Brand House Collective Inc (TBHC) 2023 Q1 法說會逐字稿

Good morning, everyone, and welcome. Thank you for participating in today's conference call to discuss Kirkland's financial results for the first quarter ended April 29, 2023. (Operator Instructions) Joining us today are Kirkland's Home Interim CEO, Ann Joyce; President and COO, Amy Sullivan; EVP and CFO, Mike Madden; and the company's External Director of Investor Relations, Cody Cree.

大家早上好，歡迎光臨。感謝您參加今天的電話會議，討論 Kirkland 截至 2023 年 4 月 29 日的第一季度財務業績。（操作員說明）今天加入我們的是 Kirkland's Home 臨時首席執行官 Ann Joyce；總裁兼首席運營官艾米·沙利文；執行副總裁兼首席財務官 Mike Madden；以及公司投資者關係外部總監 Cody Cree。

Following their remarks, we'll open the call for your questions. Before we go further, I would like to turn the call over to Mr. Cree as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Also, just a reminder, the call is being recorded. Cody, please go ahead.

在他們發表講話後，我們將開始電話詢問您的問題。在我們進一步討論之前，我想將電話轉給 Cree 先生，他正在閱讀該公司 1995 年《私人證券訴訟改革法案》含義內的安全港聲明，該聲明提供了有關前瞻性聲明的重要警告。另外，提醒一下，通話正在進行錄音。科迪，請繼續。

Thanks, Andrew. Except for historical information discussed during this conference call, the statements made by company management are forward-looking and made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Kirkland's actual results in future periods to differ materially from forecasted results.

謝謝，安德魯。除本次電話會議中討論的歷史信息外，公司管理層所作的聲明均為前瞻性聲明，並根據1995 年《私人證券訴訟改革法案》的安全港條款作出。前瞻性聲明涉及已知和未知的風險和不確定性，這可能導致柯克蘭未來時期的實際結果與預測結果存在重大差異。

Those risks and uncertainties are more fully described in Kirkland's filings with the Securities and Exchange Commission. I'd like to remind everyone that this call will be available for replay through June 15, 2023. A webcast replay will also be available via the link provided in today's press release as well as on the company's website at kirklands.com.

柯克蘭向美國證券交易委員會提交的文件中更全面地描述了這些風險和不確定性。我想提醒大家，本次電話會議將在 2023 年 6 月 15 日之前進行重播。還可以通過今天新聞稿中提供的鏈接以及公司網站 kirklands.com 進行網絡廣播重播。

Now I'd like to turn the call over to Kirkland's Home, Interim CEO, Ann Joyce. Ann, over to you.

現在我想將電話轉給 Kirkland's Home 臨時首席執行官 Ann Joyce。安，交給你了。

Thank you, Cody, and good morning, everyone. It's great to be joining you in my new role as Interim CEO. I've spent the last 2 years as a Board member and have been in this role a little over 2 months. And while there's a great deal of work to be done, being involved at this level has reinforced my view that our best days are ahead. Before we get into the quarter's results, I want to comment on my initial impressions and talk about what's next. As discussed on our last call, we disappointed some of our loyal customers in recent years by placing too much emphasis on promoting higher ticket items.

謝謝你，科迪，大家早上好。很高興能加入你們擔任臨時首席執行官的新角色。過去 2 年我一直擔任董事會成員，擔任此職務已有 2 個多月了。儘管還有大量工作要做，但參與到這一級別的工作讓我更加堅信，我們最好的日子就在前方。在我們討論本季度的業績之前，我想談談我的初步印象並談談接下來的事情。正如我們上次電話會議中所討論的那樣，近年來，我們過於重視促銷高價商品，令一些忠實客戶感到失望。

Our overall voice changed and we struggled to keep our customers engaged. We missed some seasonally relevant times of the year that had historically brought strong customer response. Kirkland's appeal has always been its ever-changing seasonally relevant product assortment that provides fashionable, curated looks, which our customers rely on to update their home décor affordably.

我們的整體聲音發生了變化，我們努力讓客戶參與進來。我們錯過了一年中一些與季節相關的時間，這些時間歷來帶來了強烈的客戶反應。 Kirkland 的吸引力始終在於其不斷變化的季節性產品系列，提供時尚、精心設計的外觀，我們的客戶依靠這些產品以經濟實惠的方式更新他們的家居裝飾。

Our highly nimble team diligently monitors the dominant home, décor trends and quickly develop our merchandise assortment accordingly. This skill allows us to provide our customers with fresh products that are relevant, stylish and within their budget. We are renewing this proven model while also expanding upon some of the recent successes that we've seen in the business. One of these successes has been the transformation of our sourcing model, allowing us to upgrade our design, enhance product quality and improve margins. We've also learned a great deal about the furniture category and what works and what doesn't work for our customers. These lessons will allow us to appropriately refine our product assortment even more, ensuring it truly fits within our model and meets our customers' expectations.

我們高度靈活的團隊努力監控占主導地位的家居、裝飾趨勢，並相應地快速開發我們的商品品種。這項技能使我們能夠為客戶提供相關、時尚且在預算範圍內的新鮮產品。我們正在更新這個經過驗證的模型，同時也在擴展我們最近在業務中看到的一些成功。其中一項成功是我們採購模式的轉變，使我們能夠升級設計、提高產品質量並提高利潤。我們還了解了很多關於家具類別以及什麼對我們的客戶有效、什麼無效的知識。這些經驗教訓將使我們能夠進一步適當地完善我們的產品種類，確保它真正適合我們的模型並滿足客戶的期望。

At our core, we are a valued specialty home décor retailer, and this means that we use promotions and deals as strategic drivers to engage and excite our customers. In recent years, we've been reactional with our promotional strategy. Now we are creating a strategic and intentional promotional calendar centered around seasonally relevant items at lower price points that we believe will drive more traffic.

我們的核心是一家有價值的專業家居裝飾零售商，這意味著我們利用促銷和優惠作為戰略驅動力來吸引和激發客戶。近年來，我們對促銷策略做出了反應。現在，我們正在創建一個戰略性和有意的促銷日曆，以價格較低的季節性相關商品為中心，我們相信這將帶來更多流量。

To maximize the promotions and sales events, we are ensuring that our messaging creates a call to action and showcases our renewed assortment. However, we're also leaving enough flexibility in our plans to be reactionary if the opportunity arises.

為了最大限度地提高促銷和銷售活動的效果，我們確保我們的信息能夠號召人們採取行動並展示我們的新產品系列。然而，我們的計劃也留有足夠的靈活性，以便在機會出現時做出反應。

We are an omnichannel retailer, which allows our customers to choose the engagement that fits their preference. Our real estate portfolio is very competitive with more than 340 stores across 35 states. A recent assessment tells us that the vast majority of our stores are in healthy retail centers with strong anchor tenants and located in areas where our core customers live. While we are confident in the strength of our current physical store footprint, we know the customer that shopped both channels spends twice as much as the single channel customer. Looking at our sales mix by channel, e-commerce represents 27% of our business today, and this makes our online platform our largest store.

我們是一家全渠道零售商，允許我們的客戶選擇適合他們偏好的參與方式。我們的房地產投資組合非常有競爭力，在 35 個州擁有 340 多家商店。最近的一項評估告訴我們，我們的絕大多數商店都位於健康的零售中心，擁有強大的主力租戶，並且位於我們的核心客戶居住的地區。雖然我們對當前實體店足蹟的實力充滿信心，但我們知道在兩個渠道購物的客戶的支出是單一渠道客戶的兩倍。從我們按渠道劃分的銷售組合來看，電子商務占我們當今業務的 27%，這使我們的在線平台成為我們最大的商店。

So we are focused on driving conversion ensuring inventory availability and driving profitability. As an omnichannel platform, we need both of our channels firing on all cylinders, and we're spending a significant amount of time working towards that. By the end of 2022, we made significant progress strengthening our balance sheet by reducing inventory to $84 million and paying down $45 million of our debt. We showed this up in the first quarter through an extension of our credit facility, which provides for additional borrowing capacity during the upcoming peak season and extends the maturity date to March 2028.

因此，我們專注於推動轉化，確保庫存可用性並提高盈利能力。作為一個全渠道平台，我們需要兩個渠道都全力以赴，並且我們正在為此花費大量時間。到 2022 年底，我們通過將庫存減少至 8400 萬美元並償還 4500 萬美元的債務，在強化資產負債表方面取得了重大進展。我們在第一季度通過延長信貸安排就證明了這一點，該安排在即將到來的旺季提供了額外的借貸能力，並將到期日延長至 2028 年 3 月。

Out of everything we've discussed. I firmly believe that our greatest asset is our people, which includes our field leaders, our associates and the distribution and corporate teams that support them. Their passion, dedication and commitment to the customer is truly impressive. So we have a solid foundation to capitalize on. So what's next?

從我們討論過的一切來看。我堅信，我們最大的資產是我們的員工，其中包括我們的現場領導、我們的員工以及為他們提供支持的分銷和企業團隊。他們的熱情、奉獻精神和對客戶的承諾確實令人印象深刻。因此，我們有堅實的基礎可以利用。下一個是什麼？

Well, recently, we realigned our organizational structure, placing an emphasis on a high-performance culture and ensuring we have the right people in the right position. I am fortunate to have Amy Sullivan and Mike Madden as our key partners during this transition.

最近，我們重新調整了組織結構，強調高績效文化，並確保將合適的人放在合適的位置。我很幸運有艾米·沙利文和邁克·馬登作為我們過渡期間的主要合作夥伴。

Amy was recently promoted to President and COO, and she has varied and increasing merchandising and operational responsibilities during her 10 years at Kirkland's. And before that, she spent a decade in the fashion apparel industry, where she served in several merchandising leadership roles and prior to that, in brand management roles at department stores, She is a talented and motivated leader.

Amy 最近晉升為總裁兼首席運營官，在 Kirkland's 工作的 10 年間，她承擔了各種且不斷增加的銷售和運營職責。在此之前，她在時尚服裝行業工作了十年，擔任過多個銷售領導職務，在此之前，她在百貨公司擔任品牌管理職務，她是一位才華橫溢、積極進取的領導者。

And Mike rejoined Kirkland's last year after spending 4 years as the CFO of a commercial real estate investment fund. Prior to that, Mike spent 17 years at Kirkland's, serving in various senior-level capacities. He has a deep understanding of our business and our customers. Both Amy and Mike have brought industry and company-specific experience, which will be crucial as we execute our plans.

邁克在一家商業房地產投資基金擔任首席財務官四年後，去年重新加入柯克蘭。在此之前，Mike 在 Kirkland's 工作了 17 年，擔任過各種高級職務。他對我們的業務和客戶有深入的了解。艾米和邁克都帶來了行業和公司的具體經驗，這對於我們執行計劃至關重要。

We are also instilling a culture that views things first through the lens of the customer and the associates. We have launched 2 initiatives, our voice of the customer and our voice of the associate programs geared to enhancing the overall brand experience. My experience is that these programs, if they're supported by a robust use of data-driven decision-making, can quickly galvanize an organization and drive change. We are still in the early stages, but I am encouraged by the organization's eagerness to embrace these changes.

我們還灌輸一種首先從客戶和員工的角度看待事物的文化。我們推出了兩項舉措：客戶之聲和員工之聲計劃，旨在增強整體品牌體驗。我的經驗是，這些計劃如果得到數據驅動決策的大力支持，可以快速激勵組織並推動變革。我們仍處於早期階段，但我對組織渴望接受這些變化感到鼓舞。

Our attention now turns to recapturing sales and product margin to better leverage our fixed cost base. This effort starts with and depends on our merchandise assortment and our value proposition. We have adjusted our assortment for the back half of 2023 to balance decorating, entertaining and gifting with an emphasis on value décor under $20. Supporting these changes with a strong promotional plan and effective marketing should allow us to win back customers and generate top line momentum. As we adjust our brand voice to recapture that style and value proposition, we expect to strike a balance between the broad category messages and personalized customer offers, leveraging the investment in our customer data platform.

我們的注意力現在轉向重新奪回銷售額和產品利潤，以更好地利用我們的固定成本基礎。這項努力始於並取決於我們的商品種類和價值主張。我們調整了 2023 年下半年的產品類別，以平衡裝飾、娛樂和送禮，重點關注 20 美元以下的超值裝飾。通過強有力的促銷計劃和有效的營銷來支持這些變化，應該能讓我們贏回客戶並產生營收動力。當我們調整品牌聲音以重新捕捉這種風格和價值主張時，我們希望利用對客戶數據平台的投資，在廣泛的類別信息和個性化客戶服務之間取得平衡。

Supply chain costs have decreased substantially, thanks to lower inbound freight rates, and we expect our internal cost to be lower due to reduced inventory levels and increased efficiency. You'll see some of these benefits already positively impacting our merchandise margin with a 160 basis point year-over-year expansion in Q1. These factors help the overall margin equation, providing a path to improve on the prior year, while giving us room to ensure our promotional strategies are effective and profitable.

由於入境運費降低，供應鏈成本大幅下降，並且由於庫存水平降低和效率提高，我們預計內部成本也會降低。您會發現其中一些優勢已經對我們的商品利潤率產生了積極影響，第一季度同比增長了 160 個基點。這些因素有助於整體利潤率方程，提供了比上一年有所改善的途徑，同時為我們提供了空間，以確保我們的促銷策略有效且有利可圖。

Continued tight expense management should provide better flow-through of any incremental sales that we generate. Looking forward to the coming months, we will be refining our long-term vision and strategic plans so that we can capitalize on our brand potential. We want to cement a strong brand identity centered around the value-oriented and stylish home décor with seasonal relevancy as well as compelling entertaining and gift options.

持續嚴格的費用管理應該可以為我們產生的任何增量銷售提供更好的流通。展望未來幾個月，我們將完善我們的長期願景和戰略計劃，以便我們能夠充分利用我們的品牌潛力。我們希望鞏固一個強大的品牌形象，以價值為導向、時尚的家居裝飾、季節相關性以及引人注目的娛樂和禮品選擇為中心。

As we continue to make progress towards our refined long-term vision, the muscle that we build along the way should allow us to shape our future and uncover additional opportunities for growth and profitability. As we balance our short-term goal of returning to profitability, with refining and executing our long-term vision, there remains much work to be done, and we are in the early stages of our journey. I do want to emphasize that during this transitional phase, we remain steadfast in our constant commitment to our customers and to a path to profitability.

隨著我們繼續朝著完善的長期願景邁進，我們一路上積累的力量應該使我們能夠塑造我們的未來，並發現更多的增長和盈利機會。當我們平衡恢復盈利的短期目標與完善和執行我們的長期願景時，仍有許多工作要做，而且我們正處於旅程的早期階段。我確實想強調，在這個過渡階段，我們仍然堅定不移地致力於對客戶和盈利之路的持續承諾。

On that note, I would like to express my sincerest gratitude to our dedicated employees, our partners and stakeholders for their unwavering support and commitment to the Kirkland's Home brand. I am confident that our collective efforts will pave the way for long-term success and create value for our shareholders.

就此而言，我謹向我們敬業的員工、合作夥伴和利益相關者表示最誠摯的謝意，感謝他們對 Kirkland's Home 品牌的堅定支持和承諾。我相信，我們的集體努力將為長期成功鋪平道路，並為股東創造價值。

With that, now I'd like to turn the call over to Mike, who will provide detailed commentary on our performance in the first quarter and our financial outlook. Mike, over to you.

現在我想將電話轉給邁克，他將對我們第一季度的業績和財務前景提供詳細的評論。邁克，交給你了。

Thank you, Ann, and good morning to everyone. For the first quarter, net sales were $96.9 million compared to $103.3 million in the prior year quarter, which includes a 4% decline in the average store count and a comparable store sales decline of 4.4%. The comparable store sales result was largely driven by traffic declines in both stores and online, partially offset by an increase in our customer conversion rate and an increase in our average transaction value. We saw a small channel shift during the quarter as stores performed slightly better than e-commerce on a year-over-year basis. E-commerce was 27% of total sales in the quarter compared to 28% in the prior year quarter. Breaking down sales within the quarter, comps were down 9% in February, followed by a decrease of 8% in March and an increase of 6% in April.

謝謝你，安，祝大家早上好。第一季度淨銷售額為 9690 萬美元，而去年同期為 1.033 億美元，其中平均商店數量下降 4%，可比商店銷售額下降 4.4%。可比商店銷售結果主要是由商店和在線流量下降推動的，但部分被我們的客戶轉化率的提高和平均交易價值的增長所抵消。我們看到本季度渠道發生了小幅轉變，因為商店的表現同比略好於電子商務。電子商務佔本季度總銷售額的 27%，而去年同期為 28%。從本季度銷售額來看，2 月份同比下降 9%，3 月份下降 8%，4 月份增長 6%。

During April, we ran a friends and family promotional event that did not occur in the prior year. The event was successful in driving to a positive comp for the month but also helpful and providing insight into how we message promotional events for the rest of the year. Store sales results were relatively consistent across geographic regions with better performance in the Southeast and Florida and weaker results in the Upper Midwest and Northeast.

四月份，我們舉辦了一場去年沒有舉辦過的親朋好友促銷活動。該活動成功地推動了本月的積極競爭，但也很有幫助，並讓我們深入了解我們如何在今年剩餘時間里傳達促銷活動的信息。各個地理區域的商店銷售結果相對一致，東南部和佛羅里達州的表現較好，而中西部北部和東北部的表現較差。

From a product perspective, we showed stronger results in the seasonal floral and outdoor categories. These increases were offset by decreases in furniture and wall décor. As Ann mentioned earlier, as we move into the back half of the year, we have increased our investment in categories that better highlight our value proposition and seasonal relevance. We've also invested in depth in key items within these categories as we felt that was a missed opportunity last year.

從產品角度來看，我們在季節性花卉和戶外類別中取得了更好的成績。這些增長被家具和牆壁裝飾的減少所抵消。正如安之前提到的，隨著進入下半年，我們增加了對更好地突出我們的價值主張和季節性相關性的類別的投資。我們還對這些類別中的關鍵項目進行了深入投資，因為我們認為去年錯失了機會。

Further, we plan to introduce more products that promote gifting and entertaining during the time frame between Thanksgiving and Christmas, another area of missed opportunity last year. Gross profit margin declined 70 basis points to 26.7% of sales compared to 27.4% in the prior year quarter. The 5 components of this year-over-year change are as follows: First, merchandise margin increased 160 basis points to 56.8% versus 55.2% in the prior year quarter; lower freight rates, combined with lower product costs, drove the increase in margin. As we've previously discussed, inbound freight rates spiked during early 2022 and have steadily declined since then.

此外，我們計劃在感恩節和聖誕節之間推出更多促進送禮和娛樂的產品，這是去年錯過的另一個機會。毛利率下降 70 個基點，佔銷售額的 26.7%，而去年同期為 27.4%。同比變化由以下 5 個部分組成：首先，商品利潤率增長 160 個基點，達到 56.8%，而去年同期為 55.2%；較低的運費加上較低的產品成本推動了利潤率的增加。正如我們之前討論的，進港運費在 2022 年初飆升，此後穩步下降。

Spot rates in our key ports of origin in China, Vietnam and India have either reached or are near post-pandemic lows. We expect our merchandise margin to benefit from the decline in inbound freight costs throughout 2023.

中國、越南和印度主要始發港的即期運價已達到或接近疫情后的低點。我們預計我們的商品利潤率將受益於 2023 年入境貨運成本的下降。

Second, central distribution costs increased 100 basis points to 5.6% of sales from 4.6% in the prior year quarter. Deleverage from the decline in sales, combined with high levels of cost capitalization in the prior year led to the increase. We saw sequential improvement from Q4 and the year-over-year comparison during the quarter. Excluding the capitalization effect, cost incurred in our distribution center operations were down during the quarter. Our operational efficiency is improving because of a decline in inventory levels and better product flow and we expect this to continue for the balance of the year.

其次，中央分銷成本佔銷售額的比例從去年同期的 4.6% 增加了 100 個基點，達到 5.6%。銷售額下降帶來的去槓桿化，加上上一年的高成本資本化水平導致了這一增長。我們看到第四季度的連續改善以及本季度的同比比較。排除資本化效應，我們的配送中心運營成本在本季度有所下降。由於庫存水平下降和產品流程改善，我們的運營效率正在提高，我們預計這種情況將在今年剩餘時間內持續下去。

Third, store occupancy costs increased 100 basis points to 14.7% of sales from 13.7% in the prior year quarter, largely due to deleverage from a lower sales base.

第三，商店佔用成本佔銷售額的比例從去年同期的 13.7% 增加了 100 個基點，達到 14.7%，這主要是由於銷售基礎較低的去槓桿化所致。

Fourth, outbound freight costs, including both store and e-commerce shipping expenses, increased 90 basis points to 7.7% of sales from 6.8% in the prior year quarter. Sales deleverage was the primary reason for the increase.

第四，出境貨運成本（包括商店和電子商務運輸費用）佔銷售額的比例從去年同期的 6.8% 增加了 90 個基點，達到 7.7%。銷售去槓桿是增長的主要原因。

And lastly, depreciation included in cost of sales decreased 60 basis points to 2.1% of sales from 2.7% in the prior year quarter. Total operating expenses were $36.2 million or 37.4% of sales compared to $39.4 million or 38.1% of sales in the prior year quarter, that's a decrease of 70 basis points. The decrease was primarily the result of lower marketing expenses, which was 3% of sales for the quarter versus 4.5% of sales for the prior year quarter.

最後，計入銷售成本的折舊佔銷售額的比例從去年同期的 2.7% 下降了 60 個基點，降至 2.1%。總運營費用為 3,620 萬美元，佔銷售額的 37.4%，而去年同期為 3,940 萬美元，佔銷售額的 38.1%，下降了 70 個基點。下降主要是由於營銷費用減少，佔本季度銷售額的 3%，而去年同期為 4.5%。

This was offset somewhat by deleverage from the sales decline, severance charges of approximately $0.5 million related to our CEO's retirement, our prior CEO's retirement and impairment charges of $0.2 million recorded during the quarter. Adjusted EBITDA, excluding impairment, stock compensation and other minor expenses, was negative $5.8 million for the current quarter and the prior year quarter. Our operating loss improved to $10.3 million versus $11.1 million in the prior year quarter.

這在一定程度上被銷售下降的去槓桿化、與我們的首席執行官退休相關的約50 萬美元的遣散費、我們前任首席執行官的退休以及本季度記錄的20 萬美元的減值費用所抵消。本季度和去年同期的調整後 EBITDA（不包括減值、股票補償和其他次要費用）為負 580 萬美元。我們的運營虧損從去年同期的 1,110 萬美元增至 1,030 萬美元。

Our income tax rate for the quarter was an expense of 12.7% compared to a benefit of 29.7% in the prior year quarter. As you may have noticed, we dropped the adjusted net income reconciliation as we are no longer including this metric within our reporting.

我們本季度的所得稅率為 12.7%，而去年同期的所得稅率為 29.7%。您可能已經註意到，我們放棄了調整後的淨利潤調節表，因為我們不再在報告中包含此指標。

Given the seasonality of our business, our tax rate will fluctuate greatly as the year progresses, depending on actual results and forecast. For this reason, operating income and adjusted EBITDA are the profitability metrics that we will use internally to gauge profitability as we progress through the year.

鑑於我們業務的季節性，我們的稅率將隨著年份的推移而大幅波動，具體取決於實際結果和預測。因此，營業收入和調整後的 EBITDA 是我們內部用來衡量全年盈利能力的盈利指標。

From a balance sheet perspective, our inventory levels are under control and flowing according to plans. We ended the quarter with $83.3 million of inventory versus $130.9 million in the prior year quarter. We had borrowings outstanding under our revolving line of credit of $33 million, which was in line with our expectations.

從資產負債表的角度來看，我們的庫存水平受到控制並按計劃流動。本季度結束時，我們的庫存為 8,330 萬美元，而上年同期為 1.309 億美元。我們的循環信貸額度下的未償還借款為 3300 萬美元，這符合我們的預期。

As we announced in April, we completed a 5-year extension to our revolving credit facility that provides additional borrowing capacity during our peak season.

正如我們在 4 月份宣布的那樣，我們完成了循環信貸安排的 5 年延期，以便在旺季期間提供額外的借貸能力。

Moving to our outlook for '23, we are not providing specific guidance for the year given the lack of visibility around the macroeconomic environment and its impact on customer traffic and conversion trends However, we do want to provide some color around our expectations for certain key areas of the business.

談到我們對23 年的展望，鑑於宏觀經濟環境及其對客戶流量和轉化趨勢的影響缺乏可見性，我們不會提供今年的具體指導。但是，我們確實希望圍繞我們對某些關鍵的預期提供一些色彩業務領域。

In the early part of the second quarter, we continue to see challenging trends in traffic counts, both in stores and online. Second quarter comp sales trends remained negative. However, we expected Q2 to be a transition quarter, factoring in lead times and execution, the merchandise assortment and promotional changes that Ann mentioned earlier, they won't be meaningfully represented until Q3. Merchandise margins are providing an offset, running higher than the prior year in the 150 to 200 basis point range thus far in the quarter. We expect that to grow as the quarter progresses.

在第二季度初期，我們繼續看到商店和網上的流量計數呈現出具有挑戰性的趨勢。第二季度公司銷售趨勢仍然為負。然而，我們預計第二季度將是一個過渡季度，考慮到安之前提到的交貨時間和執行、商品分類和促銷變化，它們直到第三季度才會有意義地體現出來。商品利潤率提供了一定的抵消作用，本季度迄今為止，該利潤率比去年同期高出 150 至 200 個基點。我們預計這一數字將隨著本季度的進展而增長。

In the latter part of the second quarter last year, we initiated a period of deep clearance in order to reduce excess inventory that we won't have to repeat this year. The merchandise margin is also benefiting from lower inbound freight costs as container rates return to pre-pandemic levels and a decrease in product costs through vendor negotiations.

去年第二季度下半年，我們啟動了深度清倉，以減少過剩庫存，今年我們不必再重複這樣的情況。隨著集裝箱運價恢復到大流行前的水平，以及通過供應商談判降低產品成本，商品利潤率也受益於入境貨運成本的降低。

Supply chain costs inside our distribution centers are reflecting lower inventory levels and increased labor efficiency. We've made moves to simplify our supply chain infrastructure by recently closing our Las Vegas e-commerce distribution hub and eliminating our reliance on off-site storage.

我們的配送中心內的供應鏈成本反映了庫存水平的降低和勞動效率的提高。我們最近關閉了拉斯維加斯電子商務配送中心並消除了對異地存儲的依賴，從而採取了簡化供應鏈基礎設施的措施。

We expect to see a bigger effect from these changes as we progress into the peak season. And we continue to be vigilant about operating expense control, reducing operating expenses by over $3 million in the first quarter. These reductions are in place and will positively impact year-over-year comparisons for the balance of the year. Looking at our balance sheet, we expect inventory levels to follow a historical cycle and peak at the end of Q3 in the range of $110 million to $120 million. We will fund this inventory investment with trade payables and borrowings under our credit facility. As of today, we have $37 million outstanding on the facility, with $20.4 million in excess availability, $12.4 million of which is available for borrowing.

隨著旺季的到來，我們預計這些變化會產生更大的影響。我們繼續對運營費用控制保持警惕，第一季度運營費用減少了超過 300 萬美元。這些削減已經到位，將對今年剩餘時間的同比比較產生積極影響。從我們的資產負債表來看，我們預計庫存水平將遵循歷史週期，並在第三季度末達到 1.1 億至 1.2 億美元的峰值。我們將通過我們的信貸額度下的貿易應付賬款和借款為這項庫存投資提供資金。截至今天，我們的貸款餘額為 3,700 萬美元，還有 2,040 萬美元的超額可用資金，其中 1,240 萬美元可用於借款。

As our inventories increase, our line capacity does as well, and we will use additional borrowing to fund our peak season inventory flow. Currently, we expect peak borrowings to be in the range of $60 million, which matches last year's level. As Ann mentioned in her remarks, our priority for the balance of 2023 is to generate renewed sales momentum through changes to our merchandise assortment and promotional activities that highlight our value proposition. Financially speaking, this would mean a return to positive adjusted EBITDA generation, while creating sales momentum that can carry forward into 2024.

隨著我們的庫存增加，我們的生產線產能也會增加，我們將使用額外的借款來為旺季庫存流動提供資金。目前，我們預計借款峰值將在 6000 萬美元左右，與去年的水平相當。正如 Ann 在她的講話中提到的，我們 2023 年剩餘時間的首要任務是通過改變我們的商品分類和突出我們價值主張的促銷活動來產生新的銷售動力。從財務角度來看，這意味著將恢復正調整後的 EBITDA 生成，同時創造可延續到 2024 年的銷售勢頭。

Our intermediate goal is to return to historical average adjusted EBITDA margins in the mid- to high single-digit range. We've made significant improvements in our operation over the last several years, including our direct importing growth and improvements in our omnichannel capabilities and supply chain infrastructure.

我們的中期目標是恢復到歷史平均調整後 EBITDA 利潤率在中高個位數範圍內。過去幾年，我們的運營取得了重大改進，包括直接進口增長以及全渠道能力和供應鏈基礎設施的改進。

We've also tightened up our store base and improved leasing terms in many of our locations. Recent work we've done to analyze our store portfolio supports the fact that we remain in competitive, vibrant real estate locations. We've done an effective job in reducing our operating expenses and continue to manage each line item prudently.

我們還加強了我們的商店基礎並改善了許多地點的租賃條款。我們最近對我們的商店組合進行的分析工作證明了我們仍然處於競爭激烈、充滿活力的房地產位置這一事實。我們在降低運營費用方面做了有效的工作，並繼續審慎地管理每個項目。

Getting back to historical adjusted EBITDA generation depends on our ability to rekindle demand with our customer base and macro factors surrounding the home furnishing sector getting back to normal after a period of sales pull forward during the pandemic. We believe that with some shifts in emphasis in our merchandise assortment, we can attract additional demand from our core customer segment, while maintaining interest from those we've attracted over the last few years.

恢復歷史調整後的 EBITDA 水平取決於我們重新點燃客戶群需求的能力，以及圍繞家居行業的宏觀因素在疫情期間的一段銷售拉動後恢復正常的能力。我們相信，隨著我們的商品種類重點發生一些轉變，我們可以吸引核心客戶群的額外需求，同時保持過去幾年吸引的客戶的興趣。

We are prioritizing more depth in seasonal buys, key items across our home decor categories, and an emphasis on more accessible price points in an environment where home consumers are stretched. All the while, we will continue to feature the improvements in style and quality that we've gained over the last few years.

我們優先考慮更深入的季節性購買、整個家居裝飾類別的關鍵商品，並強調在家庭消費者捉襟見肘的環境中更容易接受的價格點。與此同時，我們將繼續展示我們在過去幾年中所取得的風格和質量的改進。

Finally, as to capital allocations, our priority is to reduce borrowings and reestablish a level of liquidity that allows us to operate the business with more flexibility. Once that has been achieved, we'll focus on growth and ROI opportunities to push the business forward. Share repurchases and dividends have been valuable components of our capital allocation strategy historically and we expect to use them again in the future once our near-term goals have been achieved. That concludes our prepared remarks, And Andrew, we're now ready to take some Q&A.

最後，就資本配置而言，我們的首要任務是減少借款並重新建立流動性水平，使我們能夠更靈活地經營業務。一旦實現這一目標，我們將專注於增長和投資回報率機會，以推動業務向前發展。從歷史上看，股票回購和股息一直是我們資本配置策略的重要組成部分，我們預計在實現近期目標後將再次使用它們。我們準備好的發言就到此結束，安德魯，我們現在準備好進行一些問答。

(Operator Instructions) The first question comes from Jeremy Hamblin with Craig-Hallum Capital Group.

（操作員說明）第一個問題來自 Craig-Hallum Capital Group 的 Jeremy Hamblin。

And Ann, it's nice to have you on the team full time. I wanted to just start by getting a little bit of an understanding of you noted traffic trends remain challenged in that your May comps or your quarter-to-date comps were negative. Wanted to give -- get a sense of magnitude. And then as a comparison versus April, where you saw pretty solidly positive comp, your expectation in terms of compares for the remainder of the year. And whether or not you feel good about getting back to kind of a positive comp by the end of Q2 or waiting until the back half of the year?

安，很高興你全職加入團隊。我想首先稍微了解一下您指出的流量趨勢仍然面臨挑戰，因為您的 5 月份比較或本季度至今的比較為負。想要給予——獲得一種偉大感。然後與四月份進行比較，您看到了非常積極的比較，您對今年剩餘時間的比較的期望。您是否對在第二季度末恢復積極的薪酬感到滿意，還是等到下半年？

Okay, Jeremy, I'll start with that. It's Mike. So yes, I mean, April was a strong month for us, given the event we ran. We also had a little bit easier comparison that month. And as we walked into May, we are negative. Traffic trends continue to be kind of tough, both in-store and online. But we expected that really in the second quarter given what we had to do last year to really start clearing inventory. So we view Q2 as a transition And we think as we get into the back half, more of what we talked about in the call in terms of the assortment, in terms of the promotional planning and the impact of those events will take place more in Q3 and into Q4.

好的，傑里米，我就從這個開始吧。是邁克。所以，是的，我的意思是，考慮到我們舉辦的活動，四月對我們來說是一個強勁的月份。那個月我們也進行了更容易的比較。當我們走進五月時，我們持消極態度。無論是店內還是線上，客流量趨勢依然嚴峻。但考慮到我們去年必須做的事情才能真正開始清理庫存，我們預計真正會在第二季度發生。因此，我們將第二季度視為一個過渡，我們認為，當我們進入後半段時，我們在電話中討論的更多內容，包括品種、促銷計劃以及這些活動的影響，將更多地發生在Q3 並進入Q4。

The depth in the seasonal buys, the allocation of inventory investment into some of these other categories that really can drive more basket are going to be really important and we think we'll be better positioned. So Q2 is definitely a transition quarter. We've got a lot to play out. We've got some events coming up in June and July that will have a big effect on how we finish that quarter. But really, our focus has been on the back half and that's where we see the opportunity, both on the sales side and the margin side.

季節性購買的深度、將庫存投資分配到其他一些確實可以推動更多購物籃的類別將非常重要，我們認為我們將處於更好的位置。所以第二季度絕對是一個過渡季度。我們有很多事情要做。我們將在六月和七月舉辦一些活動，這些活動將對我們如何完成該季度產生重大影響。但實際上，我們的重點一直在後半部分，這就是我們在銷售方面和利潤方面看到機會的地方。

Although I will say, in Q2, margin is a big opportunity in Q2 just because of what we were doing last year to clear the inventory, and we hit such a low, I think our gross profit margin in Q2 last year was 18%-or-so.

雖然我會說，在第二季度，利潤率是第二季度的一個很大的機會，只是因為我們去年做了清理庫存的工作，而且我們達到瞭如此低的水平，我認為我們去年第二季度的毛利率是18%-或者。

Yes, that I was encouraged by what we believe was the customer voting on some of the voice changes and some of the product assortment changes that were in April. Also, I think that we had a -- did a better job of conversion in April. And as we build the conversion muscle through the back half of the year with what Mike just described in terms of our positioning, I'm encouraged by us being able to control what we can and get better at certain things as the year goes on.

是的，我們認為客戶對 4 月份的一些語音更改和一些產品分類更改進行了投票，這讓我感到鼓舞。另外，我認為我們在四月份的轉換方面做得更好。當我們按照邁克剛剛描述的定位，在今年下半年建立轉換力量時，我感到鼓舞的是，隨著時間的推移，我們能夠控制我們所能控制的事情，並在某些事情上做得更好。

That's helpful. Yes, it sounds like a good test case there in April. But Mike, you did get or kind of alluded to the point that I wanted to hone in on a little bit more, which was your gross margin, obviously, was really tough last year as you were clearing goods. Clearly, inventory levels are pretty tight and in much better shape. Sequentially, typically, Q2 is down from Q1. And I just wanted to get a sense maybe nearer term on where you expect gross margin to play out? I know that you have provided some color on merch margin, but my assumption is that you would see pretty significant improvement on overall gross margin in Q2, but maybe sequentially down from Q1. Any additional context or color you can share there?

這很有幫助。是的，這聽起來像是四月份的一個很好的測試案例。但是邁克，你確實得到了或者有點暗示了我想進一步磨練一點，這就是你的毛利率，顯然，去年你在清貨時真的很艱難。顯然，庫存水平相當緊張，而且狀況要好得多。通常情況下，Q2 的值會低於 Q1。我只是想了解一下您預計的毛利率在近期會達到什麼水平？我知道您已經提供了有關商品利潤率的一些信息，但我的假設是您會看到第二季度的整體毛利率有相當顯著的改善，但可能會比第一季度連續下降。您可以在那里分享任何其他背景或顏色嗎？

Yes. I think you're pretty much on it. I think our second quarter margin, just given seasonality in the business, second quarter is a little bit lower in terms of total sales dollars than Q1. So there's a deleveraging effect there. And it's also kind of a -- it's been more of a discount-heavy quarter historically. So that is true. sequentially down from Q1 is the right way to think about it. But on a year-over-year basis, I think we have more opportunity to grow the margin, both the merchandise margin and the gross margin in the second quarter and then for the rest of the year.

是的。我認為你對此很感興趣。我認為，考慮到業務的季節性，我們第二季度的利潤率就總銷售額而言比第一季度要低一些。因此存在去槓桿效應。從歷史上看，這也是一個折扣較多的季度。所以這是真的。從 Q1 開始依次向下是正確的思考方式。但與去年同期相比，我認為我們有更多機會提高第二季度以及今年剩餘時間的利潤率，包括商品利潤率和毛利率。

I think what we'd like to see is our ability to get back toward that 30% number for the year. And the sales and the margin mix will determine where that ultimately shakes out, but that's how we're positioning ourselves going into the back half year.

我認為我們希望看到的是我們有能力在今年恢復到 30% 的數字。銷售額和利潤率組合將決定最終的結果，但這就是我們在下半年的定位。

Got it. That's helpful. And then, as you've had a chance to assess the store portfolio, any changes in terms -- it sounds like you're pretty happy with the centers that you're operating in. Also sounds like you've had some opportunity maybe to renegotiate some of your lease deals. But I wanted to get a sense for -- is there any thought on relocations, additional closures? It looks like maybe you've closed a couple of locations quarter-to-date, but any color you can share on your store portfolio?

知道了。這很有幫助。然後，由於您有機會評估商店組合，任何條款上的變化 - 聽起來您對您所經營的中心非常滿意。而且聽起來您可能有一些機會重新談判您的一些租賃交易。但我想了解一下——是否有關於搬遷、額外關閉的想法？看起來您可能已經關閉了幾個季度迄今為止的門店，但是您可以在商店組合中分享任何顏色嗎？

Sure. We're definitely in what I would call maintenance mode in the store portfolio. We want to hold our store count up. There's a lot of changes here we talked about today that we think we'll have an enormous benefit on our store performance. And we don't -- where we see a store that's in a good retail center that's around a lot of our customers, we want to make a good deal and stay. And that's how we're looking at this.

當然。我們絕對處於我所說的商店組合維護模式。我們希望保持我們的商店數量。我們今天討論了很多變化，我們認為這些變化將為我們的商店業績帶來巨大的好處。但我們不會——當我們看到一家商店位於一個良好的零售中心，周圍有很多顧客時，我們希望達成一筆划算的交易並留下來。這就是我們看待這個問題的方式。

We are relocating a couple of stores this year. I think it's 2, and it will be later in the year as we accomplish those, but that would be better positioning successful markets that we're in. And we will do some house cleaning, I would call it, in terms of stores that are not as profitable or not profitable. And that will really come toward the end of the year. And I think it will look a lot like last year. We could close 10 to 15 stores, but they will largely be underperforming stores that we've concluded that's the right move for us to go ahead and exit.

今年我們將搬​​遷幾家商店。我認為是 2，我們將在今年晚些時候完成這些任務，但這將更好地定位我們所處的成功市場。我們將進行一些房屋清潔，我稱之為，就商店而言沒有盈利或沒有盈利。這將在今年年底真正實現。我認為今年看起來會很像去年。我們可以關閉 10 到 15 家商店，但它們大部分都是表現不佳的商店，我們認為這是我們繼續退出的正確舉措。

So that will come at the end of the year when most of our leases -- our lease actions actually have to be dealt with. A lot of our leases really coincide with the end of our fiscal year and we'll be working on that diligently for the rest of the year.

因此，這將在今年年底到來，屆時我們的大部分租賃——我們的租賃行動實際上都必須得到處理。我們的許多租賃確實與我們的財政年度結束時間一致，我們將在今年剩餘時間內努力解決這個問題。

Got it. Last one for me is you noted that advertising expense was down. Your overall SG&A was down year-over-year by a few million dollars. I wanted to get a sense in terms of the plan that you're going to execute here, how should we be thinking about that on a go-forward basis, particularly in the back half of the year? Are you still planning advertising expense down? Should that normalize? And how does that impact your SG&A overall on a year-over-year basis here as we get into the second half?

知道了。我的最後一個問題是您注意到廣告費用下降了。您的總體 SG&A 同比下降了幾百萬美元。我想了解一下您將在這裡執行的計劃，我們應該如何在未來的基礎上考慮這個計劃，特別是在今年下半年？您還在計劃削減廣告費用嗎？這應該正常化嗎？當我們進入下半年時，這對您的 SG&A 總體同比有何影響？

Yes. I'll provide some high level, and then I think we can talk also about how we're thinking about the spend itself and the effectiveness of it. But we did plan it down. In the first quarter, that difference is a little bit more striking than what you'll see for the rest of the year just because we were up against some dollars we spent on a branding test that ran in 2 markets. And we spent quite a bit of money on that. That was a rollout that we were testing.

是的。我將提供一些高層次的信息，然後我認為我們還可以討論我們如何考慮支出本身及其有效性。但我們確實計劃好了。在第一季度，這種差異比今年剩餘時間的差異更為顯著，因為我們在兩個市場進行的品牌測試上花費了一些資金。我們為此花了很多錢。這是我們正在測試的一項部署。

And we were up against that spend. So there's a chunk of that comparison I called out today that was related just to that. As we look forward, we're looking at roughly $13 million marketing spend this year. That compares to a little over $18 million last year. And we're constantly working on ways to make that spend more effective. And maybe I'll let Amy finish that.

我們面臨著這筆支出。所以我今天提到的比較中有很大一部分與此相關。展望未來，我們預計今年的營銷支出約為 1300 萬美元。相比之下，去年的金額略高於 1800 萬美元。我們一直在努力尋找使支出更加有效的方法。也許我會讓艾米完成這件事。

Jeremy, it's Amy. So as we think about the back half of the year, particularly as it pertains to advertising budget, we very intentionally preserve dollars for Q3 and Q4 when we will be in a better position in terms of our category mix and our overall value proposition that we want to speak to the customer. Right now in Q2, we're testing a few different tactics, things -- some from our path, some sort of future thinking ideas and marketing as we think about how to demand to drive demand.

傑里米，是艾米。因此，當我們考慮今年下半年時，特別是與廣告預算有關的時候，我們非常有意地為第三季度和第四季度保留資金，屆時我們將在品類組合和整體價值主張方面處於更好的位置。想與客戶交談。現在在第二季度，我們正在測試一些不同的策略，一些東西來自我們的道路，一些未來的思維想法和營銷，因為我們思考如何通過需求來推動需求。

Direct mail is one that we've got out in a test right now that I feel pretty good about. And then that's something that has worked for us in the past. So I feel good that we have the dollars that we need for the back half of the year as we think about that's the time for our sales peak to come into play. So I think we're well positioned there.

直郵是我們現在在測試中推出的一種方式，我感覺非常好。這就是過去對我們有用的東西。因此，我感覺很好，我們擁有下半年所需的資金，因為我們認為那是我們的銷售高峰發揮作用的時候。所以我認為我們在那里處於有利地位。

The next question comes from John Lawrence with Benchmark.

下一個問題來自 Benchmark 的 John Lawrence。

Would you talk a little bit about just starting off maybe about the culture and some of the changes and just a deeper dive into this? I know you explained it, but this merchandise changes and known the company for a long time, but just a sense of what that customer is going to see in the store this year at holiday maybe than what they saw last year? And just a little deeper dive into those segments a little bit, please.

您能否談談剛剛開始的文化和一些變化，以及更深入的探討？我知道你解釋過，但這種商品發生了變化，並且很早就知道這家公司了，但只是感覺到今年假期顧客在商店裡看到的東西可能會比他們去年看到的東西更好？請更深入地研究這些部分。

Sure, John. This is Ann. I'll start, and then I'll hand it over to Amy. So what I was hoping to make sure I got across is that the essence of what made Kirkland's successful in its inception is still true today, maybe even more so given the macroeconomic conditions. And that's really about the ever-changing seasonally relevant assortment. The customers relied on to be able to update their home décor affordably. No truer words. I mean I think they're more relevant today than they even were in the inception.

當然，約翰。這是安。我先開始，然後交給艾米。因此，我希望確保我明白的是，柯克蘭成立之初取得成功的本質在今天仍然是正確的，考慮到宏觀經濟條件，也許更是如此。這實際上與不斷變化的季節性相關品種有關。客戶希望能夠以經濟實惠的方式更新他們的家居裝飾。沒有更真實的話。我的意思是，我認為它們在今天比剛成立時更有意義。

We had some missteps. And the good news is we learned a lot in those missteps, right? So we want to take those learnings and move them forward, specifically into furniture. As it relates to the specifics around the back half of the assortment, I want Amy to talk about that, but I do feel very encouraged by the fact that the team has been able to pivot to the back half. And even if you look at 40% of the products being under $20 and speaking that value message, we believe those messages will drive traffic in both channels.

我們有一些失誤。好消息是我們從這些失誤中學到了很多，對吧？因此，我們希望吸取這些經驗並推動它們向前發展，特別是在家具領域。由於它涉及到後半部分的具體細節，我希望艾米談談這一點，但我確實對團隊能夠轉向後半部分這一事實感到非常鼓舞。即使您看到 40% 的產品價格低於 20 美元，並傳達了這一價值信息，我們相信這些信息將增加兩個渠道的流量。

And we also believe that we will surprise and delight our customer when they come into the store and see that they can buy gifting and decorating accessories, et cetera, at a price they can afford to enjoy their holidays. And so the pivot of that and the movement of the team and the speed by which they've been able to move is pretty impressive, and I think that we're well positioned for the back half. Amy, do you want to give a little bit more color around?

我們還相信，當顧客走進商店並看到他們可以以他們可以負擔得起的價格購買禮品和裝飾配件等時，我們會讓他們感到驚訝和高興。因此，這一點、球隊的移動以及他們移動的速度令人印象深刻，我認為我們在後半場的位置很好。艾米，你想給周圍多一點色彩嗎？

John, I know you're -- you've followed us for a long time, so you're really familiar with sort of our historic mixes in the back half that -- specifically in the holiday period. And so I think it will feel very familiar to you in terms of category mix and really focused on sort of those 3 key time frames of the holiday season, if you think about decorating, entertaining and gifting. And we have a long history in that, that has proven to be very successful for us in the past.

約翰，我知道你 - 你已經關注我們很長時間了，所以你真的很熟悉我們後半部分的歷史混音 - 特別是在假期期間。因此，我認為，如果您考慮裝飾、娛樂和送禮，那麼您會在類別組合方面感到非常熟悉，並且真正關注假期的這 3 個關鍵時間範圍。我們在這方面有著悠久的歷史，過去事實證明這對我們來說非常成功。

Over the past few years, I think the penetration that we've had in the furniture category has overshadowed some of that. We haven't walked away from that, but we need to get back to those historic levels of what the holiday business means to us in the back half of the year. So as we move into this year specifically, you'll feel the broader assortment in holiday, better depth in holiday items and then a heavier focus as Ann and Mike both mentioned in the items under $20, representing 40% of our assortment, which is also comparable to some of our best Q4s in the past.

在過去的幾年裡，我認為我們在家具類別中的滲透已經掩蓋了其中的一些。我們還沒有擺脫這一點，但我們需要在今年下半年恢復到假日業務對我們意味著什麼的歷史水平。因此，當我們具體進入今年時，您會感受到節日的種類更加廣泛，節日商品的深度更加豐富，然後更加關注，正如Ann 和Mike 在20 美元以下的商品中提到的那樣，占我們商品種類的40%，這是也可與我們過去一些最好的 Q4 相媲美。

Furniture, as Ann mentioned, we've learned a ton about. It's not going away for us. But I think the breadth of the assortment got too wide. And so we are laser-focused on staying in stock and the proven items within furniture that work because we do believe it's a foundation. If you think about our store format, our customer comes to us for inspiration and how she puts the looks together and decorates her room. So it's important to us, but we want to flip back to ensuring that we're heavily focused on how she decorates and celebrate sort of every moment throughout the year, specifically focused on Q4 right now.

正如安提到的，我們對家具了解了很多。對我們來說它不會消失。但我認為品種的範圍太廣了。因此，我們專注於保持庫存和家具中經過驗證的有效產品，因為我們確實相信這是一個基礎。如果您考慮一下我們的商店格式，我們的客戶會向我們尋求靈感，以及她如何將外觀組合在一起並裝飾她的房間。所以這對我們來說很重要，但我們想回過頭來確保我們重點關注她如何裝飾和慶祝全年的每個時刻，特別是現在的第四季度。

Great. And then secondly, you've learned a lot over the last few years about this direct sourcing. Has the furniture direct sourcing spilled over some other -- where are the learnings that you've picked up from that? And how does that go forward?

偉大的。其次，在過去幾年中，您已經學到了很多有關直接採購的知識。家具直接採購是否已經超越了其他一些——您從中學到的經驗教訓在哪裡？進展如何？

Sure. I'll take that one. It's Amy again. So our overall direct sourcing penetration, as you've heard us mention before, it's close to half of our business. And it's really pretty evenly spread across most of our categories. And so it definitely started heavily in more of our everyday home furnishings if you think about textiles and furniture. But even this year's holiday assortment has a pretty heavy penetration in direct importing. And so I would say our biggest learning and takeaway from that over the past few years has been, obviously, some improved IMU and margin out of the gate, better control of quality, better control of design and more unique products to Kirkland's.

當然。我會接受那個。又是艾米。因此，正如您之前聽到我們提到的那樣，我們的整體直接採購滲透率接近我們業務的一半。它確實相當均勻地分佈在我們的大多數類別中。因此，如果你考慮一下紡織品和家具，它肯定會在我們更多的日常家居用品中發揮重要作用。但即使是今年的節日產品，直接進口的滲透率也相當高。因此，我想說，過去幾年我們最大的學習和收穫顯然是對 IMU 和利潤的一些改進，更好的質量控制，更好的設計控制以及柯克蘭更獨特的產品。

And so we will continue to leverage that. I want it to be a really natural process for the team to ensure that we're buying the best product at the best cost from the correct vendor, whether that's a direct import or an indirect import. So we're really taking the opportunity now to make sure we're managing it holistically, but it's definitely given us across all of our categories a pretty solid footing to ensure that we have unique high-quality items at a great cost.

因此，我們將繼續利用這一點。我希望這對團隊來說是一個非常自然的過程，以確保我們以最優惠的成本從正確的供應商處購買最好的產品，無論是直接進口還是間接進口。因此，我們現在確實抓住了這個機會，以確保我們對其進行整體管理，但這無疑為我們所有類別的產品奠定了堅實的基礎，以確保我們以高昂的成本擁有獨特的高品質產品。

Great. Last one for me, Mike. When you look at the positive comp in April, obviously, was the promotion that hit gross margin to drive that if you x that out with a 4 comp in April, if you just split that month's out, did you see some of those cost leverage a little bit with a full comp? Or is it not the right way to look at that?

偉大的。邁克，我的最後一件事。當你看看4 月份的積極補償時，顯然，促銷活動影響了毛利率，如果你在4 月份用4 個補償來解決這個問題，如果你只是分割那個月的補償，你是否看到了其中一些成本槓桿一點點完整的比較？或者說這不是正確的看待方式？

Yes. We certainly gave some margins in that event, but it was productive. I mean we drove margin dollars. And with a 6 comp in April, we are able to leverage a lot of most, if not all, of the expense line items that have been deleveraging quite a bit with the negative comp. So you can see it. You can see that in play when you have a month like that, the flow-through is very strong.

是的。在那次事件中我們當然給了一些利潤，但它是富有成效的。我的意思是我們推動了保證金的增長。通過 4 月份的 6 個補償，我們能夠利用大部分（如果不是全部）費用項目，這些項目在負補償的情況下已經去槓桿化了相當多。所以你可以看到它。你可以看到，在玩遊戲的時候，當你有這樣的一個月時，流量是非常強的。

So if we can create some momentum here in the back half, that model is there for us. I mean if we can have a positive comp in that range, that's going to be a good year for us. Just given how much we've taken the fixed cost structure down, we're still able to operate. We still got all that we need. So the flow-through can be strong.

因此，如果我們能夠在後半場創造一些動力，那麼這種模式就適合我們。我的意思是，如果我們能夠在這個範圍內獲得積極的補償，那對我們來說將是美好的一年。只要考慮到我們已經降低了多少固定成本結構，我們仍然能夠運營。我們仍然得到了我們需要的一切。所以流量可以很強。

At this time, this concludes our question-and-answer session. I would like to turn the call back over to Ann for closing remarks.

至此，我們的問答環節就結束了。我想將電話轉回給安，讓她發表結束語。

Thank you, Andrew. We'd like to thank everyone for listening on today's call, and we look forward to speaking with you when we report our second quarter 2023 results. Thanks again for joining us.

謝謝你，安德魯。我們要感謝大家收聽今天的電話會議，我們期待在報告 2023 年第二季度業績時與您交談。再次感謝您加入我們。

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。