Urban Outfitters Inc (URBN) 2008 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc. fourth quarter fiscal 2008 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time.

(OPERATOR INSTRUCTIONS)

As a reminder, this conference call is being recorded.

The following discussions may include forward-looking statements within the meaning of the Private Securities LItigation Reform Act of 1995. Please note that actual financial results for the company for the periods being discussed may differ materially from the financial results projected or implied in the forward-looking statements. Additional information concerning factors that could cause actual financial results to differ materially from projected results contained in the company's annual report on Form 10-K and in other documents filed by the company with the Securities and Exchange Commission. The company disclaims any intent or obligation to update forward-looking statements. No recording or rebroadcast of this call is permitted without the company's express written permission.

I would now like to introduce your host for today's conference, Mr. Glen Senk, CEO. Sir, you may begin.

Thank you and good morning, and welcome to the Urban Outfitters quarterly conference call. I am joined today by Dick Hayne, our Chairman; John Kyees, our Chief Financial Officer; Ted Marlow, President of the Urban Outfitters brand; Meg Hayne, President of the Free People brand, and our Senior Executive staff. Earlier this morning, the company issued a press release outlining the financial and operating results for the 12- and 3-month period ending January 31st, 2008. I will begin today's call by reading prepared comments regarding our performance. The team and i will then be pleased to answer any questions you may have. As usual, the text of today's conference call can be found on our corporate website, www.urbanoutfittersinc.com.

Our fourth quarter performance was the pinnacle in what was a turnaround year. Total company sales increased by 29% to $465.4 million, a company quarterly sales record. Total company comparable store sales grew by 11%. Anthropologie and Free People achieved impressive double-digit comp increases of 18% and 19% respectively, and Urban Outfitters achieved a 6% comp, signalling an exciting recovery in the business. Direct to consumer sales surged by 39%, with all three brands contributing meaningfully to the result. Free People wholesale revenues increased by an impressive 34%. Operating income grew by 66% to $80.3 million or 17.3% of sales, just slightly below our fourth quarter record in fiscal 2004 and better than the rate in the fourth quarter of fiscal 2006, when we achieved an annual operating income of 19% for the year. Finally, the company earned a record $53.6 million for the quarter, a 50% increase from the prior year, resulting in earnings per diluted share of $0.32.

I will now go into more detail on each of the metrics of our business, starting with sales. New and noncomparable store sales accounted for $[46.6] million of the sales growth in the quarter, or 45% of total quarterly growth. The company opened 15 new stores in the quarter, eight Anthropologie stores, two Free People stores and five Urban Outfitters stores, bringing the total new store count for the year to 38. The company's comparable store performance was strongest in January, and relatively similar in November and December. At Anthropologie, 84 out of the 87 stores were comp positive for the quarter. All regions and all store types experienced double-digit growth. At Urban Outfitters, comparable store performance was positive in all regions, and strongest in the south and northeast. By type, all venues performed equally well, with the exception of lifestyle centers, which were positive but chased the group.

The increase in comparable store sales was driven largely by transactions, which increased by 10% in the total for the quarter, with gains of 11%, 14% and 9% at Anthropologie, Free People and Urban Outfitters respectively. The company's average transaction value was up 2% for the quarter; up 6% in Anthropologie, up 5% in Free People and down 3% at Urban Outfitters. Similarly, the company's average unit selling price increased 2% in total; up 6% in Anthropologie, up 8% at Free People and down 2% at Urban Outfitters. At Anthropologie and Free People, all major merchandise divisions were double-digit comp positive. At Urban Outfitters, all divisions were at least single-digit comp positive for the first time since Fall 2005.

I would like to take a minute to recognize the progress that Ted and his team have made at the Urban Outfitters brand. We created a very deliberate tactical plan back in May, and I am extremely proud of the group's accomplishments thus far. We hired 32 new team members, 14 in design and 18 in buying. This is an exceeding talented and committed group, and while a high percentage of the team is new, we have made exceptional progress under Jim Brett's leadership. The team increased the style - the retail style count by 20% from the second quarter to the fourth quarter, while keeping the SKU count flat, resulting a more balanced, less duplicative assortment.

We're managing the business, including receipt flow, on a tighter calendar, resulting in fresher inventory flow. We're managing markdowns more effectively, resulting in a better sell-through, a higher penetration of regular-priced sales, and an average January-ending per store markdown inventory that is 44% lower than the prior year. We've begun to employ a sophisticated attribute system which enables us optimize inventory and sales productivity. We've started to use design concepts to synchronize the design and buying process, resulting in a more cohesive balance and compelling assortment. Finally, we've increased the penetration of our own brand products from 15% in the third quarter to 18% in the fourth quarter, and we've positioned 30% of the first quarter's women's buy into own brand product. Equally important, own brand product is selling through at a faster rate and at better margins when compared to the women's assortment in total.

The turnaround at the Urban brand is still a work in progress, but we are gratified that we have been able to move into positive territory well within the timeline we sat during our May conference call. More importantly, I believe we have laid a strong foundation for the future.

Now, let me turn your attention to our direct to consumer business. Direct sales increased for the quarter by 39% to $72.9 million, driven by a circulation increase of just 19%. The penetration of direct sales to total company sales increased yet again, to 15.7% from 14.6% a year ago, reflecting what we believe is a paradigm shift in the way the consumer is shopping, particularly during the fourth quarter. The websites in all of our brands continue to gain traction. Site visits were up 36% in the quarter, to nearly 16 million visits. That's a gain of 4 million visits over the same period last year. Finally, Free People wholesale continued its tremendous sales momentum, increasing quarterly sales by 34%. The increase was driven purely by an increase in units, with specialty stores growing slightly faster than department stores.

For the year, total company sales were up 23% to $1.5 billion. Here are a few important highlights. Total company sales over the last five years have grown at a compounded annual rate of 29%. Total company comparable store sales for the year increased by 5.5%, with Anthropologie and Free People increasing by 13% and 18% respectively, and Urban Outfitters decreasing by 1%.

Over the past five years, including fiscal 2008, the company averaged a comparable store sales increase of 9%. By brand, Anthropologie averaged 10%, Free People averaged 19% and Urban Outfitters averaged 8%. The direct to consumer business grew 34% in fiscal 2008 to $205.7 million, with a circulation increase of just 9%. Over the last five years, the direct to consumer business had soared at an annual compounded growth rate of 45%. Site visits at the company's three websites grew 26% for the year to 49 million visits, picking up more than 10 million visits for the year. The Free People wholesale business increased 27% for the year, and has grown at an impressive five-year compounded rate of 39%.

I would like to now turn your attention to gross margin, operating expense and income. Total company gross margin increased 287 basis points for the quarter to 39.6%. This performance, while nicely favorable to last year, was below plan, driven largely by markdowns taken at the Urban Outfitters brand to clear seasonal product. As I mentioned a moment ago, our Urban stores ended the quarter with an average of 44% less clearance inventory than a year ago, and a significantly higher penetration of regular price selling; so we believe that our fourth quarter markdown strategy was effective, and that it positioned us well going into the first quarter of fiscal 2009. Total company comparable inventory was down 3% at the quarter's end, with an 8% increase at Anthropologie and a 14% reduction at Urban Outfitters.

As is our custom, we plan and manage our inventory to weeks of supply as opposed to a set percent. We change the plan as often as needed based on trend. As a result, we believe we are appropriately positioned for a positive comp trend in the first quarter of fiscal 2009.

Store occupancy leveraged 67 basis points with contributions across all brands. Dave Ziel, our Chief Development Officer, successfully completed his capital project initiative, resulting in a 20% reduction in construction cost per square foot for the year. Given Dave's accomplishment, we expect to continue to leverage occupancy expense, provided we meet or exceed our modest comp sales plans.

For the year, the total gross margin increased 135 basis points to 38.3%. As with the quarter, the year was nicely above the prior year but below plan, driven largely by markdowns taken at the Urban Outfitters brand. Store occupancy leveraged 43 basis points for the year, driven largely by significant improvements at Anthropologie. The company's operating expense leveraged 101 basis points in the quarter to 22.3%, principally due to the leveraging of direct store controllable and other corporate expense. It is important to note that the other corporate expense included a non-recurring legal fee related to protecting our intellectual property, which resulted in a negative impact for the quarter of 19 basis points. The company's operating expense for the year leveraged 18 basis points to 23.3%, principally due to the leveraging of store support-related expense.

The company's income from operations for the quarter increased 66% to $80.3 million or 17.3% of sales, with earnings per diluted share growing from $0.21 to $0.32 versus the same period last year. Income from operations for the year grew by 37%, to $224.9 million or 14.9% of sales, with earnings per diluted share growing from $0.69 to $0.94.

In a design and merchant-driven organization such as ours, we sometimes neglect to recognize the outstanding efforts of the support team. It is this operational excellence, however, that liberates the merchants to focus on their customers and their product, and ultimately enable the company to function so effectively. I am so very proud of the shared service organization and the teams within each of the brands that helped deliver the Urban experience. Distribution, finance, the call center, loss prevention, store operations, real estate and development, store design, visual merchandising, planning, allocation and marketing. Each of these teams is best-in-class and they have my heartfelt appreciation for an outstanding year.

I would also like to recognize several key accomplishments that occurred during fiscal '08. Barbara [Rosa], our Executive Director of Sourcing, made great progress with our concept to market initiative. Barbara and her group have made significant inroads compressing our design and production calendars, improving our chase ability and improving our initial margins. The principal purpose of speed to market is to better satisfy our customer by delivering the right product in the right place at the right time, ultimately improving store productivity, full price selling and maintained margins.

Calvin [Hollinger], our Chief Information Officer, just finished another year of superior execution. In addition to the numerous achievements I discussed on prior calls, in the fourth quarter we experienced near flawless peak processing, launched Urban's redesigned website, began shipping internationally for Anthropologie Direct, and readied for the opening of Terrain.

Ken McKinney, our Director of Distribution, has once again exceeded all expectations, with across-the-board improvements in performance and cost per order or unit metrics in all three distribution points, [inaudible] Pennsylvania, Trenton, South Carolina, and our new site in Reno, Nevada.

Bill Cody, our Chief Talent Officer, and his team hired 68 people in the home office during the quarter. And finally, Bob Ross, our Controller, has provided immeasurable support to each of the brands in the organization as a whole. Thanks to Bob and his team, we have the best analytics we've ever had, and the most financial support in running our business.

Before I close, I would like to take a minute to discuss some of our initiatives for fiscal 2009. At Anthropologie, there are four key initiatives for the year. The brand debuted Leifsdottir, its wholesale label, on February 7th during fashion week. This new line, with an average retail of $220, will hang with such labels as Marc by Marc Jacobs, Diane von Furstenberg, See by Chloe, and Annette Lepore. The label - excuse me - the feel of the product is vintage-inspired, young designer, featuring better fabrics and yarns and a high level of tailoring. The line shipped initially on June 30th to an exclusive group of accounts, including Bergdorf Goodman, select Bloomingdales or Nordstrom doors and 30 of the best specialty doors in the country.

Anthropologie will begin selling shoes in 23 of its stores at the end of March. Our assortment will consist of approximately 24 styles, half of which will be own brand. As the team garners information, the presentation may expand to as many as 40 stores by year end. The brand is beginning to research expansion to beyond the United States. Anthropologie's direct channel began shipping to Canada and Europe at the end of the fourth quarter, and it is likely that the first Anthropologie store in Canada will open by mid-2009, and likely that the first Anthropologie store in Europe will open by mid-2010. Finally, the brand is continuing to develop its CRM program, named Anthro. There were nearly 200,000 members by year end, and the team will continue to fine tune the program through fiscal 2009.

At Free People, there are also four major initiatives for the year. The brand is now shipping 18 deliveries of Collection, the core of the Free People line. This means that our accounts will have new product on the floor every three weeks, if not more often. It is important to note we have grown our Free People business largely by increasing productivity in existing accounts, as opposed to growing distribution. Intimately Free People, Free People's new intimate line, will be delivering 12 times this year, with distribution in key accounts, including Bloomingdales, Nordstrom, numerous specialty doors and our own retail stores. We The Free, Free People's newest line, successfully debuted in our own stores at the end of 2007. The collection is designed to hang with Free People; with an average retail of $100, it's mid-driven, boy-inspired, with a heavy amount of finish work, including printing, artwork and washing. The line will deliver seven times in 2008, with a small and extremely exclusive distribution. Finally, Free People is pioneering a wholesale website, allowing our more than 1,500 specialty accounts to place and track their orders online. Like our retail sites, the website will have real-time inventory, and will enable the sales to communicate trend information, best sellers and other insights.

At Urban Outfitters, there are five key initiatives. The Urban team will continue to make important refinements to the calendar, including increasing the number of own brand deliveries and flow. The objective is to have continual freshness on the floor, thereby increasing turn and regular-priced selling. The brand plans to decrease private label penetration and increase own brand penetration. I mentioned earlier that the own brand buy represented 30% of the total women's apparel buy in first quarter of fiscal 2009. Our goal is to achieve a penetration in excess of 50%, as the design and buying team acquires the appropriate information and experience to do so.

Just to provide clarification, because I've used the description "own brand" quite a bit today, we define own brand the way any other well-executed would define their business. To us, own brand means that the product is designed, manufactured, and marketed with the brand's point of view, that the product has a DNA, a handwriting so to speak, that is consistent over time. Private label, on the on the other hand, is typically opportunistic product that is often designed and manufactured in the market, with a label that more often than not has an inconsistent point of view.

Next, the Urban team intends to be - to more effectively mind the synergy between direct and retail businesses. For example, the calendar needs to work for both channels, and the retail team needs to be more mindful of how the catalog or website effects retail selling.

In addition to an emphasis on developing their own brand assortment, the Urban team is committed to numerous vendor collaborations with resources like Steven Alan, Charlotte Ronson, [Corpits], [Gerren] Ford, Paul & Joe Sister and Bing Bang. The company's vision from the very beginning was that Urban would offer an eclectic mix of own brand product and the best product the market had to offer. I am pleased that Jim and his team have recommitted to that vision.

Lastly, the brand is testing a new retail concept, a lifestyle project called Space 15 Twenty in West Hollywood. The Space 15 Twenty building is 26,000 square feet. Urban will be taking 11,000 square feet, and acting as the landlord to a variety of other hand-selected unique tenants for the remainder of the space. We believe this is a relatively risk-free means of creating an exciting, compelling and highly differentiated real estate venue for our brands, and we look forward to learning from the results.

Last, but certainly not least, the company will open its first Terrain store this coming April. The company purchased the J. Franklin Styer Nurseries in February, and the facility will be reopened as Terrain at Styer's in April, just in time for the peak gardening season. The site will have 19,000 square feet under roof, housing plant materials, garden equipment, pots, garden accessories, furniture, found objects, gifts and a cafe. It will have another 4,000 square feet devoted to landscaping services, and approximately three acres devoted to plant materials, outdoor furniture and accessories. The team's objective is to reinvent the garden center, and we are all highly enthusiastic about the opening plans, including the visual execution and product assortment.

Incidentally, for those of you who may be in the Philadelphia area this week, Terrain at Styer's is exhibiting at the Philadelphia flower show, the largest indoor garden show in the world. The exhibition, which will be visited by more than 250,000 visitors this week, marked an auspicious introduction for the brand. Terrain at Styer's won five awards, including the People's Choice Award, the Campbell Award, and the Best in Show Award.

We define the company's core competency as creating emotional connections with our customers through the creation of compelling, differentiated experiences. Our product offering is critical, but we believe the experiential aspect of our strategy is what truly differentiates us from other retailers. We executed well in the fourth quarter and the customer responded positively. Thus far for the first quarter, our results are also nicely ahead of last year and plans. We remain optimistic yet appropriately cautious. Given the economic environment, we believe this is a time for conservatism, and we are planning our business accordingly. Our overarching goal is constant and simple, to grow revenue by at least 20%, to grow profit at a faster rate than sales, and to reach a minimum of 20% operating income. We have achieved our growth goals consistently over time, and we remain confident that we will continue to do so.

We believe the company has built three of the most recognized, distinct and compelling brands in the industry; three brands that have consistently inspired a profound level of customer loyalty. Equally exciting, each brand has significant opportunity to grow through multi-channel expansion and brand extensions, and we now have Terrain joining the Urban portfolio to provide another means of growth. The leadership team and I couldn't be more excited about the prospects ahead, and we look forward to continuing to inspire our customers, and reward our shareholders and employees.

I will now open the call to questions. As we have done on the last several calls, before we begin I would like to ask each of you to limit yourself to one question. I respectfully apologize in advance. If you ask more than one question, we will respond only to your first query. Thank you.

(OPERATOR INSTRUCTIONS)

Our first question comes from Kimberly Greenberger of Citigroup.

Thank you. Good morning, and congratulations on a traffic fourth quarter.

Thank you.

Glen, I was hoping you can expand on the concept to market discussion. Where are you in that initiative, what are the next steps and when do think you will fully realize the benefits of CTM in merchandise, margin and in the assortment?

Kimberly, great question. I don't think we prepared to answer that fully. I certainly don't think we are prepared to answer fully when we expect to fully realize the margin improvements. I think it's a multi-year process. If I laid out a timeline, I would say we are 25% to a third of the way to where we want to be. Barbara and her team, and the merchant team, and the design team, have done just an exceptional job. The kind of big to do right now is we are doing a proof of concept on a software package that will help us enormously, We are in the process of considering opening up an overseas office. We are in the process of consolidating factories. So we've got a lot of work to do in the current year, and probably the year or two thereafter.

Great. Thanks, Glen.

Our next question comes from Brian Tunick of J.P. Morgan.

Thanks. Congrats, again. Can we get a little more color on the Urban Outfitters division, either you know, sort of the gross margin recovery story, sort of where are we, and the categories inside Urban Outfitters, sort of what were the laggards in the quarter?

Brian, I think that, you know, we never really release margin information by brand, and I would be loathe to start doing so now. We also tend not to give specific information by merchandise category. As I said on the call, all divisions were at least single-digit positive. So there is a lot of traction in the business. I also said that the regular-price selling penetration was up nicely, that we ended up the quarter with 44% less markdown inventory, so I think you can draw inferences as to what is working, what the margins could look like in the first quarter going forward. Ted, do you want to add anything?

I think you're there, yes.

Thank you, all right.

Our next question comes from Margaret Whitfield of Sterne Agee.

The tax rate is higher than I expected for the year. I am wondering if there are any strategies afoot to bring it down in the out years?

Margaret, the approach I would recommend for future years is to use around 36.5%. We are - at this point can't totally control what happens on state taxation and unitary tax moves, so 36.5% is a pretty good number.

But if you focus on an overseas office, that might change things, right, John?

That will - yes, that will be in the future.

Okay.

Our next question comes from Barbara Wyckoff of Buckingham Research.

If you could do Urban and Anthro's fourth quarter over again, what would you do differently I guess, in terms of flow, classification mix, et cetera?

Barbara, I don't know how to answer that. I think we all have hindsight meetings at the end of every quarter and, of course, there are things we would do differently. But I have to tell you, I think with a ROS that is the second highest in our company's history, with a turnaround at Urban that is faster than what we committed in May, with high double-digits comps at Free People and Anthropologie, with extraordinary gains in the direct to consumer business, I am happy. You know, Dick, for a long time, has always used the analogy of a target, a bow and arrow target, and you know, we talk about whether or not we hit the bullseye or a couple of rungs out. You know, I think that Free People and Anthropologie came very close to hitting a bullseye in the fourth quarter, and Urban is hitting the target. So, you know, I am pleased. Ted, you want to add anything?

The only thing I would chime in on, Barbara, i think that the assortment challenges that we've had in Urban, getting the assortment balanced the way that we want, to drive the business, is something that we have - not have had as much issue with in the direct side, and our marketing package in direct I think has done nothing but treat us exceptionally over the past year. So there is content there that the customer has responded very favorably to, and I think we've had really good learnings for turning the corner into this year. I expect business to continue to deliver where we have been, if not improve.

Barbara, I would like to add a couple of things. Clearly we believe there is significant margin upside at Urban, you know, because markdowns were unfavorable to plan and to last year. But we also believe that there is sufficient opportunity at all of our brands. You know, Free People achieved a staggering run rate of just under $1,100 a foot this year, but Meg and her team believe that there is opportunity there. Anthropologie is just below 800, and I've said publicly for awhile that I think we can pick up a significant amount of productivity against that number. We've talked about, and John certainly in all the conferences has talked about IMU and markdown opportunity. We've talked about opportunity to continue to leverage occupancy. So while I am very, very pleased with the quarter, I didn't mean to imply there is not a ton of opportunity going forward.

Thank you.

Thank you. Our next question comes from Lauren Levitan of Cowen and Company.

Thanks, good morning. It is Lauren Levitan. Glen, can you give us some further insights into the own brand penetration versus the private label? You talked a lot about it on the Urban side, I'm wondering if you could give us some of the the same thoughts on the Anthropologie side? Do you expect to be at either brand using or developing additional brands and labels to accomplish these goals? And are you seeing substantially different lead times currently between your own brand and your private label assortments? Thank you very much.

So the own brand business at Free People is - other than denim, is virtually 100% of the apparel business. At Anthropologie, the own brand business comprises roughly 50% of the women's assortment. And as we said, at Urban in the - it is 18%. I think for Urban and Anthropologie, 50 to 60% is a healthy number. Dick's vision, that dates back probably more than 30 years, was always to have an eclectic mix of market products and own brand product, so that we could leverage the risk or mitigate the risk. In terms of reaction time, there really is no difference between our own brand product and the market product at this point.

We are big enough at this point where we can't go into a market vendor and buy product that is hanging. They have to cut to order for us. On the other hand, as I said awhile ago, Barbara has made tremendous accomplishments - progress with chase. Literally, we were at an Anthropologie meeting on Monday and there was an item, best-selling knit top ever in the history of the company, I believe, sold at 30% its first week, Barbara was able to get a reorder in two weeks. I mean, that was unheard of - that would have been unheard of even a year ago. So, you know, the reorderability and the maneuverability is relatively equal. If anything, we are probably more maneuverable internally than we are externally, and from a strategic point of view, for Urban Outfitters and Anthropologie, I think 50% is a good number and, and obviously at Free People it will be higher.

And how about brands and labels at Anthro and Urban? Obviously at Free People, we know you are using Free People. But I am curious at Anthro and Urban, what we should be watching for and what we should be thinking about?

Well, I think the whole essence of own brand, what we're trying to accomplish, is we are trying to make the product we design and manufacture ourselves compete with the very best labels in the industry. And you know, I think it was about a year, year and a half ago, where Dick and I were brainstorming and he challenged me to start a wholesale business at Anthropologie, and my first reaction was that it was a bad idea, because I didn't want to kind of share what I felt was proprietary information at Anthropologie. And after talking it over with Dick, he challenged me to think about the fact that if we created a wholesale label, it would cause our internal team to have to compete with the best, and there would be tremendous benefits that accrued back to own brand product.

We did a lot of research and kind of rethought the process, and thanks to Dick and the Anthropologie team, we launched Leifsdottir. It is entirely possible that we will launch other brands, wholesale brands in the company. And then within our stable of own brands, I mean there's a tremendous emphasis on making them better. Each brand has to have a strong DNA and handwriting. Each brand has to have a consistency to the way it is marketed, a consistency with the details and so on.

Thank you very much and good luck.

Thank you.

Our next question comes from Liz Dunn of Thomas Weisel Partners.

Good morning. Obviously very strong sales trends, strong gross margin trends. Can you talk to us a little bit about SG&A in 2008 and what will be the leverage point? Where are you seeing incremental spending, where there are some maybe opportunities, and how much will these growth opportunities cost?

Hi, Liz, it is John. I think SG&A this coming year will probably leverage at 4.5 to 4% comps, so we would expect it not to grow much more than 20%, which makes us pretty comfortable in terms of SG&A leverage going forward.

Okay. And then anything qualitatively, like where exactly you will be spending and where there may be some opportunities?

The other issue would be Terrain, where we expect to swallow, as we said, several times a couple million dollars a year in incremental SG&A expense, and we are very comfortable with that as a R&D process that helps develop that brand. Outside of that, there really aren't any other significant SG&A additions. We will continued to add designers, but those get charged to product and not SG&A.

Very helpful. Thanks. Congratulations.

Thank you.

Your next question comes from Neely Tamminga of Piper Jaffrey.

Glen, could you talk a little about - I mean, I think it's a matter of public record that you are on a Board of a beauty company, and I'm just wondering if you could talk a little bit about what the role of the beauty, as you might be learning, has at Anthropologie? Is that what you're referring to in terms of taking up the productivity at the concept? Is it new category expansion or just wondering, you know, what we should be thinking about, because obviously you've done the pricing up and then bringing it back in. What should we be thinking about for Anthropologie?

First of all, my participation on the Board of Bare Essentials really has no bearing on my role at Urban Outfitters. Urban and Anthro have been in the kind of soaps and lotions business for years, and I will expect that they'll continue to do so. We look at productivity, Neely, we look at it many, many ways. I love this part of the business. First, we look at the fuel, so the product, and we have learned that good inventory flow drives business. Newness, you know, the more we can improve our flow and increase our flow, the more accurately we can get the right product to the right store at the right time, the more we are going to drive our business. I've said numerous times we do not use price promotions or marketing - traditional marketing to drive the business. We use product to drive our business. And we think there is opportunity with this CPM project to improve the fuel content. Okay? That's number one.

Number two, store siting, you know, store location and store design is a way that we impact productivity. I've mentioned on several conference calls that we gotten - we've invested in analytical tools, I think we have gotten much more disciplined in the way we approach our real estate selection process. I think we've also gotten a lot more disciplined in the way we design our stores, and I think there's continued opportunity to do that.

I liken it to describing a sailboat. A store that is highly productive, every square inch of it works properly. There is a lot of opportunity - we've made a lot of progress, but there is continued opportunity in the way we manage our stores. Something as simple as the way we staff on an hourly basis, to something more complex like the way - our selling culture. I talked about the CRM package which launched at Anthropologie this past year, which I believe long term will be at all three brands or four brands. We are driving across country without a map right now in our retail business. 84% of our business is driven by bricks and mortar, and we don't know who is shopping there. Imagine the impact on productivity when we know recency - when we have recency, frequency, monetary and type information on our retail database. I think it will be profound.

So those are a few examples of how we expect to increase productivity. Now of course we'll jigger the assortments; we have since we have been in business. And remember, Dick's concept from day one is that we are customer expert, not a category export. So as category is becoming important to the business, or less important to the business, we maneuver floor space and inventory accordingly. That is just one part of the way we drive our business.

Glen, that's immensely helpful.

Thanks and good luck.

Our next question comes from Christine Chen of Needham & Company.

Thank you. Congratulations on a fabulous quarter. Just wanted to ask, you had mentioned in the past that the balance of the assortment at Urban would be where you would like it to be by the Spring quarter. I'm wondering on the progress of that, if it is ahead of schedule or on schedule, or if there are still certain things that you are working on?

Christine, I don't think I said that - I don't think I'd ever make a categorical statement, you know, kind of point in time. If I did, shame on me. I think what I said is that I felt we would return to a positive state of business within six to nine months, and again congratulations to Ted and his team for doing that. I think that getting the assortment really where we want it, I think it looks much better than it did six months ago, but I think that we will have significant opportunity for many, many months to come. Ted, do you want to... okay.

Thank you.

Thanks.

Our next question comes from Richard Jaffe of Stifel Nicolaus.

Thanks very much, guys. A question regarding I guess leadership, first in the Anthropologie business and then in general, as the company grows by leaps and bounds, is there a need to staff up on a senior management level, not only with Anthropologie but some of the brands you developing on the wholesale side as well as the retail side?

Richard, that's a great question, and as CEO, I think hiring and developing the leadership of this company is my number one job. Bill and his group have done an exceptional job supporting me and the rest of the group in the company. As I mentioned, Bill hired 68 people just in the home office this past quarter, and some fantastic talent. In terms of the Anthropologie job search, we still are down to a very narrow field. We have three good candidates. It is a critical job, and we're not going to make the decision before we're ready to make the decision. But we certainly intend to make that decision in the near future.

In terms of the rest of the leadership, I feel very, very good about the leaders in this company. We have - for example, the woman who is running the Leifsdottir brand started with us an associate buyer, I think, seven or eight years ago. We have people, just looking at Meg, Meg has someone who helps run the Free People brand. Two people, [Chrissy Mehan], who started with us as our national sales manager six years ago. Sheila Harrington, who started with us as the very first buyer in the company, I think, five or six years ago. Ted has Jim Brett, he has a gentlemen named John Hauser running the stores organization, John's been with us, Ted, 15 years? At Anthropologie, I've said repeatedly I the reason why we have been able to run the business is five of the six leaders have been there since their jobs were created.

Now having said that, one of Bill's priorities and Freeman's priorities for the year that we are just entering is to put in place a senior development program for leadership. Dick and I have spent many hours talking about the old development program at Federated , and we are very committed to reinventing that for our own company as we move forward. It is an important topic and it is top of mind with all of us, so thank you for bringing

Thank you.

Our next question comes from Marni Shapiro of the Retail Tracker.

Congratulations on a great quarter and I think a good start to the year. If you can give a little bit more color around some of your wholesale businesses, both Anthro and Free People? You talked about the new brand at Anthro. If you talk a bit - is it knit or woven-based? How many SKUs? Would you set up the department like you set up Free People? And the same thing for Free People, with We The Free, will you set up separate instore sites, or would it be part of - would you house it with Free People at stores like a Bloomingdales, for example?

Why don't I ask Meg to comment first on Intimately Free People and We The Free, and then I will follow up with Leifsdottir.

We The Free - hi, this is Meg - We The Free will be in its own department in some of the larger department stores, and then we'd peek for going after a different account base. So they will be separate from Free People. And then in our own stores, We The Free select stores will be merchandised in the Free People store.

We The Free won't be even on the same floor, say in a Bloomingdales, as an example?

It will be on the same floor, but will have its own little section.

Okay, great.

And then in terms of Leifsdottir, it will be a very - as I said during the prepared comments, very, very narrow distribution; roughly 60 doors in the first year and a very, very branded approach. So you will see shop buildouts, specific - numerous specific kind of marketing paraphernalia, anything from the hangers to the fixtures, hang tags, And you know, I debated to tell who it would sit next to in a place like Bergdorf Goodman or Bloomingdales, but I chose to do that because I think it will help you kind of visualize what the line is going to look like. So if you think of it sitting next to EBF or See by Chloe or Marc by Marc Jacobs, it will feel like that.

Great, and it is - about the number of SKUs that you launched with that line?

Yes, I think - that's a good question. I should know it. I think we showed 70 styles for the first delivery and I imagine the average store like Bloomingdales will open the first delivery with about 30 to 35 styles, and continue to build on that. I think at Bloomingdales, for example, the shop will open at about 500 square feet. I am not even entirely positive, but that's what I believe we are talking about.

Congratulations. Good luck. I am looking forward to it. I'm tired of [SeeC] taking over the floor there.

Thank you. The showroom is open, by the way. So if any of you - I know several of you have gone to see the product. Meg and the Free People group group very kindly gave the Leifsdottir team their old showroom, so it has a lot of good karma. It is at 209 West 38th Street on the 7th floor, and it was redone and the showroom opened on February 7th.

I used to work on that floor - in that building. Great. Thanks.

Sure.

Our next question comes from Holly Guthrie of Janney Montgomery Scott.

Thank you, good morning. I was just curious about the timing for mining the direct and retail business at Urban Outfitters. I know you have had great success with the catalog at Urban, oftentimes leading the store, and I've seen some displays which look very similar as the catalog. But I was wondering if you can could talk about when - if it's already rolled out, when you rolled it out and/or what else we can look forward to going forward?

Sure, Holly, this is Ted. As far as minding the opportunity, as Glen mentioned a little earlier, we have very good in the direct side of our business in regard to our customer database. We do not enjoy the same thing in regard to retail, and we are putting some actions in place to develop a customer program on the retail side for data - for getting information and building a database, and realizing more opportunity in regard to cross-channel marketing. When we drop the catalog, the catalog goes to customers that we know as direct customers; that is, they've shopped with us through direct or we're prospecting with them off of other direct lists. We drop no catalogs to drive retail business in proximity zip code-wise to retail stores, because we don't have good database information.

So this is work that we feel is - could be very beneficial for the business, that honestly we are getting underway on. The last couple of days have been involved in about eight hours of conversation on the subject. So that's a key piece of the puzzle.

That being said, the other area of opportunity is, I think, over the last I would say year to year and-a-half at this point, getting a consistency and a cohesive message in regard to the creative that we are developing for catalog, website and in the store, is work that we have been underway on, and that - we like how that's been progressing and what it's done for the productivity of the business.

Thank you.

Our next question comes from Roxanne Meyer of Oppenheimer.

Let me add my congratulations. I have questions regarding Anthropologie. First, I am just curious, I know the loyalty program is still relatively new, but how long do you think it will take before you are able to extract some of that really valuable customer data and where perhaps you then can translate that into, you know, a nice sales list? And also wanted to know how much room the shoes are going to be consuming within the stores, and what it is is going to be replacing in terms of space? Thank you.

Roxanne, when we spoke about the CRM strategy at Anthropologie, initially we said it would be a two to two and-a-half year rollout, and we're on track for that. It's really three phases. The first phase was to use a third-party service provider to help us collect the data and analyze the data. By the third quarter of this year, we will decide how to proceed more permanently, whether or not to use the third-party service provider to buy a program and do it in house. As we - we have relatively limited functionality with that third=party service provider. As we work with that group and/or bring it in-house, I expect we'll have more functionality. Having said that, we do have some ability to kind of slice and dice that now on the 200,000 people who signed up, and we're beginning to do that, survey those customers, test different assumptions and so on. So that's what I meant when I said we were refining the program. The second part of your question, in the 23 stores that have shoes the average store will in selling square footage have about 200 to 250 feet, square feet, devoted to the project, and then back of house will be somewhere roughly maybe 600 to 700 square feet.

Okay. Great. And is there anything specific that is going to be coming out the store in order to make room for the shoes?

No, the 23 stores that it's launching in are stores that are larger than the kind of average of maybe 7,000 selling square, so the stores that accommodate it. We're not sure we'll be able to carry shoes in all 108 Anthropologies ever. You know, that's something that we'll figure out based on what we've learned in the first six months or so.

Great. Thanks and best of luck.

Thank you.

Our next question comes from Sam Panella of Raymond James.

Good morning, and congratulations. Glen, I'm curious. What trends are you currently seeing in women's apparel, and are skirts becoming a more important category? Thank you.

Sam, I love you. But you know I can't tell you that. It is the same thing I say every single time, go to the stores, if it is not marked down, it's selling. If you want to know what is not selling, go into the sale room. We - joking aside, this is extremely important competitive data that we have to keep close to our vest. What I will say is there is a lot of trend in the business, in all three businesses, all three brands and across the company. So, there is a lot of good data to get our teeth into right now.

Okay. Thanks.

Our next question comes from Betty Chen from Wedbush Morgan Securities.

Glen, I was wondering if you could speak a little bit about pricing and price point at various tiers. I know you had spent most of last year working on refining the price points at Anthropologie in particular. We have heard a lot about the retailers talk about pricing being so important for that shopper. Can you talk about - are we just up to - [lead to] some of your higher price point items versus maybe the more entry-level categories? That would be very helpful.

Betty, and again, I have to credit Dick for this, because it goes back to the beginning of time, unlike other retailers, we have never had a narrow band of price points. If at Urban Outfitters, the average price point of a blouse is $48, they may have renewal blouses that are $18 and they may have something by Charlotte Ronson that is $248. And prices may change over time, based on demand. So, you know, if we - I'm sure most of you on this call studied economics, and it is really a question of supply and demand. If we're early in a fashion cycle, and we have things that our competition doesn't have, then typically there is less price - or more price elasticity. As we get later in the cycle, then we have more price pressure. In general, we are not seeing any price pressure in our business. We did not see any price pressure in the the fourth quarter, as evidenced by our average unit retails and average transactions.

I don't think, you know, and Ted and Meg jump in, if you like. I don't think there is any kind of a pattern in our business that would indicate that what's selling is being particularly price-motivated right now.

No, not at all.

So I think - and just to clarify, when Anthropologie - in the Fall of 2006, when Anthropologie's prices got too high, it happened primarily in the accessory area. It was not a strategy, it was a mistake. So it was not a failed strategy, it was just an outright mistake.

Over time, and John can work with you offline on this, I believe our average prices have increased low single-digits on a consistent basis year-in, year-out, and I don't see anything happening in our business that would suggest that it will change.

Thank you and good luck.

Our next question comes from Michelle Tan of UBS.

Thanks, guys. I wonder if you can give us an update on Europe, how the stores that you have there are going, and any update on the growth opportunity that you have there?

Sure, this is Ted. In the European business, they had a, I'd say, reasonably productive year this last year. They were up against very strong business in the previous year, and they produced in the back half In the single-digit comp range, up against very strong, high double-digits the year before. We will be opening five additional stores in the market this year. Actually we're opening Belfast tomorrow. And as well this year we will be taking the business into Germany with an opening in Hamburg.

The productivity of the business is on a four wall basis; obviously our more mature stores, we are getting return on sales out of those stores that are in excess of company average, and I would say the one experience that we have had going all the way back to our second store in the market, which was in Dublin, we have a tendency to open with a pretty strong opening, and then people getting to know us, we go through lag time, and then business kicks in and starts to be very productive. What we have seen here over the last couple of years has been very true to that.

Taking the business onto the continent, in Copenhagen it followed that same model, opening strong, softening and then getting strong again. At the present time, We like how the business is treating us overall, both sales as well as we've taken the bottom line profitability of the business up and approaching - up approaching double-digits.

Great, thank you.

Our next question comes from Dana Telsey of Telsey Advisory.

Good afternoon, and congratulations. Can you talk a little bit about the direct opportunity, what you see in terms of the business, how it coordinates with the stores, and what you're seeing just in terms of the cost structure, particularly on the catalog side, the paper costs, paper printing and postage costs? And then I know that store construction costs have been an area of focus for you guys, where - lowering the store cost, is there more opportunity on that and if so, how? Thank you.

Dana, you know, the direct part of our business, over the five years is the fastest-growing part of our business, and we are tremendously excited by the opportunities that lay ahead. We think, as I said in the prepared comments, that there is a real paradigm shift in the way people are shopping the direct to consumer business. You know, quite simply they are using the web more and more. They're using the web to do research prior to going into a brick and mortar store, they are using the web to find out - to shop with their friends, they're posting what they like and what they don't like on Facebook, and you know we've had many strategy sessions internally, and we always joke that we're probably in the - kind of the Model-T stage right now in terms of direct to consumer and website, and probably none of us are even smart enough it imagine what it is going to look like in ten years.

We all believe that it's going to continue to increasingly penetrate the total sales volume, and we are very, very focused - we spend a lot of time speaking to the youngsters in the company because they are much more in touch with the technology than many of us sitting around this table are, and we look to inspiration from people like Google and eBay and all the leaders in that field.

In terms of the catalog, it is true that some of the fixed catalog expenses such as paper and postage are going up, but the web is working much harder than it used to in terms of driving our business, so we are able to have fantastic sales increases with either less circulation or in some cases decreasing circulation. It's not really been a challenge to us. In fact, we think that long term, the profitability in our direct business will be far higher than our brick and mortar business. So we're just on every account very, very excited about our direct business.

In terms of the store construction, I will let you cheat, because it's kind of a second question. But in terms of the store construction, Dave and his group just did an outstanding job this year. I think there is still opportunity for improvement, but at a much, much lower rate. Quite honestly, I would be happy with a couple of percentage points reduction, particularly with the cost of good going up in the construction area. John is making faces and holding up multiple hands up to Dave, because he wouldn't be happy with that, but I think we have to set Dave - we are certainly very cost-focused, but we also want our stores to be beautiful, we want them to brand our business, we're in this business for the long term, and our store design is a critical, critical part of our strategy and we need to balance both store design, execution and costs, and we'll continue to do so.

Thank you.

Our next question comes from Jeff Black of Lehman Brothers.

Good afternoon. A very nicely detailed call, Glen.

Thank you.

On the Urban side, I understood there was a style component as well as SKU component to the merchandise [mix], and are we correct to infer that there is still room to go on the SKU part of that? And if so, will there be implications on the margins for 1Q and possibly into 2Q? Thanks.

Just so we clear, let me tell you how we can grow style count by 20% and keep SKU counts flat. You basically offer less color choices or print choices within a style. What we said back in May was we felt that there was monotony in the assortment, that there wasn't enough variety, that we weren't hitting enough customers, and a lot of the changes that Jim and Liz and their respective teams made really addressed that. I have not worked with Ted and Jim to kind of understand what - where we can go from today over the next six to nine months. My guess would be that we'd want to keep the SKU count relatively flat and still maybe increase the style count by another 5% or so. I don't think - while the style and SKU count impact the margin, I don't think there is a direct correlation.

What I was talking about before in terms of improving the flow, you know we're very, very comfortable with where the Urban inventory is right now. Improving the flow. Improving the way we take markdowns, so that we take them earlier, deeper, faster, turn the product faster so that we convert the bulk of the store to regular price selling; those are the kinds of things that positively and maintain margin, and we are making good progress there.

Thanks for the color and continued good luck, guys.

Thank you.

Our next question comes from Randy Konik of Bear Stearns.

Thank you very much. Glen, just a quick question. You listed a number of initiatives today. Can you just point us to what you think are the top three initiatives we should we be focused on in monitoring the business in 2008? And then as you are adding more in terms of going international, wholesale, new brand et cetera, can you just talk about maybe some of the changed - or evolvement in the role of Freeman Zausner, as he's come back out of requirement, and/or any plans to hire a Chief Operating Officer?

That's a great question and, you know, they are kind of all important. And I was pretty proud of myself that I narrowed it down to just four or five by brand. I think - really, the number one priority for me is people, and - because without people I can't get any of this done. So when I look at how I spend my time and the people that I work with and what I do on a day-to-day basis, people is my number one baby. The second priority is growth. And a lot of, you know, you could those - I think it was four for Anthro, four for Free People, so that makes, and five for Ted is 13, you take you take those 13 initiatives and the bulk of them support growth. We have, since the day I joined this company, almost 15 years and a couple of weeks, Dick has publicly said that he wants to grow sales at 20% or more and profits faster than sales. I as the CEO am responsible for delivering that objective.

And the next thing is kind of the quality of growth. My last group of initiatives is productivity, profit, expense control, sustainability, consistency and so on. That's where I get to the profits faster than the sales growth. So I guess, without thinking a lot about it, that's how I would break those three strategies down.

In terms of Freeman, Freeman is an unbelievable asset to the organization, an unbelievable partner to Dick and to mem there's not a day goes by where I probably don't speak to Freeman 10 or 15 times. We are in basically in offices next to each other and he is involved in many, many parts of the business. Of course he supervises David Ziel directly, and partnered with Dave in Dave's tremendous accomplishment. He supervises Calvin Hollinger directly, and partnered with Calvin over the last several years, to the point where we have a best-in-class technology system. He hired and partners with Bill Cody in talent. and just a remarkable turnaround in that organization. He supervises Matt [Gannett], who does strategy for us, and Matt works really directly with Dick and with me and with Freeman, so Freeman touches a lot of parts of the business. Freeman has the energy of maybe a 15-year-old. He runs circles around most of us, and I expect and hope that he will continue to be as involved in the business for years to come as he is today.

With regard to a COO, that is absolutely something we are considering. We have started to speak to some potential candidates and do believe that we need a COO in the not too distant future. Great question. Thank you.

Our next question comes from [Dutch Foxx] of FBR Capital Markets.

Hi there, good afternoon. Actually I just had a quick question regarding your divisional - your square footage by division. And I was also wondering if you guys could give us a little bit of guidance where you think CapEx is going to come in this year? Thank you.

Dutch, this is John. The square footage at the end of the quarter for Urban was 1,184,147. For Anthropologie, it was 806,744 and Free People was 23,636, and CapEx for this coming year should be around $120 million.

Thank you very much. I appreciate it.

Our next question comes from Marc Bettinger of Stanford Group.

Good afternoon. Congratulations. Glen, are you seeing anything to indicate any increasing competition for any of the brands?

You know, that's a great question. In my closing comments, you know I said that we really define ourselves as a purveyor of experiences, and I think that to a certain extent that insulates us from other obvious competitors. What it doesn't do is insulate us against less obvious competitors. So when we think of our competition, we think about everything from the travel industry to the entertainment industry. You know, I do think that people today define themselves more by the experiences that they have and less by the possessions that they have. So, it really broadens the competitive field. We know when we speak to our customers for all three of our brands that they are hard-pressed to identify direct competitors, and I think that's again, you know, was kind of a brilliant strategy early on in our development and it served us well.

Having said that, I believe that people have a limited amount of money to spend each month, and if they are not spending it with us, they are spending it elsewhere, and it is our job to understand where they are spending it. I think that the idea, for example, to get into the garden center business was brilliant, because I think that people are spending an increasing amount of disposable income in their gardens. You know, people are absolutely spending more money on odd forms or exotic forms of travel. You know, they are spending - the restaurant industry is certainly growing faster than the retail industry over the last several years, so we have to watch out what is going on there. In terms of the groups themselves, I think you know Ted, Meg and I, we spend a lot of time in the traditional mall, so we understand what the competitive landscape looks like. Our the teams really don't do that. They get their inspiration from far-off places in the world. I'd rather have them be in Helsinki or the hinterlands of Japan than I would in the King of Prussia mall. We leave that to the kind of senior management to worry about that.

Thank you very much and congratulations again.

Our final question comes from Janet Kloppenburg of JJK Research.

Glen, did you ask them for me to be last?

Janet, you're first and last with me.

Thanks. Just a question on how you look out on the top line growth going forward. It sounds like you have a lot of new businesses in the hopper on the wholesale side, international, Terrain, and I know, Glen, that it is important that you keep the base of Urban Outfitters and Anthropologie exclusive. So as we go forward, should we expect the mix change in terms of square footage or top line growth, you know, non-store growth revenues may be becoming a bigger part of the business? Should we expect an evolution in the top line growth components? Thanks.

Janet, that's is great question.

By the way, congratulations to all of you. And Ted, really a fabulous comeback.

Thank you, Janet.

Janet, that is a great question. What we know about our business is that we're a retailer of experiences, we know that we are really good serving upper middle market, relatively sophisticated customers. In all of our brands, this is a customer who is college educated, who travels, who reads the right papers and magazines and so on. Whatever we do, we will be defined by those things.

I think we will not necessarily - the other thing we are committed to is protecting our brand equity. You are absolutely right. We will not grow any of our brands beyond the point or to the point where we feel we are threatening the brand equity. If anything, we will err on the side of conservativism. And that's been something - you know, when I first joined the company, I remember Dick getting in front of the investment community and saying there could be I think 35 Urban Outfitters and maybe 50 Anthropologies, and he knew he was erring on the side of conservativism, and that's our comfort zone. We will not add stores to a rate or to an absolute number that jeopardizes the way our customer perceives us. So by definition of that, Janet, the complexion of the business is going to look different ten years from now than it does today. And I think that we will be a portfolio of business, of experience-based businesses that target this kind of upper middle class, sophisticated consumer. And what we sell, and how we generate the revenue, is to be seen, as to the things we are talking about now.

What is Space 15 Twenty? Is it a concept or is it a lab? What is going on there?

I will ask Ted to talk about it.

Thank you.

Sure, Janet. The idea behind Space 15 Twenty is it is very experiential, in that we had this kind of as a working idea in our group tied to culture, commerce and community. We are seeing it as a space that obviously we would be part of the business along with other businesses, not necessarily national businesses that you, I think, commonly would think of, but you know smaller format, compatible businesses that would marry in with the lifestyle that we serve in our business and that our customer would be looking for. We are very open to what those businesses would, everything from food to possibly entertainment, possibly beauty, fashion, possibly gallery. There will be a space -

Is this like Dover Street Market in London, or something like that? Is that what is happening?

Dover Street being multi-level, under one roof?

Right.

Perhaps to some degree, but that is certainly is not how we framed it up in our thoughts. We are looking at it more from there would be, you know, I don't know of opportunity for entertainment at Dover Street.

No, but I think there's gallery space.

It really is meant to address the business side of what we do, the culture that our customer lives in and what they're looking to do in their social time other than simply shop, and as well be a place in the community for people to gather and simply enjoy themselves whether they shop or not. The back side of the project is an active farmer's market on weekends, and I think it is really an ideal location for us to try the idea.

Oh, so it's by the farmer's market in Hollywood?

No, it is not. There is a farmer's market off of Sunset that takes place on the back side of this location. There are also other retailers within that neighborhood that are very compatible to what our customer is looking for lifestyle-wise.

Do you look for this to be expandable over time into other cities?

Well, we would like to think that. We are playing with some other ideas as well. We are trying some smaller formats. We just opened up in St. Denis, which is Montreal, a smaller format store that is women's apparel, accessories, gifts. The idea is that we can support that with the infrastructure of our larger store in Montreal. So we are trying different ideas in regard to format; again, back to Glen's callout, it is all driven by the idea of growth. growing. Different things that we can do to do to grow the productivity and the experience of the brand.

Well, it sounds very exciting to me. Congratulations and good luck this year.

Thank you.

(OPERATOR INSTRUCTIONS) We will pause to see if there are any further questions. Mr. Senk, I am not showing any further questions, would you like to continue with any closing remarks?

No, thank you so much to everybody for joining us this morning and for your support.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.