Q2 2025 Vera Bradley Inc Earnings Call
Speaker Change: [inaudible]
Speaker Change: Thank you for watching!
Speaker Change: i
Speaker Change: Greetings. Welcome to the Fair Bradley Second Quarter Fiscal 2025 earnings conference call. The time-al慈 spends our list of only mode. The question and answer session will follow the formal presentation.
Speaker Change: If anyone's sure to call our British Assistant during the conference, please press star 0 from your telephone keypad. Please note that the conference is being recorded.
Mark Dely: I'll now turn the call over to Mark Dely, Chief Administrator Officer. Should you lie, you may go ahead to proceed.
Speaker Change: Good morning and welcome everyone, we'd like to thank you for joining us for today's call.
Speaker Change: Some of the statements made during our prepared marks and response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the private security's litigation reform act of 1995 as amended.
Speaker Change: That's 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.
Speaker Change: Please refer to today's press release and the company's most recent Form 10K filed with the SEC for a discussion of known risks and uncertainties.
Jackie Ardrey: 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 not turn the call over to Verbelli CEO, Jackie Ardrey, Jackie.
Jackie Ardrey: Thank you, Mark. Good morning everyone. Thank you for joining us on today's call.
Jackie Ardrey: As we discussed in our last call, late in the second quarter, we rolled out the initial phase of Project Restoration to our brand stores and theverebradley.com website.
Jackie Ardrey: This was a public-facing reintroduction of our iconic beer Bradley Brand anchored on a renewed vision and positioning as we pivot our organization towards a bright future geared to sustainable long-term profitable growth.
Jackie Ardrey: The initial phase was designed to elevate and differentiate the assortment and positioning from our outlet channels, attract new customers and fuel a higher mix of full-price selling.
Jackie Ardrey: I'm so proud of what the organization delivers in a very short time in the extremely successful marketing campaigns we launched. We targeted a younger, more affluent customer for this launch and we're successful at driving traction with this segment at most week old price.
Jackie Ardrey: Our modernized brand marketing and products are also attracting partnerships with new retailers like Urban Outfitters that launch this month.
Jackie Ardrey: Our top of the pyramid collections like leather and Oxford Canvas sold especially while to existing customers even at higher retail.
Ardrey: Ardrey's transactions for our brand channels were up 9.3% to last year post launch, reflecting a higher level of full price selling and a shift to products at the top of the pyramid.
Ardrey: Although we were pleased with many aspects of this rollout, our overall results were disappointing and reflect a continuation of first quarter macro consumer headwinds as well as some elements that are within our control.
Pirovita: At Pirovita, we continue to see elevated digital media acquisition costs that prevented further investment in customer growth. Our indirect panel was also cautious in the first part of the second quarter, a specialty of destination store traffic for our partners was initially down.
Pirovita: Overall, for the second quarter, we registered net revenues of 110.8 million, a decline of 13.5% compared to the prior year, and non-gap net income of 3.9 million, or 13 cents per diluted share.
Pirovita: These results did not meet our internal expectations and largely reflect a challenging consumer backdrop in which consumers continue to be very discriminating with discretionary spending.
Pirovita: By segment for the second quarter, Vera Bradley direct revenues told 72.2 million with an operating margin of 19.1%.
Pirovita: Dear Bradley and indirect revenues, we're 21.8 million with an operating margin of 22.8% and peer-of-eater revenues totaled 16.8 million with an operating margin of 4.1%.
Pirovita: We are confident in the direction we are taking the business and remain committed to project restoration key areas of focus.
Pirovita: including first restoring beer Bradley's brand relevancy, strategically marketing are distinctive and unique position as a feminine, fashionable brand that connects with consumers on a deep emotional level.
Pirovita: 2. Targeting casual and feminine 35-54-year-old women who value both fashion and function.
Pirovita: Third, leaving into our elegantly redesigned product assortment from modern consumer and her needs while retaining the elements that classically defy very broadly. And fourth, building a balanced multi-channel structure that allows customers to shop when where and how they want to shop with us.
Pirovita: I'll speak to these key focus areas in a moment.
Pirovita: In light of our first half results and the initial start to third quarter, we are now prudently planning the second half with a much more conservative lens.
Pirovita: Our overall outlook reflects the pressures and trends we have seen experience through the midpoint of this year, and we expect those are going to continue through the balance of the year. Michael will share some details on this in a few minutes.
Michael: I want to be clear, though, that we remain confident in the direction we're taking the business and keywinds in the quarter, which have continued third quarter to date, our validation that we are moving in the right direction for long-term health. The pace of our journey is slower than we anticipated, but we are on the right path.
Michael: With our brand restoration efforts well underway, we will remain agile and flexible throughout the fall of holiday season while pursuing our vision to inspire people to be bold in their pursuits and brilliant in their self-expression.
Michael: We enter the second half in a strong financial position however with no debt and $44 million in cash which allows us to remain nimble while navigating a dynamic consumer environment.
Michael: We're committed to strengthening our financial position through operational improvements over the next few years, and Michael will talk more about those as well.
Michael: We've done a great job managing SGA this quarter and are down over $6 million to last year across both brands, even with a planned incremental marketing investments at Vera Bradley.
Speaker Change: I would like to take a moment to thank the entire Vera Bradley organization for their hard work and dedication leading up to and throughout the launch of project restoration as well as our unwavering commitment to our brands and our customers.
Speaker Change: Our mission is to unlock joy and ignite conversations through uplifting color and artistry, and our teams have executed on this mission with passion.
Speaker Change: We know there's much work ahead of us and we are staying close to both new and existing customers listening, adjusting and executing with speed and excellence to deliver emotionally connected brand experiences.
Speaker Change: Now I'd like to give you some more detail on project restoration for Vera Bradley.
Speaker Change: On July 11th, we unveiled the first part of their VR Bradley transformation aimed at re-envigorating the business and restoring brand relevance, featuring new products, new logo, install renovations, and optimize website experience, and new marketing campaign, featuring Zoey Nationals, our brand ambassador.
Speaker Change: Our efforts in this transformation revolved around four pillars of product, brand, customer, and channel. I'd like to note that the outlet portion of this transformation launched late in August, and although it hasn't yet changed, fails turns in the outlet store channel, or VBoutlet.com site is viewing very well.
Speaker Change: The new product assortment in our brand channel features higher quality fabrics and performance materials such as cotton gabbardine, Oxford canvas, and genuine full grain leather in modernized silhouettes based on our traditional best-selling styles.
Speaker Change: The new styles have been elegantly redesigned while honoring the heritage and elements that have classically defined beer Bradley. I'm very pleased to report that we saw strong performance at the top end of our good better best product pyramid, particularly with existing and reactivated customers.
Speaker Change: Leather goods as well as solids in trend-right fashion colors, including bronze, green and pummel stone, all performed well, which validates that both are existing and new customers are interested in trend-right to the West End Colors.
Speaker Change: Although the majority of the product enhancements we made have been well received, we did receive some constructive feedback on select product style adjustments, such as the need for longer and wider straps, more pockets and zip closures.
Speaker Change: We embrace the feedback and have made assortment edits in time for the holiday and spring seasons. It's important to us that both new and existing customers find products they love with the functions they need.
Speaker Change: We also heard that we cut our printed sortment back too much, especially in cotton, and we are planning to resolve that in upcoming season.
Speaker Change: Finally, our selection of new collaborations in second quarter was reduced to last year, but we'll continue to be part of our assortment in all channels. Our new Mickey deliveries in both brand and outlet channels were very well received by customers and fans can look forward to both favorite and new properties that will launch in holiday and future seasons.
Speaker Change: To address our brand and customer pillars, we engage to the number of activities and strategies.
Speaker Change: As part of this, beer Bradley enlisted actress musician and entrepreneur Zoe Dationnell to service the face of the brand's fall creative campaign, which spans billboards, print, and digital platforms.
Zoe Dationnell: We saw strong selling across Zoey's hands-elected favorite items, including the Astoria shoulder bag, the Springbrook Sling Crossbody, and the Miramar Weekender.
Speaker Change: Most of these efforts were about increasing awareness, relevancy, and exposure to our target customer group. We have initially seen great progress as our choir customers are within our desired age target with higher household income.
Speaker Change: The piece and acquiring these customers is initially slower than we planned, but continues to make progress.
Speaker Change: Dely is featured in our holiday campaigns and we look forward to the reception of our new prints and giftable items launching next month.
Speaker Change: Looking across our various channels, the earliest reads have occurred in our indirect business where we were particularly pleased with the on-the-floor selling across our top-tier wholesale accounts, including specialty stores, department stores, and airports.
Speaker Change: We have been especially excited about our August 27th Beer Bradley Limited Edition launch collection in collaboration with Urban Outfitters. This partnership is often a fantastic start and will expand significantly for holiday both in stores and online.
Speaker Change: We are also in discussions with other retailers and licensing partners who have expressed strong interest in our rebranding and I look forward to updating you on our progress next quarter.
Speaker Change: Now we'll turn to Pure Vita.
Speaker Change: A pure Vita, we continue to shift our long-term focus to delivering profitability through cost control and gross margin expansion, while balancing the e-commerce business with wholesale and appropriate retail storage expansion.
Speaker Change: We remain committed to sharpening our focus on 18 to 24-year-olds and re-centered our brand expression to live life to the fullest.
Speaker Change: We continue to diversify our marketing spend and concentrate our efforts on customer retention and reactivation.
Speaker Change: For Product, we are turning our focus to core product categories like bracelets and jewelry. Our Harper Charm program is performing well and continues to be a growth opportunity.
Speaker Change: We also continue to pursue product partnerships with licenses such as Harry Potter, Disney, Shark Week and others.
Speaker Change: Our stress program continues to perform well in bracelets and anglers and we will iterate on those successes.
Speaker Change: For Channel, we continue to focus on profitable e-commerce sales as well as retail. Our stores are performing well and we are especially excited about our new Disney Springs location, which is scheduled to open late this month.
Speaker Change: I'll turn the call over now to see if Michael Schwindle to review the financial result. Michael.
Michael Schwindle: Thanks, Jackie. Good morning, everyone. And thank you for joining us. We will open up for questions in a few minutes. But first I'd like to cover some highlights for the quarter, and briefly discuss our updated guidance for the year.
Michael Schwindle: For the sake of clarity, all the numbers I'm discussing today are non-gap and exclude the charges outlined in today's press release. A complete detail of the items excluded from the non-gap numbers, as well as a reconciliation of gap to non-gap numbers can be found in that release.
Michael Schwindle: For the second quarter, a consolidated revenues told about $110.8 million, compared to $128.2 million in the prior year, second quarter.
Michael Schwindle: and I didn't come for a second quarter, total $3.9 million or $13 per dilute and share, and that's compared to a net income of $10.2 million last year or 33 cents per dilute and share.
Michael Schwindle: In terms of segment performance, beer Bradley direct segment revenues for this current year second quarter told us $72.2 million.
Michael Schwindle: Approximately 16% decrease from $85.7 million in the prior year or second quarter.
Michael Schwindle: Comparable sales declined approximately 11% and total revenues here every year were also impacted by five store closures, one store opening and the movement of the annual outlet sale from the second quarter to last year to first quarter this year.
Michael Schwindle: Beer Bradley indirect segment revenues.
Michael Schwindle: To hold $21.8 million, a 25% increase from $17.4 million in the prior year second quarter. This increase was related primarily to new assortment purchasing by our indirect partners, as well as older assortment liquidations associated with project restoration.
Michael Schwindle: is Jackie noted earlier, we are very pleased with many aspects of our indirect purpose business for this quarter. For example, our comparable indirect partner accounts posted a mid-single digit increase in orders as well as meaningful, experiencing meaningful or average order by increasing resources.
Speaker Change: We've also seen great business development, as evidenced by the success of urban outfitters at Jackie noted just a few minutes ago, along with others that are in the pipeline.
Speaker Change: Piero Vita segment revenue is totaled $16.8 million, a 33% decrease from $25.1 million in the prior year second quarter, primarily related to declines in e-commerce and wholesale revenues.
Speaker Change: As a reminder, I keep up, focus for PureVita has been and it continues to be managing the business for profitability and not merely revenue growth.
Speaker Change: in response to rapidly rising digital marketing costs that began at late 3rd quarter last year. The peer-reviewed team is focused on marketing efficiency as well as digital marketing diversification.
Speaker Change: Non-Gap First Quarter Gross Margin told him $56.4 million or $50.9% of net revenues.
Speaker Change: Compare to $72 million or $56.2% of net revenues in the prior year. Grist margin declined year over year from an increase in liquidation sales, along with increased promotional activity, most notably in our outlets.
Speaker Change: Non-Gap SGNA expense total $52.2 million or $47.1% of net revenues compared to $58.3 million or $45.5% of net revenues in the prior year, second quarter.
Speaker Change: Court Quarter expenses were lower than the prior year primarily related to cost reduction initiatives, along with a reduction in variable related expenses from lower sales volumes.
Speaker Change: We continue to closely examine areas of our organization for both process and cost opportunities and our teams are increasingly diligent and attentive to cost management.
Speaker Change: Second quarter, non-gap consolidated operating income to $4.3 million or to $3.9% of net revenues compared to operating income of $14 million or 10.9% of net revenues in the prior year.
Speaker Change: At turning to the balance sheet, a quarter-in cash and cash equivalence told him $44.1 million, compared to $48.5 million at the end of last year's second quarter. We continue to have no borrowings on our $75 million ABL facility at quarter end.
Speaker Change: Total Quarter-and-Inventory was $133 million, down nearly 5% from $139.3 million at the end of last year's first, last year's second quarter.
Speaker Change: We continue to take strategic actions to reduce our inventory levels in addition to structural changes in our merchandising and sourcing processes to improve both product flow and product quality.
Speaker Change: are merchandising, fertilised planning, sourcing and design teams in particular have done it made substantial progress in redefining our approach to inventory acquisition as walls management. And these efforts have meaningfully impacted our ability to navigate this year and will continue to drive improvements into the future.
Speaker Change: During the second quarter, we also repurchased approximately $9.5 million of common stock or approximately $1.4 million shares at an average price of $7.1.
Speaker Change: Bringing the total repurchased for the six months to approximately $15.9 million. At the end of the quarter, we had approximately $9.6 million remaining on our $50 million repurchased authorization and that authorization expires in December of 2024.
Speaker Change: Finally, I'd like to go through our revised guidance for fiscal 2025. As a reminder, all forward-looking guidance is on an on-gap basis. As a point of context, please also keep in mind that the current year represents 52 weeks while the prior year as reported was comprised of 53 weeks.
Speaker Change: In light of our first half performance and a continued macro uncertainty, we are pretty playing the recent business trends to continue for the balance of this year.
Speaker Change: We have been actively assessing a number of responses to the environment and are accelerating several operational changes to the organization which will streamline our cost structure and improve our flexibility and responsiveness.
Speaker Change: Many of these changes are delivering savings and effectiveness in the current fiscal year while some will continue to deliver future savings and effectiveness in future years as well.
Speaker Change: For the full year of fiscal 2025, we expect consolidated net revenues of approximately $410 million.
Bradley Overall: We are Bradley Overall, sales year to go were expected to decline in the low-team range, with some sequential improvement in Q4 over Q3 driven by the opening of six new Vier Bradley outlet stores and one new Vier Bradley brand store in Q4.
Bradley Overall: Fair Bradley indirect segment sales are expected to decline, and the low single digit range with a softer key three partially offset by a stronger Q4.
Bradley Overall: Peeravita sales are expected to decline in the mid-teen range with Q3 similar to Q2 performance relative to the last year.
Speaker Change: but a single digit rate to climb, ranged to climb to other in Q4 as the business anniversary is the marketing efficiency challenges from last year, as well as the opening of the new Disney Springs 4.
Speaker Change: We expect consolidated gross margin for the year of approximately 53%, compared to 54 and a half percent in fiscal 24.
Speaker Change: The decline the gross margin rate is driven by increased promotional cadence in our direct segments, along with increased liquidation sales here to date, while partially offset by product cost improvements and lower supply chain costs. These trends are expected to continue fairly radively across the balance of this year.
Speaker Change: Consolidated SQ&A expense is expected to be approximately $250 million compared to $234.7 million in fiscal 2024.
Speaker Change: The here-over-year SG&A expense reductions are anticipated to come from decreased variable costs.
Speaker Change: Along with continued structural cost reductions, and will be heavily weighted to the fourth quarter.
Speaker Change: As I noted a few moments ago we continued to assess our business processes and standards and were committed to right-size and the overall cost structure of the organization. In the long run, this will establish a new and lower baseline from which business growth can better leverage in the future.
Speaker Change: All of this is expected to result in consolidating operating income of approximately $3 million, compared to 22.6 million in the fiscal 2024 year. Along with diluted earnings per share of approximately 10 cents per share compared to 54 cents per share last year on a 52 week basis.
Speaker Change: We also expect net capital spending of approximately $13 million versus $3.8 million light last year. This spin-mobile reflects investments associated with new and remodeled stores, as well as technology and logistics enhancements.
Speaker Change: Tramp up the guidance, we expect continued progress on disciplined inventory management, as I mentioned earlier.
Speaker Change: Such that the end of year inventory is expected to be approximately 5% lower than last year's.
Speaker Change: here in level.
Speaker Change: which at that time had decreased approximately 17% from the prior year.
Speaker Change: As a result, we expect an end of your cash balance of approximately $50 million, which reflects these guidance comments along with the sheer buyback activity that I noted earlier.
Rob: and that concludes our formal remarks. Since a rob can you please open up the line for questions?
Rob: Thank you. Well now we can do a question and answer session. If you like to ask a question today, please press star 1 from your telephone keypad and a confirmation tone to indicate your line is in the question queue.
Speaker Change: You may first start, too, if you let's withdraw your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: and I welcome you to the next episode of the World War II episode.
Speaker Change: Thank you, and our first question is from the line of Daniel Ardman with Sidotian Company. Please just use your questions.
Daniel Ardman: Good morning, Jacqueline. Good morning, Michael. Just a little quick one for me.
Daniel Ardman: On the first quarter call you highlighted, you know, consumer weakness, but in particular the lower income consumer which had an impact in the outlet channel. Is that more or less what you're seeing, you know, thus far into the third quarter or is it more evenly spaced out across all income channels?
Daniel Ardman: and then I was just wondering, Jackie, I know you mentioned you're going to provide more details on the third quarter call, but if you could just maybe expand a little bit upon some of the new wholesale partners that you've identified and hooked a team up with in the future.
Jackie Ardrey: Sure. Great question. First of all, to your question about the lower income consumer and whether it's spread across all levels or concentrated, I would say, we don't share.
Jackie Ardrey: specific detail about our consumer levels, but I have talked about before that our outlet channels, which have really been the most challenged this year, are really highly indexed to a lower income customer, and that's where we're seeing this offness. So that's definitely the answer to your first question. And then in terms of the partners we're looking at.
Jackie Ardrey: We're looking at largely how we can appeal to targets that really align with our customer acquisition targets.
Jackie Ardrey: It's too early to comment on anything yet, but what I do want you to take away is that there's a lot of interest that we've never really seen this level before based on all of the new
Jackie Ardrey: Marketing and Zoe and all of the efforts that we've made in the rebranding. So we've definitely seen a lot more interest, we're having a lot more conversations and the success of our urban out-bitter's partnerships and its expansion into holiday. I think is a great example of...
Jackie Ardrey: How we are continued to be confident in the direction we're taking to business and how project restoration is really supporting where we're going, although admittedly again in my comments I said a little slower than we planned.
Speaker Change: Okay great, thank you all so much and I will I'll hop back in the queue.
Speaker Change: Thank you. Our next question is in the line of Doug Lane with Water Tower Research. Please just use your questions.
Speaker Change: Fist.
Doug Lane: Yeah, thanks for the morning, everybody. Morning, Michael.
Doug Lane: the morning, Michael.
Doug Lane: I'm just looking at the cash flow statement and...
Doug Lane: The Freedcast flow was negative in the first half of the year and you know you're going to end up slightly positive so you're optimistic about Freedcast flow generation in the second half of the year sticking on the first half the big swing I see is an inventory is where it was a 15 million dollar use this year unless you was a $3 million source can you put some color around that.
Speaker Change: Absolutely. One of the aspects of Project Restoration is everyone has heard us talking a number of times is the new assortment that we were bringing over into the brand's channels.
Speaker Change: because of the timing of that that created basically an overlapping period over a couple of a few months here. We also had a significant amount of intransitant inventories coming across the water in preparation for the fall season as well. So there's a little bit of a timing issue. As I mentioned in my comments earlier, we do continue to act. We were around 5% the last year on inventories.
Speaker Change: The spite that intransit issue and we expect to continue to be down 5% through the end of this year.
Speaker Change: Q3 might be a little bit different just from a timing issue but by the end of the year we expect to be 5% down to last year.
Speaker Change: I'm really pleased with the work that the team did and that's in context of the revised guidance as well. So our teams have done an exceptionally good job of reacting to the environment, doing so in a very productive way and preserving our ability to maneuver and flux as we look forward.
Speaker Change: So we can look at inventories as maybe a key area to be a source of cash in the back half of the year, right? So it was a use of cash in the first half of the year. Is that fair?
Speaker Change: That would be fair, I think there's a number of things that we've talked a lot about all the different initiatives and things we've been working on. We've not talked until this call about some of the work that we've been doing and our inventory or sourcing and our buying practices. So this is I think an example of one of those things that we have been working in the background amidst.
Speaker Change: Everything else, knowing that we have to build a very strong and solid organization to carry this business into the future. So we're really pleased with the work that the team's have done in that regard.
Speaker Change: Okay, that's helpful. And, you know, this is a difficult. You said that up front, but, you know, your capital spending outlook hasn't changed, which is encouraging, so.
Speaker Change: is an investment year and it continues to be investment year. So you mentioned in your first quarter release that you had incremental marketing investment as well. Is that still on tap or are you being a little bit more judicious in your marketing spending given the environment?
Jackie Ardrey: I'll start if you want to add in the color of Jackie, yes, this is an investment year across lots of different aspects of the business as you noted.
Jackie Ardrey: CapEx and marketing as well. So we are carrying some elevated marketing in the Vera Bradley brand.
Jackie Ardrey: and second quarter and we will continue to carry that for the balance of this year. It's significant about this is about brand awareness and driving brand awareness as well as transactional activity. But there's it continues to be an investment year.
Speaker Change: Yeah, and I would add that again, overall, our goal here is, you know, we're pivoting this organization.
Speaker Change: to sustainable long-term profitable growth, and it's going to take time. That's the headline, is that it's going to take time, but in the meantime...
Speaker Change: What we're building on is a foundation of strong business discipline with a highly engaged team, strong balance sheet, and a robust technology platform. So all of those things.
Speaker Change: are really kind of underscore, you know, your question about marketing investment, you know, strong business discipline is, you know, the team is looking at all of that in the back half of the year and saying, okay, what are the investments that we need to make to keep?
Speaker Change: But we're not discounting the value of where the consumers mind is going to be as we come up to the election time period, but you know what what we're doing is just controlling the controllable making.
Speaker Change: Nurturing all the green shoots that we're seeing in the business and and planning the back half with this much more conservative Lance obviously that is reflected in our guidance.
Speaker Change: Okay. Thanks, Jackie Thanks, Michael.
Speaker Change: Thank you Doug and thank you.
Speaker Change: Thank you so as a reminder to ask a question, saying you May press star one on your telephone keypad.
Speaker Change: The next question is from the line of Eric better with FCC Research. Please proceed with your questions.
Eric Better: Good morning.
Speaker Change: Good morning, Good morning, Eric.
Speaker Change: Okay, well I'll talk about some pieces around the stores. So that's somewhat Colette first of all sorry about collaborations.
Eric Better: I know that in the outlets you've added a direct Disney collaboration which is kind of the first time, we've seen that.
Speaker Change: As on the outlet channel and I'm curious how.
Eric Better: Collaborations.
Eric Better: And.
Eric Better: The newer the mainline stores in terms of their ability to drive kind of a younger newer customer I know that.
Historically that has been a big push there for driving new customer base to get him with the collaborations.
Eric Better: Yeah, Great Great question Eric.
Eric Better: So we did launch.
Eric Better: The new dedicated Disney collection and outlets for the first time.
In August so outside of this quarter and it was very well received and yeah I do want to I.
Speaker Change: Do you want to say it I said in my comments, we did have during the launch we had a reduced.
Speaker Change: Level of collaboration with Disney and Peanuts to last year, but those are absolutely part of our go forward or our go forward strategy here and all channels. So they're they're very important for our existing customer.
We definitely are kind of reading all of the results that we have from these most recent collaborations to see what kind of customer.
Speaker Change: What is the demographics look like what does she spending.
Speaker Change: And really ensuring that we're choosing the right properties for the future. So you'll see some some new things for us we're definitely looking at not only keeping the the fan favorites that we've had and again.
Speaker Change: Deploying them in all channels, but but looking at some some new properties that we think will both new and existing customers will love.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: When you look at.
Speaker Change: You also did a very strong rollout last year in leather, which have expanded here and now.
Speaker Change: You have some weather in the outlets also again, that's Q3, but it came in and that's why I think it's a pretty strong there and what are you seeing in terms of that customer who is focusing on that higher product.
Speaker Change: And their ability to kind of continue to buy on the higher level and b, what's your kind of planning to do with that category and that fabric going forward.
Speaker Change: Yeah.
Speaker Change: So for leather like I said I think one of the the big positive surprises was the.
Reception of the of our leather program, even at the higher retail. So we did launch a leather program last year, we tested it it was very strong but this is even the the leather that we just launched for the brand channels is even even have higher price.
Speaker Change: Point, so where we're going there are there's a good better best strategy within leather as well and what we were I think a little surprised by is that those those higher price points actually did very well and they over index to existing consumers or reactivated consumer so so.
Speaker Change: That was a that was it.
Speaker Change: Positive surprise for sure and the the leather faux leather and the outlets that has actually initially is is a very positive read as well so what kind of regrouping to see what you know what does that mean for future assortments, but but you know overall, we're very pleased with.
Speaker Change: The results of the leather program, and our higher or higher price point items.
Speaker Change: And that will be part of what we're building into our future Assortments I think theres one of the last point on this one.
Speaker Change: Remember this isn't recall everybody's memory on this what we did last year was a very narrow very tight test of leather we did not because of how quickly. We're moving we did not have the ability to.
Speaker Change: Quantities and scale and so we were very pleased with that as Jackie said and as we said at the time, but.
Speaker Change: But I just want to make sure we understand that was a pretty limited amount of business that we did last year, we're really pleased with the business we're doing now.
And what that portends for the future.
Speaker Change: Last question so.
Speaker Change: When you look at new stores, and the kind of the core customer who wanted to buy.
Speaker Change: Yeah.
Speaker Change: Pattern product.
Speaker Change: I know that.
Speaker Change: Did you have to kind of move on Shlomo, but at the same time that it has been somewhat the base of the company for a very long time.
Speaker Change: Should we be seeing a kind of hinted about this already but I'd like to get a little bit more color on it going forward for that customer who is drawn to that product and that's the product going forward.
Speaker Change: Sure. So so here here's what I what.
Speaker Change: What I would say to that end and what I'd like you to take away is that you know this was never we this was never are.
Speaker Change: And attempt to move.
Speaker Change: Move away from our existing customers and I think in my comments I said, we did receive some constructive feedback on our style adjustments that we made which we actually made those style adjustments based on customer feedback that told us that they they wanted these things end and so again when we launched.
Speaker Change: And got feedback the other way, we we said, okay, well, we need to make some adjustments.
Speaker Change: It's really important to us that both our new and existing customers find the products. They love with the functions that they need and what they told US was we.
Speaker Change: We we need longer and wider drops more pockets and ZIP closures and then ultimately we needed more print assortment and so those are not difficult adjustments to make end and we're making them on a rolling basis starting in holiday. So you know, we we kind of immediately read that and if not when we're.
Speaker Change: We're making adjustments and we're not going all the way back, but we're making sure that both new and existing customers have a robust assortment that that reflects the aesthetic and the pivots that that we're making but but it doesn't.
Speaker Change: It is inclusive of of all of our customers need so its.
Speaker Change: Thank again, there's overall, there's when when we launched this in the stores, there's been less discounting to a to a much a much lesser degree than we've had in the past and and that's also been a place where we've customers have paused and.
Speaker Change: And you know, where we're evaluating all of that as well, but in terms of the styling.
Speaker Change: We're we're very happy with where we are but again, you know always taking customer feedback and and analyzing the data and making the right changes. So that we were offering the best assortment we can.
Speaker Change: Okay. Good luck for the rest of the rest of the year holiday season.
Eric Better: Thanks, Eric.
Right.
Eric Better: Thank you at this time, we've reached the end of the question and answer session I'll now turn the call over to Jackie Ardrey for closing remarks.
Jackie Ardrey: In closing our team is dedicated to returning the company to long term profitable growth and creating value for our shareholders.
Jackie Ardrey: Thank you for joining us today, and we look forward to speaking with you again on our third quarter earnings call on December 11th.
Speaker Change: This will conclude today's conference you may disconnect your lines at this time and thank you for your participation.
Speaker Change: [noise].