Q3 2023 Vera Bradley Inc Earnings Call

Please standby.

Yes.

Good morning, ladies and gentlemen, thank you for standing by welcome to the Vera Bradley third quarter Conference call. At this time all participants are in listen only mode. Following the presentation. We will conduct a question and answer session and instructions will be provided at that time for you to queue up for questions.

Minder Today's conference call is being recorded I would now like to turn the call over to Mark do you lie Vera Bradley's Chief administrative officer.

Good morning, and welcome everyone I'd like to thank you for joining us for today's call. Some of the statements made during our prepared remarks and in response to your questions may constitute forward looking statements made pursuant to and within the meaning of the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 as amended such forward looking.

Statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect please refer to today's press release and the company's most recent Form 10-K with the SEC for a discussion of known risks and uncertainties investors should not assume that the statements made during the call will remain operative.

At a later time, we undertake no obligation to update any information discussed on today's call I will now turn the call over to Vera Bradleys outgoing CEO , Rob Wallstrom Rob.

Thank you Mark.

Good morning, and thank you for joining us on today's call, our new CEO , Jackie Ardrey and John Enwright, Our CFO . Both join me today Jackie joined the company in November after most recently, serving as President of Grandin Road with previous experience at Harry <unk>, David and Anna Anderson. She has jumped right in and we are excited to have her leading the company.

To the future.

First let me make a few comments on the quarter, we delivered a year over year improvement in non-GAAP EPS, largely driven by implementation of our targeted expense reductions total revenues of $124 million were modestly above overall expectations and we began to experience some stabilization in our <unk>.

Margin rate is supply chain challenges moderated as strategic price increases helped to offset increased raw material and freight costs.

As in past quarters, we are continuing to experience bifurcation in the spending of our customer base Vera Bradley's direct full price channel customers with higher household incomes remain more engaged and continue to spend more than customers with lower household incomes, especially in our Vera Bradley factory channel, where inflationary pressures impacted trap.

Vic and discretionary spending.

However, our Vera Bradley indirect channel experienced its third consecutive quarter of year over year growth.

And our Vera Bradley brand, we are continuing to fuel our innovation pipeline and build on our lifestyle merchandising focus and the core areas of travel back to campus everyday and collaborations.

In the third quarter, we continued our powerful product collaborations with Disney and Harry Potter launched a new range of your collaboration with <unk> introduced our VB cloud casual footwear collection expanded our family sleep and lounge wear collection and made our W. In the meta unit the meta versus with our in Ftes to sell.

<unk>, our 40th anniversary anniversary.

While stores will continue to play an important part of our Vera Bradley distribution strategy going forward, we continue to rationalize our store base closing underperforming stores as leases expire we have closed 10 full line Vera Bradley locations. This year.

PURA Vida is e-commerce revenues continue to be affected by social and digital media effectiveness and higher cost. This year, we have lowered PURA vida as year over year marketing spend until we can determine the best ways to maximizing the market marketing effectiveness, which has had a negative impact on sales in.

In the third quarter, we did begin to reinvest more marketing dollars than we spent in the first and second quarters and we saw a positive impact on e-commerce sales trends, although still negative compared to the prior year.

However, at the same time, we experienced a negative trend and PURA Vida as wholesale revenues are.

Our number one priority is to build a more diverse innovative effective and performance based marketing program to drive PURA Vida E. Commerce sales. We are in the process of implementing a comprehensive customer data platform for PURA Vida to build a single coherent complete view.

Of each customer so that we can better target and personalized marketing and become rest less reliant on third party marketing there should be complete by early next year in the meantime, we are continuing to work with our micro influencers expanding our tick tock presence launching impactful ads on connected TV optimizing SMS and aggressively.

Exploring other methods to effectively reach our customers.

We opened our new PURA Vida full price stores at Broadway at the Beach in Myrtle Beach, South Carolina in August and at the San Tan village in Metro Phoenix in September .

Stores can play a key role in driving new customer acquisition as we continued to diversify our marketing platforms and they demonstrate the power of retail presence has in driving digital sales omnichannel loyalty and spending.

So far all of our PURA Vida full price retail stores are trending to exceed their first year sales projections.

On the PURA Vida product front, we continue to build customer excitement and engagement through collaborations like Disney Harry Potter and Hello, Kitty partnering with key Influencers and continuing.

Innovation like expansion of our demo fine and stone jewelry collections and extension of our apparel offerings.

Now, let me officially introduce our new CEO Jackie Ardrey Jackie.

Thanks, Rob.

Although I've been with the company just a few short weeks I'm convinced that both are they are Bradley and PURA Vida brands have untapped potential in the marketplace.

Expect the macro environment to remain unpredictable our teams are focused and our cash position and balance sheet remain solid I look forward to working closely with our leadership teams to develop and execute solid growth plans leverage our many opportunities, especially in the areas of merchandising and marketing and.

And deliver consistent sustainable growth and value to our shareholders over the long term I look forward to talking to you more about our go forward plans during our year end earnings call in March now, let me turn the call over to John to review the financial results John .

Jackie and good morning, Let me go over a few highlights for the third quarter.

The numbers I will discuss today are all non-GAAP and exclude the changing charges outlined in todays release.

For a complete detail of items excluded from the non-GAAP numbers as well as a reconciliation of GAAP to non-GAAP numbers. Please reference today's press release.

Consolidated net revenues totaled $124 million compared to $134 7 million in the prior year third quarter.

Consolidated net income totaled $6 3 million or <unk> 20 per diluted share compared to $6 $2 million or <unk> 18 per diluted share last year.

As Rob noted the increase in EPS was primarily attributable to expense leverage due to the cost reduction initiatives.

For Europe Rally direct segment revenues totaled $80 1 million, a seven 6% decrease from $86 6 million last year.

Comparable sales decreased nine 6% in the third quarter.

<unk> Bradley indirect segment revenues totaled $22 3 million, a six 7% increase from $20 9 million in the prior year third quarter.

Reflecting an increase in certain key account orders, partially offset by a decline, especially account orders.

PURA Vida segment revenues totaled $21 7 million, a 23% decrease from $27 2 million last year.

Third quarter gross margin totaled 65, 6 million or 52, 9% of net revenues compared to $72 3 million or 53, 6% of net revenues last year.

The current year gross profit rate was negatively affected by higher inbound and outbound freight expense deleverage of overhead costs in.

And channel mix changes, partially offset by price increases.

Third quarter consolidated SG&A expense totaled $57 6 million or 46, 4% of net revenues for the current year third quarter compared to $63 7 million or <unk> 47, 3% of net revenues in the prior year.

As expected current year expenses were lower than prior year, primarily due to cost reduction initiatives and a reduction in variable related expenses due to lower sales volume.

The company's third quarter consolidated operating income totaled $8 2 million or six 6% of net revenues compared to $8 7 million or six 5% of net revenues in the prior year.

Now, let's turn to the balance sheet.

Total quarter end inventory was $178 3 million compared to $148 3 million at the end of third quarter last year.

Total current year inventory was higher than prior year, primarily due to approximately $17 million in incremental logistics costs burdening overall inventory as well as incremental pure Bradley factory inventory, what it related to lower than expected revenues.

Cash cash equivalents and investments as of quarter end totaled $25 2 million compared to $75 3 million at the end of last year's third quarter.

The company had no borrowings on its $75 million ABL credit facility at quarter end.

A key reason for lower cash position is due to the inventory build of $30 million over last year.

We will continue to take a conservative approach to cash, particularly in this volatile and challenging environment now.

Now, let's shift to our fiscal 2023 outlook.

We expect the fourth quarter macroeconomic environment to continue to be unpredictable.

<unk> business will continue to be challenging inflationary pressures will continue to impact Vera Bradley's customers with lower household incomes, particularly in the factory channel and there will be continued pressure on gross margin.

All forward looking guidance numbers that I will discuss our non-GAAP for.

For the fourth quarter, we expect consolidated net revenues of $136 million to $141 million compared to $149 6 million last year.

Consolidated gross margin rate of $49, 5% to 55% compared to 59% last year.

The expected decrease is primarily associated with incremental targeted promotional activity and deleverage on overall head costs, partially offset by price increases and lower year over year freight expense.

Consolidated SG&A expense of $61 million to $63 million compared to $67 1 million in the prior year the reduction.

It's primarily <unk>.

Driven by cost reduction initiatives and lower variable related expenses due to expected sales decline.

Consolidated EPS of 16 to 20 compared to 17 cents last year.

For the full year, our updated expectations, our consolidated net revenues of $489 million to $494 million compared to $540 5 million in fiscal 2022.

Consolidated gross margin rate of 51, 9% to 52, 1% compared to 53, 3% in last year.

The expected year over year decrease is primarily related to incremental inbound and outbound freight expense.

Incremental targeted promotional activity and deleverage on overhead costs, partially offset by price increases.

Consolidated SG&A expense of $242 million to $244 million compared to $258 8 million in fiscal 2022.

The reduction in SG&A expense is being driven by cost reduction initiatives and variable expenses.

Consolidated diluted EPS of <unk> 22 to 26 cents compared to 57 cents last year net.

Net capital spending of approximately $10 million compared to $5 5 million in the prior year.

Operator, we will now open up the call to questions.

Thank you.

Signal with questions. Please press star one on your Touchtone telephone.

Joining us today.

Please make sure mute function is turned off to allow your signal to reach our equipment.

That will be star one if you would like to signal with questions Star one.

Our first question will come from Oliver Chen with Cowen and company.

Hi, Good morning, Hi, Jackie ROM, David Rob as you think about channels could you tell us a little bit about the right sizing our full price also.

Also as we look ahead the factory you've been experiencing that pressure with that customer what are your thoughts on the evolution of that and interact has a nice number as well.

Would love.

Lots of that momentum can continue in.

And Jackie.

I was curious about what attracted you most.

Vera Bradley and also as you embark on.

Your initial.

Weeks and months there what are some of your key priorities and then finally, Rob on the inventory number you gave a lot of great detail, maybe you could help us understand how to model going forward inventory growth relative to sales.

That'd be great. Thanks, everybody.

Thanks Oliver.

I guess, a couple of things, let me hit some of the channel conversations and questions that you've asked so full.

Full price we've been talking about that we see the full price store count.

Consolidated this year, which we've been doing and making sure that we're really right sizing it.

And we do believe that continuing to leverage the e-commerce business, our indirect business and really.

Looking at our full price business as a way to get to the customer in the most efficient way and in a place where she shops. So I think that youre going to see that rationalization kind of continue through this year. The factory channel right now we do believe that the big factor for US has really been what's been going on in the general economy in this inflationary pressure.

For the tightness that we're seeing kind of across retail and more.

What I'll call more of the semi opening price areas right. The non luxury areas that we're seeing just some reduction in that customer. So we're just trying to kind of fight through these these near term economic.

For points, but we still believe that long term factor is a really important part of our business and the indirect channel has been very encouraging to see and really the power of <unk>.

Expanding our e-commerce businesses within our indirect channel that they are really where we're seeing the strength.

So again, we just think that continuing to leverage that e-commerce space will be important.

I think maybe I'll turn it over to Jack you're a little bit to talk about kind of what attracted her and then we'll hit the inventory comments, yes. Thanks, Rob.

Drawn to the opportunity here.

I Love the fact that both the iconic Vera Bradley and PURA Vida brands, where belt from an entrepreneurial spirit, we have devoted emotionally connected and multi generational customer bases high brand recognition socially conscious purpose, driven and have enormous untapped potential in the marketplace.

I am really working now with the leadership team and the board to build upon the company's heritage and leverage our opportunities, particularly in merchandising and marketing, which is where I'm spending a lot of my time right now to really drive the long term profitable growth and for both brands since joining over just about a month ago.

Besides relocating here to Fort Wayne and then really immersing myself in the business working with Rob spending time meeting with the corporate Vera Bradley and PURA Vida teams visiting stores and meeting with our board of directors, it's been a really busy but great exciting month, and and really my key priority right now is just.

Evaluating our go forward strategies. So that we can have some really exciting things to talk about in March.

Oliver I'll hit on the inventory quest.

Question, you know as we kind of work through inventories a little bit higher than we would want it to be we expected results were a little bit different when we started this year. So inventory built as we kind of detailed a lot of the build is associated with just the cost to get inventory from southeast Asia to kind of Indiana. So as we think about.

Next year, we anticipate obviously, we'll come out with our guidance.

Guidance for next year at next earnings release, but we anticipate by the end of next year getting inventory back in line to where we would normally be and so ultimately we would expect to see some free cash flow benefit next year associates and a reduction in inventory.

Okay. Thank you and Rob as we think about the consumer and the industry. We saw a pretty volatile October with a weaker October and then shopper is shopping later are you are you seeing that as well if you could help characterize.

Some dynamics there and second question to this is on on the gross margin line you called out promos in the prepared remarks, but you also are undertaking strategic price increases.

What should we take away you know between those two dynamics and how well we'll model or consider gross margins. Thank you.

Yeah, So I think from a consumer standpoint, youre right Oliver that we saw.

Weakness in October .

And as we got towards Black Friday, we saw the consumer begin to pick up during black Friday and kind of that momentum has continued past black Friday, what we have definitely seen though there is the importance of promotional activity as part of that stimulation.

That the consumer definitely is looking for the deal it's kind of returning to that historical Black Friday, a mentality. We've been you know we've added some promotional deals into the brand and the consumers responded.

So we expect that as we move through fourth quarter that it'll continue to be promotional driven targeted promotions, but promotional driven nonetheless.

And so I think that's part of the balances we kind of move in the year ahead is just how to balance that promotional environment for the consumer and finding opportunities to offset that expense through.

Other ways, whether that's through product cost or whether that's through general SG&A.

And I think that probably talks a little bit about that gross margin.

Number because we do think there'll be some promotional pressure on that gross margin number the international logistics long term will really help us as that has come dramatically down.

But the domestics logistic cost or remaining.

I would say.

And we're not seeing a reduction on that side, but the international logistics costs will be a tailwind as we move forward, yes ill just add to that I think obviously, we're not giving out guidance for next year, but as a tailwind into next year will be kind of international logistics getting back to a more normalized pre pandemic levels, which will obviously benefit our.

Piano.

Okay. Thank you and the last question where at Cowen.

We've done a lot of work on non fungible tokens in NFC is and also the <unk>.

Or.

What's happening with the centralization and web three.

What why did that obviously it makes sense for Vera Bradley and are you seeing any interesting trends with the customer profile, there and any thoughts on plans ahead. Thank you.

I think one thing this bid so important for us of getting in the N. F. T. World is one we've always been a company that's been innovation drove it and we wanted to get into that space learned from that space begin to experiment in that space and stay relevant with the art customer, especially.

So we thought it was a great opportunity we thought we could use it as a leverage for our foundation.

Our leverage for just the collectability of our patterns and so it's something that we'll continue to experiment around right, it's not a huge commercial opportunity yet.

But it's one of those areas, we want to make sure that we're exploring and learning and kind of growing as that space grows in the years ahead.

Thank you best regards happy holidays.

Thanks, Oliver Thank you.

Thank you. Our next question will come from Joe Gomes with noble capital.

Good morning, Joe.

I wanted to start off on.

PURA Vida we've talked.

For a year now about the digital trends.

Just and I know you will.

Youre looking at.

Putting together the database.

What really needs to happen here before we can start to see some.

Some improvement in that business just seems to be taking.

A long time.

I guess figure out what where to go next.

On that side outside of opening the retail stores.

I think it's a great question Joe.

Few different things right. So one thing that is underway is the customer data platform. The technology. There's a lot of technology pieces. The team has been working very hard on over the last quarter. We've.

We've had success with all of these platforms at Vera Bradley's So we're working through that and getting that learnings. So we do think the first party data will be part of that but the other piece of it is just a real diversification to the marketing platform. One thing that I think is exciting with Jackie coming in and her leadership with their merchandising and marketing background.

A fresh set of eyes to look at it.

Because we do need to find a new way of acquiring customers that it's not as dependent upon our old channels.

That obviously has not been an easy transition, but it's one that we think we can get through stores have shown.

That the consumer still remains engaged it's improved our ecommerce business. So when we get in front of the consumer we're seeing a positive up tick. So I think it's going to be really mixing as we've seen a lot of these direct to consumer businesses have started to become more omnichannel opening up stores diversifying their marketing.

And I think that we need to be doing the same we just we've had.

It has not been an easy transition at PURA Vida to kind of re platform the business, but I think we're making some progress and I think with Jackie coming onboard we can accelerate that progress in the months ahead.

Okay, and then speaking on the retail stores I know, we've talked about in the past.

You have the San Diego store I think its now anniversarying.

Hum.

How was that performing your hurdles comps looking year over year.

For the San Diego story.

Great news on the new ones that they all seem to be.

Performing above expectations.

What I would say about the stores that PURA Vida is it still early innings right. So that the good news is with all of our four full price stores that have opened up they're all tracking to exceed first your expectations. That's really encouraging the second part of it that is very encouraging is were seeing a significant up.

Tick in the e-commerce business in those metro areas and again, just showing the power of that stores have not only as a four wall.

Revenue and profit center, but also just for the franchise overall, so I know, it's one of these areas. The jackie's Lucky that as she plans that go forward strategy is just how to diversify.

PURA Vida platform, so that we can get that business growing again.

And I'm speaking a little bit for her but we've had so many conversations over the last 30 days that.

She she really see some excitement and potential around that brand.

And so I think well I think you will see improvements as we move through next year.

Okay.

And one more if I may just on the guidance I was wondering if you could give us a little more color last quarter.

The gross margin guidance was 53, 7% to 54.1.

And your inquiries.

The range for revenues for the full year guide.

But significantly reduced gross margins down to 51, 9% to 52.1.

Even with freight expense.

The declining and some of the other things that you've discussed.

Can you give us a little more color into how that gross margin.

Estimate declined so dramatically.

Yeah, So Joe I mean, we talked a little bit about.

Some more tactical discounting than we had probably initially built into our forecast that the.

Beginning of quarter three so really that is the more significant driver, obviously that helped us drive a little bit more revenue as well.

<unk> to drive more revenue based on that but at.

At a rate difference from our profit profit perspective, Hayward neutral to positive on that so we think it's the right thing to do.

<unk> be competitive in the marketplace that she's out there. She is looking for more of a <unk>.

Discount then I think we initially anticipated when we put together our guidance at the beginning of the third quarter.

Okay, great. Thanks.

Thank you thanks, Joe.

If you would like to signal with questions. Please press star one on your touch tone telephone again that is star one.

Our next question will come from Eric better with SCC research.

Okay.

Good morning.

Okay.

Good morning, Good morning, Eric.

Good morning could you talk a little bit about.

Product categories, you've expanded the Vera Bradley change of expanding the product categories significantly.

Now in the outlets with your shoes, the bogie outlets and full priced stores.

Outerwear the last years before.

As part of their overall looking at this.

How do you feel about the categories and other categories that should be.

We emphasize our emphasize going forward.

Okay.

I think a couple of things Eric So first of all I think the product innovation and expansion in the categories. You know just again shows the power of the Vera Bradley brand in our heritage in prints and color and fund and casual so I think that that's an underlying piece that stitches. It altogether I do.

Take that part of what Jackie's evaluating is just overall, the merchandising strategy and how to balance that strategy. Both in terms of what is the overall offering as well as what is the offering by channel. So I know that that's one area that she is really digging into and we will we'll be looking at that over the months ahead.

Yes, and I would add that although it's really too early to make a judgment about any product categories that we might exit.

I'd say the team was already going through a SKU count reduction exercise, which I completely support.

And then I, obviously believe that travel back to campus every day are kind of the key franchises for the Vera Bradley brand.

And we will continue to collaborate with strategic partners going forward, but again, we're looking at all of that right now and I'll have more to share in March.

Great and you can look at it.

How should we be thinking about expansion in terms of PURA Vida stores, you're at for now.

If you look upon next year is another year to continue to expand the brand or do you want to kind of sit here and wait and get a little bit better data from those stores as they start to anniversary as mentioned previously San Diego just anniversary.

Should we be thinking about expansion for PURA Vida stores next year.

Great question, Eric I think first of all there definitely is a learning in gathering the learnings from the stores. So I know that the team is actively doing that right now.

And so we are learning a lot and that will make us better as we move forward I think that's another key area that Jackie is really looking at is as she is thinking about the next go forward strategy.

Is kind of what is the role of stores play and PURA Vida what are the first things we she really wants to attack to get that business back on track.

So again I think you'll have more information on that in March.

Okay and last question here so in terms of collaborations.

<unk> gone through the full cycle with Harry Potter.

Collaborations I would assume are solid margin player because theyre not discounted even on the sales here.

How do you look at the need and.

Desire to have more or less collaboration as they both Vera Bradley and PURA Vida.

Going forward.

Do they fit into this overall world here.

Yes, I think that our collaborations have been really powerful and attracting new customers to the business and that's really been one of the key points and I think that you will continue to see opportunities around collaborations at the same time. It is really important that we keep it fresh we keep it measure.

I don't think that you would see us overall, expanding big in terms of having more collaborations that we're having today I think it's really about dialing a man we've learned a lot as we've worked through the franchises that.

Disney is a great one right when we talk about our Disney collaborations Theres a lot of different franchises within Disney that we've worked with and some of them have really worked well, particularly the ones that kind of fit with the Vera Bradley DNA.

So I think we get smarter and smarter over time, but I think it will continue to play a role, but it will be a measured roll as we move forward.

Yes.

We are focused on.

And in terms of how much is core and how much is his partnerships for both of these brands.

So that's definitely something that's on my mind.

Okay, Alright, well happy.

Hopefully, we'll have some happy holidays and good luck for the rest of the year.

Thanks, Eric Thank you.

Okay.

And our next question will come from Steve Marotta with CL King and associates.

Good morning, everybody I know that you are not providing any sort of guidance for next year, but maybe at the highest level can you talk a little bit about your planning do you think it will be a tale of two halves.

Or maybe just.

Even very very little list.

Can you talk a little bit about the cost initiative programs, just remind us what the size was originally what was captured this year and what is expected to be captured next year. Thank you.

Yeah, Thanks, Steve Yeah. So.

We do think next year is going to be a tough year.

Think a lot of people are thinking about a recession next year and you know we're as we're finalizing our plans, we're taking that into consideration, while we finalize our plans.

In regards to kind of the.

The expense reduction target was $25 million is kind of what we committed to and a lot of that commitment is going to we're going to.

<unk> a lot of that commitment in this year.

So ultimately we'll have gotten a lot of that through the P&L. This year and ultimately then we'll lap it next year right we won't.

We need to grow from kind of we'll have that in our base next year to $25 million compared to where we expect it to be this year. So.

Yeah.

I think we.

Were not finalized with the plans we have to get through holiday as we think about next year. So that's why we can't can be really committal on what we expect for next year, but.

We will be able to give a much more detailed answer.

Sure I'll answer in a couple of months.

I think I always say that would add Steve just from kind of a big picture market standpoint, the way. We're looking at it is we think the positive for next year, which John spoke about earlier is the reduction of international logistics expenses right, that's going to be a positive on the P&L next year and a tailwind which is good news on the flip side.

We do expect the macro environment to continue to be challenging and as long as there's this recessionary pressure that that will be pressure that we're facing next year and then the company will just continue to be very disciplined on the SG&A.

<unk> as we move through and.

And making sure that we're controlling SG&A well to kind of manage through the recessionary environment. So to me those.

Is that kind of the three big levers that we're looking at next year, but we're obviously still finalizing our plans.

That's really helpful and Rob you actually just touched on something I wanted to follow up on from a logistics standpoint.

Remind.

Our handy what that incremental was in 'twenty one.

The incremental incremental was in 'twenty two.

And those two numbers would be helpful. Because I know that that is not.

100% roll off because inventory needs to work its way through the system.

Just knowing those two numbers would give a benchmark for what what could be the ultimate earnings power standpoint. Thanks.

Yes, I can I can handle that question. So in 'twenty. One it was about a $6 million increase roughly about that number.

And then 'twenty two about $7 million, so kind of if you go back to kind of logistics expense.

From pre pandemic level of our 21, that's about $12 million to $13 million.

Really helpful. Thank you.

Yes.

And that does conclude the question answer session I'll now turn the conference back over to Rob Wallstrom for any additional or closing remarks.

Okay.

Great. Thank you.

I've enjoyed being with this amazing organization for the last nine years I could not have been surrounded by a more dedicated collaborative and committed team and I have enjoyed being part of the company's special and powerful culture.

And I'm, especially proud of the innovation tenacity and resilience that our teams have demonstrated to overcome challenges as we stay focused as a customer centric and purpose driven organization.

Forbes named US as America's number one best size mid sized employer for a reason.

It's an exciting time as Jackie leads the company into the next phase in the future. We have a portfolio of two iconic lifestyle brands multi generational customers with amazing loyalty and devotion remarkable brand recognition, a solid balance sheet and incredible team.

With Jackie's leadership and strategic direction, I believe the company will deliver meaningful growth and value to our shareholders over the long term.

Look forward to following the Companys continued progress and wish everyone much success.

You for joining us today, and I know Jack and John look forward to speaking with you in March on the yearend earnings call.

Thank you and that does conclude today's conference. We do thank you for your participation and have an excellent day.

Yeah.

[music].