Tandy Leather Factory Inc (TLF) 2022 Q3 法說會逐字稿

Good morning, everyone, and thank you for joining us for a discussion of Tandy's Q3 financial results. I'm Dan Ross, General Counsel and Corporate Secretary for Tandy, and I will be moderating the discussion today. Our CEO, Janet Carr, will give a brief overview of the quarter and then we will open it up for questions and discussion. (Conference Instructions) I will not be reading questions or comments directly from the chat unless asked. With that, let's get started.

大家早上好，感謝您加入我們討論 Tandy 第三季度的財務業績。我是 Tandy 的總法律顧問兼公司秘書 Dan Ross，我將主持今天的討論。我們的首席執行官珍妮特·卡爾 (Janet Carr) 將簡要介紹本季度的情況，然後我們將公開提問和討論。 （會議說明）除非有人問，否則我不會直接從聊天中閱讀問題或評論。有了這個，讓我們開始吧。

Today's presentation will include statements other than historical results that constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, each as amended. These statements reflect our expectations or estimates based on the information we have today but are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from the statements contained in this presentation.

今天的演示文稿將包括歷史結果以外的陳述，這些陳述構成前瞻性陳述，符合 1933 年證券法和 1934 年證券交易法的含義，每一個都經過修訂。這些陳述反映了我們根據今天掌握的信息做出的預期或估計，但不是對未來業績的保證或預測。它們涉及已知和未知的風險、不確定性和其他因素，其中許多是我們無法控制的，並且可能導致實際結果與本演示文稿中包含的陳述存在重大差異。

You are cautioned not to put undue reliance on these forward-looking statements. The company assumes no obligation to update or otherwise revise these forward-looking statements except as required by law.

請注意不要過分依賴這些前瞻性陳述。除非法律要求，否則公司不承擔更新或以其他方式修改這些前瞻性陳述的義務。

And now I'll turn it over to Janet.

現在我將把它交給珍妮特。

Thanks, Dan, and thanks to all of you for joining us today. Overall, it was a good quarter for us, putting us back on track for profitability. Although sales were down 1.2% over Q3 of last year, improved gross margin and operating expense discipline resulted in $1 million in operating profit for the quarter and $1.5 million in adjusted EBITDA, adjusting for noncash items such as depreciation and stock-based compensation, as well as interest, taxes, and one-time expenses related to the restatement. Cash was down to $3.1 million from $5.6 million at the end of Q2, due mostly to paydown of accrued expenses and liabilities and capital expense associated with our new web platform.

謝謝丹，也感謝大家今天加入我們。總體而言，這對我們來說是一個不錯的季度，讓我們重回盈利軌道。儘管銷售額比去年第三季度下降了 1.2%，但毛利率和運營支出紀律的改善導致本季度的運營利潤為 100 萬美元，調整後的 EBITDA 為 150 萬美元，對折舊和股票薪酬等非現金項目進行了調整，因為以及與重述相關的利息、稅金和一次性費用。現金從第二季度末的 560 萬美元減少到 310 萬美元，這主要是由於應計費用和負債的償還以及與我們新網絡平台相關的資本支出。

While the end of Q3 is usually our high point of inventory for the year as we built for Black Friday and holiday, at $42.3 million in inventory at the end of Q3 this year, we're down $1.4 million compared to the end of Q3 last year as we adjusted our buys to reflect the lower trend of sales. On a year-to-date basis, sales are down 2.2% versus last year, gross margin is 58.7%, operating income is $1.1 million and adjusted EBITDA is $3 million. Sales in Q3 were down 1.2% to last year, slightly worse than the less than 1% decline we saw in Q2.

雖然第三季度末通常是我們為黑色星期五和假期建立的年度庫存最高點，但今年第三季度末的庫存為 4230 萬美元，與去年第三季度末相比減少了 140 萬美元年，因為我們調整了購買量以反映較低的銷售趨勢。從年初至今，銷售額比去年下降 2.2%，毛利率為 58.7%，營業收入為 110 萬美元，調整後的 EBITDA 為 300 萬美元。第三季度的銷售額比去年下降了 1.2%，略低於我們在第二季度看到的不到 1% 的降幅。

The retail and wholesale environments remain challenging due to inflation, worries about recession, war, public health. It's a long list. As we reported last quarter, we closed one door in March of this year, our San Bruno, California, store, and in July, the Oxnard, California, store. We also closed our Miami, Florida, store in October of this year. All of these stores had negative four-wall cash flow and some combination of high rents, expiring leases and/or other nearby stores that could pick up sales. We evaluate these and a number of other factors when determining whether to close existing stores or open new ones.

由於通貨膨脹、對經濟衰退的擔憂、戰爭和公共衛生，零售和批發環境仍然充滿挑戰。這是一個長長的清單。正如我們上個季度報告的那樣，我們在今年 3 月關閉了一家位於加利福尼亞州聖布魯諾的商店，並於 7 月關閉了位於加利福尼亞州奧克斯納德的商店。我們還於今年 10 月關閉了位於佛羅里達州邁阿密的商店。所有這些商店的四壁現金流量均為負值，而且租金高、租約到期和/或附近其他商店可能會增加銷售額。在決定是關閉現有商店還是開設新商店時，我們會評估這些因素和許多其他因素。

Retail channel share remained flat year over year, but the proportion of sales coming from e-commerce grew, while commercial sales declined. Our commercial customers, mostly small to medium businesses making consumer products, are suffering from the effects of the economic environment. We believe our e-commerce business benefited from a number of factors, including our continued optimization of digital marketing, especially in Canada, but may have also had some small impacts from our closed stores and high gas prices through the quarter.

零售渠道份額同比持平，但電子商務銷售額佔比增長，而商業銷售額下降。我們的商業客戶，主要是生產消費品的中小型企業，正受到經濟環境的影響。我們認為我們的電子商務業務受益於多種因素，包括我們對數字營銷的持續優化，尤其是在加拿大，但本季度關閉的商店和高油價也可能對我們產生了一些小的影響。

Furthermore, in particular in our retail stores, we're seeing customers purchase more at full price and less on sale. We believe this is a result of our everyday low price strategy continuing to resonate with customers, as we've been talking about for the last several quarters. We're refining and evolving our promotions. They are still extremely important in driving traffic, excitement and sales, but we're also pleased with the consumer response to our improved proposition. That said, we expect the retail environment will remain challenged by the many external forces at play right now and into the foreseeable future and more about that in a moment.

此外，特別是在我們的零售店，我們看到客戶以全價購買更多商品，而減價商品則更少。我們相信這是我們日常低價策略繼續引起客戶共鳴的結果，正如我們在過去幾個季度一直在談論的那樣。我們正在完善和改進我們的促銷活動。它們在推動流量、興奮度和銷售方面仍然非常重要，但我們也很高興消費者對我們改進的主張的反應。也就是說，我們預計零售環境在當前和可預見的未來仍將受到許多外部力量的挑戰，稍後會詳細介紹。

Q3 gross profit dollars came in 4.6% above last year on 1.2% lower sales with over 300 basis points improvement in gross margin rate. The higher gross margin rate reflects a combination of factors: the better full price selling that I just mentioned, the modest price increases that we've been taking in response to significantly increased product-related costs and the channel shift. More sales came from e-commerce, our highest margin channel, and less from commercial, which has lower gross margins. On a year-to-date basis, gross profit is down 1.5% to last year with margin rate up 40 basis points.

第三季度毛利潤比去年同期增長 4.6%，銷售額下降 1.2%，毛利率提高超過 300 個基點。較高的毛利率反映了多種因素的組合：我剛才提到的全價銷售情況更好，我們為應對產品相關成本的顯著增加和渠道轉移而採取的適度提價。更多的銷售額來自我們利潤率最高的電子商務渠道，而較少的銷售額來自毛利率較低的商業渠道。從年初至今，毛利潤比去年下降 1.5%，利潤率上升 40 個基點。

Better gross profit, combined with a 4% decline in operating expenses over last year, helped deliver $1 million in operating income and $1.5 million in adjusted EBITDA. On a year-to-date basis, we're still behind last year's operating income by $0.6 million. But this quarter has helped us make up some ground.

更好的毛利潤，加上運營費用比去年下降 4%，幫助實現了 100 萬美元的運營收入和 150 萬美元的調整後 EBITDA。從年初至今，我們仍比去年的營業收入低 60 萬美元。但是這個季度幫助我們彌補了一些不足。

We introduced you in our last quarterly call to the key principles that we use to manage the business. So just briefly summarizing from a financial perspective, disciplined capital allocation, meaning capital investments to be funded from operations; two, a conservative balance sheet, caution about leverage; three, focus on long-term shareholder value with consideration for all mechanisms for increasing value without impairing the long-term prospects for the business.

我們在上一季度的電話會議中向您介紹了我們用於管理業務的關鍵原則。因此，從財務角度簡單總結一下，有紀律的資本配置，意味著資本投資要從運營中獲得資金；二、保守的資產負債表，謹慎槓桿；第三，關注長期股東價值，考慮在不損害企業長期前景的情況下增加價值的所有機制。

And then from an operating perspective, number one, primarily focus on the consumer proposition: quality, value, consistency, service. Number two, build a durable business foundation and operating model, the talent, systems, processes that can support the business for many years to come. And three, but that can remain flexible and nimble that can both scale and allow us to respond to changing market conditions quickly.

然後從運營的角度來看，第一，主要關註消費者的主張：質量、價值、一致性、服務。第二，建立持久的業務基礎和運營模式，人才、系統和流程，可以在未來多年支持業務。第三，但它可以保持靈活和敏捷，既可以擴展又可以讓我們快速響應不斷變化的市場條件。

And we believe we're in a period of time right now that requires that flexibility and nimbleness, with inflation in the US remaining high and the possibility of recession next year getting higher, with China COVID lockdowns continuing to disrupt the global supply chain, and with Europe already seeing significant economic fallout from the war in Ukraine, we would be prudent to assume that the economic headwinds we've been facing this year will continue and possibly even accelerate into next year.

我們相信我們現在正處於需要這種靈活性和敏捷性的時期，美國的通貨膨脹率居高不下，明年經濟衰退的可能性越來越大，中國 COVID 封鎖繼續擾亂全球供應鏈，並且由於歐洲已經看到烏克蘭戰爭對經濟造成的重大影響，我們謹慎地假設我們今年面臨的經濟逆風將繼續存在，甚至可能加速到明年。

Our plan to weather what could be a very challenging environment of declining consumer demand is to shift our focus to growing profit and cash under the assumption that things will get worse. This means pausing or slowing our investments in driving sales growth for now with a focus on what's necessary to hold onto the gains we've made in improving the consumer proposition and building the foundation for the long term.

我們計劃經受消費者需求下降可能是一個非常具有挑戰性的環境，是在假設情況會變得更糟的情況下，將我們的重點轉移到增加利潤和現金上。這意味著暫時暫停或放慢我們在推動銷售增長方面的投資，重點放在保持我們在改善消費者主張和建立長期基礎方面取得的成果所必需的東西上。

While the opportunity for sales growth across these four initiatives remains that we talked about in our last quarterly call, our near-term focus will be on managing the core business for financial sustainability, maintaining profit and growing cash even in the face of possible declining demand. This will be primarily through optimizing our gross profit dollars, responding to our customers' sensitivity to regular retails and promotion to maximize profit dollars and by trimming operating expenses to the minimum necessary to run the core business without damaging our long-term prospects. We've already begun seeing the potential for this shift in Q3, and while Q4 tends to be unique, we are building our 2023 plan with this focus.

雖然我們在上一季度電話會議中談到了通過這四項舉措實現銷售增長的機會，但我們近期的重點將是管理核心業務以實現財務可持續性，即使在需求可能下降的情況下也能保持利潤和增加現金.這將主要通過優化我們的毛利美元、響應我們的客戶對常規零售和促銷的敏感性來最大化利潤美元以及通過將運營費用削減到運行核心業務所需的最低限度而不損害我們的長期前景來實現。我們已經開始看到第三季度這種轉變的潛力，雖然第四季度往往是獨一無二的，但我們正在以此為重點制定 2023 年計劃。

Now moving to questions and discussion, if you wish to ask a question, or make a comment, message Daniel Ross directly in the chat, and he will ask you to unmute your line. You can join the chat on the toolbar. When he asks you, you'll need to accept the prompt to unmute yourself.

現在開始提問和討論，如果您想提出問題或發表評論，請直接在聊天中向 Daniel Ross 發送消息，他會要求您取消靜音。您可以在工具欄上加入聊天。當他問你時，你需要接受提示才能取消靜音。

No questions in the chat queue so far. So please go ahead and send me a message. Okay. Here's the first one. Thanks. And this question comes from [Eddie Riley]. Please unmute yourself and go ahead and ask your question.

到目前為止，聊天隊列中沒有問題。所以請繼續給我發消息。好的。這是第一個。謝謝。這個問題來自 [Eddie Riley]。請取消靜音，然後繼續提問。

Hey, guys. I have two questions. I'm curious if you're able to give some more details on the Fort Bragg store. Why that location, how much does it cost to build out and maybe what you're expecting in free cash flow in the store?

大家好。我有兩個問題。我很好奇您能否提供有關布拉格堡商店的更多詳細信息。為什麼選擇那個位置，建造成本是多少，也許您對商店的自由現金流有什麼期望？

I can tell you that we are excited about the opportunity in military bases. It's a test for us. It is the first one and we are being cautious. We went in with a very low build-out. We used a lot of what was already there and we're looking to see what we can do.

我可以告訴你，我們對軍事基地的機會感到興奮。這是對我們的考驗。這是第一個，我們很謹慎。我們進入了一個非常低的擴建。我們使用了很多已經存在的東西，我們正在尋找我們能做些什麼。

We have a very strong base of military customers. And if this is any sign, and it may or may not be, but as they were setting up a store, we had a lot of interest from people who were just passing by and super exciting to see us there. It also gives us access to the rehab facilities there on-site. I think there are something like seven of them at Fort Bragg. So I think there are lots of possibilities and we're really seeing it as a test of what this can be going forward.

我們擁有非常強大的軍事客戶群。如果這是任何跡象，它可能是也可能不是，但是當他們開設一家商店時，我們對路過的人產生了很大的興趣，看到我們在那裡非常興奮。它還使我們能夠使用現場的康復設施。我認為在布拉格堡大約有七個這樣的人。所以我認為有很多可能性，我們真的將其視為對未來發展方向的測試。

Okay. And the second one for me. It's nice to see operating expenses decrease even relative to adjusted operating expense in the second quarter. Seems like a lot of that's driven by the bonus expense reduction. I'm wondering if you could provide a little bit more color there. Who's typically getting this? How they are incentivized and why it's decreased so much just given the performance?

好的。第二個給我。很高興看到第二季度的運營費用相對於調整後的運營費用有所下降。似乎其中很大一部分是由獎金支出減少推動的。我想知道您是否可以在那裡提供更多顏色。誰通常會得到這個？他們是如何受到激勵的，為什麼僅憑表現就減少了這麼多？

Yes, retail store employees are bonused on sales comp right now and have been for the last year or so. And corporate employees have a combination of factors. And we continue to bonus the retail employees as they deliver comp, which is variable. But overall, as it is down, the total dollar amount is down . And of course, this year, we're not expecting for the corporate employees to bonus.

是的，零售店員工現在和過去一年左右一直在銷售補償上獲得獎金。公司員工有多種因素。我們繼續為零售員工提供獎金，因為他們提供的薪酬是可變的。但總的來說，隨著它的下降，總美元數額下降了。當然，今年，我們並不期望公司員工獲得獎金。

Our next question comes from [George Bester], who asked me to read it for him. He says with cash balance lower, how is Tandy approaching share repurchase?

我們的下一個問題來自 [George Bester]，他讓我讀給他聽。他說，隨著現金餘額的減少，Tandy 如何接近股票回購？

Yeah, great question. You know, as this is a low point in the year for our cash balance, we are pausing on our share repurchases. We still think they're a great value at our recent and current share price, but we will be rebuilding our cash balance through Black Friday and holiday and the Board will be revaluating share repurchases in the future.

是的，很好的問題。你知道，由於這是我們今年現金餘額的最低點，我們正在暫停我們的股票回購。我們仍然認為它們在我們最近和當前的股價中具有很高的價值，但我們將通過黑色星期五和假期重建我們的現金餘額，並且董事會將在未來重新評估股票回購。

Our next question comes from Andrew. Please unmute yourself and ask your question.

我們的下一個問題來自安德魯。請取消靜音並提出您的問題。

How is employee turnover and morale currently?

目前員工流動率和士氣如何？

Employee turnover is down versus last year. Morale is quite good, but you're probably asking the wrong person. That's probably the answer I'm going to give you. We do measure this and we do measure turnover regularly and we've been working hard at improving our turnover, especially in this recent period of time, with unemployment really low and hiring being very challenging. And Tandy is not on the highest end of wages that we pay, especially for retail employees. We've built a lot of non-monetary benefits into the packages for those employees, and that seems to be working.

員工流動率低於去年。士氣很好，但你可能問錯人了。這可能就是我要給你的答案。我們確實會衡量這一點，我們會定期衡量營業額，我們一直在努力提高營業額，尤其是在最近這段時間裡，失業率非常低，招聘也非常具有挑戰性。 Tandy 的工資並不在我們支付的最高水平，尤其是對於零售員工而言。我們為這些員工提供了許多非貨幣福利，這似乎奏效了。

Great, and also, what are the most important competitive dynamics that you're currently addressing in winning the customer over?

太好了，而且，您目前在贏得客戶方面正在解決的最重要的競爭動力是什麼？

Yeah, good question. We are continuing to face the challenges of the fragmentation of online players, although that is reduced as the what I would call the Amazon effect has been reduced. A lot of those folks who are selling on Amazon are suffering on their businesses. So I think that's been a bit of a benefit to us.

是的，好問題。我們繼續面臨在線玩家分散化的挑戰，儘管隨著我稱之為亞馬遜效應的減弱，這種情況有所減輕。很多在亞馬遜上銷售的人都在為他們的生意苦苦掙扎。所以我認為這對我們有點好處。

But otherwise, it's just the normal blocking and tackling, being in there and having great service, good product and for our customers in particular, this category tends to be price and promotion sensitive. Continuing to be vigilant about where we can take price increases relative to our competition to help mitigate the cost increases that we've seen and where we can be aggressive about staying on top of our competitive pricing issues. It's been a hangover from many, many years in the past when we were not particularly price competitive.

但除此之外，這只是正常的攔截和解決，在那裡並提供優質的服務，優質的產品，特別是對於我們的客戶而言，這一類別往往對價格和促銷敏感。繼續保持警惕，我們可以在哪些方面提高相對於我們的競爭對手的價格，以幫助減輕我們已經看到的成本增加，以及我們可以在哪些方面積極應對我們的競爭性定價問題。這是過去很多很多年的宿醉，當時我們在價格上沒有特別的競爭力。

I will read another question from [George Bester], who asks what inflation level is Tandy seeing for its inventory? Less than the national rate, greater or equal. In general terms, please. I know there are a lot of SKUs.

我將閱讀 [George Bester] 的另一個問題，他問 Tandy 的庫存通脹水平是多少？小於全國率，大於或等於。籠統地說，請。我知道有很多 SKU。

I think you're asking the question of how much has the value of our inventory increased sort of per unit. I'm sorry, I'm not able to answer that question. We have seen significant price increases. And where the increases come across essentially all the SKUs is in particular in the transportation costs of freight and warehouse boxes, things like that that all get capitalized up into our inventory value. That's where we've seen the really big increases.

我想你問的是我們的庫存價值每單位增加了多少。對不起，我無法回答這個問題。我們看到價格大幅上漲。基本上所有 SKU 都出現了增長，特別是貨運和倉庫箱的運輸成本，諸如此類的事情都被資本化為我們的庫存價值。這就是我們看到真正大幅增長的地方。

There's always mix as well, which is -- becomes very challenging. As we bring in higher priced items, it's difficult to kind of tease out which is coming from mix versus absolute price increases. But some categories of product that's capitalized like boxes, for example, have increased over 100%. And we all know that freight and fuel surcharges on freight have also increased really dramatically. Vessels coming from Asia, for example, have increased 300%. So those are the areas where we've seen really significant increase. I can't tell you what it is overall though.

總是有混合，這變得非常具有挑戰性。當我們引進價格更高的商品時，很難弄清楚哪些是混合價格上漲，哪些是絕對價格上漲。但是一些像盒子這樣大寫的產品類別，例如，增長了 100% 以上。而且我們都知道，貨運的運費和燃油附加費也確實大幅增加。例如，來自亞洲的船隻增加了 300%。所以這些是我們看到真正顯著增長的領域。我不能告訴你它的總體情況。

Next is a question from [Eric Spheron], which he asked me to read. He says nice job getting the gross margin back through 60%. In the context of the drivers, full price sell-through is self-evident, but can you talk about the impact of proprietary products in e-commerce? What percentage of sales are they now? And what is a good 24-month goal?

接下來是 [Eric Spheron] 的問題，他讓我閱讀。他說把毛利率恢復到 60% 做得很好。在驅動因素的背景下，全價銷售是不言而喻的，但您能談談自營產品對電商的影響嗎？他們現在佔銷售額的百分比是多少？什麼是好的 24 個月目標？

Yes, e-com, as we said in the presentation, is now at 18% of sales. And we are, you know, -- it's a little bit of accounting because e-commerce shipping is included in sales and shipping out to customers is included in operating expense. So it creates kind of this artificial higher gross margin for web.

是的，正如我們在演示文稿中所說，電子商務現在佔銷售額的 18%。你知道，我們是——這有點會計核算，因為電子商務運輸包含在銷售額中，而向客戶發貨包含在運營費用中。因此，它為網絡創造了這種人為的更高毛利率。

Sorry, other parts of your question around what's the mix of proprietary brands? Those would be Tandy Brands that we've been rebuilding. And I don't have that number on list off the top of my head. Maybe somebody on the team can dig that up while we're talking. But those have been increasing and we've improving the margins where we can with that mix.

抱歉，您問題的其他部分是關於專有品牌的組合是什麼？那些將是我們一直在重建的 Tandy Brands。而且我的腦海中沒有那個數字。也許團隊中的某個人可以在我們談話時挖掘它。但這些一直在增加，我們正在通過這種組合提高利潤率。

And Eric had asked about 24-month goal for that. For product mix.

埃里克為此詢問了 24 個月的目標。對於產品組合。

Yes, we don't have a number for that for 24 months, but for us, it's not about hitting a number for those brands. It's really about providing the mix that is both meeting our financial goals around the mix for the margin, but more importantly the things that customers really want to buy.

是的，我們沒有 24 個月的數字，但對我們來說，這並不是要為這些品牌打一個數字。這實際上是關於提供既能滿足我們圍繞利潤率組合的財務目標的組合，更重要的是提供客戶真正想要購買的東西。

We have a lot of items that are lower gross margin that are branded items that are really meaningful to our customers. Leather Machine Co., the Cobra sewing machines, are among our lower margin items but they have been very important in terms of driving sales and demand and traffic. And they also contribute to the perception that Tandy has things that customers want to buy it. So it's about really managing the mix of those things.

我們有很多毛利率較低的商品，它們是對我們的客戶真正有意義的品牌商品。 Leather Machine Co. 的 Cobra 縫紉機是我們利潤率較低的產品之一，但它們在推動銷售、需求和流量方面一直非常重要。而且它們還有助於形成這樣一種看法，即 Tandy 擁有客戶想要購買的東西。所以這是關於真正管理這些東西的組合。

I will also read the next question, which comes from Mike C. He asks is the overall industry for leathercraft growing in 2022? Do you see more people joining this hobby?

我還將閱讀下一個問題，該問題來自 Mike C。他問 2022 年皮革工藝的整體行業是否在增長？你看到更多的人加入這個愛好了嗎？

I'm sorry. I'm getting a million answers from my team on proprietary products. You want me to -- let me check that real quick and see what they said. Yes, so especially, you know, with regard to kits, that's an area that has been growing very significantly where our margins are much improved and we're estimating those to be in the 15% to 20% range. So I'm sorry, can you repeat the next question again, Dan?

對不起。我從我的團隊那裡得到了一百萬個關於專有產品的答案。你想讓我——讓我快速檢查一下，看看他們說了什麼。是的，特別是，你知道，關於套件，這是一個增長非常顯著的領域，我們的利潤率大大提高，我們估計這些領域在 15% 到 20% 的範圍內。抱歉，丹，你能再重複下一個問題嗎？

Yes, Mike's question was is the overall industry for leathercraft growing in 2022? And do you see more people joining this hobby?

是的，Mike 的問題是整個皮革行業在 2022 年是否會增長？你看到更多的人加入這個愛好了嗎？

Yes. You know, crafting in general has been growing. I think that we are not taking as strong a measure, a quantitative measure of where the category is. As the leader in the category sort of as goes Tandy, so as the category. So we're definitely -- we've definitely seen dampened consumer demand in the category, but the long-term trend for crafting in general and for leather crafting specifically is very positive.

是的。你知道，手工藝總體上一直在增長。我認為我們沒有採取強有力的措施，即對類別所在位置的量化措施。作為類別中的領導者，Tandy 也是如此。所以我們肯定 - 我們確實看到該類別的消費者需求減弱，但總體手工藝和皮革手工藝的長期趨勢非常積極。

Okay. If anybody else would like to ask a question, please send it to me in the chat. Right now, there's nothing in the queue.

好的。如果其他人想問問題，請在聊天中將其發送給我。現在，隊列中沒有任何內容。

Give you a second. I do want to come back to the Fort Bragg question for a moment while people are thinking about if they have other questions. The other thing that's unique about the Fort Bragg model is that rent is a percentage of sales. So as your sales gets bigger, that's not necessarily the greatest thing. But to get started, it is actually a very, very low risk. In addition, it is a very low time commitment.

等一下。在人們思考是否還有其他問題時，我確實想暫時回到布拉格堡問題。布拉格堡模型的另一個獨特之處在於租金是銷售額的百分比。所以當你的銷售額變大時，這不一定是最好的事情。但要開始，它實際上是一個非常非常低的風險。此外，這是一個非常低的時間承諾。

So this has been a really, really low cost way for us to get in with some of our highest affinity customers for a very low cost. And we will be -- potentially they've come to us and asked us to be in a number of other military bases and we're going to see how this goes. And I think that it could be a model that can be quite successful for us longer term.

因此，這對我們來說是一種非常非常低成本的方式，可以以非常低的成本與一些最親近的客戶建立聯繫。我們將 - 可能他們已經來找我們並要求我們進入許多其他軍事基地，我們將看看情況如何。而且我認為，從長遠來看，這可能是一種對我們來說非常成功的模式。

We have one more in the queue, again from Mike C., who asks what should be the long-term net margin for the business?

我們還有一個人在排隊，同樣來自 Mike C.，他問企業的長期淨利潤率應該是多少？

We're not providing long-term guidance. You know, we've talked about our long-term goal to get to $15 million to $20 million in operating income and $100 million in sales. But you know, given the current economic headwinds, clearly that's not going to be happening in the next year or so. That's going to take us longer to really drive toward.

我們不提供長期指導。你知道，我們已經談到了我們的長期目標，即營業收入達到 1500 萬至 2000 萬美元，銷售額達到 1 億美元。但你知道，考慮到當前的經濟逆風，顯然這在未來一年左右不會發生。這將花費我們更長的時間才能真正實現目標。

And one more from Eric Spheron, who asks on store number 36 -- I'm sorry, it's a little hard to follow. On store number 36 year months out, how do you think our store count at 103 stores? A few more or a few less? I'm sorry, he's asking -- yes, he's asking generally 36 months.

還有一個來自 Eric Spheron，他在 36 號商店詢問 -- 抱歉，有點難以理解。在 36 年的商店數量上，您認為我們的商店數量如何達到 103 家？多一些還是少一些？對不起，他要求——是的，他一般要求 36 個月。

Look, we are closing stores incrementally as the -- for the negative cash flow stores that have leases expiring or we can get out of them nominally. There are really only one or two stores right now today that we think have the potential to be negative cash flow in the near future. So I'd like to see us stop closing. And the reason we close is because they're not doing well economically.

看，我們正在逐步關閉商店——對於租約到期的負現金流商店，或者我們可以名義上擺脫它們。我們認為，目前只有一兩家商店在不久的將來有可能出現負現金流。所以我希望看到我們停止關閉。我們關閉的原因是因為他們的經濟狀況不佳。

So obviously, I'd like to see us stop closing. But I would also like to see us grow some stores, not dramatically, but because they need to be cash flow positive. This is a big use of operating expense for us, and we need these stores to be delivering positive cash flow.

很明顯，我希望看到我們停止關閉。但我也希望看到我們增加一些商店，不是顯著增加，而是因為它們需要現金流為正。這對我們來說是一筆很大的運營費用，我們需要這些商店提供正現金流。

So that's why I'm optimistic about the opportunity to test a new format in Fort Bragg where the economics could be more attractive, honestly, potentially. And we will be -- we are constantly seeking other potential locations, but we're also being very cautious about we're making these investments. So didn't -- I'm not going to give you a number, but that is to say I don't expect it to be continuing to decline. And we would like to see it increased nominally.

所以這就是為什麼我對在布拉格堡測試一種新格式的機會持樂觀態度，老實說，那裡的經濟學可能更具吸引力。我們將 - 我們一直在尋找其他潛在地點，但我們對進行這些投資也非常謹慎。所以沒有 - 我不會給你一個數字，但也就是說我不認為它會繼續下降。我們希望看到它名義上有所增加。

Thanks. One more from Eddie Riley. Eddie, please unmute and you can ask your question.

謝謝。埃迪·萊利 (Eddie Riley) 的另一首。 Eddie，請取消靜音，然後你可以提出你的問題。

Great. Thanks. Janet, with Fort Bragg as the test store for military bases, if this works out well, will future stores on military bases also have rent tied to sales?

偉大的。謝謝。珍妮特，以布拉格堡作為軍事基地的試驗店，如果一切順利，未來軍事基地的商店是否也將租金與銷售額掛鉤？

That's the way AAFES, who is the Army Air Force Exchange Service, I think that's what AAFES stands for, they run all of the retail concessions on Army and Air Force bases. That is their model. It is a percentage of sales model, and you know, really all comes down to what's that rate that you negotiate because they are all negotiated. They're not to rigid. And I think that we -- what we're hoping for is getting to a tiered sort of approach with them, but the positive of it is that it allows you to get in fast, to get out if it's not working, and to really test.

這就是 AAFES 的方式，它是陸軍空軍交換服務處，我認為這就是 AAFES 的代表，他們在陸軍和空軍基地經營所有零售特許權。那是他們的模型。這是銷售模式的百分比，你知道，實際上所有都歸結為你協商的比率是多少，因為它們都是經過協商的。他們不是死板的。而且我認為我們 - 我們希望的是與他們採用一種分層的方法，但它的積極之處在於它可以讓你快速進入，如果它不起作用則退出，並且真正測試。

Could you maybe give us an indication of the rate that you negotiated with Fort Bragg?

你能告訴我們你與布拉格堡談判的費率嗎？

Yes, it's 8%.

是的，它是 8%。

Okay, great. Thank you.

好的，太好了。謝謝。

That is all we have in the queue now.

這就是我們現在排隊的全部內容。

All right. Well, as always, you can message us individually, and thank you again for joining. And we'll see you next quarter.

好的。好吧，一如既往，您可以單獨給我們發消息，再次感謝您的加入。我們下個季度見。