Q3 2021 Chico's FAS Inc Earnings Call
Welcome to Chico's, Fas third quarter, 2021 conference call and webcast.
Speaker 1: Welcome to Chico's FAS third quarter 2021 conference call and webcast. All participants will be in a listen-only mode.
All participants will be in a listen only mode.
Please note this call is being recorded.
I would now like to turn the call over to corporate going forward David Oliver.
Speaker 2: I would now like to turn the call over to Corporate Controller David Oliver. Mr. Oliver, please go ahead, sir. Good morning, and welcome to the Chico's FAS 3rd Quarter 21 conference call and webcast.
Oliver. Please go ahead, Sir good morning, and welcome to the Chico's Fas third quarter, 'twenty, one carpets call and webcast.
<unk> earnings release can be found on our website at.
Speaker 2: For reference, our earnings release can be found on our website at www.chicasfas.com under press releases on the investor relations page.
Www Dot Chico's Fas dot com under.
The press releases on the Investor Relations page.
Yeah.
Today's comments will include forward looking statements regarding our current expectations assumptions plans estimates judgments and projections.
Speaker 2: Today's comments will include forward-looking statements regarding our current expectations.
Speaker 2: Assumptions, plans, estimates, judgments, and projections.
About our business and our industry, which speak only as of today's date.
Speaker 2: about our business and our industry, which speak only as of today's date. You should not.
Should not unduly rely on these statements.
Okay.
Important factors that could cause actual results or.
Speaker 2: Important factors that could cause actual results or events to differ materially from those projected or implied fire-for-relief statements are included in today's earnings release, RSEC filings, and the comments made on this call.
Vince to differ materially from those projected or implied by our forward looking statements are included in today's earnings release or SEC filings.
Comments made on this call.
We disclaim any obligation to update or revise any information discussed on this call except as may be otherwise required by law.
Speaker 2: We disclaim any obligation to update or revise any information discussed on this call except as may be otherwise required by law.
Now I'll turn the call over to our CEO and President Molly Lincoln side.
Speaker 2: Now I'll turn the call over to our CEO and President, Molly Lingenstein.
Thank you David and good morning, everyone.
Speaker 3: Thank you, David, and good morning, everyone. I would like to officially welcome P.J. Guido to the company in his role as Chief Financial Officer. He comes to us with a wealth of retail financial experience, and we are pleased to have him on board and on the call today.
Would like to officially welcome P. J guide owed to the company in his role as Chief Financial Officer. He comes to us with a wealth of retail financial experience and we are pleased to have him on board and on the call today.
We achieved another great quarter and the momentum continues.
Speaker 3: We achieved another great quarter, and the momentum continues.
Third quarter earnings per share of 15 represents the company's best third quarter performance since 2016.
Speaker 3: Third quarter earnings per share of $0.15 represents the company's best third quarter performance since 2016 and demonstrates the extraordinary progress we continue to make in our turnaround strategy.
And demonstrates the extra ordinary progress we continue to make in our turnaround strategy.
The return to third quarter profitability was driven by healthy year over year comparable sales growth meaningful gross margin expansion in fact, the best third quarter gross margin performance since 2014 and continued diligent expense management.
Speaker 3: The return to third-quarter profitability was driven by healthy year-over-year comparable sales growth, meaningful gross margin expansion, in fact, the best third-quarter gross margin performance since 2014, and continued diligence.
The robust year over year third quarter comparable sales increase of 28% was driven by significant digital and store outperformance across all three brand propelled by meaningful quality fit and fabrication enhancements in our product.
Speaker 3: The robust, year-over-year, third-quarter comparable sales increase of 28% was driven by significant digital and store outperformance across all three brands, propelled by meaningful quality, fit, and fabrication enhancements in our products.
Which have continued to significantly drive full price selling reduce markdowns and increase gross margin quarter over quarter.
Speaker 3: which have continued to significantly drive full price selling, reduce markdowns, and increase gross margin quarter over quarter.
Dramatic improvement is continuing at Chico's and White house Black market as indicated by our third quarter comp sales increase of 23% and 33% respectively on significantly lower inventory levels.
Speaker 3: Dramatic improvement is continuing at Chico's and White House black market as indicated by our third quarter comp sales increase of 23% and 33% respectively on significantly lower inventory levels.
Both apparel brand are driving meaningfully faster sell through rates higher productivity more full price sales and better maintained margins.
Speaker 3: Both apparel brands are driving meaningfully faster sell-through rates, higher productivity, more full-price sales, and better maintained margins.
Existing and new customers are enthusiastically responding to our updated fabrics fits and new product offering.
Speaker 3: Existing and new customers are enthusiastically responding to our updated fabrics, fits, and new product offerings.
The apparel brand generated their best third quarter gross margin performance in more than five years.
Speaker 3: The apparel brands generated their best third quarter gross margin performance in more than five years.
Soma posted 830% comp sales increase over last year's third quarter on top of an 11% comp sales increase in the third quarter of 2019.
Speaker 3: Soma posted a 30% comp sales increase over last year's third quarter, on top of an 11% comp sales increase in the third quarter of 2019.
Marking five consecutive quarters of comp sales growth.
Speaker 3: marking five consecutive quarters of comp sales growth.
But can you can you driving this business forward, we have invested in the necessary inventory capital and staffing.
Speaker 3: To continue driving this business forward, we have invested in the necessary inventory, capital, and staff.
12 months trailing data from market Research N. P. D group shows that it's almost growth continues to outpace the market in non sports bras panties and sleepwear.
Speaker 3: Twelve months trailing data from market research NPD group shows that Thoma's growth continues to outpace the market in non-sports bras, panties, and sleepwear.
We believe this data along with our recent performance is a strong indication.
Speaker 3: We believe this data, along with our recent performance, is a strong indication that Selma is well positioned to continue capturing additional market share on our journey to becoming a billion dollar brand.
That Soma is well positioned to continue capturing additional market share on our journey to becoming a 1 billion dollar brand.
Our third quarter performance highlights the remarkable progress we are making on our five strategic priorities. Let me take a few minutes to update you on each.
Speaker 3: Our third quarter performance highlights the remarkable progress we are making on our five strategic priorities. Let me take a few minutes to update you on each.
First continuing our ongoing digital transformation.
Speaker 3: First, continuing our ongoing digital transformation.
Over the last two and a half years, we have successfully transform chico's Fas into a seamless digital first customer led company as evidenced by the trajectory of.
Speaker 3: Over the last two and a half years, we have successfully transformed Chico's FAF into a seamless, digital-first, customer-led company, as evidenced by the trajectory of our digital sales over this time.
Our digital sales over this time.
Even as store revenues have continued to rebound digital sales have remained very strong.
The investments we have made in talent and technology have paid off.
Speaker 3: The investments we have made in talent and technology have paid off.
Our proprietary digital tools continue to gain traction and customers using these tools are more engaged and have higher conversion rates and average order values.
Speaker 3: our proprietary digital tools continue to gain traction. And customers using these tools are more engaged and have higher conversion rates and average order value.
These tools continue to drive year over year, new multichannel customer growth and these customers are our most valuable spending three times a single channel customer.
Speaker 3: These tools continue to drive year-over-year new multi-channel customer growth and these customers are our most valuable, spending three times a single channel customer.
We continue to leverage our online outfitting experiences style connect in my closet and customer engagement grows every quarter.
Speaker 3: We continue to leverage our online outfitting experiences, Style Connect and My Closet, and customer engagement grows every quarter.
Approximately 3 million customers, representing nearly half of our active customer file are now enrolled in style connect.
My closet, the personalized experience, enabling customers to augment their closets by coordinating their wardrobes with past purchases.
Generates conversion at four and a half times, a slight average and significantly higher average order value than those not using the feature.
Speaker 3: generates conversion at four and a half times the site average and significantly higher average order value than those not using the feature.
We are continually enhancing our personalization efforts to drive engagement.
Speaker 3: We are continually enhancing our personalization efforts to drive engagement.
Conversion and orders, including our shop, the look feature launched last year.
Speaker 3: conversion and orders, including our Shop the Look feature launched last year.
After pay allowing for customers to pay for their purchases and installment has also proven to be a terrific U P T and sales driver since.
Speaker 3: Afterpay, allowing for customers to pay for their purchases in installments, has also proven to be a terrific UPT and sales driver.
Since it launched about a year ago it continues to exceed our expectations.
Speaker 3: Since it launched about a year ago, it continues to exceed our expectations.
Buy online pickup in store has also remained popular and is still growing double digits.
Speaker 3: Buy online, pick up in store has also remained popular and is still growing double digits.
Second further refining our product on the product front, we are doing two key things at each of our brand to take market share and drive results.
First leveraging our customer data and insights and second constantly innovating and elevating our assortments customers are clearly responding across all three brands.
Speaker 3: First, leveraging our customer data and insights, and second, constantly innovating and elevating our assortment. Customers are clearly responding across
At Chico's.
Speaker 3: At Chico's, denim and our new pant selection are big hits, which she is pairing with wovens, Rowanas, sweaters, and our great no iron shirt to make complete outfits.
And our new Pant selections are big hits, which she is pairing with woven rwanda's sweaters and our great no iron shirt to make complete outfit.
She is responding to our elevated fabrics and new comfort features in bottom.
Speaker 3: She is responding to our elevated fabrics and new comfort features in bottom.
White House Black market continues to benefit from elevated styling and quality improvements as well we had an outstanding response to our new denim fit and fabric with year over year denim revenues nearly doubling for the quarter.
Speaker 3: White House Black Market continues to benefit from elevated styling and quality improvements as well. We had an outstanding response to our new denim fits and fabrics, with year-over-year denim revenues nearly doubling for the quarter.
She is pairing denim with our three new key White house Black market jacket silhouette that are versatile for every occasion.
Speaker 3: She is pairing denim with our three new key White House Black Market jacket silhouettes that are versatile for every occasion.
Continually creating comfortable beautiful solutions are core to the Soma brand.
Speaker 3: Continually creating comfortable, beautiful solutions are core to the Thelma brand.
We offer a full broad menu of solutions. So she can find the absolute right raw for all of her needs.
Speaker 3: We offer a full bra menu of solutions so she can find the absolute right bra for all of her needs.
Year over year Bra revenues were up 38% in the quarter boosted by the fact that our customers returned to the stores or in person fittings.
Speaker 3: Year over year, bra revenues were up 38 percent in the quarter, boosted by the fact that our customers returned to the stores for in-person fittings.
LIBOR and panties continued to be strong and drove double digit growth over last year and 2019 levels.
Speaker 3: Sleepwear and panties continue to be strong and drove double-digit growth over last year and 2019 levels.
Next driving customer engagement.
Through enhanced customer data analytics and insights, we have elevated and targeted our marketing efforts, which are driving brand awareness generating traffic and acquiring new customers.
Speaker 3: Through enhanced customer data analytics and insights, we have elevated and targeted our marketing efforts, which are driving brand awareness, generating traffic, and acquiring new customers.
We continue to allocate more resources to digital digital storytelling, influencers and other social efforts.
Speaker 3: We continue to allocate more resources to digital, digital storytelling, influencers, and other social efforts.
We are elevating our content, including using more organic and user generated content.
Speaker 3: We are elevating our content, including using more organic and user-generated content.
Our social media customer engagement continues to grow and customers are responding.
Speaker 3: Our social media customer engagement continues to grow and customers are responding.
For example, our weekly Facebook live selling events are engaging and continue to gain traction and generate sales.
Speaker 3: For example, our weekly Facebook Live selling events are engaging and continue to gain traction and generate sales.
In the third quarter, our apparel brand had over $2 3 million views and social selling live videos and real.
Speaker 3: In the third quarter, our apparel brand had over 2.3 million views in social selling, live videos, and reels.
We continue to acquire new customers with.
Speaker 3: We continue to acquire new customers with the customer count up nearly 8% from the prior year third quarter and their average age continues to trend younger than existing customers. This data reinforces the runway.
With the customer count up nearly 8% from the prior year third quarter.
And their average age continues to trend younger than existing customers.
This data reinforces the runway for all three brands.
Priority for maintaining our operating and cost discipline.
Speaker 3: Priority four, maintaining our operating and cost.
One of our most meaningful third quarter accomplishment was our gross margin performance.
Speaker 3: One of our most meaningful third quarter accomplishments was our gross margin performance.
We achieved our highest third quarter gross margin rate since 2014.
Speaker 3: We achieved our highest third quarter gross margin rate since 2014.
Driven by strength in full price sales and the corresponding reduction in promotions.
Speaker 3: driven by strength in full-price sales and the corresponding reduction in promotion.
Strategic inventory management and improved leverage of occupancy costs on higher sales.
Speaker 3: strategic inventory management, and improved leverage of occupancy costs on higher sales.
Continued cost discipline efforts and sales leverage resulted in a third quarter SG&A rate lower than both the third quarters of 2020 and 2019 in fact, we posted our best SG&A rate performance since 2018.
Speaker 3: Continued cost discipline efforts and sales leverage resulted in a third quarter SG&A rate lower than both the third quarters of 2020 and 2019. In fact, we posted our best SG&A rate performance since 2018.
And finally, delivering higher productivity in our real estate portfolio.
Speaker 3: And finally, delivering higher productivity in our real estate portfolio.
Store traffic was very healthy and we delivered strong store sales growth during the third quarter.
Speaker 3: Store traffic was very healthy, and we delivered strong store sales growth during the third quarter.
Stores continue to be an integral part of our overall strategy as data indicate that digital sales are higher in markets, where we have a strong retail presence.
Speaker 3: Stores continue to be an integral part of our overall strategy as data indicates that digital sales are higher in markets where we have a strong retail presence.
Food and store growth for the portfolio of brands makes sense, where the investment delivers profitable returns.
Speaker 3: Food and store growth for the portfolio of brands makes sense where the investment delivers profitable return.
We have successfully opened 64 soma shop in shops inside Chico's stores.
Speaker 3: We have successfully opened 64 Soma shop-in-shops inside Chico stores, which are exceeding expectations, driving new customers to both brands, lifting store productivity, and further expanding our digital business.
Which are exceeding expectations driving new customers to both brand lifting store productivity and further expanding our digital business.
We plan to open nine more shop in shops in the fourth quarter.
Speaker 3: We plan to open nine more Shop-N-Shop in the fourth quarter.
At the same time, we continue to rationalize and tightened our real estate portfolio as appropriate.
Speaker 3: At the same time, we continue to rationalize and tighten our real estate portfolio as appropriate in order to deliver overall higher...
In order to deliver overall higher store profitability.
We will make decisions to close stores when it is accretive to the overall portfolio.
Speaker 3: we will make decisions to close doors when it is accretive to the overall portfolio. This remains a dynamic
This remains a dynamic process.
For example at the beginning of the year, we expect it to close 45 to 50 locations. This fiscal year, but have reduced that number to 37 due to a combination of favorable store performance and successful lease negotiation.
Speaker 3: For example, at the beginning of the year, we expected to close 45 to 50 locations this fiscal year, but have reduced that number to 37 due to a combination of favorable store performance and successful lease negotiations.
Now, let me turn the call over to P. J to update you on our financial performance T J.
Speaker 3: Now let me turn the call over to TJ to update you on our financial performance. TJ.
Thanks, Molly and good morning, everyone I'm excited to be part of the Chico's team and look forward to engaging with all of you in the investor and analyst community.
Speaker 4: Thanks Molly and good morning everyone. I am excited to be part of the Chico's team and look forward to engaging with all of you in the investor and analyst
Our momentum continued in Q3, and we posted another quarter of profitable growth with diluted EPS of <unk> 15 for the quarter compared to a 48 loss per share in last year's third quarter and a seven loss per share for the third quarter of fiscal 2019.
Speaker 4: Our momentum continued in Q3, and we posted another quarter of profitable growth with diluted EPS of $0.15 for the quarter, compared to a $0.48 loss per share in last year's third quarter and a $0.07 loss per share for the third quarter of fiscal 2019.
I will note that on a non-GAAP basis before one time charges diluted EPS for the quarter was <unk>.
Speaker 4: I will note that on a non-GAAP basis, before one-time charges, diluted EPS for the quarter was $0.18.
This year's third quarter marks our best third quarter earnings performance since 2016, with all three brands leveraging a shared platform contributing meaningfully to sales growth gross margin expansion and significantly higher operating income.
Speaker 4: This year's third quarter marks our best third quarter earnings performance since 2016.
Speaker 4: with all three brands, leveraging a shared platform, contributing meaningfully to sales growth, gross margin expansion, and significantly higher operating income.
Third quarter net sales totaled $453 6 million compared to $351 4 million last year. This 29% increase reflects a comparable sales increase of 28% and was driven by meaningful improvement in products and enhanced marketing efforts, which drove full price selling.
Speaker 4: Third quarter net sales totaled $453.6 million compared to $351.4 million last quarter.
Speaker 4: This 29% increase reflects a comparable sales increase of 28% and was driven by meaningful improvement in product and enhanced marketing efforts which drove full-price sellers.
Partially offset by 31 net store closures in the last 12 months at the brand level Chico's comparable sales grew 23% White house Black market comp sales grew 33, 4% and Soma comp sales grew 32% over 2012.
Speaker 4: partially offset by 31 next door closures in the last 12
Speaker 4: At the brand level, Chico's comparable sales grew 23 percent, White House black market comp sales grew 33.4 percent, and Soma comp sales grew 30.2 percent over 2020.
Looking at the third quarter compared to 2019, our comparable sales continued to improve reaching close to 97% of pre pandemic 2019 levels with Soma, increasing 44% in chico's and White house black market down, 16% and 5% respectively.
Speaker 4: Looking at the third quarter compared to 2019, our comparable sales continue to improve, reaching close to 97% of pre-pandemic 2019 levels, with Soma increasing 44% and Chico's and White House black market down 16% and 5% respectively.
I would note that this level of sales growth was achieved with much lower on hand inventories compared to 2019 with chico's inventories down, 46% and White house Black market inventory is down 39%.
Speaker 4: I would note that this level of sales growth was achieved with much lower on-hand inventories compared to 2019.
Speaker 4: with Chico's inventories down 46% and White House black market inventories down 39%.
Reinforcing the higher productivity achieved by managing inventory with a focus on overall profitability.
Speaker 4: reinforcing the higher productivity achieved by managing inventory with a focus on overall profitability.
The third quarter gross margin was 47% compared to 22% last year and 35, 3% in 2019.
Speaker 4: The third quarter gross margin was 40.7% compared to 22% last year and 35.3% in 2019.
The current year gross margin rate was our best performance in 18 consecutive quarters and reflected higher full price sales and improved occupancy leverage. This improvement was achieved despite supply chain challenges and related costs that continue to impact the retail sector.
Speaker 4: The current year gross margin rate was our best performance in 18 consecutive quarters and reflected higher full price sales and improved occupancy.
Speaker 4: This improvement was achieved despite supply chain challenges and related costs that continue to impact the retail sector.
Moving down the P&L.
Speaker 4: Moving down the P&L, SG&A expenses for the third quarter totaled $162.5 million, or 35.8% of the total.
<unk> expenses for the third quarter totaled $162 5 million or 35, 8% of sales compared to 43, 6% of sales in 2020, and 37, 3% of sales in 2019.
Speaker 4: compared to 43.6% of sales in 2020 and 37.3% of sales in 2019.
Cost discipline and expense reduction initiatives, coupled with improving sales have enabled us to realize meaningful leverage that will give us more financial flexibility as we continue to grow all three brands.
On a year to date basis, I would like to highlight that both profitability and cash flows have improved significantly since last year and 2019.
Speaker 4: On a year-to-date basis, I would like to highlight that both profitability and cash flow have improved significantly since last year and 2019.
In addition to giving us much more flexibility higher free cash flow generation will provide us with fuel to invest behind our strategy that is working.
Speaker 4: In addition to giving us much more flexibility, higher free cash flow generation will provide us with fuel to invest behind a strategy that is working.
Fueling growth will be a key capital allocation priority going forward.
Speaker 4: Fueling growth will be a key capital allocation priority going forward.
On a year to date basis, we generated $89 million of EBITDA through the third quarter, which is significantly higher than EBITDA of $65 million for all of fiscal 2019.
Speaker 4: On a year-to-date basis, we generated $89 million of EBITDA through the third quarter, which is significantly higher than EBITDA of $65 million for all of fiscal 2019.
For the current year nine months, we posted EPS of <unk> 29.
Speaker 4: For the current year nine months, we posted EPS of 29.
Compared to a loss of $2 43, this year and the prior year nine months and a loss of <unk> seven for the same periods in 2019.
Speaker 4: compared to a loss of $2.43 a share in the prior year nine months, and a loss of 7 cents for the same period in 2019.
Now, let's shift to the balance sheet.
Our cash position and total liquidity remains strong providing us with the flexibility to manage the business and make investments to further fuel our momentum we ended the quarter with cash and marketable securities of $137 5 million a slight increase over the second quarter balance even after reducing borrowings on our <unk>.
Speaker 4: Our cash position and total liquidity remain strong, providing us with the flexibility to manage the business and make investments to further fuel our momentum.
Speaker 4: slight increase over the second quarter balance even after reducing borrowings on our long-term credit facility by a third, with a $50 million debt reduction.
Long term credit facility by a third with a $50 million debt repayments.
On hand inventories for the quarter remained very lean down 13% relative to 2020 and down 19% relative to 2019, our inventory has never been more productive and is delivering very high gross margin for us, especially in the apparel brands were on hand inventory was down 38% to last.
Speaker 4: On-hand inventories for the quarter remained very lean, down 13% relative to 2020 and down 19% relative to 2019.
Speaker 4: Our inventory has never been more productive and is delivering very high gross margins.
Speaker 4: Especially in the apparel brands, where on-hand inventory was down 38% to last year, and down 43% to 2019.
Year and down 43% to 2019.
Turning to real estate in the third quarter, we continued our lease renegotiation initiatives with AMG real estate partners, securing incremental commitments of $7 million.
Speaker 4: In the third quarter, we continued our lease renegotiation initiative with A&G Real Estate Partners, securing incremental commitments of $7 million, bringing our total year-to-date commitments to $22 million in rent-related payments.
Bringing our total year to date commitments to $22 million and rent reductions from landlords.
This is in addition to the $65 million in reductions negotiated last year for a total savings of $87 million since we commenced the renegotiation program in 2020.
Speaker 4: This is in addition to the $65 million in reductions negotiated last year for a total savings of $87 million since we commenced the renegotiation program in 2020. These renegotiated store leases will provide an occupancy tailwind and further enhance store profitability going forward.
These renegotiated store leases will provide an occupancy tailwind and further enhanced our profitability going forward.
As Molly noted we are continuing to right size our store base.
Speaker 4: As Molly noted, we are continuing to right-size our store.
Primarily as leases come due lease kick outs are available where buyouts make economic sense, we have flexibility with approximately 60% of our leases coming up for renewal for 2000 available over the next two to three years.
Speaker 4: Primarily as leases come due, lease kickouts are available where buyouts make economic
Speaker 4: We have flexibility with approximately 60% of our leases coming up for renewal or kickouts available over the next two to three years.
During the third quarter, we closed five stores, bringing our year to date closings to 'twenty three and we ended the quarter with 1279 boutiques.
Speaker 4: During the third quarter, we closed five stores, bringing our year-to-date closings to 23, and we ended the quarter with $1,279.
Going forward, we will continue to actively manage our real estate portfolio to enhance overall store profitability.
Speaker 4: Going forward, we will continue to actively manage our real estate portfolio to enhance overall store profitability.
Now turning to our fourth quarter outlook.
Given the strength of customer demand for all three of our brands. We are confident that our momentum will be sustained as we get further into the quarter.
Speaker 4: Given the strength of customer demand for all three of our brands, we are confident that our momentum will be sustained as we get further into the future.
We expect fourth quarter total sales to continue to accelerate closer to 2019 and reached $495 million to $510 million.
Speaker 4: We expect fourth quarter total sales to continue to accelerate closer to 2019 and reach $495 to $510 million.
We expect fourth quarter gross margin rate as a percent of sales to be above 2020, and 2019 and in the range of 33 to 34, 5%.
Speaker 4: We expect fourth quarter gross margin rate as a percent of sales to be above both 2020 and 2019 and in the range of 33 to 34 and a half.
This expectation incorporates continued inventory management with faster sell through rates and higher full price sales as well as higher supply chain costs.
Speaker 4: This expectation incorporates continued inventory management with faster sell-through rates and higher full-price sales, as well as higher...
We are continuing to manage our expense structure and expect the SG&A rate as a percentage of sales to be in the range of 32, 3% to 32, 8%.
Speaker 4: We are continuing to manage our expense structure and expect the SG&A rate as a percent of sales to be in the range of 32.3 to 32.8%.
We expect our effective tax rate to be approximately 33% for the quarter, which will give us a rate of 24% for the full year.
Speaker 4: We expect our effective tax rate to be approximately 33% for the quarter, which will give us a rate of 24% for the quarter.
We expect to deliver diluted EPS of flat to <unk> <unk> for the fourth quarter, putting us well above 2020, and 2019 for both the quarter and the full year.
Speaker 4: And we expect to deliver diluted EPS of flat to five cents for the fourth quarter, putting us well above 2020 and 2019.
Before we go onto Q&A I would like to leave you with three key thoughts first our turnaround has accelerated due to our strategic initiatives and continued cost discipline.
Speaker 4: Before we go on to Q&A, I would like to leave you with three key thoughts.
Speaker 4: First, our turnaround has accelerated due to our strategic initiatives and continued cost discipline.
Second.
All three of our brands are contributing meaningfully to sales growth and profitability.
Speaker 4: All three of our brands are contributing meaningfully to sales growth and profit.
Last we have greatly improved the fundamental operating model of the business and have created a sustainable tailwind that will allow us to successfully navigate the current macro environment and continue on our path of profitable growth well into the future.
Speaker 4: And last, we have greatly improved the fundamental operating model of the business and have created a sustainable tailwind that will allow us to successfully navigate the current macro environment and continue on a path of profitable growth well into the future. Now I'll turn the call over to
Now I will turn the call over to the operator for Q&A.
Operator.
Thank you.
Speaker 1: Thank you. At this time, we would be happy to take your questions.
We will be happy to take your questions.
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Today's first question comes from Susan Anderson of B Riley. Please go ahead.
Speaker 1: Today's first question comes from Susan Anderson of B. Reilly. Please go ahead.
Hi, Good morning, it's nice to see the improvement in the quarter.
Speaker 5: Hi, good morning. It's nice to see the improvement in the quarter. I guess I'm curious just on the supply chain front, in terms of inventory, did you feel like you had enough inventory? And then looking into holiday, how do you feel about your inventory level? And will there be any late deliveries? And then I'm not sure if I missed this, but did you say what the freight impact was to the margins?
I guess I'm curious just on the supply chain front.
In terms of inventory did you feel like you had enough inventory and then looking into holiday how do you feel about your inventory level and will there be any late deliveries and then I'm not sure if I missed this but did you.
See what the impact was to the margin.
Okay.
Thank you Susan I will take the supply chain inventory and looking into holiday late deliveries and then I'll pass it to P. J in terms of the freight impact.
Speaker 3: Thank you, Susan. I will take the supply chain inventory and looking into holiday late deliveries, and then I'll pass it to PJ in terms of freight impact.
First of all no.
Speaker 3: First of all, for nearly two years, we have been managing through many COVID challenges. We have been operating in an assessing, aligning, anticipating, and actioning model. And we will continue to do so, remaining diligent to make sure that we make swift decisions to move us forward.
For nearly two years, we have been managing through many COVID-19 challenges, we have been operating in and assessing aligning anticipating and Actioning model and we will continue to do so remaining diligent to make sure that we make swift decisions to move us forward.
I mentioned this because we have had efficiencies in the way that we've been managing the supply chain and in the third quarter of the supply chain did not materially limit our ability to be able to meet demand. In fact, if you look at the entire Covid period. During this timeline, we've been able to grow all three.
Speaker 3: I mention this because we have had efficiencies in the way that we've been managing the supply chain. And in the third quarter, the supply chain did not materially limit our ability to be able to meet demand. In fact, if you look at the entire COVID period, during this timeline, we've been able to grow all three brands, satisfy customer demand, and elevate our liquidity and cash flow.
Rand satisfy customer demand and elevate our liquidity and cash flow.
And Susan on your freight question.
Speaker 4: And Susan, on your freight question, the impact was approximately 350 basis points to gross margin, and that includes both inbound and outbound freight.
Impact was approximately 350 basis points to gross margin in that.
That includes both inbound and outbound freight.
Obviously, we have seen higher ocean.
Speaker 4: Obviously, we have seen higher ocean costs, ocean cargo, as well as air freight. So the total impact in the quarter was roughly 350 basis points, or just over 50.
Cost ocean cargo as well as airfreight.
So.
The total impact.
In the quarter was roughly.
350 basis points or just over $15 million.
Great and was that I guess that the excess free above normal.
Speaker 5: Great. And was that, I guess, the excess free above normal?
Yes, correct.
Okay, and then I guess, you mentioned that gross margins reached their highest level since 2014, I'm curious where merch margins were relative to history and then just looking forward. How much do you think of that is sustainable and do you think there's still more opportunity on the margin front. Thanks.
Speaker 5: Okay, and then I guess you mentioned that gross margins reached their highest level since 2014. I'm curious where merge margins were relative to history, and then just looking forward, how much do you think of that as sustainable, and do you think there's still more opportunity on the margin front?
In the in the gross margin.
Speaker 4: So in the gross margin, with regards to maintained margin, the majority over 2 3rds of the margin expansion is due to higher AUR.
With regards to.
Maintain margin.
The majority over two thirds of the margin expansion is due to higher AUR.
So obviously that accrues to the maintain margin and in terms of sustainability.
Speaker 4: So, obviously, that accrues to the maintain margin. And in terms of sustainability, we obviously have greatly enhanced the operating model of the business. So, we feel, you know, that managing our inventory, higher full-price selling going forward is sustainable. So, that is – we view that as a tailwind.
We obviously have.
<unk> has greatly enhanced the operating model of the business. So we feel that managing our inventory higher full price selling going forward is.
It's sustainable so.
So that is we view that as a tailwind for us and.
And Susan I'd like to add one piece on the product as it relates to.
Speaker 3: And Susan, I'd like to add one piece on the product as it relates to the margin and supply chain.
The margin in supply chain.
We have.
Then retooling as part of our turnaround strategy all of the product in particular in the apparel brand and what Youre seeing in our results in the third quarter is that our a D S. Our AUR or spend per customer is it in.
Speaker 3: Then retooling as part of our turnaround strategy, all of the product, in particular in the apparel brand.
Speaker 3: And what you're seeing in our results in the third quarter is that our ADS, our AUR, our spend per customer is at an all-time four-year high in all three brands.
All time four year high in all three brands and we've had the fastest apparel regular price sell through in four years that she is responding to the better quality the enhanced fabric the new fits that we're putting into our product. So that we've been able to deliver higher margins and.
Speaker 5: And we've had the fastest apparel regular price sell-through in four years. That she is responding to the better quality, the enhanced fabric, the new fits that we're putting into our product so that we've been able to deliver higher margins and also have a softer landing in the cost of goods with supply chain challenges because the product is materially different than it was three years ago.
Also have a softer landing in the in the in.
In the cost of goods with supply chain challenges because the product is materially different than it was three years ago.
Great. That's good to hear and then I could just add one more I think last quarter, you mentioned that your loyal customers started to increase again I'm curious if there's any data you could give around that by brand and then also if there's if.
If youre seeing increased market share.
Yes, our customer account and year to date is up in all three brands specifically by brand Chico's is up 19% White House is up 13% in Soma is up 33%, so and that is not only new let also reactivated customers and and.
Speaker 3: Yes, our customer count year-to-date is up in all three brands, specifically by brand. Chico's is up 19%, White House is up 13%, and Soma is up 33%. And that is not only new, but also reactivated customers. And the spend per customer, which I think is key, is at a four-year high for all three brands for the quarter. Thank you.
Our spend per customer, which I think is key is that a four year high for all three brands for the quarter.
Great. That's good to hear thanks, so much good luck this holiday.
Thank you Susan.
And our next question today comes from Marni Shapiro with retail Treasurer. Please go ahead.
Speaker 1: And our next question today comes from Marnie Shapiro with Retail Tracker. Please go ahead.
Hey, guys. Congratulations welcome P. J good to hear you on the call.
Speaker 6: Hey, guys. Congratulations. Welcome, PJ. Good to hear you on the call.
Good morning.
Could you just break down a little bit your inventory levels are down substantially I guess, what percentage of that was planned versus late and then I guess along those lines.
Speaker 6: So could you just break down a little bit, your inventory levels are down substantially. I guess what percentage of that was planned versus late and then I guess along those lines? If I'm thinking about the strength of your sales and anything that was delayed, am I right to think that sales could have been even stronger if the inventory was in on time? Can you just walk us through that dynamic?
If I'm thinking about the strength of your sales.
Anything that was delayed.
Am I right to think that sales could have been even stronger if the inventory was in on time can you just walk us through that dynamic.
Absolutely morning.
Speaker 3: Absolutely, Marnie. So, yes, we did plan, in apparel in particular, we have been planning the inventories lower than 19 and lower than 20 levels.
So yes, we did plan in apparel in particular, we have been planning the inventories lower.
More than 19 and lower than 20 levels.
The reasoning behind that is that we had multiple years of heavy promotion in both of those brands that we were in a reset.
Speaker 3: You know, the reasoning behind that is that we had multiple years of heavy promotion in both of those brands that we were in a reset. And when you put so much more product and quality into the garments...
And when you put so much more product and quality into the garments. We wanted to have a scarcity quite honestly in the brand to be able to create some of that now that does not mean that the inventory levels that we ended with in Q3 is exactly where we want it to be there was definitely some inventory.
Speaker 7: We wanted to have scarcity, quite honestly, in the brands to be able to create some of that. Now, that does not mean that the inventory levels that we ended with in Q3 is exactly where we want it to be. There was definitely some inventory slides that impacted us as we discussed in Q3 quarter and in our second quarter call, in particular with some of the challenges that we were having with Vietnam.
Slides that impacted us as we discussed in Q, Florida third quarter.
In our in our second quarter call in particular with some of the challenges that we were having with Vietnam, having said that we have you know if you look at White house in particular, because that brand is a black and white brand.
Speaker 7: Having said that, we have, you know, if you look at White House in particular, because that brand is a black and white brand.
That merchandise has delivered it really all sort of works together, whether it came in the first week of the month or it came in the second week of the month and we're actually winning because the customer is getting a lot more frequency of newness.
Speaker 7: how that merchandise has delivered, it really all sort of works together, whether it came in the first week of the month or it came in the second week of the month, and we're actually winning because the customer is getting a lot more frequency of newness and she is shopping with us more often.
And she is shopping with us more often and in chico's because that customer in particular right now is gravitating towards being in stores. She's also enjoying a frequency of being able to go in more often as deliveries are heading us a little more sporadically than they have in the pattern on the flip side.
Speaker 7: In Chico's, because that customer in particular right now is gravitating towards being in stores, she's also enjoying the frequency of being able to go in more often as deliveries are hitting us a little more sporadically than they have in the past. On the flip side...
We overly made sure that we had inventory in Soma, because soma is a gift giving brand. The two apparel brands are not as impacted in Q4, our biggest quarter actually in Chico's is Q1, and it's pretty normalized across the year with a quarters for white house. So we advantage the inventory level in Soma and why we.
Speaker 7: overly made sure that we had inventory in Salma, because Salma is the gift-giving brand. The two apparel brands are not as impacted in Q4. Our biggest quarter actually in Chico's is Q1, and it's pretty normalized across the year with the quarters for White House.
Speaker 7: So we advantage the inventory level in Thalma and why we ended up with inventories.
We ended up with inventories up.
Up 40% to last year at the end of the quarter. So that we had the gift, giving and pajamas in particular to get to get us through the holidays.
Speaker 7: up 40% to last year at the end of the quarter so that we had the gift giving in pajamas in particular to get us through the holidays.
Yes.
That makes sense and so do you feel like at the end of the day if you had.
Speaker 6: That makes sense. And so do you feel like at the end of the day, if you had more inventory in apparel, it would have worked better or no, let her come back hungry?
More inventory in apparel, it would have worked better or no let her come back hungry.
Yes, I think we would have done more business in the quarter and that's opportunity for us next year, but supply chain did not materially limited our ability to be able to meet customer demand.
Speaker 7: Yes, I think we would have done more business in the quarter and that's an opportunity for us next year. But supply chain did not materially limit our ability to be able to meet customer demand.
The stores look fantastic best of luck with the next couple of weeks.
Speaker 6: Amazing. The stores look fantastic. Best of luck with the next couple of weeks.
Thank you Marni.
And our next question today comes from Dana Telsey Telsey Advisory Group. Please go ahead.
Speaker 8: And our next question today comes from Dana Telsey and Telsey Advisory Group. Please go ahead. Good morning, everyone. Nice to see the progress.
Everyone nice to see the progress.
As you as we've talked about supply chain. What is this leading to on the other end in terms of raw materials and pricing. How do you think about pricing for this spring have you taken any pricing now and then I have a couple of follow up quick follow ups.
Speaker 8: As we talked about supply chain, what is this leading to on the other end in terms of raw materials and pricing? How do you think about pricing for the spring? Have you taken any pricing now? And then I have a couple of quick follow-ups.
Yeah.
Speaker 7: Yeah. Thank you, Dana. In terms of pricing, the way that we've been guiding the teams and the way that we're looking at it is holistically to look at the overall product versus looking at an individual item based upon the raw material components and pricing challenges that are certainly out there, and particularly in terms of like cotton pricing as an example.
Thank you Dana in terms of our pricing and the way that we've been guiding the teams and the way that we're looking at it as Holistically to look at the overall product versus looking at an individual item based upon the raw material components and pricing challenges that are certainly out there and particularly in terms of like cotton.
Pricing as an example.
And we are stepping back as merchants and saying what is the material value of that item that we believe our customer would pay for that item. We have the advantage that as we put better quality fabrics fit and make into our garments and more novelty into our garments that they're in.
Speaker 7: And we are stepping back as merchants and saying, what is the material value of that item that we believe our customer would pay for that item? We have the advantage that as we put better quality fabric fit and make into our garments.
Speaker 7: and more novelty into our garments that there is more room to be able to have leeway with those certain items versus maybe price pressure on commoditized categories and items, which quite honestly are not a big part of the business anymore, those are just categories that you would find within outlets.
There is more room to be able to have leeway with those certain items versus maybe price pressure on commoditized categories and items, which quite honestly are not a big part of the business anymore. Those are just categories that you would find within outlet and the way that we are managing our outlet business going forward is we're keeping our inventory.
Speaker 7: And the way that we are managing our outlet business going forward is we're keeping our inventories tight in outlet so that if there are challenges in terms of lateness with deliveries, we have a place to go with it. So right now that's been working for us for the last two years and we'll continue to manage the supply chain challenges in that same manner.
<unk> tight in outlet so that if there are challenges in terms of lateness with deliveries we have a place to go with it. So right now that's been working for US for the last two years and will continue to manage the supply chain challenges in that same manner.
And then on the real estate side, the 22 million that you got this quarter.
Speaker 8: Got it. And then on the real estate side, the $22 million that you got this quarter, is there more benefit from real estate renegotiation to come forward? And given you have reduced the number of store closings, how do you think about the store base for next year?
More benefit from real estate renegotiation to come forward and given you have reduced the number of store closings, how do you think about that.
Our store base for next year.
Hey, Dana.
On the 22 million we do.
Speaker 9: Hey, Dana. So on the $22 million, we do feel like we've been through most of the portfolio, at least with the major landlords. So going forward, there will be opportunities to continue to renegotiate, but it would be at a more, you know, a more muted level.
I feel like we've been through most of the portfolio at least with the major landlords. So going forward there will be opportunities to continue to to renegotiate, but it would be added more.
A more muted level.
Going forward in terms of the stores.
Speaker 9: Going forward, in terms of the stores, I would say...
I would say.
It's a living breathing model right. So we constantly refresh.
Speaker 9: you know, it's a living, breathing model, right? So we constantly refresh store performance and monitor, you know, profitability. So it's not a given that, you know, we've identified certain stores. There is obviously.
Our store performance and.
And monitor profitability, so it's not a given that we've.
We've identified certain stores.
There is obviously.
The possibility that they'll return to profitability and we will keep them open.
Speaker 9: The possibility that they'll return to profitability and we'll keep them open and that we saw that this year right with, you know, we targeted 30 to 40 store closures.
We saw that this year right with a.
Targeted 30% to 40 store closures.
And we're coming in below that because we've seen some improvement in profitability. So again going forward, we stated roughly over 10% will close over 10% of our stores going forward through 2023.
But I would I would caution that again, it's a living model so.
We'll work to to improve store profitability as we go forward the stores remain a strategic asset for us.
Speaker 4: remain a strategic asset for us and you know obviously given the momentum in the business we'll constantly evaluate.
Obviously, given the momentum in the business.
We will constantly evaluate that.
And just lastly, any difference between the performance of the outlet stores in the full line stores and any commentary you'd want to make on Black Friday cyber Monday, how that performed relative to expectations. Thank you.
Speaker 8: And just lastly, any difference between the performance of the outlet stores and the full line stores and any commentary you'd want to make on Black Friday, Cyber Monday, how that performed relative to your expectations. Thank you.
Yes.
Speaker 7: Yes, the outlet stores versus frontline have been managing really pretty much the same, both in traffic and results. As it relates to the Black Friday Thanksgiving weekend, our Q3 momentum has carried over into Q4, and we are pleased with the performance that we have seen throughout November in both stores and online, inclusive of this past holiday week.
Yeah the.
The outlet stores versus frontline have been managing really pretty much the same both in traffic and and results as it relates to the Black Friday Thanksgiving weekend. Our Q3 momentum has carried over into Q4 and we are pleased with the performance that we have.
Seen throughout November in both stores and online inclusive of this past holiday week.
Thank you best of luck for the season.
Thank you Dana Thanks Dana.
Speaker 10: Thank you, Dana. Thanks, Dana.
It was another one of those are among those who want to ask a question.
Speaker 1: And ladies and gentlemen, as a reminder, if you'd like to ask a question, please press star and 1.
As far as them alone.
Next question comes from Janet Kloppenburg with Joe Jackson Resource Associates. Please go ahead.
Speaker 1: Today's next question comes from Janet Kaufenberg with JJK Research Associates. Please go ahead.
Hi, good morning, everyone.
Speaker 11: Good morning, everyone, and congratulations on the good performance. Hi, PJ.
And congratulations on the good performance Hi P J.
I wanted to first of all Molly I got on a little bit late so.
Speaker 11: I wanted to – first of all, Molly, I got on a little bit late, so I was wondering about the outlook for the gross margin impact from freight going forward. I know you just defined what it was for the third quarter. You may have said it, but I didn't get it. Is it going to continue to be that high? Could it start to moderate? Do you see an opportunity for gross margin to give back next year?
I was wondering about the outlook for the gross margin impact.
Going forward I know you just define what it was for the third quarter.
You may have said, it but I didn't get it.
Is it going to continue to be that high because it's got to moderate do you see an opportunity for gross margin give back next year as well.
Great.
If you are seeing freight prices come down.
Speaker 11: If you're seeing freight prices come down, you know, is that a possibility that you know You earn some of that margin hit back next year
That is a possibility that.
You own some of that margin hit back next year and also Molly on White House and Chico's I was wondering you know from the learnings from the third quarter and how the customer is shopping and what opportunities you've identified by category or price point.
Speaker 11: And also, Molly, on White House and Chico's, I was wondering, you know, from the learnings from the third quarter and how the customers shopping, you know, what opportunities you've identified by category or price point?
Product flow standpoint that you will be able to.
Speaker 11: or product flow standpoint, that you will be able to embed into
In bed into.
Fiscal 'twenty two inventories to have to perhaps continue to sustain this momentum. Thank you great great. Thank you Janet I will take the the learnings on third quarter opportunity for category by price point, and then I'll pass it to Jay to answer your question on on the outlook on gross margin and freight.
Speaker 11: fiscal 22 inventories to perhaps continue to sustain this momentum.
Speaker 7: Thank you. Great. Great. Thank you, Janet. I will take the learnings on third quarter opportunity for category by price point, and then I'll pass it to PJ to answer your question on the outlook on gross margin and freight. One of the things that I would share in terms of the product learnings in apparel is denim.
One of the things that I would share in terms of the product learnings in apparel is denim and denim we are having a resurgence in the category and it is running up 38% to 2019 levels because its being fueled by a shift in silhouette and so we're very excited about that cat.
Speaker 7: In denim, we are having a resurgence in the category and it is running up.
Speaker 7: 38% to 2019 levels because it's being fueled by a shift in silhouette. And so we're very excited about that category. The other learning on top of that is the ability to be able to create full outfits for our customers. Our digital tools and also those tools that we use in stores to create that outfitting, pairing both jackets and underpinnings for the White House brand, and then pairing Rowana's soft jackets and also our no-iron shirts.
<unk> the other learning on top of that is the ability to be able to create full outfits for our customers. Our digital tools and also those tools that we use in stores to create that outfitting pairing both jackets and underpinnings for the White House brand and then pairing a well one is soft jacket and also our no iron shirts.
In the in the Chico's brand continued to be best in class categories for us that we're going to continue to drive next year, we see upside opportunity in categories like dresses and dress up categories. As we move forward. So lots of good things Dan It that we're excited about on the product front.
Speaker 7: in the Chico's brand continue to be best-in-class categories for us that we're going to continue to drive next year. We see upside opportunity in categories like dresses and dress-up categories as we move forward. So lots of good things, Janet, that we're excited about on the product front.
Got it.
Hi.
On your question about supply chain costs. So we mentioned that the impact in Q3 was.
Speaker 9: On your question about supply chain costs, so we mentioned that the impact in Q3 was roughly 350 basis points to gross margin, and that came in the form of higher inbound costs, ocean cargo and air freight.
It was roughly 350 basis points to gross margin and that.
It came in the form of higher inbound cost ocean cargo and air freight.
In the in the fourth quarter, we do expect it to continue.
Speaker 4: In the fourth quarter, we do expect it to continue, and roughly that, you know, around 300 to 400 basis points of impact. I would note that the best defense to higher raw materials, higher freight costs.
And roughly that you know around 3% to 400 basis points.
Of impact.
I would note that the best defense to higher raw materials higher freight costs.
It has been higher full price selling and turning our inventory faster so our business model.
Speaker 4: It has been higher full price selling and turning our inventory faster, so our business model is geared towards digesting those costs. So we'll continue to navigate it. It is a headwind. We do expect it to continue. It's become a cost of doing business.
It is geared towards digesting those costs. So we will continue to navigate it. It is it is a headwind we do expect it to continue its become a cost of doing business.
So we do expect that this headwind going into.
Speaker 4: So we do expect this headwind going into 2022.
Going into 2022.
So so likely to be with us for a while.
Speaker 9: So, likely to be with us for a while.
So as you look to your receipts for the person in the second quarter.
Speaker 11: So as you look to your receipts for the first and second quarter, we should be thinking that the freight impact to gross margin will be unchanged, no improvement, that kind of thing, or could it be worse, PJ?
Should be thinking that the freight impact in gross margin will be.
Unchanged.
No one.
That kind of thing or could it be worse P. J.
Yes, it's difficult to say.
Speaker 9: Yeah, it's difficult to say, you know, it's, you know, there's not a lot of visibility out there as to when this could end, but given, you know, given the cost today is so high and there are several choke points.
You know it.
There is there's not a lot of visibility out there as to when this could end.
But given you know given the cost today is so high and there are several chokepoints.
Along the supply chain, we do.
Speaker 9: along the supply chain. We do, you know, anticipate that there'll be relief there at some point, so which would
We anticipate there'll be relief there at some point so.
<unk>.
Which would which which assumes that the cost would come down but still.
Speaker 9: you know, which assumes that the cost would come down, but still, you know, still a volatile environment out there. Okay. Thanks so much. Talk.
Still a volatile environment out there.
Okay. Thanks, so much talk to you guys later.
Thank you Janet.
This concludes our question and answer session.
Speaker 1: And ladies and gentlemen, this concludes the question and answer session. I'd like to turn the conference back over to Molly Langenstein for any closing remarks.
Mark over to Molly long enough time for any closing remarks.
Thank you each quarter this fiscal year, our momentum and results have become proof point that our turnaround strategy is working.
Speaker 7: Thank you. Each quarter this fiscal year, our momentum and results have become proof points that our turnaround strategy is working.
We are a digital first customer led company with a clear path for profitable growth.
Speaker 7: We are a digital-first, customer-led company with a clear path for profitable growth. We have three unique brands, each with their own opportunities for expanding their customer bases, market share, and sales.
Have three unique brands each with their own opportunities for expanding their customer base is market share and sales.
We continue to improve our operating performance strengthen our balance sheet and build our team and infrastructure, we are poised to generate shareholder value over the long term and have an exciting future ahead.
Speaker 7: We continue to improve our operating performance, strengthen our balance sheet, and build our team and infrastructure. We are poised to generate shareholder value over the long term and have an exciting future ahead. Before I close, I would like to thank David Oliver, who has served as interim CFO for the last two years and has resumed his controller role with the company.
Before I close I would like to thank David Oliver who has served as interim CFO for the last two years and has resumed his controller role with the company.
I would also like to express my sincere appreciation to our team across the company, whose unwavering commitment has put us back on a path to sustainable topline growth and great improved profitability and to all our shareholders and other stakeholders, who have invested and have confidence in the future of Chico's Fas.
Speaker 7: I would also like to express my sincere appreciation to our team across the company whose unwavering commitment has put us back on a path to sustainable top-line growth and great improved profitability, and to all our shareholders and other stakeholders who have invested and have confidence in the future of Chico's FAS.
Yes.
We look forward to speaking with you again during our fiscal year end call.
Speaker 7: We look forward to speaking with you again during our fiscal year-end call.
Ladies and gentlemen. This concludes today's conference call. We thank you all for attending today's presentation with all disconnect your lines and have a wonderful day.
Speaker 1: Thank you. Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.