Brand House Collective Inc (TBHC) 2024 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 August 3, 2024. Joining us today are Kirkland's Home CEO, Amy Sullivan; EVP and CFO, Mike Madden; and the company's External Director of Investor relations, Caitlin Churchill. Following their remarks, we'll open the call for your questions.

大家早安。感謝您參加今天的電話會議，討論柯克蘭截至 2024 年 8 月 3 日的第三季財務業績。今天加入我們的是 Kirkland's Home 執行長 Amy Sullivan；執行副總裁兼財務長 Mike Madden；以及公司投資者關係外部總監凱特琳·邱吉爾 (Caitlin Churchill)。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 Miss Churchill as she 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. Caitlin, please go ahead.

在我們進一步討論之前，我想將電話轉給邱吉爾小姐，她正在閱讀該公司根據 1995 年《私人證券訴訟改革法案》所定義的安全港聲明，該聲明對前瞻性聲明提供了重要的警告。凱特琳，請繼續。

Thank you and good morning.

謝謝你，早安。

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 Securities and Exchange Commission.

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具有前瞻性，並根據 1995 年《私人證券訴訟改革法案》的安全港條款作出。前瞻性陳述涉及已知和未知的風險和不確定性，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。

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. Now, I will turn the call over to Kirkland's CEO, Amy Sullivan.

也可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。現在，我將把電話轉給柯克蘭的執行長艾米·沙利文。

Thank you, Caitlin. And good morning, everyone.

謝謝你，凱特琳。大家早安。

The third quarter marked a significant turning point for Kirkland's as we entered into a strategic partnership with Beyond that allowed us to retire expensive debt, strengthen our balance sheet and begin to position our company for growth. This partnership not only provides us with additional capital to continue progressing on our Kirkland's Home initiatives but enabled new growth opportunities as we work together to revitalize the Bed Bath & Beyond brand.

第三季標誌著柯克蘭的一個重要轉折點，因為我們與 Beyond 建立了策略合作夥伴關係，這使我們能夠償還昂貴的債務，加強我們的資產負債表，並開始為我們的公司的成長做好準備。這種合作關係不僅為我們提供了額外的資金來繼續推進 Kirkland's Home 計劃，而且在我們共同努力振興 Bed Bath & Beyond 品牌時帶來了新的成長機會。

In addition to this important milestone during the quarter, we anniversaried the strategic shift in our Kirkland's Home brand that we began to implement in September of last year. Going forward, our results will be much more comparable to prior year periods as we continue the brand revitalization. Before I share more on our strategic initiatives, let me review a few highlights from the quarter.

除了本季這一重要里程碑之外，我們還慶祝了去年 9 月開始實施的 Kirkland's Home 品牌策略轉變週年紀念。展望未來，隨著我們繼續品牌振興，我們的業績將與去年同期更加具有可比性。在分享更多我們的策略舉措之前，讓我先回顧一下本季的一些亮點。

I am very pleased with our team's ability to deliver our fourth consecutive quarter of positive comparable store sales growth of 1.6% driven by positive traffic and conversion despite a significant headwind from hurricanes Helene and Milton. In line with prior quarter trends, the strength in our store performance continued to be offset by declines in our e-commerce channel, resulting in a total comparable sales decline of 3% for the period. With respect to profitability, we delivered a year-over-year $3.7 million improvement in adjusted EBITDA resulting in a return to positive adjusted EBITDA for the quarter.

我很高興我們的團隊能夠在客流量和轉換率的推動下連續第四個季度實現 1.6% 的可比商店銷售額正增長，儘管颶風海倫和米爾頓帶來了巨大的阻力。與上一季的趨勢一致，我們商店業績的強勁繼續被電子商務通路的下滑所抵消，導致期內可比總銷售額下降 3%。在獲利能力方面，我們的調整後 EBITDA 年成長了 370 萬美元，導致本季調整後 EBITDA 恢復為正值。

While we have continued to see our customer be choiceful in her spend, which has increased promotional activity across the industry. We were pleased to see a 6% increase in transactions and 10% increase in units sold driven by continued positive momentum and seasonally relevant decor such as holiday, floral and gifts.

雖然我們繼續看到客戶在消費時有選擇，這增加了整個行業的促銷活動。我們很高興看到，在持續的積極勢頭和節日、花卉和禮品等季節性相關裝飾的推動下，交易量增長了 6%，銷售量增長了 10%。

Our overall third quarter performance is a great example of our team's ability to deliver year-over-year improved financial performance while navigating the necessity to operate with a conservative approach to cash management, which impacted our marketing budgets and timing of product flow in the quarter.

我們第三季的整體業績很好地證明了我們的團隊有能力實現同比改善的財務業績，同時滿足了以保守的現金管理方法進行運營的必要性，這影響了我們本季度的營銷預算和產品流的時間安排。

This accomplishment reinforces our optimism for the future. Given the healthier financial position we expect to be in following the completion of the beyond transaction, allowing us to begin to build the foundation for new growth.

這項成就增強了我們對未來的樂觀態度。鑑於我們預計在超越交易完成後財務狀況將更加健康，這使我們能夠開始為新的成長奠定基礎。

Now, let me turn to the ongoing progress we are making on our Kirkland's Home strategic initiatives and how we see the Beyond partnership further supporting our efforts and growth potential.

現在，讓我談談我們在 Kirkland's Home 策略計畫方面正在取得的進展，以及我們如何看待 Beyond 合作夥伴關係進一步支持我們的努力和成長潛力。

First, with respect to reengaging our core customer. We spent the first half of the year diligently focused on reactivating lapsed customers, enhancing their loyalty profiles and keeping them engaged with the brand. These efforts are paying off as we have seen a 39% reactivation of lapsed customers over the last 12 months. We have continued to grow our loyalty file, and we have continued to drive high engagement with our over 3 million social media followers, particularly when we feature an in-store shopping experience.

首先，關於重新吸引我們的核心客戶。今年上半年，我們努力致力於重新激活流失的客戶，提高他們的忠誠度並保持他們對品牌的參與。這些努力正在取得成效，過去 12 個月裡，流失客戶的重新啟動率為 39%。我們不斷擴大我們的忠誠度檔案，並繼續推動與超過 300 萬社交媒體追隨者的高度互動，特別是當我們提供店內購物體驗時。

While our marketing budget is lean, given our strategically conservative approach to expenses, we continue to focus on impact and efficiency by driving traffic through seasonally relevant events that align to our new product launches and continued to drive conversion through targeted email and SMS campaigns.

雖然我們的行銷預算很精簡，但考慮到我們在策略上採取保守的支出方式，我們繼續關注影響力和效率，透過與我們的新產品發布一致的季節性相關活動來推動流量，並繼續透過有針對性的電子郵件和簡訊活動來推動轉換。

Looking ahead as our financial position improves and we begin to leverage beyond robust customer database, we believe we have a greater opportunity to more effectively engage with our customers and more efficiently acquire new customers. In addition, we believe in the opportunity to further expand customer loyalty and retention through unified loyalty and credit programs with Beyond.

展望未來，隨著我們的財務狀況改善以及我們開始利用強大的客戶資料庫之外的資源，我們相信我們有更大的機會更有效地與客戶互動並更有效地獲取新客戶。此外，我們相信透過與 Beyond 統一的忠誠度和信用計劃，有機會進一步提高客戶忠誠度和保留率。

Let me now turn to our next initiative, refocusing our product assortment. As I mentioned, we are now a year into executing on this initiative, leaning into our always something new mindset by delivering more frequent newness in the key categories that our customers expect and love.

現在讓我談談我們的下一個舉措，重新調整我們的產品種類。正如我所提到的，我們現在已經執行該計劃一年了，透過在客戶期望和喜愛的關鍵類別中提供更頻繁的新內容，我們始終保持新的心態。

We continue to see excellent results in holiday, floral, gift, fragrance, and textiles. And while we are pleased with the results across our decor categories, we saw continued softness in furniture and wall decor driven by both macroeconomic pressures to high ticket goods and the strategic decision to ship goods in these categories later to minimize the impact from the spike in container cost and limited availability of containers over the summer.

我們繼續在節日、花卉、禮品、香水和紡織品領域看到出色的業績。雖然我們對裝飾類別的結果感到滿意，但我們看到家具和牆壁裝飾持續疲軟，原因是宏觀經濟對高價商品的壓力以及稍後運送這些類別的商品以盡量減少價格飆升的影響的戰略決策。成本和夏季集裝箱供應有限。

As we shared last quarter, we had seen a strong start to our Halloween and harvest assortment, and we were pleased to end the season exceeding our expectations in both revenue and margin. The reintroduction of gift continues to resonate with our customers largely driven by apparel, accessories and impulse product. Our Carry-All tote and monogram jewelry boxes continue to be the top items in this category. These category trends remain strong as we look at early holiday sales and see newness in Christmas and gift continuing to drive demand.

正如我們上季度分享的那樣，我們看到萬聖節和收穫品種的強勁開局，我們很高興在收入和利潤方面超出了我們的預期。禮品的重新推出繼續引起我們客戶的共鳴，這主要是由服裝、配件和衝動產品推動的。我們的 Carry-All 手提袋和花押字首飾盒仍然是該類別中的頂級產品。這些品類趨勢依然強勁，因為我們觀察早期假期銷售情況，發現聖誕節和禮品的新鮮感持續推動需求。

We also anticipate being in a more favorable inventory position in furniture and wall decor as we move into December. Our merchants have worked diligently to bring value price points back to the higher ticket categories. And we believe those efforts will help improve conversion in these categories as we move forward.

我們也預計，進入 12 月後，家具和牆面裝飾的庫存狀況將更加有利。我們的商家一直在努力將超值價格帶回更高的門票類別。我們相信，隨著我們的前進，這些努力將有助於提高這些類別的轉換率。

In addition to our own initiatives around our product assortment, we are also excited to leverage our partnership with Beyond to expand our distribution channels and more efficiently move slower turning product via overstock.com. We believe in time, these efforts combined with continuing to drive newness and freshness across the assortment will further support improved inventory terms more in line with our historical performance.

除了我們自己圍繞產品分類的舉措外，我們還很高興能夠利用與 Beyond 的合作夥伴關係來擴大我們的分銷渠道，並透過 overstock.com 更有效地運輸週轉較慢的產品。我們相信，隨著時間的推移，這些努力與繼續推動品種的新穎性和新鮮度相結合，將進一步支持改善庫存條件，使其與我們的歷史表現更加一致。

This now leads me to our final strategic initiative, strengthening our omnichannel capabilities. With respect to e-commerce while performance remains challenged, our teams are actively working to drive improvements.

現在我要談談我們的最終策略舉措，即加強我們的全通路能力。在電子商務方面，雖然績效仍面臨挑戰，但我們的團隊正在積極努力推動改善。

As we discussed last quarter, we had recently implemented a new pricing tool to help our merchants better analyze the competition particularly in our drop ship assortment. Within the quarter, we deployed two major pricing tests in art and furniture and the findings have provided us clear direction for pricing and the technology needed to best showcase value for the customer that we plan to incorporate into our strategy for the upcoming e-commerce replatform.

正如我們上季度討論的那樣，我們最近實施了一種新的定價工具，以幫助我們的商家更好地分析競爭，特別是在我們的直運品類中。在本季度內，我們在藝術品和家具方面部署了兩項主要定價測試，結果為我們提供了明確的定價方向，以及為客戶提供最佳展示價值所需的技術，我們計劃將其納入即將推出的電子商務重整平台的策略中。

As we focus on developing our road map to our replatforming efforts next year, we are thrilled to leverage the e-commerce expertise of Beyond. We are reviewing our current technology and our recent RSP process with our partners at Beyond with the goal of making a platform decision by the end of the year.

當我們專注於制定明年的平台重組工作路線圖時，我們很高興能夠利用 Beyond 的電子商務專業知識。我們正在與 Beyond 的合作夥伴一起審查我們目前的技術和最近的 RSP 流程，目標是在年底前做出平台決策。

With stronger e-commerce capabilities in place, we expect to better leverage our omnichannel model as we remain highly encouraged with the continued strength of our brick-and-mortar channel. It is a testament to our store teams that through our partnership with Beyond, we will be the exclusive brick-and-mortar licensee and lead the efforts to revitalize the iconic Bed Bath & Beyond brand.

憑藉更強大的電子商務能力，我們期望更好地利用我們的全通路模式，因為我們對實體通路的持續實力感到高度鼓舞。透過與 Beyond 的合作，我們將成為獨家實體授權商，並領導振興標誌性 Bed Bath & Beyond 品牌的努力，這對我們的商店團隊來說是一個證明。

As we discussed in our announcement, we are planning to open our initial Bed Bath & Beyond neighborhood stores in 2025. We expect these stores to generate at least two times the revenue of a current average Kirkland's Home store and we'll focus on a curated assortment of Bed Bath & Beyond's iconic legacy brands, as well as complimentary Kirkland's Home seasonal and decor products.

正如我們在公告中討論的那樣，我們計劃在 2025 年開設首批 Bed Bath & Beyond 社區商店。我們預計這些商店的收入至少是目前 Kirkland's Home 商店平均收入的兩倍，我們將重點放在 Bed Bath & Beyond 標誌性傳統品牌的精選品種，以及免費的 Kirkland's Home 季節性和裝飾產品。

We recently reorganized our team to support both brands and are actively building the Bed Bath & Beyond merchandizing and store strategy. There is still a lot of work to be done as we prepare for our first opening next year, but both of our teams are excited for the growth opportunity we see ahead for this strategy as we position Kirkland's as a multi-brand retailer.

我們最近重組了我們的團隊來支持這兩個品牌，並正在積極制定 Bed Bath & Beyond 的銷售和商店策略。在我們為明年的首次開業做準備時，還有很多工作要做，但我們的兩個團隊都對我們在這項策略中看到的成長機會感到興奮，因為我們將Kirkland's 定位為多品牌零售商。

In summary, we are pleased with the progress we are making across our business. Our partnership with Beyond has further energized our teams and our efforts in positioning Kirkland's to achieve its full potential. We remain excited about what we can achieve together as we look to end fiscal 2024 in a healthier financial position with significant opportunities for growth.

總之，我們對整個業務所取得的進展感到滿意。我們與 Beyond 的合作進一步激勵了我們的團隊以及我們為柯克蘭充分發揮潛力所做的努力。我們仍然對我們能夠共同實現的目標感到興奮，因為我們希望在 2024 財年結束時擁有更健康的財務狀況和巨大的成長機會。

And now, over to Mike.

現在，輪到麥克了。

Thank you, Amy. And good morning, everybody.

謝謝你，艾米。大家早安。

For the third quarter, net sales were $114.4 million versus $116.4 million in the prior year quarter. As a reminder, we had anticipated that the calendar shift associated with last year's 53-week year would benefit total sales dollars in the third quarter as a smaller week at the beginning of the quarter was replaced by a larger week pulled into the end of the quarter. This shift benefited sales by approximately $3 million in the third quarter. In addition to this shift, the total sales comparison incorporated the 4% decline in average store count compared to the prior year quarter and a comparable sales decrease of 3% for the quarter.

第三季淨銷售額為 1.144 億美元，去年同期為 1.164 億美元。As a reminder, we had anticipated that the calendar shift associated with last year's 53-week year would benefit total sales dollars in the third quarter as a smaller week at the beginning of the quarter was replaced by a larger week pulled into the end of the四分之一.這一轉變使第三季的銷售額增加了約 300 萬美元。除了這一轉變之外，總銷售額比較還包括平均商店數量與去年同期相比下降 4%，本季可比銷售額下降 3%。

The decrease in comparable sales, which is calculated on a like-for-like basis by shifting the prior year in our f calendar by one week was driven by declines in the consolidated average ticket and e-commerce conversion, partially offset by an increase in consolidated traffic and store conversion. We estimate that hurricanes Helene and Milton negatively impacted our comparable sales performance by approximately 100 basis points. For the quarter, comparable store sales increased 1.6% inclusive of the disruption from the hurricanes which impacted about 20% of our store base in some fashion.

可比較銷售額的下降是透過將我們的f 日曆中的上一年移動一周來計算的，這是由於綜合平均門票和電子商務轉換率的下降而造成的，但部分被可比銷售額的增長所抵消。我們估計颶風海倫和米爾頓對我們的可比較銷售業績產生了約 100 個基點的負面影響。本季度，可比商店銷售額增長了 1.6%，其中包括颶風造成的破壞，颶風以某種方式影響了我們約 20% 的商店基礎。

With respect to our e-commerce business, sales declined 14.9% compared to the prior year period, offsetting the positive results in our store channel. E-commerce accounted for 24% of total sales in the quarter, down from 28% in the prior year quarter.

電商業務銷售額較去年同期下降14.9%，抵銷了實體店通路的正面表現。電子商務佔本季總銷售額的 24%，低於去年同期的 28%。

Breaking down sales within the quarter, comps were down 3% in August, down 1.3% in September and down 5.2% in October. October reflected a more difficult year-over-year comparison and included the impact of the hurricanes and the inventory flow adjustments that Amy discussed.

按本季銷售額細分，8 月年減 3%，9 月下降 1.3%，10 月下降 5.2%。十月份反映了更困難的同比比較，包括颶風的影響和艾米討論的庫存流量調整。

From a merchandise perspective, we saw increases versus the prior year in holiday, gift, textiles, floral, fragrance and housewares reflecting our shift in emphasis to faster turning lower price point items. However, these increases were not enough to offset declines in the higher ticket categories of furniture, mirrors, wall decor, art and lamps. Geographically speaking, sales performance lagged in Florida, Georgia and North Carolina due to the impact of the storms while we saw strong performance in Texas and other areas of the Southeast.

從商品角度來看，我們看到節慶、禮品、紡織品、花卉、香水和家居用品的銷售量較上年有所增長，反映出我們的重點轉向更快地轉向低價商品。然而，這些增長不足以抵消家具、鏡子、牆壁裝飾、藝術品和燈具等高價類別的下降。從地理來看，由於風暴的影響，佛羅裡達州、喬治亞州和北卡羅來納州的銷售表現落後，而德克薩斯州和東南部其他地區的銷售表現強勁。

Gross profit margin increased 180 basis points to 28.1% of sales compared to 26.3% in the prior year quarter. The components of this year-over-year change were as follows. Central distribution cost decreased by 130 basis points to 4.8%, primarily due to a later inventory build-up versus the prior year. The closure of our Winchester, Virginia e-commerce hub in the prior year quarter also contributed to the decline compared to the prior year.

毛利率成長 180 個基點，佔銷售額的 28.1%，去年同期為 26.3%。本次同比變化的組成如下。中央配送成本下降 130 個基點至 4.8%，主要是由於庫存累積較上年較晚。上一季我們位於維吉尼亞州溫徹斯特的電子商務中心的關閉也導致了與去年相比的下降。

Outbound freight costs including both store and e-commerce shipping expenses decreased 120 basis points to 6.8% of sales compared to the prior year quarter. Improved management of outbound store routes along with lower rates per route were the primary drivers of the decrease. We also benefited from lower parcel delivery costs due to the reduction in e-commerce revenue and lower contract parcel rates.

與去年同期相比，包括商店和電子商務運輸費用在內的出境貨運成本下降了 120 個基點，佔銷售額的 6.8%。出庫路線管理的改進以及每條路線費率的降低是下降的主要原因。由於電子商務收入的減少和合約包裹費率的降低，我們也受益於包裹遞送成本的降低。

In addition1 to these cost improvements, depreciation included in cost of sales decreased by about 20 basis points to 1.3% of sales. Partially offsetting these factors was a decline in merchandise margin and an increase in store occupancy costs. Compared to the prior year, merchandise margin decreased approximately 50 basis points to 53.5% and store occupancy costs increased 40 basis points to 12.5%.

除了這些成本改善之外，銷售成本中包含的折舊也下降了約 20 個基點，佔銷售額的 1.3%。商品利潤率下降和商店佔用成本增加部分抵消了這些因素。與前一年相比，商品利潤率下降約 50 個基點至 53.5%，商店佔用成本增加 40 個基點至 12.5%。

The decrease in merchandise margin was largely driven by increased promotional activity during the period, particularly in the latter part of the quarter. And the pressure that we expected to experience from freight was minimized in the quarter due to our strategic decision to ship certain goods later than we previously planned. The deleverage of store occupancy costs was largely due to the overall sales decline in the quarter.

商品利潤率下降主要是由於該期間促銷活動增加所致，特別是在本季後半段。由於我們的策略決定比先前的計劃晚於運輸某些貨物，因此我們預計本季將承受的貨運壓力降至最低。門市入住成本去槓桿很大程度是由於本季整體銷售額下降。

Total operating expenses decreased $2.8 million to $34.5 million or 30.2% of sales compared to $37.3 million or 32% of sales in the prior year quarter. The decrease in dollars was primarily the result of reduced advertising costs, corporate salaries and asset impairment expenses.

總營運費用減少 280 萬美元，降至 3,450 萬美元，佔銷售額的 30.2%，而去年同期為 3,730 萬美元，佔銷售額的 32%。美元減少主要是因為廣告費用、公司薪資和資產減損費用減少。

Adjusted EBITDA which excludes certain expenses related to the Beyond transaction, stock compensation and severance charges was a positive $0.5 million versus negative $3.3 million in the prior quarter.

調整後的 EBITDA（不包括與 Beyond 交易相關的某些費用、股票補償和遣散費）為正 50 萬美元，而上一季為負 330 萬美元。

Operating loss was $2.4 million compared to an operating loss of $6.7 million last year. Excluding the items are reviewed and adjusted EBITDA, adjusted operating loss was $1.9 million compared to $6 million last year.

營業虧損為 240 萬美元，而去年營業虧損為 670 萬美元。不包括經過審查和調整的 EBITDA 項目，調整後的營運虧損為 190 萬美元，而去年為 600 萬美元。

Interest expense in the quarter was $1.7 million compared to $1.2 million in the prior quarter due to higher borrowing levels and higher interest rates. During the quarter, we incurred a charge of $3.3 million related to the repayment of our FILO Term Loan in conjunction with our transaction with Beyond.

由於借款水準和利率上升，本季的利息支出為 170 萬美元，而上一季的利息支出為 120 萬美元。本季度，我們因償還 FILO 定期貸款以及與 Beyond 的交易而產生了 330 萬美元的費用。

Net loss was $7.7 million compared to $6.4 million in the prior quarter. Excluding the non-core operating items incurred in both periods, adjusted net loss was $3.8 million compared to $5.9 million in the prior quarter.

淨虧損為 770 萬美元，上一季淨虧損為 640 萬美元。不包括這兩個時期發生的非核心經營項目，調整後淨虧損為 380 萬美元，上一季為 590 萬美元。

With respect to our balance sheet, we ended the quarter with $111 million in inventory. A 5.7% increase from the $105.2 million at the end of the prior year quarter. The year-over-year increase was largely due to timing. Due to the calendar shift, we were one week deeper into the season as compared to last year. And we also strategically prioritized our inventory flow to better manage the container availability and freight costs previously discussed.

就我們的資產負債表而言，本季末我們的庫存為 1.11 億美元。比上一季末的 1.052 億美元成長 5.7%。同比增長主要是由於時間安排。由於日曆的變化，與去年相比，我們的賽季提前了一周。我們還策略性地優先考慮我們的庫存流，以更好地管理前面討論的貨櫃可用性和貨運成本。

We had total borrowings outstanding of $80.4 million at the end of the quarter, which was comprised of $65 million under our senior revolving line of credit and $15.4 million in debt to Beyond related to the term loan, convertible term loan and the sale of a percentage of Kirkland's future revenues to Beyond net of debt issuance and original issue discount costs.

截至本季末，我們的未償還借款總額為 8,040 萬美元，其中包括高級循環信貸額度下的 6,500 萬美元，以及與定期貸款、可轉換定期貸款和出售百分比相關的 Beyond 債務 1,540 萬美元柯克蘭未來收入的百分比扣除債務發行和原始發行折現成本。

This compares to $52.7 million under our senior revolving line of credit and $8.7 million under our prior FILO Term Loan net of debt issue costs at the end of the previous quarter. The increase in borrowings reflects the net loss for the quarter, seasonal growth in working capital and capital expenditures of $0.5 million.

相較之下，上一季末我們的優先循環信貸額度為 5,270 萬美元，先前的 FILO 定期貸款為 870 萬美元（扣除債務發行成本）。借款的增加反映了該季度的淨虧損、營運資本和資本支出的季節性增長 50 萬美元。

We are continuing our policy of not providing specific guidance given the difficulty in forecasting visibility. However, we do want to provide some color around our expectations in key areas.

鑑於預測能見度有困難，我們將繼續執行不提供具體指引的政策。然而，我們確實希望圍繞我們在關鍵領域的期望提供一些色彩。

First, as a reminder, this year's fiscal calendar includes 52 weeks compared to last year's 53-week fiscal calendar. This extra week last year resulted in approximately $6.6 million in revenue that we will not benefit from this year. In addition, the timing shift associated with the 53rd week will negatively impact Q4 as a larger week at the beginning of the quarter will be replaced by a smaller week at the end resulting in a headwind of approximately $3 million for the quarter.

首先，提醒一下，今年的財政日曆包括 52 週，而去年的財政日曆為 53 週。去年這額外的一周帶來了約 660 萬美元的收入，但今年我們將無法從中受益。此外，與第 53 週相關的時間變化將對第四季度產生負面影響，因為季度初較大的一周將被季度末較小的一周所取代，導致該季度產生約 300 萬美元的不利影響。

We've seen a slower start to Q4, but we are encouraged by the sell through we are seeing in key categories such as holiday and gifts. And we expect our in-stock levels and furniture to improve from earlier this fall.

我們看到第四季度的開局較慢，但我們對假期和禮品等關鍵類別的銷售感到鼓舞。我們預計我們的庫存水準和家具將比今年初秋早些時候有所改善。

We also believe that the slower start is driven in part by the calendar shift and the compressed holiday selling season we have this year. Using history as a guide, we have been analyzing the sales build and consumer behavior we saw in 2019, which is the last time we had a similar retail calendar. While consumer behavior has certainly changed since that pre-pandemic year. the overall analysis suggests that the compressed shopping calendar would benefit December versus November. Thus, we remain cautiously optimistic as we move forward through the quarter.

我們也認為，開局較慢的部分原因是日曆變化和今年假期銷售季的壓縮。以歷史為指導，我們一直在分析 2019 年的銷售情況和消費者行為，這是我們最後一次有類似的零售日曆。自大流行前一年以來，消費者行為確實發生​​了變化。總體分析表明，與 11 月相比，壓縮的購物日曆將有利於 12 月。因此，隨著本季的進展，我們仍保持謹慎樂觀。

We expect the promotional environment to continue to be a factor in Q4 and we also expect to see some added margin pressure from the spike in inbound freight rates we experienced in the summer as the affected goods sell through. However, the actions we took to control shipments will limit the amount of that pressure versus our original expectations.

我們預計促銷環境將繼續成為第四季度的一個因素，我們也預計，由於受影響的貨物銷售旺盛，我們在夏季經歷的入境運費飆升將帶來一些額外的利潤壓力。然而，我們為控制出貨量而採取的行動將限制這種壓力，而不是我們最初的預期。

As for operating expenses, we continue to manage them very tightly and expect to continue to benefit from the cost reduction actions we took earlier this year. While we believe we continue to have a line of sight to achieving positive adjusted EBITDA for the year, we acknowledge that the promotional environment has intensified as reflected in our results today and our expectations for the fourth quarter.

至於營運費用，我們繼續嚴格管理，並期望繼續受益於我們今年早些時候採取的成本削減行動。雖然我們相信今年我們將繼續實現積極的調整後 EBITDA，但我們承認促銷環境已經加劇，正如我們今天的業績和對第四季度的預期所反映的那樣。

With that said, we are continuing to control the aspects of the business that we can control, and our priorities are unchanged. We are confident in our ability to drive strong year-over-year improvement and profitability and enter 2025 under stronger footing.

話雖如此，我們將繼續控制我們可以控制的業務方面，我們的優先事項並沒有改變。我們對推動獲利能力逐年強勁成長並以更強勁的基礎進入 2025 年充滿信心。

We continue to believe in the long-term opportunities still ahead, especially as we layer in our strategic partnership with Beyond. We believe through our transaction with Beyond, we have the potential to accelerate the timeline to achieve our long-term targeted margins and growth guidance. We look forward to sharing more details on our plans on our future calls.

我們仍然相信未來仍然存在長期機遇，特別是當我們與 Beyond 建立策略夥伴關係時。我們相信，透過與 Beyond 的交易，我們有潛力加快實現長期目標利潤率和成長指引的時間表。我們期待在未來的電話會議上分享更多有關我們計劃的細節。

I will now turn the call back over to Amy for a few closing remarks before we open the call up for questions,

現在，在我們開始提問之前，我將把電話轉回給艾米，讓她做一些結束語，

Thank you, Mike.

謝謝你，麥克。

We are proud of the results we have continued to deliver throughout this year despite the challenges we have faced. This year is a transformative year for Kirkland's. We entered the year as a single banner retailer in the midst of a turnaround and we are exiting the year as a dual brand retailer with significantly more growth opportunities along with an improved balance sheet and ongoing traction against our initiative.

儘管面臨挑戰，我們對今年繼續取得的成果感到自豪。今年對柯克蘭來說是改變的一年。我們以單一旗艦零售商的身份進入了這一年，正處於轉型之中，而我們將以雙品牌零售商的身份結束這一年，擁有更多的增長機會、改善的資產負債表以及對我們計劃的持續吸引力。

As we look ahead to 2025, we are excited to unlock the potential of our partnership with Beyond as we revitalize the Bed Bath & Beyond brand, further strengthen the Kirkland's Home foundation and begin to reinvest in areas like technology and marketing.

展望 2025 年，我們很高興能釋放與 Beyond 合作的潛力，重振 Bed Bath & Beyond 品牌，進一步加強 Kirkland's Home 基礎，並開始在技術和行銷等領域進行再投資。

Before I close, I want to thank our team. None of our accomplishments would be possible without our team members who show up focused on our customer every day. Their dedication to the art and science of retail is crucial in delivering the experience our customers love. We are excited by the opportunities for growth and are committed to delivering value to our shareholders. That is our focus now and will continue to be in 2025 and beyond. That concludes our prepared remarks.

在結束之前，我要感謝我們的團隊。如果沒有每天專注於客戶的團隊成員，我們就不可能有任何成就。他們對零售藝術和科學的奉獻對於提供客戶喜愛的體驗至關重要。我們對成長機會感到興奮，並致力於為股東創造價值。這是我們現在的重點，並將在 2025 年及以後繼續關注。我們準備好的演講到此結束。

Operator, we're now ready to take Q&A.

接線員，我們現在準備好進行問答。

(Operator Instructions)

（操作員說明）

Jeremy Hamblin, Craig-Hallum Capital Group.

傑里米·漢布林 (Jeremy Hamblin)，克雷格·哈勒姆資本集團。

Thanks for taking the questions and congrats on the strategic partnership.

感謝您提出問題並祝賀雙方建立策略夥伴關係。

I wanted to start by coming back to the commentary around trends and see if we can get a little more color in terms of what you're seeing. You noted a little bit softer results here in November, but wanted to understand, if you could help us with magnitude. And then also the split that you're expecting in terms of e-commerce performance, which it's lapping similar compares in Q4 versus Q3 versus your retail store sales, which saw a pretty meaningful improvement last year and it's clearly a tougher compare.

我想先回到趨勢的評論，看看我們是否可以根據您所看到的內容獲得更多色彩。您注意到 11 月的結果有些疲軟，但您想了解您是否可以在幅度上為我們提供幫助。然後，您所期望的電子商務業績也將出現分裂，第四季度與第三季度與零售店銷售額的情況類似，去年零售店銷售額出現了相當有意義的改善，這顯然是一個更艱難的比較。

Thanks, Jeremy. I'll start and then I'll let Mike give some additional color.

謝謝，傑里米。我先開始，然後讓麥克提供一些額外的顏色。

So from an overall start to the season perspective, as you know, Q4 is our holiday season. And so when you take into account the calendar shift, we're really managing to this nine-week spread between November and December. So there's a lot of noise in the month of November in terms of how the calendar shift plays out.

因此，從整體開始到季節的角度來看，如您所知，第四季度是我們的假期季節。因此，當您考慮到日曆變更時，我們確實能夠在 11 月至 12 月之間實現九週的時間間隔。因此，關於日曆轉換如何進行，11 月有很多噪音。

Mike alluded in his part of the script that if you use history as a comparison and look at 2019 and the rate of sales that we expect to have in at this point in the season, it still gives us optimism that November and December combined will be what we need it to be. So we're really looking into the next two weeks are really important for us. We have a huge customer appreciation event going on right now. And as we wind into December, we believe those nine weeks combined will shake out.

麥克在他的劇本部分提到，如果你使用歷史作為比較，看看 2019 年以及我們預計在本季度此時的銷售額，它仍然讓我們樂觀地認為 11 月和 12 月合計將達到我們需要它是什麼。因此，我們正在研究接下來的兩週，這對我們來說非常重要。我們現在正在舉辦一場盛大的客戶感謝活動。隨著進入 12 月，我們相信這九週加起來將會結束。

And Jeremy, in terms of the compares, I think we continue to see more momentum in the store side of the business. I think that will continue in the fourth quarter, notwithstanding the tougher comps you called out as it relates to stores. That's just the trend we've been on. We've been seeing the traffic gains there, the conversion gains there and that continues.

傑里米（Jeremy），就比較而言，我認為我們繼續在商店方面看到更多的業務勢頭。我認為這種情況將在第四季度繼續下去，儘管您提出了與商店相關的更嚴格的競爭。這就是我們一直以來的趨勢。我們已經看到那裡的流量增加、轉換率增加，而且這種情況還在持續。

Got it. And then shifting gears here to talking about the Beyond partnership. As we head into 2025, it sounds like that really starts in earnest in Q1 and wanted to get a sense for how you think that's going to evolve, particularly your e-commerce business. And the potential there, there's, obviously some aspects to that agreement in which you're paying fees and incentive fees for success there. But also wanted to understand how it might impact your marketing budget and how those costs may be shared across the two parties.

知道了。然後這裡轉移話題來談論 Beyond 合作夥伴關係。當我們進入 2025 年時，聽起來這確實是從第一季開始的，並且希望了解您認為這將如何發展，特別是您的電子商務業務。那裡的潛力，顯然，該協議的某些方面，你需要為那裡的成功支付費用和獎勵費。但也想了解它可能如何影響您的行銷預算以及如何在兩方之間分攤這些成本。

Sure. So from an e-commerce perspective, we, as you know, throughout this past year, have been really focused on evaluating our technology. We've gone through a pretty robust RSP process to start to identify the replatforming choices that we need to make given that our inherent strength here is brick-and-mortar and theirs is e-commerce. We've paused just to bring their expertise to the table with us as we make those final decisions on the replatform.

當然。因此，從電子商務的角度來看，如您所知，在過去的一年中，我們一直非常專注於評估我們的技術。鑑於我們的固有優勢是實體店，而他們的優勢是電子商務，我們已經經歷了相當強大的 RSP 流程，開始確定我們需要做出的平台重組選擇。我們停下來只是為了在我們就平台重組做出最終決定時將他們的專業知識與我們一起討論。

So when I think about how we leverage them as we cross into the New Year, it would really be taking their guidance in terms of those next steps in our decision for building out our road map. And leaning into them as we think about are there other partners or other players in the technology space that we should be evaluating as we look at our dated tech stack and negotiate alongside of them from an economy of scale perspective. Just to open up more options to make sure that when we do invest in technology, we've made the best decision for the long haul. So we're actively working through that right now. We expect to make our platform decision by the end of this calendar year. And then other components of technology that we think enhance the total business, we will continue to have those conversations as we move into the start of the new year.

因此，當我考慮在跨入新的一年時如何利用它們時，我們在製定路線圖的決定中的後續步驟方面確實會受到它們的指導。當我們思考技術領域是否有其他合作夥伴或其他參與者時，我們應該評估這些合作夥伴或其他參與者，當我們審視過時的技術堆疊並從規模經濟的角度與他們一起談判時。只是為了提供更多選擇，以確保當我們投資科技時，我們做出了長遠來看最好的決定。所以我們現在正在積極解決這個問題。我們預計在今年年底前做出我們的平台決定。然後，我們認為可以增強整體業務的其他技術組件，在新年伊始我們將繼續進行這些對話。

And then from a marketing perspective, I would say it's sort of twofold. And so obviously, our goal both Kirkland's and Beyond is to get a benefit of pooling our customer data and how can we not only learn customer shopping behavior by having the data pooled together but how can we also share in a potential future unified loyalty program, unified credit card program. And so we're in the very early phases of that and obviously working through sharing that data, ensuring that we're giving our customer the opportunity to opt into that and working with our legal teams on all the privacy laws. But we definitely believe that there's significant upside when you think about the opportunity for Kirkland's to get new customers into the file at a much more efficient cost by sharing in the much larger pool of customers that Beyond has across its multitude of brands.

然後從行銷的角度來看，我想說這是雙重的。顯然，Kirkland 和 Beyond 的目標都是從匯集客戶資料中獲益，我們不僅可以透過匯集資料來了解客戶的購物行為，而且還可以分享未來潛在的統一忠誠度計劃，統一信用卡計劃。因此，我們正處於該專案的早期階段，顯然正在透過共享這些資料來努力，確保我們為客戶提供選擇加入的機會，並與我們的法律團隊就所有隱私法進行合作。但我們絕對相信，當你想到柯克蘭有機會透過分享 Beyond 旗下眾多品牌擁有的更大的客戶群，以更有效的成本吸引新客戶時，就會有顯著的優勢。

And Jeremy, one thing to add to that, just even with the fees related to the collaboration and the fees related to the incentive on the e-commerce side. When you look at it all together from where we were cost of debt, if you will, versus where we are, it's neutral and it comes with these benefits. So we continue to be pleased that that's the case going into 2025.

傑里米（Jeremy）需要補充一點，即使是與合作相關的費用以及與電子商務方面的激勵相關的費用。如果你願意的話，如果你願意的話，如果你從我們的債務成本與我們目前的情況來看，它是中性的，並且帶來了這些好處。因此，我們對 2025 年的情況仍然感到高興。

Let me see if I can get a little bit more granular there on. In terms of thinking about the cost, right, as you're getting into a venture like this and taking your respective customer bases and helping them to understand the changes that are happening here. Would you expect a greater investment to be made by Kirkland's in getting this kick-started next year.

讓我看看是否可以更詳細地了解一下。就考慮成本而言，當您進入這樣的企業並吸引各自的客戶群並幫助他們了解這裡正在發生的變化時。您是否期望柯克蘭明年投入更多資金來啟動這項計畫？

We definitely would in terms of the store aspect of this, I mean, we're going to operate these stores with our people, with our real estate efforts, our construction. So as we look at that five stores, the plan for the pilot next year, that will be an investment from us, but we're getting that additional capital as we close this with the shareholder meeting coming up here on December 23, that's when the final $8 million comes through connected to the entire transaction. And that will provide us that it's not a whole, it's not a huge amount to get into these five stores, but it does provide us the ability to do that and some flexibility to do some other things across the business.

在商店方面，我們肯定會這樣做，我的意思是，我們將與我們的員工、我們的房地產工作、我們的建設一起經營這些商店。因此，當我們看到這五家商店時，明年的試點計劃將是我們的一項投資，但是當我們在12 月23 日召開的股東大會上結束這項計劃時，我們將獲得額外的資本，那時我們就將獲得額外的資金。這將使我們知道，這不是一個整體，進入這五家商店並不是一個巨大的數字，但它確實為我們提供了這樣做的能力，以及在整個業務中做其他一些事情的靈活性。

Great. And then just one other quick one here for me. In terms of what you're seeing from a promotional environment out there, I think that the category as a whole has probably been somewhat neutral year-over-year but wanted to get your insight in terms of what you're seeing from your closest competitors and whether or not there are particular categories. You noted the disparity in performance among categories, but whether or not you're seeing some more aggressive promos in particular categories.

偉大的。然後再給我一個快速的。就您從促銷環境中看到的情況而言，我認為整個類別可能逐年保持中立，但希望了解您從最近的促銷環境中看到的情況競爭對手以及是否有特定類別。您注意到類別之間的表現差異，但您是否在特定類別中看到了一些更具侵略性的促銷活動。

Yeah. I would say overall, we've been able to control sort of what we expected the promotional cadence to be. I would say it's more about consistency of promo and ensuring that there's always a new fresh deal for our customer to keep traffic and conversion where we need it to be from an ongoing perspective. There have been parts of our business in the more seasonally relevant, the core side of things. And we specifically mentioned on this call, Halloween and harvest, where we were able to get better reg price a little better than we had in prior years.

是的。我想說，總的來說，我們已經能夠控制我們預期的促銷節奏。我想說，這更多的是關於促銷的一致性，並確保我們的客戶始終有新的優惠，從持續的角度將流量和轉換保持在我們需要的地方。我們的部分業務與季節更相關，是事物的核心面向。我們在這次電話會議上特別提到了萬聖節和收穫，在那裡我們能夠獲得比前幾年更好的註冊價格。

If you think about the higher ticket categories, though, I would say it is just a continuation of what we've seen in terms of the pressure on those high ticket goods. The good news for us is we have been been very consistently focused on bringing and value engineered product within the high-ticket categories. So as we move into the future months, we think that will start to balance, but it's really just about getting that consistency of a value message and a promotional message out there to focus on traffic.

不過，如果你考慮更高的票價類別，我會說這只是我們所看到的高價商品壓力的延續。對我們來說，好消息是我們一直致力於在高價類別中引入並重視工程產品。因此，當我們進入未來幾個月時，我們認為這將開始平衡，但這實際上只是讓價值資訊和促銷訊息保持一致，以關注流量。

Got it. Alright. Thanks for taking the questions and best wishes.

知道了。好吧。感謝您提出問題並致以最美好的祝愿。

This concludes our question-and answer-session. I would like to turn the conference back over to Amy Sullivan for any closing remarks.

我們的問答環節到此結束。我想將會議轉回艾米·沙利文（Amy Sullivan）發表閉幕詞。

Thank you all for joining us today. As a reminder, we are having our upcoming shareholder vote on December 23, which assuming a positive outcome will solidify the full investment from Beyond resulting in $8 million of additional liquidity by year end. We look forward to speaking with you again on our next earnings call, and we hope that everyone has a happy and healthy holiday season.

感謝大家今天加入我們。提醒一下，我們即將於 12 月 23 日進行股東投票，假設投票結果積極，將鞏固 Beyond 的全部投資，到年底將帶來 800 萬美元的額外流動性。我們期待在下一次財報電話會議上再次與您交談，並希望每個人都有一個快樂健康的假期。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。