Brand House Collective Inc (TBHC) 2023 Q3 法說會逐字稿

Good morning, everyone, and thank you for participating in today's conference call to Discuss Kirkland's Financial Results for the third quarter ended October 28th, 2023.

大家早安，感謝您參加今天的電話會議，討論柯克蘭截至 2023 年 10 月 28 日的第三季度財務業績。

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. Following their remarks, we'll open the call for your questions.

今天加入我們的是 Kirkland's Home 臨時執行長 Ann Joyce；總裁兼營運長艾米·沙利文；執行副總裁兼財務長 Mike Madden；以及公司投資者關係外部總監 Cody Cree。在他們發表講話後，我們將開始電話詢問您的問題。

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. Cody, please go ahead.

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。科迪，請繼續。

Thanks, Jamie. 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. Those risks and uncertainties are more fully described in Kirkland's filings with the Securities and Exchange Commission.

謝謝，傑米。除本次電話會議中討論的歷史資訊外，公司管理層所做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有重大差異。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。

I'd like to remind everyone that this call will be available for replay through December 7, 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.

我想提醒大家，本次電話會議將在 2023 年 12 月 7 日之前進行重播。還可以透過今天新聞稿中提供的連結以及公司網站 kirklands.com 進行網路廣播重播。

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

現在，我想將電話轉給柯克蘭臨時執行長安‧喬伊斯 (Ann Joyce)。安，交給你了。

Thank you, Cody, and good morning, everyone. Before diving into our results, I want to thank all of our associates at Kirkland's for their ongoing commitment to the success of this brand. This team has spent the last several months assessing and taking corrective action across every area of the business, all while preparing for the important holiday season.

謝謝你，科迪，大家早安。在深入探討我們的表現之前，我要感謝柯克蘭的所有員工為該品牌的成功所做的持續承諾。該團隊在過去的幾個月裡對業務的各個領域進行了評估並採取了糾正措施，同時為重要的假期做好了準備。

We knew these efforts weren't going to be easy as we remained up against difficult macroeconomic headwinds, but I believe the actions we've taken and the ones we are planning can return us -- this company to profitability.

我們知道這些努力並不容易，因為我們仍然面臨著艱難的宏觀經濟逆風，但我相信我們已經採取的行動和我們正在計劃的行動可以讓我們——這家公司恢復盈利。

Back in June, we discussed returning to the roots of the Kirkland brand, while continuing to modernize and update where appropriate and where we've seen success. The teams have worked tirelessly to make significant changes to the product, marketing, operational effectiveness, expense management, and culture, and I want to thank them for all their efforts.

早在六月，我們就討論了回歸柯克蘭品牌的根源，同時在適當的地方和我們已經取得成功的地方繼續進行現代化和更新。這些團隊不知疲倦地工作，對產品、行銷、營運效率、費用管理和文化做出了重大改變，我要感謝他們所做的一切努力。

Our people are our greatest assets, and they are experts in their fields, they believe in this brand, and they love our customer. While the third quarter still had its challenges, we began seeing early signs that our strategic repositioning was resonating with our consumer. In fact, we experienced sequential improvements in traffic and comparable sales each month of the quarter, along with expanded gross margins.

我們的員工是我們最大的資產，他們是各自領域的專家，他們相信這個品牌，並且熱愛我們的客戶。儘管第三季仍然面臨挑戰，但我們開始看到早期跡象，表明我們的策略重新定位正在引起消費者的共鳴。事實上，我們每季的流量和可比銷售額都在連續改善，同時毛利率也有所擴大。

On the macro level, inflation remains a challenge for our customers, particularly in high-ticket categories, such as furniture and wall décor. However, we have been able to drive improvements in traffic and demand by focusing on lower-ticket items like decorative accessories, seasonal décor, and gifting. As a result, our omnichannel traffic declines improved from down 14% in August to down 6% in September, and down 4% in October.

在宏觀層面上，通貨膨脹仍然是我們客戶面臨的挑戰，特別是在家具和牆壁裝飾等高價類別中。然而，透過專注於裝飾配件、季節性裝飾和禮品等低價商品，我們已經能夠推動流量和需求的改善。因此，我們的全通路流量下降幅度從 8 月的 14% 下降到 9 月的 6% 和 10 月的 4%。

Our Q3 comparable sales improved from down 13% in August to down 9% in September to down 6% in October. In addition, our merchandise margin improved by 110 basis points, leading to an overall year-over-year improvement in Q3 gross profit margin of 130 basis points to 26.3%.

我們第三季的可比較銷售額從 8 月的下降 13% 改善到 9 月的下降 9%，再到 10 月的下降 6%。此外，我們的商品利潤率提高了110個基點，導致第三季毛利率整體年增130個基點至26.3%。

During the quarter, we continued to see other promising indicators from the pivot in our marketing strategy. It is mission-critical for us to reengage our loyal customer and we are very encouraged to see a 20% increase in lapsed customer reactivation during Q3.

在本季度，我們繼續看到行銷策略的其他有希望的指標。重新吸引忠實客戶對我們來說至關重要，我們非常高興地看到第三季流失客戶重新啟動量增加了 20%。

We are seeing sequential improvement in traffic and conversion with less discounting and improved profitability. We believe those trends are a result of the strategic shift in product mix and marketing.

我們看到流量和轉換率連續改善，折扣減少，獲利能力提高。我們相信這些趨勢是產品組合和行銷策略轉變的結果。

As we discussed on our last call, we have renewed our emphasis on seasonally relevant value home décor. We are encouraged by the performance of our decorative accessories category during Q3, which had an 8% increase in sales and a 23% increase in margin dollars. We also saw unprecedented early selling of our holiday product during Q3.

正如我們在上次電話會議中所討論的那樣，我們重新強調了與季節相關的價值家居裝飾。我們對第三季裝飾配件類別的表現感到鼓舞，該類別的銷售額成長了 8%，利潤率成長了 23%。在第三季度，我們也看到我們的假期產品史無前例的提前銷售。

Although we did have some margin impact from the lingering effects of the remaining higher priced assortments in furniture and wall décor that required higher levels of discounting, we believe that these will have less of an impact on our business as we continue to optimize our merchandise assortment.

儘管我們確實受到了家具和牆壁裝飾中剩餘價格較高的品種的揮之不去的影響，需要更高水平的折扣，但我們相信，隨著我們繼續優化我們的業務，這些對我們業務的影響將會較小。商品品種。

Additionally, as you might expect, in our holiday selling season, those larger-ticket categories have less of an impact on our business.

此外，正如您所預料的那樣，在我們的假期銷售季節，這些大件商品類別對我們的業務影響較小。

Shifting the focus to operations, we have continued to improve our discipline and accuracy in our inventory flow. We ended Q3 with 17% less inventory than last year, along with being in stock and on time with products for the holiday season, putting us in good position to meet the demands of our peak season.

我們將重點轉移到營運上，繼續提高庫存流程的紀律和準確性。第三季末，我們的庫存比去年減少了 17%，而且節日期間的產品庫存充足且準時，這使我們能夠很好地滿足旺季的需求。

Our supply chain efficiencies are continuing to increase through effective use of technology, contract negotiations, and process improvements. For example, we closed our two e-commerce hubs and have consolidated our e-commerce operations in our Jackson, Tennessee distribution center.

透過有效利用技術、合約談判和流程改進，我們的供應鏈效率不斷提高。例如，我們關閉了兩個電子商務中心，並整合了田納西州傑克遜配送中心的電子商務業務。

Cost containment remains critical for our operations and in our third quarter, we were able to reduce operating expenses by over $2 million compared to the prior year period. Overall, we've made significant strides shoring up the operations to support the strategic repositioning. There is still work to be done, but the changes we've made so far are working, and we are establishing a mindset across our teams, focused not just on cutting expenses, but on sustainable cost efficiencies through process change that we believe will benefit us for years to come.

成本控制對於我們的營運仍然至關重要，在第三季度，我們與去年同期相比減少了超過 200 萬美元的營運費用。總體而言，我們在支援營運以支援策略重新定位方面取得了重大進展。仍有工作要做，但我們迄今為止所做的改變正在發揮作用，我們正在整個團隊中建立一種心態，不僅關注削減開支，還關注透過我們相信將受益的流程變革來實現可持續的成本效率我們在未來的歲月裡。

As we continue to demonstrate our ability to execute our strategic repositioning, we expect to impact Q4 more significantly than originally anticipated. Our teams across the business have been reenergized by the progress we're making and we're better engaging our consumer base as they decorate, entertain, and shop for gifts this holiday season. As a result, we are encouraged by a low single-digit increase in comparable sales at a much-improved merchandise margin in November, which includes Black Friday.

隨著我們繼續展示我們執行策略重新定位的能力，我們預計對第四季度的影響將比最初預期的更大。我們整個業務的團隊都因我們所取得的進步而重新煥發活力，我們更好地吸引了我們的消費者群，讓他們在這個假期裝飾、娛樂和購買禮物。因此，我們對 11 月（包括黑色星期五）可比銷售額出現低個位數成長而商品利潤率大幅提高感到鼓舞。

Amy will speak more about this in her commentary. Reflecting on the initial phase of our turnaround strategy, we knew it would be a time of transition as we perform extensive deep dive into identifying near-term strategies and return to profitability and growth. Many of our initial changes are already delivering value as we continue to see improved trends and positive customer response.

艾米將在她的評論中更多地談論這一點。回顧我們扭虧為盈策略的初始階段，我們知道這將是一個過渡時期，因為我們將進行廣泛深入的研究，以確定近期策略並恢復獲利和成長。隨著我們不斷看到趨勢的改善和客戶的積極回應，我們最初的許多改變已經帶來了價值。

Overall, I remain confident in our team's ability to deliver on the expectations we have set for ourselves. We are committed and driven to return the company to profitability and ultimately deliver the value to our shareholders.

總的來說，我對我們團隊實現我們為自己設定的期望的能力仍然充滿信心。我們致力於並努力使公司恢復獲利，並最終為股東創造價值。

Now, I'd like to turn the call over to our President and COO, Amy Sullivan, to provide a more detailed commentary on the results tied to our strategic initiatives.

現在，我想將電話轉給我們的總裁兼營運長艾米·沙利文，請她對與我們的策略舉措相關的結果提供更詳細的評論。

Thank you, Ann, and good morning, everyone. I would like to echo Ann's gratitude to our entire organization. I've been incredibly impressed and encouraged by the dedication and willingness to pivot and deliver results this year. On our last call, I introduced five near-term strategic initiatives that we are executing again to return to profitable growth.

謝謝你，安，大家早安。我想表達安對我們整個組織的感激之情。今年轉向和交付成果的奉獻精神和意願給我留下了令人難以置信的印象和鼓舞。在我們上次的電話會議上，我介紹了我們正在再次執行的五項近期策略舉措，以恢復獲利成長。

While we expect these to evolve as we continue to reimagine the possibilities for Kirkland, I'd like to update you on the current progress of each initiative. First, we continue to strengthen our connection to our core customer and are optimistic by the progress we are making to drive engagement and acquisition. Prior to August, our digital marketing tactics were focused heavily on website conversion and generating traffic from prior online shoppers, and we saw an average 17% year-over-year decline in online traffic.

雖然我們期望這些隨著我們繼續重新構想柯克蘭的可能性而不斷發展，但我想向您介紹每項舉措的當前進展。首先，我們持續加強與核心客戶的聯繫，並對我們在推動參與和收購方面取得的進展感到樂觀。 8 月之前，我們的數位行銷策略主要集中在網站轉換和從先前的線上購物者產生流量，我們發現線上流量平均年減 17%。

So we made swift changes to our digital marketing strategy to focus on demographic and geographic targeting of core omnichannel customers to drive more visit online and into our brick-and-mortar locations. We were able to cut our e-commerce traffic decline from negative 17% in the first half of the fiscal year to only negative 3% in October.

因此，我們迅速改變了數位行銷策略，專注於核心全通路客戶的人口統計和地理定位，以吸引更多的線上訪問和實體店訪問。我們成功地將電子商務流量的降幅從本財年上半年的負 17% 減少到 10 月的負 3%。

On the brick-and-mortar front, we improved traffic from a decline of 11% during the first half of the fiscal year to down 4% in October. In November, traffic to our stores stayed positive for the first time in 2023. Most recently, we piloted an exclusive video SMS campaign, allowing 1 million SMS subscribers access to an exclusive holiday look book and coupon offer. We achieved the largest volume of clicks and highest revenue of any SMS campaign to-date.

在實體店方面，我們將流量從本財年上半年的下降 11% 改善至 10 月的下降 4%。 11 月，我們商店的客流量自 2023 年以來首次保持正增長。最近，我們試行了一項獨家視訊簡訊活動，讓 100 萬簡訊訂閱者獲得獨家假日造型書籍和優惠券優惠。我們實現了迄今為止所有簡訊活動中點擊量最大和收入最高的。

We are thrilled with the promising early results of this innovation and look forward to further utilizing this tool as we move into the new year. I could not be more pleased with the rapid turnaround of our marketing strategy and how it is progressing, recognizing there is more to be done.

我們對這項創新的早期成果感到非常興奮，並期待在進入新的一年時進一步利用這項工具。我對我們行銷策略的快速轉變及其進展感到非常滿意，因為我認識到還有更多工作要做。

Second, we have rebalanced our category mix and will be known for always something new as we deliver curated seasonally relevant home decor at a great price. In the third quarter, we were still transitioning our category mix that began to see promising results from our strategy shifts as the quarter progressed. Most notably, Decorative Accessories delivered an 8% sales increase in the third quarter and best represents our future growth potential and value décor.

其次，我們重新平衡了我們的品類組合，並將始終以新事物而聞名，因為我們以優惠的價格提供精心策劃的季節性相關家居裝飾。在第三季度，我們仍在轉變我們的品類組合，隨著季度的進展，我們的策略轉變開始看到有希望的結果。最值得注意的是，裝飾配件第三季的銷售額成長了 8%，最能代表我們未來的成長潛力和裝飾價值。

We are also pleased with the season-to-date results in our Christmas assortment, which has delivered a 3% sales increase. We have reintroduced our gifting category for this holiday season, which we anticipate will drive incremental sales for this year's fourth quarter, and we expect this to be a year-round business in 2024.

我們也對聖誕系列迄今為止的銷售業績感到滿意，銷售額增長了 3%。我們在這個假期重新推出了禮品類別，我們預計這將推動今年第四季的銷售增量，我們預計這將成為 2024 年的全年業務。

We are encouraged by the customer response to these pivots, which position us to drive more profitable demand. Third, with our customer at the center, we are focused on providing a seamless omnichannel experience that meets her whenever and wherever she wants to shop.

我們對客戶對這些關鍵點的反應感到鼓舞，這使我們能夠推動更有利可圖的需求。第三，以客戶為中心，我們致力於提供無縫的全通路體驗，滿足她隨時隨地購物的需求。

We have a new operations leader in place who is igniting our entire field through engagement, contest, and incentives. Our incredible field team delivered a 248-basis point increase in conversion during the third quarter, and I'm happy to share that trend is continuing into Q4 as they drove a low single-digit positive sales comp increase in November.

我們任命了一位新的營運領導者，他透過參與、競爭和激勵來點燃我們整個領域的活力。我們令人難以置信的現場團隊在第三季度實現了248 個基點的轉換率成長，我很高興地告訴大家，這一趨勢正在持續到第四季度，因為他們在11 月份推動了低個位數的正銷售成長。

As we build our long-term strategy, we have begun evaluating our entire store portfolio to assess real estate, customer experience, and localization in our product and marketing strategies.

在製定長期策略時，我們已開始評估整個商店組合，以評估我們的產品和行銷策略中的空間、客戶體驗以及在地化。

Shifting focus to our e-com business. We are pleased with our overall conversion improvement, which increased 17 basis points year-over-year. Since our last call, we completed an end-to-end assessment of our overall site experience. Through this process, we have outlined the limitations of our current site, along with the cost to maintain latest technology. As a result, we are building a new ecommerce strategy, defining its role in driving sales and profitability through a modernized customer experience. There will be more to come on this initiative as we further build out our plan.

將重點轉向電子商務業務。我們對整體轉換率的改善感到滿意，較去年同期成長了 17 個基點。自上次通話以來，我們完成了整體網站體驗的端到端評估。透過這個過程，我們概述了目前站點的局限性，以及維護最新技術的成本。因此，我們正在製定新的電子商務策略，定義其透過現代化的客戶體驗推動銷售和獲利能力的作用。隨著我們進一步製定計劃，這項舉措將會有更多內容。

Fourth, we are a valued specialty retailer and must execute with efficiency and consistency in our end-to-end operations. It is imperative for us to remain disciplined in our operational effectiveness through supply chain efficiency, tech enablement, and cost containment.

第四，我們是一家有價值的專業零售商，必須有效率、一致地執行我們的端到端營運。我們必須透過供應鏈效率、技術支援和成本控制來維持營運有效性。

With more normalized levels of inventory this year, our supply chain has stabilized, allowing us with the help of process improvements in labor management to achieve approximately $500,000 in savings in Q3. In addition, we have enhanced our ecommerce demand forecasting model, and our team has done an excellent job managing increased ordering unit demand without disrupting the customer experience.

隨著今年庫存水準更加正常化，我們的供應鏈已經穩定，借助勞動力管理流程改進，我們在第三季度節省了約 50 萬美元。此外，我們也增強了電子商務需求預測模型，我們的團隊在管理不斷增加的訂購單位需求方面做得非常出色，同時又不影響客戶體驗。

As we look ahead to our future, we are committed to the discipline in our overall cost structure to improve liquidity, returning to historic adjusted EBITDA levels, and strategically investing capital for the long-term growth of the brand.

展望未來，我們致力於嚴格控制整體成本結構，以提高流動性，恢復歷史調整後的 EBITDA 水平，並為品牌的長期成長進行策略性資本投資。

Last, but certainly not least, our associates are revitalizing our company culture day-by-day. We are committed to our customers, our shareholders, and our team members as we drive our results, remain nimble in our strategy, and celebrate our wins together.

最後但同樣重要的是，我們的員工每天都在振興我們的公司文化。我們致力於我們的客戶、股東和團隊成員，推動我們取得成果，保持靈活的策略，並共同慶祝我們的勝利。

I am encouraged by the continuous improvement now visible in our month-to-month trend in sales and profitability. As we look ahead to 2024, I'm excited by the potential as we realize the full year impact of these strategic initiatives. We remain committed to delivering long-term value to our customers and shareholders as we reimagine the future of Kirkland.

我對我們的銷售和盈利能力逐月趨勢中可見的持續改善感到鼓舞。展望 2024 年，我對潛力感到興奮，因為我們意識到這些策略舉措對全年的影響。在重新構想柯克蘭的未來時，我們仍然致力於為客戶和股東提供長期價值。

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

現在我想將電話轉給麥克，他將對我們第三季的財務業績和今年剩餘時間的前景提供詳細的評論。

Mike, over to you.

麥克，交給你了。

Thank you, Amy, and good morning, everybody. For the third quarter, net sales were $116.4 million compared to $131 million in the prior year quarter, which included a 5% decline in the average store count and a comparable sales decline of 9.2%. The decrease in sales was driven by decline in the average ticket as well as traffic declines in both stores and online, particularly or partially offset by an increase in conversion rates in both channels. Breaking down sales within the quarter, comps were down 13% in August, down 9% in September, and down 6% in October.

謝謝艾米，大家早安。第三季淨銷售額為 1.164 億美元，去年同期為 1.31 億美元，其中平均商店數量下降 5%，可比銷售額下降 9.2%。銷售額下降的原因是平均門票下降以及商店和網路流量下降，尤其或部分被兩個通路轉換率的上升所抵消。以本季銷售額細分，8 月年減 13%，9 月下降 9%，10 月下降 6%。

E-commerce was 27% of total sales in the current and the prior year quarter. E-commerce comp sales were down 8.5% and store comps were down 9.5%. From a merchandise perspective, the largest sales declines were in furniture, wall décor, and harvest. These declines were partially offset by gains in decorative accessories and strong early selling of Christmas.

電子商務佔本季和去年同期總銷售額的 27%。電子商務銷售額下降 8.5%，商店銷售額下降 9.5%。從商品角度來看，銷售額下降幅度最大的是家具、牆壁裝飾和收穫品。這些下降被裝飾配件的增長和聖誕節早期的強勁銷售所部分抵消。

Sales performance was relatively consistent across geographic regions with notably better results in Florida and weaker results in Texas and the West. Gross profit margin increased 130 basis points to 23 -- or 26.3% of sales compared to 25% in the prior year quarter.

各地理區域的銷售業績相對一致，佛羅裡達州的銷售業績明顯較好，而德州和西部地區的銷售業績則較差。毛利率成長 130 個基點，達到 23，佔銷售額的 26.3%，而去年同期為 25%。

The five components of this year-over-year change were as follows; first, merchandise margin increased 110 basis points to 54% versus 52.9% in the prior year quarter. Lower freight rates and inventory levels, along with improved product flow drove the increase in merchandise margin. Second, central distribution costs decreased by 110 basis points to 6.1%. The decrease as a percentage of sales is largely due to the reversal of capitalized costs in the prior year as inventory levels declined from Q2 to Q3.

這一同比變化的五個組成部分如下：首先，商品利潤率成長 110 個基點，達到 54%，去年同期為 52.9%。較低的運費和庫存水準以及產品流的改善推動了商品利潤率的增加。其次，中央配送成本下降 110 個基點至 6.1%。佔銷售額百分比的下降主要是由於庫存水準從第二季度下降到第三季度，導致上一年資本化成本的逆轉。

With a normalized inventory flow this year, capitalized costs increased slightly along with the seasonal inventory buildup. On a cash basis, distribution center costs were $500,000 lower than the prior year quarter, reflecting improved labor efficiency and lower inventory storage costs. Third, occupancy costs increased 130 basis points to 12.1%. This increase as a percentage of sales is primarily due to deleverage from the sales decline. The actual cash rent is down slightly versus the prior year quarter.

隨著今年庫存流動的正常化，資本化成本隨著季節性庫存的增加而略有增加。以現金計算，配送中心成本比去年同期低 50 萬美元，反映出勞動效率的提高和庫存儲存成本的降低。第三，入住成本增加130個基點至12.1%。佔銷售額百分比的增加主要是由於銷售額下降的去槓桿化所致。實際現金租金與去年同期相比略有下降。

Fourth, outbound freight costs, including both store and e-commerce shipping expenses were 8% of sales, flat compared to the prior year quarter. This comparison reflects a reduction in shipments to the stores in the current year, resulting from lower inventory levels, offset by deleverage from the overall sales decline.

第四，出境運費（包括商店和電子商務運費）佔銷售額的 8%，與去年同期持平。這項比較反映出，由於庫存水準較低，本年度向商店出貨的減少，但被整體銷售下降的去槓桿化所抵消。

And lastly, depreciation included in cost of sales decreased by 40 basis points to 1.5%. Total operating expenses, excluding impairment charges, declined by $2.1 million to $37 million or 31.7% of sales compared to $39.1 million or 29.9% of sales in the prior year quarter.

最後，包含在銷售成本中的折舊下降了 40 個基點，達到 1.5%。總營運費用（不包括減損費用）下降了 210 萬美元，至 3,700 萬美元，佔銷售額的 31.7%，而去年同期為 3,910 萬美元，佔銷售額的 29.9%。

The decrease in dollars was primarily the result of reductions in corporate salaries and overhead, along with a lower store count. These decreases were partially offset by planned increases in store payroll hours to support the buildup to our holiday selling season.

美元的減少主要是由於公司工資和管理費用的減少以及商店數量的減少。這些減少被計劃增加商店工資發放時間以支持假日銷售季節的增加所部分抵消。

Impairment charges related to underperforming stores and technology assets were $0.3 million for the quarter compared to $0.2 million for the prior year quarter. Adjusted EBITDA, excluding impairment, stock compensation, and other minor expenses, was negative $3.2 million versus negative $1.7 million in the prior year quarter. This was primarily the result of weaker operating performance during August and September.

本季與業績不佳的商店和技術資產相關的減損費用為 30 萬美元，而去年同期為 20 萬美元。調整後的 EBITDA（不包括減損、股票補償和其他小額費用）為負 320 萬美元，而去年同期為負 170 萬美元。這主要是八月和九月經營業績疲弱的結果。

During October, our adjusted EBITDA loss was lower than the prior year as margins improved. Quarter-over-quarter, our operating loss was flat at $6.7 million. Net interest expense was $1.2 million for the quarter compared to $0.7 million in the prior year quarter due to higher interest rates. Our income tax rate for the quarter was a benefit of 16.8% compared to an expense of 0.8% in the prior year period.

十月份，隨著利潤率的提高，我們調整後的 EBITDA 損失低於去年同期。與上一季相比，我們的營運虧損持平於 670 萬美元。由於利率上升，本季淨利息支出為 120 萬美元，而去年同期為 70 萬美元。我們本季的所得稅率為 16.8%，而去年同期的所得稅率為 0.8%。

From a balance sheet perspective, our inventory levels continue to be under control and in line with our planned inventory flow. We ended the quarter with $105.2 million in inventory, that was a 17% decrease from $126.3 million at the end of the prior year period. We had borrowings outstanding of $62 million compared to $60 million in the prior year quarter.

從資產負債表的角度來看，我們的庫存水準繼續受到控制並符合我們計劃的庫存流量。本季末，我們的庫存為 1.052 億美元，比上年末的 1.263 億美元減少了 17%。我們的未償還借款為 6,200 萬美元，而去年同期為 6,000 萬美元。

Moving to our outlook for the remainder of the year. Early in the fourth quarter, the environment remains challenging, but our topline and margin trends have improved. For November, we recorded a low single-digit positive sales comp along with a strong increase in merchandise margin. As a reminder, November was the toughest monthly sales comparison to last year when comps were flat. Last year, December comps were down 11% and January comps were down 8%.

轉向我們對今年剩餘時間的展望。第四季初，環境仍然充滿挑戰，但我們的營收和利潤率趨勢有所改善。 11 月份，我們的銷售業績錄得低個位數正值，同時商品利潤率強勁成長。提醒一下，11 月是與去年相比最艱難的月度銷售，當時的比較持平。去年，12 月的比較下降了 11%，1 月的比較下降了 8%。

Traffic also turned positive in November, but we remain cautious about assuming the same trend for the rest of the quarter, given continued macro uncertainty. Customers continue to scale back on higher-ticket purchases, but our seasonal offering has been well received thus far as shown in our customer conversion rate and our merchandise margin improvement.

11 月客流量也轉為正值，但鑑於宏觀不確定性持續存在，我們對本季剩餘時間的相同趨勢仍持謹慎態度。客戶繼續減少高價購買，但迄今為止，我們的季節性產品受到了好評，這從我們的客戶轉換率和商品利潤率的改善中可見一斑。

With less inventory to clear compared to last year, we expect the merchandise margin improvement to continue for the remainder of the quarter, supply chain costs continue to normalize, and we are managing operating expenses very tightly. For the year-to-date, operating expenses are down approximately $10 million versus the same nine months for 2022.

與去年相比，由於需要清理的庫存減少，我們預計商品利潤率將在本季度剩餘時間內持續改善，供應鏈成本繼續正常化，並且我們正在非常嚴格地管理營運費用。今年迄今為止，營運費用與 2022 年同期 9 個月相比減少了約 1,000 萬美元。

We expect operating expenses to be down again in Q4 versus the prior year when adjusted for the additional week in this year's retail calendar. As a result, we expect a solid year-over-year improvement in adjusted EBITDA for the fourth quarter. In the fourth quarter of 2022, adjusted EBITDA was $2.6 million.

我們預計，根據今年零售日曆中額外一周的情況進行調整後，第四季度的營運支出將比去年同期再次下降。因此，我們預計第四季度調整後 EBITDA 將比去年穩定改善。 2022 年第四季度，調整後 EBITDA 為 260 萬美元。

Looking beyond this year, our goal is to get back to mid to high single-digit adjusted EBITDA margins, which has been our historical average. As Amy outlined, we are beginning to see improvements in sales and merchandise margin through our pricing and promotional strategies. We have already taken steps to enhance our sourcing capabilities, improve supply chain efficiencies, and remove fixed costs from our distribution facilities. We are addressing additional ways to streamline our operating cost structure. Significant reductions have been achieved over the last several years, but we believe there are additional areas to address and redeploy. The combination of these factors provides the pathway to returning to historical adjusted EBITDA levels. In the coming quarters, we will provide updates on our progress in each of these areas.

展望今年，我們的目標是恢復到中高個位數的調整後 EBITDA 利潤率，這一直是我們的歷史平均值。正如艾米所概述的，我們開始透過我們的定價和促銷策略看到銷售和商品利潤的改善。我們已經採取措施增強採購能力、提高供應鏈效率並消除分銷設施的固定成本。我們正在尋找其他方法來簡化我們的營運成本結構。過去幾年已經實現了大幅削減，但我們認為還有其他領域需要解決和重新部署。這些因素的結合提供了恢復歷史調整後 EBITDA 水準的途徑。在接下來的幾個季度中，我們將提供有關每個領域進展的最新資訊。

Lastly, I'd like to reiterate our priorities for capital allocation. We continue to focus first on reducing borrowings and reestablishing a level of liquidity that allows us to operate the business with more flexibility. As of today, we have reduced our borrowings from $62 million at the end of Q3 to $35 million. Given the current uncertain economic conditions, we are evaluating ways to expand our borrowing capacity to ensure that we have the liquidity cushion to support and accelerate our turnaround efforts. Once that milestone is achieved, we plan to focus our efforts on reinvesting in the business. And from there, we can start looking at share repurchases and dividends as additional ways to return value to our shareholders.

最後，我想重申我們資本配置的優先事項。我們繼續首先專注於減少借款和重建流動性水平，使我們能夠更靈活地經營業務。截至今天，我們已將借款從第三季末的 6,200 萬美元減少到 3,500 萬美元。鑑於當前不確定的經濟狀況，我們正在評估擴大借貸能力的方法，以確保我們擁有流動性緩衝來支持和加速我們的扭虧為盈。一旦實現這一里程碑，我們計劃集中精力對業務進行再投資。從那時起，我們可以開始考慮股票回購和股息，作為向股東回報價值的其他方式。

That concludes my prepared remarks. I'll hand it back over to Ann for her closing remarks and then we'll move to Q&A. Ann?

我準備好的發言就到此結束。我會將其交回給 Ann 進行結束語，然後我們將進行問答。安？

Thank you, Mike. Before taking your questions, I wanted to reiterate my thanks to our dedicated associates for what they have accomplished in such a short period of time. To have achieved the improvements that we've talked about today took a tremendous amount of effort and determination.

謝謝你，麥克。在回答你們的問題之前，我想再次感謝我們敬業的員工在如此短的時間內所取得的成就。為了實現我們今天所討論的改進需要付出巨大的努力和決心。

Although there is still much more to achieve, it is important to acknowledge the work that has improved our business trend in such a condensed timeframe. Our improved results are energizing our organization, and we have no plans of slowing down. We're heading into 2024 with a renewed sense of optimism and a plan that we believe will translate into improved financial results. I greatly appreciate all our stakeholders and the support we continue to receive as we strategically reposition the business amidst the challenging consumer environment. I firmly believe that our patients will pay off in the long run.

儘管還有很多工作要做，但重要的是要承認我們在如此短的時間內改善了我們的業務趨勢的工作。我們改進的成果正在為我們的組織注入活力，我們沒有放慢腳步的計劃。我們帶著新的樂觀情緒和我們相信將轉化為改善財務表現的計劃邁入 2024 年。我非常感謝我們所有的利害關係人以及我們在充滿挑戰的消費者環境中策略性地重新定位業務時所持續獲得的支持。我堅信，從長遠來看，我們的患者將會得到回報。

Operator, we're now ready for Q&A.

接線員，我們現在準備好進行問答了。

Thank you, ma'am. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. (Operator Instructions) Jeremy Hamblin, Craig-Hallum.

謝謝你，女士。女士們、先生們，現在我們開始問答環節。 （操作員說明）Jeremy Hamblin，Craig-Hallum。

Thanks and congratulations on the improved results and progress against your strategic initiatives. I wanted to start with getting a better understanding of what you're seeing or what you're expecting on the margin front, particularly, you noted that you expect merch margin to continue to improve here in Q4. And I wanted to just get a sense of the potential magnitude around that. Last year, Q4 was pretty tough. There were a lot of markdowns. You made really nice progress here in Q3 to see gross margin up 140 bps.

感謝並祝賀您的策略舉措所取得的改進成果和進展。我想先更了解您所看到的或您對利潤率的期望，特別是，您指出您預計商品利潤率將在第四季度繼續改善。我只是想了解這方面的潛在影響。去年第四季相當艱難。有很多降價。你們在第三季取得了非常好的進展，毛利率上升了 140 個基點。

And as we look at Q4, I'm wondering in context of if you saw like a peak in Q4 gross margin of just over 33% and if we go back to 2019, it was like 29.8%. I wanted to just see if you could have a little context for what we think Q4 of this year could look like, whether that's the range or whatnot?

當我們回顧第四季時，我想知道第四季度毛利率是否達到了 33% 以上的峰值，如果我們回到 2019 年，則約為 29.8%。我想看看您是否可以了解我們認為今年第四季的情況，無論是範圍還是其他什麼？

Thanks, Jeremy. It's Mike. I'll start and others may want to chime in. I think the one big point I would make going into this is if you compare this year to last year, the way we're coming into this quarter, we came in with a much higher IMU, so were going in margin is better. And that's in part due to some of our efforts with our vendor base, but it's also due to the freight rates being lower. So we're coming in in a stronger position.

謝謝，傑里米。是麥克。我會開始，其他人可能想插話。我認為我要說的一個重要觀點是，如果你將今年與去年進行比較，我們進入本季度的方式，我們進來了很多IMU 越高，因此裕度就越好。這部分是由於我們在供應商基礎上所做的一些努力，但也是由於運費較低。所以我們處於更有利的地位。

The increase we saw in November was significant. It was a nice improvement from where we had been running. And that had actually started to build through the third quarter. So we really started early in the fourth -- in the third quarter with some pretty heavy markdowns still moving through a lot in some of these other categories, not fully equipped with some of the changes that we've made in the assortment, and we're in a better position on that front going into Q4.

我們在 11 月看到的成長非常顯著。與我們之前的情況相比，這是一個很好的改進。事實上，這種情況在第三季就已經開始形成。因此，我們確實在第四季度初期就開始了，在第三季度，在其他一些類別中，一些相當大的降價仍在進行，沒有完全適應我們在品種中所做的一些變化，我們進入第四季度，我們在這方面處於更好的位置。

So, those factors, I think, give us that feeling that we have a better chance to improve on that as we move through Q4. And yes, we were still clearing a lot of inventory into December last year that we just don't have to do this year. On the other components, we continue to improve our supply chain efficiency. I think that's going to be in our favor in the fourth quarter.

因此，我認為這些因素讓我們感覺在第四季度我們有更好的機會來改善這一點。是的，去年 12 月我們仍在清理大量庫存，但今年我們不必這樣做。在其他方面，我們持續提高供應鏈效率。我認為這對我們第四季有利。

And if we can get some topline momentum to continue through the rest of the quarter, I think we would get back not to those historical levels, but certainly into that 30% range in the fourth quarter on gross profit, and it will depend on the leverage and the sales results as to how well we do, plus or minus. But I just think the overall positioning is better coming into this year as you look at that to last year.

如果我們能夠在本季度剩餘時間內獲得一些營收動力，我認為我們不會回到歷史水平，但肯定會在第四季度毛利達到 30% 的範圍，這將取決於槓桿率和銷售結果決定了我們的業績，無論是正值還是負值。但我只是認為，從去年的情況來看，今年的整體定位會更好。

That's great. And then you also noted in your remarks that you did have some larger-ticket items that you may still have in your inventory and looking to move on from, although they're not key items here during the holiday period. It did sound like there was still some items maybe to move through as we get into 2024. And I wanted to just see if you could add a little context around what our expectation should be on that and how long do you think some of that maybe aged inventory might linger?

那太棒了。然後您還在評論中指出，您確實有一些大件商品，您的庫存中可能仍然有這些商品，並且希望繼續使用，儘管它們不是假期期間的關鍵商品。聽起來確實有一些項目可能需要在我們進入 2024 年時完成。我想看看您是否可以添加一些背景信息來說明我們對此的期望應該是什麼，以及您認為其中一些項目可能需要多長時間陳舊庫存可能會持續存在？

Hi Jeremy, it's Amy. I'll take that and Mike can layer on if he wants to add anything else. The two areas in particular where we have higher ticket AUR inventory sort of carrying from the earlier part of the year would be in furniture and sort of all things wall, wall décor and art.

嗨，傑里米，我是艾米。我會接受這個，如果麥克想添加其他內容，他可以繼續補充。今年早些時候，我們擁有較高 AUR 庫存的兩個領域是家具以及所有牆壁、牆壁裝飾和藝術品。

And those categories have always been part of the Kirkland's business and will always be a part of the Kirkland's business. But as you know, earlier in the year, they were a significant penetration to the total, and that has continued to dwindle as we get into the back part of the year. I'm really comfortable with where we are in furniture as we move through the end of this year and into next year, and I think we'll be at the right balance.

這些類別一直是柯克蘭業務的一部分，並將永遠是柯克蘭業務的一部分。但如您所知，今年早些時候，它們在總體中的滲透率很高，隨著進入今年下半年，滲透率繼續下降。隨著今年年底和明年的到來，我對家具業的現狀感到非常滿意，我認為我們將保持適當的平衡。

There's a little bit of residual particularly in the wall areas, and that's a bit of our higher ticket items from earlier in the year as well as just an overall macro decline in that category, but not significant enough that I'm terribly worried about it having a 2024 impact.

有一點殘留，特別是在牆壁區域，這是我們今年早些時候的一些高價商品，也是該類別的整體宏觀下降，但還不夠嚴重，以至於我非常擔心。產生2024年的影響。

As we move into this post-Christmas period, not only will we have new spring products coming in to help bring up our IMU, but we'll also use that time as sort of the post-holiday clearance period to really strategically get focused on some of that clearance hangover from earlier in the year and try to get out of that and be clean going into 2024.

當我們進入聖誕節後時期時，我們不僅會推出新的春季產品來幫助提升我們的 IMU，而且我們還將利用這段時間作為假期後的清倉期，真正戰略性地專注於一些今年早些時候的清理遺留問題，並試圖擺脫這種情況，並在進入2024 年之前保持乾淨。

Got it. That's great. And then I wanted to move on to your marketing. So you've made some really nice pivots here on your strategy and how that messaging is being delivered to your customer base. I wanted to understand in terms of your marketing budget for 2023, I think that was down pretty meaningfully on a year-over-year basis as you guys reduce cost. I wanted to get an understanding of what that budget looks like here in Q4? And then as we look ahead into planning for 2024, what should we be expecting in terms of how that marketing budget might compare in '24 versus '23?

知道了。那太棒了。然後我想繼續你的行銷。因此，您在策略以及如何將訊息傳遞給客戶群方面做出了一些非常好的轉變。我想了解你們 2023 年的行銷預算，我認為隨著你們降低成本，這項預算年比大幅下降。我想了解第四季的預算是什麼樣的？然後，當我們展望 2024 年的規劃時，我們應該對「24 年」和「23 年」的行銷預算進行比較有何期待？

So, Jeremy, it's Amy again. Right now, we are running around 2.5% to 3% of sales for our marketing budget and we intend to hold that flat as we move into 2024. The difference is we're deploying it in more successful places. And so we've recalibrated how we're spending the marketing budget that we have and testing and learning our way into funding additional things.

傑里米，又是艾米。目前，我們的行銷預算約為銷售額的 2.5% 至 3%，我們打算在進入 2024 年時保持這一水平。不同之處在於我們將其部署在更成功的地方。因此，我們重新調整瞭如何支出現有的行銷預算，並測試和學習了為其他事情提供資金的方式。

I mentioned during my script, the new SMS program that we're doing, we've had a lot of success there. So, that's opportunity for next year where we might put some additional funding there and really trying to think of our marketing budget similarly to an open to buy that a merchant would have and as we test and learn things that are working, funding it a little more.

我在劇本中提到，我們正在開發的新簡訊程序，我們在那裡取得了巨大的成功。因此，這是明年的機會，我們可能會在那裡投入一些額外的資金，並真正嘗試將我們的行銷預算與商家的開放購買類似，當我們測試和學習有效的東西時，為其提供一點資金更多的。

It's -- I'd love to grow that budget ever so slightly as sales grow to make sure that we're continuing to capitalize on the positive traffic that we're seeing right now, but we'll stay really close to it and really play it month-by-month.

隨著銷售額的成長，我希望稍微增加預算，以確保我們繼續利用我們現在看到的積極流量，但我們會非常接近它，並且真的每月玩一次。

And Jeremy, on the numbers side of that, I mean, we are down about $5 million, give or take, year-over-year, 2023 to 2022. And in the fourth quarter, it's pretty flat. I mean we spend a little bit more in the back half, as you would imagine, and a little bit more in the fourth quarter to support the sales. But it's not going to be much different than what you've seen each quarter this year.

傑里米（Jeremy），就數字而言，我的意思是，從 2023 年到 2022 年，我們同比減少了約 500 萬美元。在第四季度，情況相當平穩。我的意思是，正如您想像的那樣，我們在後半段花費了更多的錢，並且在第四季度花費了更多的錢來支持銷售。但這與今年每季所看到的情況不會太大不同。

Great. And then I wanted to also just understand, so through -- it looks like you've seen some stability here in the store fleet, wanted to just confirm, as we make this progress back into a positive comp trends and some of the changes that you've made overall. First, wanted to understand whether or not you felt like there was any additional acceleration of store closures you had to do as we head into 2024 or if we kind of have just kind of some of the typical closures? One.

偉大的。然後我也想了解，所以通過 - 看起來您已經在商店隊伍中看到了一些穩定性，想確認一下，因為我們使這一進展回到了積極的競爭趨勢以及一些變化你總體上已經做到了。首先，想了解您是否認為在 2024 年到來之際，您必須進一步加速關閉商店，或者我們只是進行了一些典型的關閉？一。

And then part two would be just in terms of the balance sheet and how you would expect to utilize your credit line here in 2024, there's kind of a natural ebb and flow related to balance sheet and inventory needs as we progress through the year?

第二部分將討論資產負債表以及您預計如何在 2024 年利用您的信貸額度，隨著這一年的進展，與資產負債表和庫存需求相關的自然潮起潮落？

So you've already made some really nice paydowns on that debt line here in Q4, but I wanted to just understand what you thought you might need for your peak use of that credit line into 2024 and presumably similar timing where that maxes out in Q3?

因此，您已經在第四季度的債務額度上支付了一些非常好的還款，但我只想了解您認為您可能需要什麼才能在2024 年達到該信貸額度的峰值使用，並且大概在第三季度達到最大值的時間類似？

Yeah. Jeremy, I'll start with the store question. I think the way to think about store fleet right now is we are maintaining. There are going to be a few closings in January. I would expect to see eight or nine closings in January, but I would consider that typical housekeeping and dealing with rent or lease expirations and renewals. So you'll see that.

是的。傑里米，我將從商店問題開始。我認為現在考慮商店車隊的方式是我們正在維護。一月份將會有一些關閉。我預計一月份會看到八到九處成交，但我會考慮典型的內務管理以及處理租金或租約到期和續約的情況。所以你會看到這一點。

But largely, we are looking at this as let's improve our position as well as we can in each location and let's consider each location a show play for us that really drives business to those stores, but also in an omnichannel way. So those stores are really important for the ecommerce side of the business as well.

但在很大程度上，我們正​​在考慮這一點，讓我們盡可能地提高我們在每個地點的地位，讓我們將每個地點視為我們的一場演出，真正推動這些商店的業務，而且是以全通路的方式。因此，這些商店對於電子商務方面也非常重要。

So we are maintaining. We would like to get to a point, and that leads into your second question about the liquidity and the balance sheet. We certainly want to build our liquidity position such that we can play a little more offense than we're playing right now. And that's why I cited that in the prepared remarks. I mean, we feel comfortable with our credit line and the way that works and flexes up with our build to peak.

所以我們正在維護。我們想談談一個觀點，這引出了你關於流動性和資產負債表的第二個問題。我們當然希望建立我們的流動性頭寸，這樣我們就可以比現在更具進攻性。這就是為什麼我在準備好的發言中引用了這一點。我的意思是，我們對我們的信用額度以及我們的建設達到頂峰的工作和靈活方式感到滿意。

But in order for us to be really more offensive in terms of what we're trying to do to speed the turnaround and invest wisely in things that we know will work for us, we need that flexibility. And that's why we're just kind of taking a look at everything. We don't have anything to talk about yet, but we're considering how we might bolster that position throughout 2024.

但是，為了讓我們在努力加速轉變並明智地投資於我們知道對我們有用的事情方面更具進攻性，我們需要這種靈活性。這就是為什麼我們只是看看一切。我們還沒有什麼可討論的，但我們正在考慮如何在 2024 年鞏固這一地位。

And this is Ann. In addition to that, I would say, as Amy mentioned earlier about the strategy around igniting the field, it includes physically visiting every single store and understanding what are the triggers to the performance which is not just location and demographic, but allocation and localization of product, et cetera. And anything that can affect the performance in a positive way, we're taking action on in parallel to their real estate strategy conversation, I mean, the points that Mike just made.

這是安。除此之外，我想說，正如艾米之前提到的圍繞點燃該領域的策略，它包括親自參觀每家商店並了解績效的觸發因素是什麼，這不僅僅是位置和人口統計，還包括商品的分配和本地化。產品等。任何能夠以積極方式影響業績的事情，我們都會在他們的房地產策略對話的同時採取行動，我的意思是，麥克剛才提出的觀點。

John Lawrence, Benchmark.

約翰‧勞倫斯，《基準》。

Good morning. Congratulations on the numbers. I mean certainly we've seen tremendous change in the stores that we visited and certainly have seen that traffic and resonate across the board. So congratulations from that standpoint. Can you -- either Ann or Amy, either one just sort of describe a little bit when you laid out the assortment, you mentioned a little bit about it in the prepared remarks. But what -- if you look at that balance of harvest and in the second quarter you talked about a little bit of sort of that improvement and as you moved into the third quarter, what would maybe be a couple of categories that maybe surprised you or disappointed with you as you just looked? Obviously, it all looks very positive. Just trying to dial into some of those categories that may have either worked better or worse than you expected?

早安.恭喜你的數字。我的意思是，我們確實看到了我們參觀過的商店發生的巨大變化，當然也看到了客流量和全面的共鳴。從這個角度來看，恭喜你。你能——安或艾米，當你佈置品種時，任何一個都可以描述一下，你在準備好的評論中提到了一些。但是，如果你看看收穫的平衡，在第二季度你談到了一點點這種改進，當你進入第三季度時，可能有幾個類別可能會讓你感到驚訝或對你剛才的樣子感到失望嗎？顯然，這一切看起來都非常積極。只是嘗試進入其中一些可能比您預期效果更好或更差的類別？

Sure. So specific to Q3, as we mentioned, the decorative accessories category really is a standout. And for us, that bases basket, all of the décor accent pieces throughout the customer's home. And over the years of growing furniture, that is one of the categories that historically had been kind of our best value category. And I think the pricing, along with furniture got too high for our customers.

當然。具體到第三季度，正如我們所提到的，裝飾配件類別確實很突出。對我們來說，這個籃子是客戶家中所有裝飾品的基礎。經過多年來不斷發展的家具，這是歷史上我們最有價值的類別之一。我認為價格以及家具對我們的客戶來說太高了。

So we really turned that one completely upside down, got back into sort of basics and high-value, high-unit velocity items and saw a ton of success there. You've heard me mention a couple of times the impact and the importance of the seasonal business for us here. And I would say that one kind of is a tale of two stories.

因此，我們確實徹底顛覆了這一點，回到了基礎知識和高價值、高單位速度的項目，並在那裡取得了巨大的成功。您已經聽我多次提到季節性業務對我們的影響和重要性。我想說，其中一種是兩個故事的故事。

If you think about Q3, Halloween had just a runaway success, probably the fastest and earliest season demand that we have seen for that business in my time here. And then harvest, I would say, was a little bit disappointing. Some of that, we pulled some of those sales forward into Q2. So there was a little bit of a pull forward there. But because of the stakes that we were in in Q3 are still dialing in our marketing strategy, still being in the mix of sort of old product strategy and new product strategy. We had to leverage harvest as a little bit of a loss leader to drive traffic and demand. And so we eroded that AUR more than I would have liked to.

如果你想想第三季度，萬聖節剛剛取得了巨大的成功，這可能是我們在我在這裡期間看到的該業務最快和最早的季節需求。然後收穫，我想說，有點令人失望。其中，我們將部分銷售額提前到第二季。所以那裡有一點推動力。但由於我們在第三季面臨的風險，我們仍在調整我們的行銷策略，仍然處於舊產品策略和新產品策略的混合中。我們必須利用收成作為虧損領導者來推動流量和需求。因此，我們對 AUR 的侵蝕程度超出了我的預期。

And then the last thing I would say is just again on those higher-ticket categories, as I mentioned on Jeremy's question as well. Furniture, I feel really good about the direction that that's heading and getting back into true value furniture for our customer.

然後我要說的最後一件事就是關於那些高價類別，正如我在傑里米的問題上提到的那樣。家具，我對這個方向感到非常滿意，並為我們的客戶回歸真正有價值的家具。

The wall areas are still the ones that industry-wide, we're seeing a dip, but I think we've still got a little bit more work to do in the balance of this year to get the pricing right there. But I feel like we can get that on track as we go into 2024.

牆壁區域仍然是整個行業範圍內的區域，我們看到了下降，但我認為在今年的剩餘時間裡我們仍然需要做更多的工作才能獲得正確的定價。但我覺得進入 2024 年我們就能步入正軌。

Great. Thanks for that. And last thing for me, as you look at that assortment, where do you think you are as you look into 2024 and changes, deletions from the assortment, what will we see as we move through the first half of 2024?

偉大的。感謝那。最後一件事是，當你審視這個品種時，當你展望 2024 年以及品種的變化和刪除時，你認為你處於什麼位置，當我們進入 2024 年上半年時，我們會看到什麼？

Amy Sullivan& You'll see a continuation of more important from a seasonally relevant categories. So as you think about spring florals, making sure that we're well in stock in the smaller holidays like Valentine's and Easter. And then I would say the biggest sort of shift year-over-year, and I've alluded to this on the past couple of calls, is this notion of always something new.

Amy Sullivan& 您將看到與季節相關的類別中更重要的內容的延續。因此，當您考慮春季花卉時，請確保我們在情人節和復活節等較小的節日有充足的庫存。然後我會說，同比最大的轉變，我在過去的幾次電話會議中提到過這一點，就是這種總是新事物的概念。

And so just ensuring that we have some faster-turning, lower-ticket, little trend in moments that come in throughout the quarter, so Mother's Day, different holidays that resonate with our customer. And then the other thing I would say is I mentioned the gift and sort of impulse category. And you've been with us long enough to know that used to be a really important part of our business, and we reintroduced that this Q4 and it's doing amazing.

因此，只要確保我們在整個季度的時刻（例如母親節）有一些週轉更快、票價更低、小趨勢的趨勢，就能與我們的客戶產生共鳴。然後我要說的另一件事是我提到了天賦和某種衝動類別。您和我們在一起已經足夠長的時間了，知道這曾經是我們業務的一個非常重要的部分，我們在第四季度重新推出了它，它的表現非常出色。

So having that year around next year, I think is going to be some upside for us as well both in topline sales and certainly in conversion in stores.

因此，在明年左右，我認為對我們來說，無論是在營收方面，還是在商店的轉換方面，都會有一些好處。

And ladies and gentlemen, at this time this completes our question-and-answer session and concludes today's teleconference. We thank you for your participation. You may now disconnect your lines.

女士們、先生們，我們的問答環節到此結束，今天的電話會議也結束了。我們感謝您的參與。現在您可以斷開線路。