將繼續長期下降。因此，讓我們專注於我們的數字和批發機會。

From a traffic perspective, our e-commerce traffic was up low double digits in Q1 and we anticipate traffic will continue to grow as we progress throughout the year. We have been very successful in driving e-commerce traffic through our marketing initiatives, and we believe this will continue.

從流量的角度來看，我們的電子商務流量在第一季度增長了兩位數，我們預計流量將隨著我們全年的進步而繼續增長。我們通過我們的營銷計劃在推動電子商務流量方面非常成功，我們相信這將繼續下去。

AUR. Our e-commerce AUR was up slightly in Q1, driven by very strong customer acceptance of our Easter dress-up assortments. We are leaders in the holiday family dress-up category, and we anticipate that our upcoming Q4 holiday assortments will be equally well received. We are not counting on any lift in e-commerce AUR versus Q1 for the balance of the year based on the ongoing inflationary pressures on our core customer. We've made significant progress in raising AUR since the start of the pandemic, and we believe that this is a permanent structural change and will be 1 of the key drivers of improved profitability as cotton costs come down.

AUR。我們的電子商務 AUR 在第一季度略有上升，這是由於客戶對我們的複活節裝扮商品的接受度非常高。我們是節日家庭裝扮領域的領導者，我們預計即將推出的第 4 季度節日裝扮系列將同樣受到歡迎。基於我們核心客戶持續的通脹壓力，我們不指望今年餘下時間電子商務 AUR 會比第一季度有任何提升。自大流行開始以來，我們在提高 AUR 方面取得了重大進展，我們相信這是一個永久性的結構性變化，隨著棉花成本的下降，這將成為提高盈利能力的主要驅動力之一。

Conversion. We are planning for conversion in our e-commerce channel to improve in Q4, due to a historically low conversion rate in Q4 of 2022, which we believe resulted from the impact of record inflation on our core customer and stockouts online in key, highly marketed categories across both TCP and Gymboree post Black Friday last year.

轉換。由於 2022 年第四季度的轉化率處於歷史低位，我們計劃在第四季度提高電子商務渠道的轉化率，我們認為這是由於創紀錄的通貨膨脹對我們的核心客戶的影響以及關鍵、高度營銷的在線缺貨造成的TCP 和 Gymboree 的類別在去年的黑色星期五後都出現了。

As we have discussed, we have higher levels of top of funnel marketing plans for the back half of this year versus 2022. And based on last year's learnings, we believe our strategic inventory investments will result in a meaningful improvement in digital conversion this upcoming holiday season.

正如我們所討論的那樣，與 2022 年相比，我們今年下半年的漏斗營銷計划水平更高。根據去年的經驗，我們相信我們的戰略庫存投資將在即將到來的假期中顯著改善數字轉換季節。

With respect to our Amazon business, we are well positioned and are planning for a significant growth with Amazon in both Q3 and Q4. On the bottom line, we anticipate a significant improvement in our results versus last year, due to the abating cost pressures and the progress we are making in inventory and expense management.

關於我們的亞馬遜業務，我們處於有利地位，併計劃在第三季度和第四季度與亞馬遜實現顯著增長。歸根結底，由於成本壓力減輕以及我們在庫存和費用管理方面取得的進展，我們預計我們的業績將比去年有顯著改善。

Thank you. And now I'll turn it over to Maegan to discuss our progress with respect to marketing and Amazon.

謝謝。現在我將把它交給 Maegan 來討論我們在營銷和亞馬遜方面的進展。

Thank you, Jane, and good morning, everyone. Since the start of our marketing transformation we've been focused on 3 key strategies: First, the accelerated growth of our e-commerce footprint. Second, our fully integrated marketing and media mix with an emphasis on top-of-funnel brand awareness. And third, new customer acquisition via our compelling and differentiated family of brands.

謝謝你，簡，大家早上好。自我們的營銷轉型開始以來，我們一直專注於 3 個關鍵戰略：首先，我們電子商務足蹟的加速增長。其次，我們完全整合的營銷和媒體組合，強調漏斗頂端的品牌知名度。第三，通過我們引人注目的差異化品牌系列獲得新客戶。

Let's recap our encouraging results across these key strategies, beginning with accelerated e-commerce growth. Consolidated e-commerce traffic in Q1 was up low double digits versus Q1 of 2022, fueled by our increased media spend and top-of-funnel brand campaigns. Consolidated e-com traffic across our family of brands represented 77% of our total traffic, up from 74% in 2022 and 60% in 2019, making Digital our largest traffic channel.

讓我們回顧一下我們在這些關鍵戰略中取得的令人鼓舞的成果，首先是電子商務的加速增長。在我們增加的媒體支出和頂級渠道品牌活動的推動下，第一季度的綜合電子商務流量比 2022 年第一季度低兩位數。我們品牌系列的綜合電子商務流量占我們總流量的 77%，高於 2022 年的 74% 和 2019 年的 60%，使數字成為我們最大的流量渠道。

Digital represented 46% of our retail sales in Q1, up from 45% in 2022 and 33% in 2019. Mobile continues to be the cornerstone of our digital strategy. In Q1, 76% of our U.S. digital transactions occurred on a mobile device. Our targeted mobile app strategies have driven a significant increase in mobile app transactions and mobile app users. In Q1 our Mobile app accounted for 19% of our U.S. digital transactions versus 15% in Q1 of 2022 and 7% in Q1 of 2019, fueled by an impressive 32% increase in mobile app customers versus last year.

數字占我們第一季度零售額的 46%，高於 2022 年的 45% 和 2019 年的 33%。移動仍然是我們數字戰略的基石。第一季度，我們 76% 的美國數字交易發生在移動設備上。我們有針對性的移動應用策略推動了移動應用交易和移動應用用戶的顯著增長。在第一季度，我們的移動應用程序占我們美國數字交易的 19%，而 2022 年第一季度為 15%，2019 年第一季度為 7%，這得益於移動應用程序客戶與去年相比增長了 32%。

Our mobile app customers spent 75% more than non-app users and shopped 61% more than non-app users. Our mobile app continues to drive strong customer engagement, especially amongst our loyalty members, who represent over 97% of our mobile app transactions. We're very proud of our industry-leading digital penetration, and we're planning for continued growth in this channel throughout the balance of 2023, fueled by our increased media spend and top-of-funnel brand campaigns in the back half of the year.

我們的移動應用程序客戶比非應用程序用戶多花 75%，購物量比非應用程序用戶多 61%。我們的移動應用程序繼續推動強大的客戶參與度，尤其是在我們的忠誠會員中，他們占我們移動應用程序交易的 97% 以上。我們對我們行業領先的數字滲透率感到非常自豪，並且我們計劃在 2023 年的剩餘時間裡繼續增長這一渠道，這得益於我們在 2023 年下半年增加的媒體支出和漏斗頂部品牌活動年。

Now let's move on to our brand awareness and marketing initiatives and the successful results from Q1. Our top-of-funnel brand work has been a key focus for us over recent years. This spring, we launched 2 brand campaigns highlighting our expansive full family Easter assortment for The Children's Place and Gymboree brands, featuring Eli Manning and Mandy Moore. We continued our disruptive strategy in featuring a star-studded millennial-focused cast, including Olivia Culpo and her sisters, Cody Rigsby, Remy Bater and more for our PJ Place brand.

現在讓我們繼續我們的品牌知名度和營銷計劃以及第一季度的成功結果。近年來，我們的漏斗頂端品牌工作一直是我們關注的重點。今年春天，我們推出了 2 個品牌活動，重點宣傳我們為 The Children's Place 和 Gymboree 品牌提供的豐富的全家復活節系列，其中包括 Eli Manning 和 Mandy Moore。我們繼續我們的顛覆性戰略，為我們的 PJ Place 品牌打造星光熠熠的千禧一代演員陣容，包括 Olivia Culpo 和她的姐妹、Cody Rigsby、Remy Bater 等。

Across our spring campaigns for The Children's Place, Gymboree and PJ Place, we garnered over 25 billion impressions across our earned and paid media efforts. These disruptive brand campaigns also translated to positive top-line results. For every dollar we invested, we made close to 5x back in top-line revenue, and our blended return on ad spend is well above the industry benchmark for top-of-funnel performance. In addition to driving a healthy return, these brand campaigns have a meaningful impact on traffic, further positioning us for success in the back half of the year with our back-to-school and holiday campaigns.

在我們為 The Children's Place、Gymboree 和 PJ Place 開展的春季活動中，我們通過免費和付費媒體活動獲得了超過 250 億次展示。這些顛覆性的品牌活動也轉化為積極的頂線結果。對於我們投資的每一美元，我們的收入增加了近 5 倍，而且我們的混合廣告支出回報率遠高於頂級渠道績效的行業基準。除了帶來可觀的回報外，這些品牌活動還對流量產生了有意義的影響，進一步為我們在今年下半年的返校和假期活動取得成功奠定了基礎。

Our successful top-of-funnel media brand activations also heavily influenced our third strategy, customer growth through new customer acquisition. Our ongoing brand work, coupled with our fully integrated media strategies have fueled our acquisition. U.S. acquisition during the first quarter of 2023 was up 21% versus last year, with 56% of those acquisitions coming through Digital. Even more impressive when compared to Q1 of 2019, total acquisition is up 7% despite having significantly fewer stores, which further validates our successful digital acquisition strategy.

我們成功的頂級渠道媒體品牌激活也極大地影響了我們的第三個戰略，即通過新客戶獲取來增長客戶。我們正在進行的品牌工作，加上我們完全整合的媒體戰略，推動了我們的收購。 2023 年第一季度，美國的收購比去年增長了 21%，其中 56% 的收購來自 Digital。與 2019 年第一季度相比，更令人印象深刻的是，儘管門店數量明顯減少，但總收購量仍增長了 7%，這進一步驗證了我們成功的數字收購戰略。

With these results, we've shown consistent acquisition growth over the past several quarters, leaving us with an active and healthy pool of newly acquired customers that we will be marketing to in the back half of this year. We believe that this not only sets us up for success for the remainder of this year, but our future e-com growth.

有了這些結果，我們在過去幾個季度顯示出持續的收購增長，為我們留下了活躍而健康的新收購客戶群，我們將在今年下半年向這些客戶進行營銷。我們相信，這不僅為我們今年剩餘時間的成功奠定了基礎，而且為我們未來的電子商務增長奠定了基礎。

Our loyalty and private label credit programs continue to be strong retention vehicle for our brands. Much like last quarter, our customer continues to feel the pain of inflation, and this is apparent in our overall customer spend. Customer spend in Q1 was down 8% versus Q1 of 2022, making it that much more important for us to focus on driving new customers to trial our brand. Even through this incredibly challenging environment, we have proven that we now have the ability to drive meaningful reach, drive incremental qualified traffic, capitalize on this traffic and scale our digital penetration, and acquire net new audiences to our family of brands, which is going to be key to propelling our future results.

我們的忠誠度和自有品牌信用計劃繼續成為我們品牌的強大保留工具。與上個季度非常相似，我們的客戶繼續感受到通貨膨脹的痛苦，這在我們的整體客戶支出中顯而易見。第一季度的客戶支出與 2022 年第一季度相比下降了 8%，這使得我們更加重視吸引新客戶試用我們的品牌。即使在這個極具挑戰性的環境中，我們已經證明，我們現在有能力擴大有意義的影響範圍，推動增量合格流量，利用這些流量並擴大我們的數字滲透率，並為我們的品牌系列吸引新的受眾，這將成為推動我們未來成果的關鍵。

We hold a leadership position in the children's apparel industry, providing market differentiation through our unique and trend-right product assortment. We have a very clear vision and a love for our customer. We know who she is. We know where she is, and we know how to efficiently and effectively invite her to trial our family of brands.

我們在兒童服裝行業處於領先地位，通過我們獨特且符合潮流的產品組合提供市場差異化。我們有非常清晰的願景和對客戶的熱愛。我們知道她是誰。我們知道她在哪裡，我們知道如何有效地邀請她試用我們的品牌系列。

Now let's move on to Amazon. The significant time and resources that we have dedicated towards building our Amazon marketplace have resulted in another strong quarter. Our Q1 Amazon site sales were up 124% versus Q1 of 2022, fueled by a 214% increase in traffic and an 81% increase in customers over Q1 of 2022. Our Easter dressy assortment was particularly strong during Q1 with our fashion penetration growing over 1,000 basis points compared to Q1 of 2022.

現在讓我們轉到亞馬遜。我們投入大量時間和資源來建設我們的亞馬遜市場，結果又是一個強勁的季度。我們的第一季度亞馬遜網站銷售額比 2022 年第一季度增長了 124%，這得益於與 2022 年第一季度相比流量增加了 214% 和客戶增加了 81%。我們的複活節盛裝系列在第一季度特別強勁，我們的時尚滲透率增長了 1,000 多個與 2022 年第一季度相比的基點。

Marketing continues to be a key component to driving the Amazon business and our successful marketing strategies are driving the significant year-over-year increases in traffic. Ad attributed sales were 51% of total Amazon channel sales for Q1 of 2023, up 145% versus 2022, with a strong double-digit return on ad spend. Our top-performing ads for the time period featured our NFL celebrity campaign, which garnered over 18 million impressions on Amazon during Q1.

營銷仍然是推動亞馬遜業務的關鍵組成部分，我們成功的營銷策略正在推動流量同比顯著增長。 2023 年第一季度，廣告歸因銷售額佔亞馬遜渠道總銷售額的 51%，比 2022 年增長 145%，廣告支出回報率高達兩位數。我們在這段時間內表現最好的廣告是我們的 NFL 名人活動，該活動在第一季度在亞馬遜上獲得了超過 1800 萬次展示。

Last fall, we launched our iconic Gymboree brand on Amazon. And the Amazon business has built consistently, since our launch and exceeded our expectations for Q1 of 2023. The momentum behind the Gymboree launch continues to be fueled by an enhanced advertising strategy built around maximizing the brand's visibility and high impact placements. Ad attributed sales for the quarter were 49% of total sales, had a very healthy return on ad spend, which signals the significant opportunity ahead to drive incremental sales through increased marketing investment.

去年秋天，我們在亞馬遜上推出了標誌性的金寶貝品牌。自我們推出以來，亞馬遜業務一直在不斷發展，並超出了我們對 2023 年第一季度的預期。金寶貝推出背後的勢頭繼續受到圍繞最大化品牌知名度和高影響力展示位置而製定的強化廣告策略的推動。本季度廣告歸因銷售額佔總銷售額的 49%，廣告支出回報率非常可觀，這表明未來存在通過增加營銷投資來推動增量銷售的重大機遇。

Easter collection ad units featuring Mandy Moore drove a 25% conversion rate increases versus non-Easter creative. In addition, the Mandy Moore ad units continued to be a strong acquisition driver with new-to-brand customers generating 43% of total orders during Q1. We anticipate that our partnership with Amazon will continue to strengthen and plan for the business to grow significantly in the back half of this year. We'll talk more about future opportunities as the year progresses, but we continue to see opportunity to pursue expanding our family of brands through the Amazon channel as well as Amazon International growth opportunities.

與非複活節創意相比，以 Mandy Moore 為主角的複活節系列廣告單元將轉化率提高了 25%。此外，Mandy Moore 廣告單元繼續成為強大的收購驅動力，品牌新客戶在第一季度產生了總訂單的 43%。我們預計我們與亞馬遜的合作夥伴關係將繼續加強，併計劃在今年下半年實現業務的顯著增長。隨著時間的推移，我們將更多地討論未來的機會，但我們繼續看到通過亞馬遜渠道和亞馬遜國際增長機會尋求擴大我們品牌系列的機會。

Now I'll turn it over to Sheamus.

現在我將把它交給 Sheamus。

Thank you, Maegan, and good morning, everyone. As Jane discussed, the first quarter proved to be a difficult period from a top-line perspective due to a challenging macro environment, which continued to impact demand from our core customer. While sales were negatively impacted, we continued to make significant progress on our inventory levels with Q1 ending inventory down 8% year-over-year. We took advantage of the cooler weather to liquidate more of our fall/winter inventory than originally planned, enabling us to work through some additional higher AUC goods.

謝謝你，Maegan，大家早上好。正如 Jane 所討論的那樣，由於充滿挑戰的宏觀環境繼續影響我們核心客戶的需求，從收入的角度來看，第一季度被證明是一個困難時期。雖然銷售受到負面影響，但我們繼續在庫存水平方面取得重大進展，第一季度末庫存同比下降 8%。我們利用涼爽的天氣清算了比原計劃更多的秋冬庫存，使我們能夠處理一些額外的 AUC 更高的商品。

Net sales for the first quarter decreased $40.8 million or 11.2% to $321.6 million, primarily driven by the continued macroeconomic challenges, including inflation, lack of government stimulus and a decrease in tax refunds. Our U.S. net sales decreased by $39.5 million or 13% to $268.2 million and our Canadian net sales decreased by $6 million or 20% to $24.5 million. Comparable store sales decreased 8.2% for the quarter.

第一季度的淨銷售額下降 4080 萬美元或 11.2% 至 3.216 億美元，這主要是受宏觀經濟持續挑戰的推動，包括通貨膨脹、缺乏政府刺激措施和退稅減少。我們在美國的淨銷售額減少了 3950 萬美元或 13% 至 2.682 億美元，我們在加拿大的淨銷售額減少了 600 萬美元或 20% 至 2450 萬美元。本季度可比店面銷售額下降 8.2%。

Our comparable store traffic was up approximately 3%, while our e-commerce traffic was up low double digits. Our comp store traffic was driven by a double-digit increase in February in which we lapped the COVID surge from last year, while our consolidated AUR declined by approximately 2% driven by the liquidation of prior season merchandise.

我們的可比商店客流量增長了約 3%，而我們的電子商務客流量增長了兩位數。我們的 comp 商店流量是由 2 月份的兩位數增長推動的，其中我們超越了去年的 COVID 激增，而我們的綜合 AUR 因上一季商品的清算而下降了約 2%。

Our AUR on go-forward spring and summer product was flat. Importantly, AURs remain significantly higher than pre-pandemic levels, validating the success of our restructured pricing strategies, which we believe will continue to pay significant dividends as input and transactional costs come down as we move into the back half of 2023. And our AUCs decline as we continue to liquidate goods purchased after the surge in supply chain costs in 2022.

我們對前瞻性春夏產品的 AUR 持平。重要的是，AUR 仍遠高於大流行前的水平，證實了我們重組定價策略的成功，我們相信隨著我們進入 2023 年下半年，投入和交易成本下降，該策略將繼續帶來可觀的紅利。我們的 AUC由於我們在 2022 年供應鏈成本激增後繼續清算購買的商品，因此下降。

Gross profit margin for the first quarter decreased to 30% of net sales as compared to 39.2% of net sales in the prior year. This was better than our prior guidance, but still reflected the combination of an unprecedented increase in input costs, including cotton and supply chain costs and the impact of a highly promotional retail environment.

第一季度的毛利率下降至淨銷售額的 30%，而去年同期為淨銷售額的 39.2%。這好於我們之前的指引，但仍反映了投入成本前所未有的增加，包括棉花和供應鏈成本以及高度促銷的零售環境的影響。

Adjusted SG&A was $109.2 million for the first quarter as compared to $108.2 million in the comparable period last year. This modest increase was primarily a result of planned investments in marketing initiatives, as Maegan detailed, and was mostly offset by a reduction in store expenses and a reduction in equity compensation.

第一季度調整後的 SG&A 為 1.092 億美元，而去年同期為 1.082 億美元。正如 Maegan 所詳述的那樣，這種適度增長主要是由於對營銷活動進行了計劃投資，並且大部分被商店開支的減少和股權補償的減少所抵消。

Our net interest expense was $5.9 million for the quarter versus adjusted net interest expense of $1.7 million in the prior year's first quarter. The increase in interest expense was driven by higher borrowings and higher average interest rates associated with the revolving credit facility and term loan due to increases in our variable rate based upon market rate increases.

我們本季度的淨利息支出為 590 萬美元，而去年第一季度的調整後淨利息支出為 170 萬美元。利息支出的增加是由於我們的浮動利率根據市場利率上漲而增加，導致借款增加以及與循環信貸和定期貸款相關的平均利率上升。

Our adjusted tax rate for the quarter decreased to approximately 19% as compared to 23.5% in the prior year, reflecting a shift in certain taxable income.

我們本季度調整後的稅率從去年同期的 23.5% 降至約 19%，反映出某些應稅收入的變化。

For the first quarter, we reflected an adjusted net loss of $24.7 million or $2 per share as compared to an adjusted net profit of $14.5 million or $1.05 per diluted share in the comparable period last year.

第一季度，我們反映調整後的淨虧損為 2470 萬美元或每股 2 美元，而去年同期的調整後淨利潤為 1450 萬美元或每股攤薄收益 1.05 美元。

Moving to the balance sheet. We ended the quarter with cash and short-term investments of $18.2 million and with $300.8 million of borrowings under our revolving credit facility and a modest amount of long-term debt, which remains unchanged at $50 million.

轉到資產負債表。本季度結束時，我們的現金和短期投資為 1,820 萬美元，循環信貸額度下的借款為 3.008 億美元，還有少量長期債務（保持在 5,000 萬美元不變）。

During the quarter, we continued to make significant progress in our inventory reduction efforts. As we previously discussed, our inventory still includes certain higher average unit cost inventory that was purchased in 2022, when input costs were at their peak. Nonetheless, we are pleased that we were able to liquidate a significant portion of this inventory in Q1. And importantly, ended the quarter with lower levels of seasonal fall and holiday inventory. Inventory levels, which had been up 4% as we entered the year, were down approximately 8% as we ended the quarter, enabling us to end in a healthy unit position despite the higher carrying costs.

本季度，我們在減少庫存方面繼續取得重大進展。正如我們之前討論的那樣，我們的庫存仍然包括某些平均單位成本較高的庫存，這些庫存是在 2022 年投入成本達到頂峰時購買的。儘管如此，我們很高興我們能夠在第一季度清算該庫存的很大一部分。重要的是，本季度末季節性秋季和假日庫存水平較低。庫存水平在我們進入今年時上升了 4%，在本季度結束時下降了約 8%，這使我們能夠在持有成本較高的情況下以健康的單位狀況結束。

As previously disclosed, we experienced an increase in the average unit cost of inventory in recent periods, due to the higher input costs, including cotton and supply chain costs, which increased our inventory investments, but we have reduced units, which are down double digits versus the prior year first quarter.

如前所述，由於棉花和供應鏈成本等投入成本增加，我們的存貨投資增加，我們近期的平均單位存貨成本有所增加，但我們減少了單位數量，下降了兩位數與去年第一季度相比。

Our basic inventory, which includes several key high-volume categories with limited to no markdown risk, accounted for over 50% of our on-hand inventory at the end of the first quarter. This is the larger portion of inventory dedicated to basics than in prior periods, which helps mitigate inventory risk in a low AUR category. We expect inventory investments to be down throughout fiscal 2023, providing a significant opportunity to expand free cash flow.

我們的基本庫存，包括幾個關鍵的大批量類別，降價風險有限或沒有，在第一季度末占我們現有庫存的 50% 以上。與前幾個時期相比，這是專用於基礎知識的更大比例的庫存，這有助於降低低 AUR 類別的庫存風險。我們預計整個 2023 財年庫存投資將下降，為擴大自由現金流提供重要機會。

Moving on to cash flow and liquidity. We generated $5 million in cash from operations in Q1 versus a use of $19 million last year. As we will discuss in our outlook, our digital-first model positions us well to generate free cash flow, which we expect will ramp-up in the second half of the year. Capital expenditures in Q1 were $11 million. As we have previously discussed, as part of our operating plan for 2023, we remain focused on inventory management and have significantly reduced our purchases throughout 2023, which will result in a reduced level of inventory investment throughout the year as compared to the prior year.

繼續討論現金流和流動性。我們從第一季度的運營中產生了 500 萬美元的現金，而去年使用了 1900 萬美元。正如我們將在展望中討論的那樣，我們的數字優先模式使我們能夠很好地產生自由現金流，我們預計自由現金流將在今年下半年增加。第一季度的資本支出為 1100 萬美元。正如我們之前所討論的，作為我們 2023 年運營計劃的一部分，我們仍然專注於庫存管理，並在整個 2023 年大幅減少了採購，這將導致全年的庫存投資水平與上一年相比有所下降。

While inventory levels are down versus the prior year, we are currently building inventory to support our critical back-to-school selling period, which requires a significant use of working capital. We are pleased to be near the end of this peak working capital period in the next few weeks, and we project that we will then begin to generate significant cash flow, which we plan to use to reduce debt.

雖然庫存水平與上一年相比有所下降，但我們目前正在建立庫存以支持我們關鍵的返校銷售期，這需要大量使用營運資金。我們很高興在接下來的幾週內接近這個營運資金高峰期的尾聲，我們預計屆時我們將開始產生大量現金流，我們計劃將其用於減少債務。

As we progress through the back half of the year, when free cash flow is expected to expand significantly, due to the combination of sequential reductions in inventory and turn to profitability, we intend to reduce debt. We continue to expect to decrease borrowings by more than $100 million by the end of the year, further positioning us for long-term sustainable growth.

隨著我們在今年下半年取得進展，由於庫存連續減少和盈利能力的結合，預計自由現金流將顯著擴大，我們打算減少債務。我們繼續預計到今年年底將藉款減少超過 1 億美元，進一步為我們的長期可持續增長做好準備。

During the first quarter, we closed 14 locations, ending the quarter with 599 stores. We continue to carefully evaluate our store fleet and close lower-volume, unprofitable stores. With over 75% of our fleet coming up for lease action in the next 24 months, we are maintaining meaningful financial flexibility in our lease portfolio.

第一季度，我們關閉了 14 家門店，本季度末共有 599 家門店。我們繼續仔細評估我們的門店數量，並關閉銷量較低、無利可圖的門店。在未來 24 個月內，我們超過 75% 的機隊將採取租賃行動，我們將在租賃組合中保持有意義的財務靈活性。

Moving to our outlook. Given the significant macroeconomic headwinds, which have an outsized impact on our lower income customers' purchasing power, including the continuation of record inflation and tempered consumer sentiment, we now have a more cautious consumer outlook. As a result, the company believes it is prudent to take a more conservative approach. And as a result, we have tempered both our top line and bottom line expectations for the remainder of the year.

轉向我們的前景。鑑於重大的宏觀經濟逆風對我們低收入客戶的購買力產生了巨大影響，包括創紀錄的通脹持續和消費者情緒低迷，我們現在對消費前景持更加謹慎的態度。因此，該公司認為採取更保守的方法是謹慎的。因此，我們降低了對今年剩餘時間的收入和利潤預期。

As we have reduced top-line expectations, we have further reduced our planned inventory and capital investments as well as our expenses. These strategies are designed to reduce risk, while helping position us to achieve double-digit operating margins in the back half of the year.

由於我們降低了頂線預期，我們進一步減少了計劃庫存和資本投資以及我們的費用。這些策略旨在降低風險，同時幫助我們在今年下半年實現兩位數的營業利潤率。

Now let me take you through our outlook for Q2 and the back half of the year. As the company has previously indicated, the first 6 months of 2023 will be negatively impacted by several temporary input cost headwinds, most notably cotton. These high input costs, which are embedded in our spring and summer inventory in the first half of 2023, will continue to negatively impact margin rates in Q2.

現在讓我帶您了解一下我們對第二季度和下半年的展望。正如該公司此前表示的那樣，2023 年前 6 個月將受到幾個暫時的投入成本逆風的負面影響，其中最顯著的是棉花。這些高投入成本包含在我們 2023 年上半年的春季和夏季庫存中，將繼續對第二季度的利潤率產生負面影響。

For Q2, the company expects net sales to be in the range $340 million to $345 million, representing a decrease in the high single digits to low double-digit percentage range as compared to the prior year second quarter. Adjusted operating loss is expected to be approximately 8% of net sales.

對於第二季度，公司預計淨銷售額將在 3.4 億美元至 3.45 億美元之間，與去年第二季度相比，從高個位數到低兩位數的百分比範圍有所下降。調整後的經營虧損預計約為淨銷售額的 8%。

The tax rate for Q2 is expected to be similar to the rate experienced in Q1. Adjusted net loss per share is expected to be approximately $2.15 to $2.20 per share. We anticipate that the Q2 2023 gross margin rate will decline by approximately 200 basis points, reflecting higher input costs on goods expected to be sold during the quarter.

第二季度的稅率預計與第一季度的稅率相似。調整後的每股淨虧損預計約為每股 2.15 美元至 2.20 美元。我們預計 2023 年第二季度的毛利率將下降約 200 個基點，反映出本季度預計銷售商品的投入成本較高。

Selling, general and administrative expenses are expected to be in line with last year, reflecting planned increase in marketing investments, offset by reductions in store payroll due to lower store count and our expense rationalization initiatives. However, on a rate basis, these expenses are expected to deleverage, due to the impact of lower revenue.

銷售、一般和行政費用預計與去年持平，反映了營銷投資的計劃增加，但被商店數量減少和我們的費用合理化舉措導致的商店工資減少所抵消。然而，在利率基礎上，由於收入下降的影響，這些費用預計會去槓桿化。

At the end of the second quarter, inventory is expected to continue to be down in the high single-digit percentage range versus the prior year second quarter. In the back half of 2023, despite continued macro pressures on top line, the company expects to drive increases in wholesale revenue with an acceleration in Q4, experience a softening of the pressures from high input costs, which year-over-year represents an estimated annualized impact of more than $100 million, benefit from clean and appropriately sized inventory investments, which are expected to reduce the need to liquidate seasonal goods and reduce expenses with a more optimized expense structure. All of which is expected to enable us to achieve double-digit operating margins and adjusted net EPS of over $5 in the back half of 2023.

在第二季度末，與去年第二季度相比，庫存預計將繼續保持在較高的個位數百分比範圍內。到 2023 年下半年，儘管營收持續面臨宏觀壓力，但該公司預計第四季度將加速批發收入的增長，高投入成本帶來的壓力將有所緩解，同比估計年化影響超過 1 億美元，受益於清潔和適當規模的庫存投資，預計這將減少清算季節性商品的需要，並通過更優化的費用結構減少費用。所有這些預計將使我們能夠在 2023 年下半年實現兩位數的營業利潤率和超過 5 美元的調整後淨每股收益。

For the full year, the company now expects the following: Net sales are expected to be in the range of $1.57 billion to $1.59 billion, representing a decrease in the high single-digit percentage range as compared to the prior fiscal year.

對於全年，公司現在預計如下： 淨銷售額預計在 15.7 億美元至 15.9 億美元之間，與上一財年相比下降了高個位數的百分比範圍。

Adjusted operating profit is expected to be approximately 2.5% to 2.9% of net sales. The consolidated tax rate for the full fiscal year is now expected to be in the low 20% range. Adjusted net earnings per diluted share is expected to be in the range of $1 to $1.50 per share.

調整後的營業利潤預計約為淨銷售額的 2.5% 至 2.9%。現在預計整個財政年度的綜合稅率將處於 20% 的低水平範圍內。調整後的每股攤薄淨收益預計在每股 1 美元至 1.50 美元之間。

These results include the impact of the 53rd week in 2023 based upon our retail calendar. This week occurs during a low-volume nonpeak clearance period. And as a result, it is expected to have a very modest impact on revenue and an insignificant impact on operating results. We have also significantly reduced our planned capital expenditures for the full fiscal year, which are now expected to be in the range of $20 million to $25 million, primarily to support our DC expansion, digital initiatives and enhancement of our fulfillment capabilities.

根據我們的零售日曆，這些結果包括 2023 年第 53 週的影響。本週發生在低流量非高峰清倉期。因此，預計它對收入的影響非常有限，對經營業績的影響微乎其微。我們還大幅減少了整個財政年度的計劃資本支出，目前預計將在 2000 萬至 2500 萬美元之間，主要用於支持我們的 DC 擴展、數字計劃和增強我們的履行能力。

We anticipate closing 100 stores as part of our ongoing fleet optimization initiatives with the bulk of the closures happening in 2023, leaving us with an optimized fleet of approximately 500 stores.

作為我們正在進行的車隊優化計劃的一部分，我們預計將關閉 100 家門店，其中大部分關閉發生在 2023 年，使我們擁有約 500 家門店的優化車隊。

Thank you. And now we will open up the call to your questions.

謝謝。現在我們將打開您的問題的電話。

(Operator Instructions) We'll go first to Jim Chartier with Monness, Crespi, Hardt.

（操作員說明）我們將首先與 Monness、Crespi、Hardt 一起去找 Jim Chartier。

Sheamus, I wonder if you could first kind of talk about the gross margin in the first quarter. What were the biggest drivers of the decline, if you quantify the impact of the freight and cotton cost there, how the inventories -- how you're going to manage promotional activity in the second quarter given the sales shortfall? And then if you could provide an update on kind of the cost structure and any additional cost savings that you've seen with a little bit more time with the company?

Sheamus，我想知道你是否可以先談談第一季度的毛利率。下降的最大驅動因素是什麼，如果你量化那裡的運費和棉花成本的影響，庫存如何 - 鑑於銷售不足，你將如何管理第二季度的促銷活動？然後，您是否可以提供有關成本結構類型的更新以及您在公司工作更多時間後看到的任何額外成本節省？

Yes, absolutely. Thanks, Jim. I appreciate the question. First, in terms of Q1, as we discussed in our prepared remarks, Q1's gross margin rate came in slightly better than we had expected. I think our original guidance was to be down approximately 1,000 basis points and we came in a little bit better than that.

是的，一點沒錯。謝謝，吉姆。我很欣賞這個問題。首先，就第一季度而言，正如我們在準備好的評論中所討論的那樣，第一季度的毛利率略好於我們的預期。我認為我們最初的指導是下降大約 1,000 個基點，而我們的表現比這要好一些。

As we talked when we gave the original guidance and in various discussions previously, that impact in terms of gross margin was largely driven by the higher input costs in terms of the higher AUCs that had built up in our inventories given the supply chain pressures and cotton pressures that we experienced last year in our purchasing activity.

正如我們在給出最初的指導意見和之前的各種討論中所說的那樣，毛利率方面的影響主要是由更高的投入成本驅動的，即考慮到供應鏈壓力和棉花，我們庫存中積累的更高的 AUCs我們去年在採購活動中遇到的壓力。

As we look at kind of bifurcating the most significant pieces of that, in Q1, it was clearly a combination of both cotton as well as high supply chain costs that were embedded in inventory that was receded towards the end of 2022 with cotton probably being a higher penetration of that deterioration.

當我們考慮將其中最重要的部分分成幾部分時，在第一季度，顯然是棉花和高供應鏈成本的結合，這些成本包含在庫存中，到 2022 年底庫存減少，棉花可能是一個這種惡化的滲透率更高。

The anticipated margin impact was not as a result of incremental promotional activities or liquidation of inventory. It was almost exclusively those higher input costs. As we move into Q2, as we guided, we're still anticipating some level of pressure on margins as compared to last year. Certainly, much less than we experienced in Q1. But nonetheless, we are anticipating about a 200 basis point decline in margin in Q2.

預期的利潤率影響不是增量促銷活動或庫存清算的結果。幾乎完全是那些較高的投入成本。當我們進入第二季度時，正如我們所指導的那樣，與去年相比，我們仍然預計利潤率將面臨一定程度的壓力。當然，比我們在第一季度經歷的要少得多。儘管如此，我們預計第二季度的利潤率將下降約 200 個基點。

That decrease in margin is primarily the result of, again, higher input costs, but in this case, almost exclusively cotton, because the higher freight costs have dissipated and the inventory associated with those higher freight costs has also largely been liquidated.

利潤率的下降主要是由於更高的投入成本，但在這種情況下，幾乎完全是棉花，因為較高的運費已經消散，與這些較高運費相關的庫存也已基本清算。

So the impact in Q2 is more so related to cotton. Still a little bit of higher freight costs. And then also a little bit of a shift in terms of as we penetrate higher in terms of wholesale. It is a lower gross margin business for us. However, we don't incur the same cost. So it is a strongly profitable operating margin business for us. So there is some shift in terms of geography of expense structure as we penetrate higher and higher in terms of wholesale, it is a strong profitable business for us, but it does shift around a little bit the margin and -- the gross margin and operating margin.

因此，第二季度的影響更多地與棉花有關。運費還是有點高。然後，隨著我們在批發方面的滲透率更高，也會發生一些轉變。對我們來說，這是一項毛利率較低的業務。但是，我們不會產生相同的成本。因此，這對我們來說是一項利潤豐厚的營業利潤率業務。因此，隨著我們在批發方面的滲透率越來越高，費用結構的地理分佈發生了一些變化，這對我們來說是一項盈利能力很強的業務，但它確實在利潤率和 - 毛利率和運營方面發生了一些變化利潤。

As we look to the final part of your question, expenses, I think in my first few months here, we definitely have spent a lot of time analyzing the expense structure. And as we hinted in some of our commentary, but we do believe and have implemented a number of changes to rationalize expenses across the board, starting with our real estate initiatives, our store operation initiatives as well as some of our home office activities, all geared towards understanding and believing that we do need to invest more in digital marketing. As we become a digitally dominant retailer, we do need to invest more dollars there.

當我們看你問題的最後一部分，費用時，我想在我來這裡的頭幾個月裡，我們肯定花了很多時間分析費用結構。正如我們在一些評論中暗示的那樣，但我們確實相信並已經實施了一些改變，以全面合理化開支，從我們的房地產計劃、我們的商店運營計劃以及我們的一些家庭辦公活動開始，所有旨在理解並相信我們確實需要在數字營銷方面進行更多投資。隨著我們成為一家在數字領域占主導地位的零售商，我們確實需要在這方面投入更多資金。

So we've definitely saved dollars in terms of expense structure across the board, diverted some of those dollars into marketing initiatives, and we believe that positions us well for future success and future growth. So it moves us more in line with where we should have been in terms of marketing investment. So we're pleased with those activities and believe that, that will serve us well and pay dividends as we move into particularly the back half of the year and beyond, where we'll start to see growth and -- more sustainable growth, expansion of margins as well as generating significant free cash flow.

因此，我們肯定在全面的費用結構方面節省了美元，將其中的一些美元轉移到營銷計劃中，我們相信這為我們未來的成功和未來的增長做好了準備。因此，它使我們更符合我們在營銷投資方面應該達到的水平。因此，我們對這些活動感到滿意，並相信，這將對我們有好處，並在我們進入特別是今年下半年及以後的時候帶來紅利，在那裡我們將開始看到增長——更可持續的增長、擴張利潤率以及產生可觀的自由現金流。

And Jim, I think from the promotional question you asked, we placed -- we had mentioned before that we placed summer fashion receipts down significantly versus last year, due to the pressure we had on AUC. So as Sheamus says, we plan to end the quarter down with inventory down high singles, and we anticipate that the fashion element of the high AUCs spring and summer goods will be completely behind us, and then we'll end with a healthy position in basics, which sets us up for back-to-school.

吉姆，我想從你問的促銷問題來看，我們之前提到過，由於我們對 AUC 的壓力，我們將夏季時裝收入與去年相比大幅下降。因此，正如 Sheamus 所說，我們計劃在本季度結束時庫存減少高單品，我們預計高 AUC 春夏商品的時尚元素將完全落後於我們，然後我們將以健康的狀態結束基礎知識，這讓我們為返校做好準備。

Our next question comes from Jeff Lick with B. Riley Financial.

我們的下一個問題來自 B. Riley Financial 的 Jeff Lick。

Jane, I was wondering if you maybe could elaborate a little typically in this quarter's call, when you have a weak weather period, the May deterioration that you talked about, generally, you show some signs of picking up that didn't happen this year. So I was wondering, if you could elaborate a little on that and then just juxtapose that against all the good things you kind of have going on with the digital traffic, getting into the back half, also Amazon.

簡，我想知道你是否可以在本季度的電話會議上詳細說明一下，當你遇到天氣疲軟的時候，你談到的 5 月惡化，一般來說，你會表現出一些今年沒有出現的回升跡象.所以我想知道，你是否可以詳細說明一下，然後將它與你在數字流量方面所發生的所有美好事物並列，進入後半部分，還有亞馬遜。

I'm just wondering -- it seems like there'll be this kind of aha moment where those good factors kind of overwhelm the bad factors. I'm just kind of curious how you're thinking about that.

我只是想知道——似乎會有這樣的驚喜時刻，那些好的因素會壓倒壞的因素。我只是有點好奇你是怎麼想的。

Yes. I think -- I think we had mentioned in our last call that we really wanted to see a weather break because we didn't get a weather break the whole quarter during first quarter. And so that would allow us to see how much of what was happening in Q1 was weather versus how much was the consumer. So to your point, we did get a break in the weather in early May, and we did not see that change our trajectory as we mentioned on the call. We've decelerated in May versus where we were in April.

是的。我想 - 我想我們在上次電話會議中提到我們真的希望看到天氣休息，因為我們在第一季度的整個季度都沒有天氣休息。這樣一來，我們就可以了解第一季度發生的事情有多少是天氣原因，有多少是消費者原因。因此，就您的觀點而言，我們確實在 5 月初天氣有所好轉，而且我們沒有看到這改變了我們在電話會議上提到的軌跡。與 4 月份相比，我們 5 月份的增速有所放緩。

So we believe that it's really solidly on the back of the consumer right now and clearly she's under pressure. We don't see that changing in the near term. As Maegan pointed out, she's spending less when she visits and inflation is in everything she buys. We've heard it all. Savings are down. Credit card debt is up. And so she's being very, very cautious with her budget.

所以我們相信，現在消費者確實堅定地支持著她，顯然她承受著壓力。我們認為短期內不會發生變化。正如 Maegan 指出的那樣，她在訪問時花費更少，而且通貨膨脹是她購買的一切。我們都聽到了。儲蓄下降了。信用卡債務上升。所以她對預算非常非常謹慎。

From a marketing perspective, remember that Q2 is usually our least profitable quarter. We don't have a marketing campaign per se in Q2 until we get to the very end of July, where we start up our back-to-school in mid-July. So when you think about what marketing is doing for us currently, it's not doing what it did for us in Q1, which Maegan outlined and it's certainly not doing for us what we anticipated to do in Q3 and Q4 and what we saw from last year.

從營銷的角度來看，請記住第二季度通常是我們利潤最低的季度。直到 7 月底，我們才開始在第二季度開展營銷活動，屆時我們將在 7 月中旬開始返校。因此，當您考慮營銷目前為我們做了什麼時，它並沒有像 Maegan 概述的那樣在第一季度為我們所做的事情，而且它肯定沒有為我們做我們預期在第三季度和第四季度所做的事情以及我們從去年看到的事情.

So we anticipate May is going to continue to be tough. The store business is going to continue to be tough. June is going to be a continuation of that. And then when we get to July, remember that we have a bit of a different cadence than others, 40% of our quarter is it -- comes from the month of July and about 60% of that comes from the last 2 weeks. So that is a very important period for us. And like I said, we'll be ramping up marketing.

因此，我們預計 5 月將繼續艱難。商店業務將繼續艱難。六月將是這種情況的延續。然後當我們到達 7 月時，請記住我們的節奏與其他人略有不同，我們季度的 40% 是來自 7 月，其中大約 60% 來自過去兩週。所以這對我們來說是一個非常重要的時期。就像我說的，我們將加強營銷。

From an Amazon point of view, I'm going to turn it over to Maegan to talk about it. I think she can provide some more detail on, as we shift into back-to-school in mid-July on both the marketing front and the Amazon front to kind of round out your question about how we see the low right now and then how we see that improvement in the back half.

從亞馬遜的角度來看，我將把它交給 Maegan 來談談。我認為她可以提供更多詳細信息，因為我們將在 7 月中旬在營銷方面和亞馬遜方面轉向返校，以解決您關於我們現在如何看待低谷以及之後如何看待低谷的問題我們在後半部分看到了這種改善。

Yes. So certainly, from an Amazon perspective, despite the slowdown that we're seeing in consumer demand caused by inflation. It's really not impacting that business. Our results and the investment that we've made in marketing, obviously resulted in a very strong quarter. And when we think about the back half of the year, there's a lot that we're planning for from an Amazon perspective in terms of significant growth. And it's really based on the current trends that we've been seeing quarter-over-quarter consistently for the past year.

是的。所以當然，從亞馬遜的角度來看，儘管我們看到通貨膨脹導致消費者需求放緩。這真的不會影響那項業務。我們的業績和我們在營銷方面的投資顯然導致了一個非常強勁的季度。當我們考慮下半年時，從亞馬遜的角度來看，我們在顯著增長方面有很多計劃。它實際上是基於我們在過去一年中一直看到的季度環比的當前趨勢。

Our increased marketing investment, we're continuing to scale that as we head into Q3 and Q4, it will be very meaningful over last year on the Amazon side. We're also seeing a significant outsized fashion growth. So as I had mentioned, our fashion penetration was up 1,000 basis points in Q1, which really lends itself to the opportunity that we see as we head into Q4, specifically with holiday. So there's a lot of kind of really good happening there in terms of what we feel like we're going to see for the balance of the year, along with what we're already seeing in booked sales as we head into 1 of our biggest time periods as we head into back-to-school with Amazon.

我們增加了營銷投資，我們將在進入第三季度和第四季度時繼續擴大營銷投資，這將比去年對亞馬遜方面非常有意義。我們還看到了顯著的超大規模時尚增長。因此，正如我所提到的，我們的時尚滲透率在第一季度上升了 1,000 個基點，這確實有助於我們在進入第四季度時看到的機會，特別是假期。因此，就我們將在今年餘下時間看到的情況而言，以及我們在進入最大的銷售量之一時已經看到的預訂銷售額方面，那裡發生了很多非常好的事情我們與亞馬遜一起返校的時間段。

So there's a lot of momentum that's planned for the significant growth we're seeing in the back half of the business -- in the back half of the year for that business. And then from a marketing perspective, as Jane had mentioned, we really start to ramp-up significantly in the July time period as we head into back-to-school with our back-to-school brand campaign and then the same into holiday. There's a lot when we think about kind of what's fueling that digital growth. And as we had mentioned in some of our prepared remarks, we're planning in the back half to see a similar traffic trend as it relates to digital to what we saw in Q1.

因此，我們在業務的後半年看到的顯著增長有很多計劃 - 在該業務的下半年。然後從營銷的角度來看，正如 Jane 提到的那樣，我們在 7 月期間真正開始顯著增加，因為我們通過我們的返校品牌活動進入返校，然後同樣進入假期。當我們思考推動數字增長的因素時，有很多。正如我們在一些準備好的評論中提到的那樣，我們計劃在後半部分看到類似的流量趨勢，因為它與我們在第一季度看到的數字相關。

So continuing to really fuel the digital business through that traffic, and that's coming through our increased marketing investment, which is going to scale significantly in Q3 and Q4 over last year. We're also planning to see a slight change in our conversion trend as Jane had mentioned. And really that's based on being up against last year in Q4 specifically, our lowest converting quarter historically as it relates to our Digital business, and that was based on obviously the macro environment, the impact of inflation, really coming up in a big way in Q4 of last year as well as some out-of-stocks that we saw in key marketing looks, all of which we feel like we've really rightsized in terms of, a, the marketing investment that we're lingering on top of this year and then the investment we made in -- from a product perspective to really make sure we're covering all of those key marketing looks.

因此，繼續通過流量真正推動數字業務，這是通過我們增加的營銷投資實現的，這將在去年第三季度和第四季度顯著擴大。正如 Jane 所提到的，我們還計劃看到我們的轉換趨勢略有變化。實際上，這是基於與去年第四季度相比，特別是與我們的數字業務相關的歷史上我們轉換率最低的季度，這顯然是基於宏觀環境，通貨膨脹的影響，在很大程度上確實出現了去年第 4 季度以及我們在關鍵營銷外觀中看到的一些缺貨，所有這些我們覺得我們已經真正調整了，a，我們在這之上揮之不去的營銷投資年，然後我們進行了投資——從產品的角度來看，真正確保我們涵蓋所有這些關鍵的營銷外觀。

So we feel like we're really positioned well. I would also say, really the third kind of driver is that acquisition growth that we've been talking about, and we've seen acquisition has a longer tail in terms of really seeing meaningful impact to top line. So when we think about when we're anticipating to see the growth and the impact of the top line from the past several quarters of really positive acquisition trends, we're assuming we're going to start see a lot of that in the back half of this year and then into 2024.

所以我們覺得我們真的定位很好。我還要說，實際上第三種驅動因素是我們一直在談論的收購增長，而且我們已經看到收購在真正看到對收入的有意義影響方面有更長的尾巴。因此，當我們考慮到我們預計何時會看到過去幾個季度真正積極的收購趨勢的增長和頂線的影響時，我們假設我們將開始在後面看到很多這樣的情況今年一半，然後進入 2024 年。

Our next question comes from Jay Sole with UBS.

我們的下一個問題來自瑞銀的 Jay Sole。

James, we just talked a lot about Amazon there. But if you can just maybe talk a little bit about I know you said you'd give some more numbers kind of maybe later in the year, but just big picture over the last 90 days, like what gives you confidence that the Amazon business continues to develop. And if you can give us an idea of like, well how big this business can be over time and how profitable it can be, that would be helpful.

詹姆斯，我們剛剛在那裡談了很多關於亞馬遜的事情。但是，如果你能談談，我知道你說過你可能會在今年晚些時候給出更多的數字，但只是過去 90 天的大局，比如是什麼讓你對亞馬遜業務繼續發展充滿信心發展。如果你能給我們一個想法，那麼隨著時間的推移，這項業務會有多大，利潤會有多高，那將很有幫助。

Yes. I think as far as -- and I'll take this question, just as far as, again, where we're really seeing the growth and why we feel confident in the back half of the year from an Amazon perspective, we're looking at as we head into the back-to-school time period what we already have book sales. We're also looking at, again, a scaled marketing investment. The trends we're continuing to see the trend coming off of Q1. And then again, when we just look at those past 90 days, we have not seen the slowdown in that business. We've continued to build coming out of the Q1 time period, and feel like we're in a significantly better position from both an inventory and an investment perspective for the Q3 and Q4 time period of this year than we've ever been historically with the Amazon business specifically.

是的。我認為就——我會回答這個問題，就我們真正看到增長的地方以及為什麼從亞馬遜的角度來看，我們對今年下半年充滿信心，我們是當我們進入返校時期時，看看我們已經有的圖書銷售情況。我們還在考慮規模化的營銷投資。我們繼續看到第一季度趨勢的趨勢。再一次，當我們回顧過去 90 天時，我們並沒有看到該業務的放緩。從第一季度開始，我們繼續建設，感覺今年第三季度和第四季度的庫存和投資角度比以往任何時候都好得多特別是與亞馬遜業務。

So I think that's really what -- those kind of levers are what really make us feel confident in the continued growth.

所以我認為這真的是 - 那些槓桿真正讓我們對持續增長充滿信心。

I think the other thing I would add to that is for us, the Amazon business is certainly a big and important business and we anticipate that not only are we going to expect growth in the back half of the year, but we're really expecting that business to grow significantly as we move into '24 and '25. We believe we have opportunities within that business, both in the TCP brand, as well as our recent launch of Gymboree on Amazon. So we believe that there's tremendous growth opportunity.

我想我要補充的另一件事是對我們來說，亞馬遜業務當然是一項重要的大業務，我們預計我們不僅會期待今年下半年的增長，而且我們真的期待隨著我們進入 24 世紀和 25 世紀，該業務將顯著增長。我們相信我們在該業務中有機會，無論是 TCP 品牌，還是我們最近在亞馬遜上推出的 Gymboree。因此，我們相信存在巨大的增長機會。

I think it's important to put it in perspective as well. While the first half of the year was certainly a difficult time period for us or anticipated to be a difficult time period for us due to macro pressures and high input costs, as we move into the back half of the year and into 2024, we really believe that we're establishing a new base for go-forward growth. And part of that new base is that Amazon business that Maegan described, and we're expecting an acceleration of that business as we move into the back half of the year and in Q4.

我認為正確看待它也很重要。由於宏觀壓力和高投入成本，上半年對我們來說肯定是一個困難時期，或者預計對我們來說是一個困難時期，但隨著我們進入下半年和 2024 年，我們真的相信我們正在為未來的增長建立新的基礎。新基地的一部分是 Maegan 描述的亞馬遜業務，我們預計隨著我們進入今年下半年和第四季度，該業務將加速發展。

We're also going to benefit as part of that new base from a stabilization in terms of costs. So the input costs are dissipating as we've talked, we're going to benefit from clean inventories, we're going to benefit from reduced expense structure that we're diverting into marketing and then also a stabilized store base as we're nearing the end of our store closure initiatives that we believe we're going to settle in at around 500 stores. All of this adds up to really establishing a new base for the company in terms of growth for the future that will enable us to not only grow top line, but expand margins and generate significant free cash flow.

作為新基地的一部分，我們還將從成本穩定中受益。因此，正如我們所說，投入成本正在消散，我們將從清潔庫存中受益，我們將受益於我們正在轉向營銷的減少的費用結構，然後也是穩定的商店基礎，因為我們正在我們相信我們將在大約 500 家商店安頓下來，我們的商店關閉計劃即將結束。所有這些加在一起，真正為公司在未來的增長方面建立了一個新的基礎，這將使我們不僅能夠增加收入，還能擴大利潤率並產生可觀的自由現金流。

So we think Amazon is certainly an important part of that go-forward strategy.

因此，我們認為亞馬遜無疑是該前進戰略的重要組成部分。

Thank you for joining us today. If you have further questions, please contact Investor Relations at 201-558-2400 extension 14500. You may now disconnect your lines, and have a wonderful day.

感謝您今天加入我們。如果您還有其他問題，請致電 201-558-2400 分機 14500 聯繫投資者關係部。您現在可以掛斷電話，祝您有美好的一天。