Q4 2025 Designer Brands Inc Earnings Call

Good day and welcome to the designer brands, Inc. Fourth quarter 2024 earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

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Dustin Hauenstein: I would now like to turn the conference over to Dustin Hauenstein. Vice President of Finance. Please go ahead.

Speaker Change: I'd now like to turn the conference over to Duston Hornstein Senior Vice President of Finance. Please go ahead.

Dustin Hauenstein: Good morning. Earlier today, the company issued a press release comparing results of operations for the 13-week and 52-week periods ended February 1, 2025, to the 14-week and 53-week periods ended February 3, 2024. Please note that the financial results that we will be referencing during the remainder of today's call exclude certain adjustments recorded under GAAP unless specified as otherwise. For a complete reconciliation of GAAP-to-adjusted earnings, please reference our press release. Additionally, please note that remarks made about the future expectations, plans, and prospects of the company constitute forward-looking statements. Results may differ materially due to the various factors listed in today's press release and the company's public filings with the SEC.

Speaker Change: Earlier today, the company issued a press release comparing results of operations for the 13 week and 52 week periods ended February one 2025.

Speaker Change: For the 14 week and 53 week periods ended February three 2024.

Speaker Change: Please note that the financial results that we will be referencing during the remainder of today's call excludes certain adjustments recorded under GAAP unless specified otherwise.

Speaker Change: For a complete reconciliation of GAAP to adjusted earnings Please reference our press release.

Speaker Change: Additionally, please note that remarks made about the future expectations plans and prospects of the company constitute forward looking statements.

Speaker Change: Results may differ materially due to the various factors listed in today's press release, and the company's public filings with the SEC.

Dustin Hauenstein: The company assumes no obligation to update any forward looking statements.

Speaker Change: The company assumes no obligation to update any forward looking statements.

Dustin Hauenstein: Joining us today are Doug Howe, Chief Executive Officer, and Jared Poff, Chief Financial Officer.

Speaker Change: Joining us today are Doug Howell, Chief Executive Officer, and Jared Poff, Chief Financial Officer, now, let me turn the call over to Doug.

Doug Howe: Now let me turn the call over to Doug. Good morning, and thank you, everyone, for joining us. I'd like to begin by saying a special thank you to our associates for their continued hard work and dedication to designer brands throughout the year. We are pleased to return to positive comps in the fourth quarter of fiscal 2024 for the first time in nine quarters, as results improved throughout the year with our transformation taking a greater hold. In the fourth quarter, given the inclusion of the 53rd week last year, we saw a 5% year-over-year decline in total sales, excluding the 53rd week, our comps were up 1%.

Doug Howell: Good morning, and thank you everyone for joining us.

Doug Howell: I'd like to begin by saying a special thank you to our associates for their continued hard work and dedication to the designer brands throughout the year.

Doug Howell: We were pleased to return to positive comps in the fourth quarter of fiscal 2024 for the first time in nine quarters as a result improved throughout the year with our transformation, taking a greater hole.

Doug Howell: In the fourth quarter, given the inclusion of the 50 <unk> week last year, we saw a 5% year over year decline in total sales exclude.

Doug Howell: Excluding the 50 <unk> week, our comps were up 1%.

Doug Howell: For the full year total company sales were down roughly 2% to last year and comps were down one 7% in line with our revised guidance.

Doug Howe: For the full year, total company sales were down roughly 2% to last year, and costs were down 1.7%, in line with our revised guidance. We also delivered full year adjusted EPS of $0.27 at the upper end of our revised guidance range of $0.10 to $0.30. As I reflect upon our performance this year, the improvement we saw was a direct result of our commitment to executing on those initiatives within our control. This included decisive actions to refresh our leadership team, revitalize and modernize our assortment, optimize our marketing, right size our brand portfolio organization, and continuously improve our customers' omni-channel experience.

Doug Howell: We also delivered full year adjusted EPS of 27.

Doug Howell: At the upper end of our revised guidance range of 10% to 30.

Doug Howell: As I reflect upon our performance this year the improvement we saw was a direct result of our commitment to executing on those initiatives within our control.

Doug Howell: Food of decisive actions to refresh our leadership team revitalize and modernize our assortment optimize our marketing right size, our brand portfolio organization and continuously improve our customers' omnichannel experience.

Doug Howell: Over the last year and a half we've updated our leadership team naming a new president of DSW, and new brands, President and New Chief marketing Officer, and a new head of merchandising to reinvigorate our teams.

Doug Howe: Over the last year and a half, we've updated our leadership team, naming a new president of DSW, a new brands president, a new chief marketing officer and a new head of merchandising to reinvigorate our teams, implement new ways of working and bring in expertise we were previously lacking. We've also made considerable progress in revitalizing our assortment. We ended 2024 with a more relevant and balanced assortment that includes more athleisure than ever before, increasing our penetration by five percentage points and grabbing market share. We also rekindled and expanded our relationship with our top brand partners, deepening the number of styles offered with key brands to build an eye-catching in-store and online selection.

Doug Howell: <unk>, new ways of working and bring in expertise we were previously lacking.

Doug Howell: We've also made considerable progress in revitalizing our assortment. We ended 2024 with a more relevant and balanced assortment that includes more athleisure than ever before increasing our penetration by five percentage points and grabbing market share.

Doug Howell: We also re candles and expanded our relationship with our top brand partners deepening the number of styles offered with key brands to build an eye catching in store and online selection.

Doug Howe: Our top eight brands remain a primary driver of positive performance, with sales of those brands up 25% on a full year basis. On the marketing front, this year we leaned into the holiday season more than ever, focusing on giftable items. Black Friday, Cyber Monday and a well-timed post-holiday sale help generate buzz, capture consumer interest, and maintain strong momentum beyond the season. Additionally, we enhanced the customer experience, leading with overt holiday messaging and strategic collaborations allowed us to establish our stores as a gifting destination. A holiday assortment had an impactful visual presence with impressive and intention grabbing gift giving collateral.

Doug Howell: Our top eight brands remain a primary driver of positive performance with sales of those brands up 25% on a full year basis.

Doug Howell: On the marketing front this year, we leaned into the holiday season more than ever focusing on giftable items.

Doug Howell: Black Friday, cyber Monday, and our well time post holiday sale help generate buzz.

Doug Howell: <unk> consumer interests and maintained strong momentum beyond the season.

Doug Howell: Additionally, we enhanced the customer experience, leading with overt holiday messaging and strategic collaborations allowed us to establish our stores as a gifting destination.

Doug Howell: Our holiday assortment had an impactful visual presence with impressive and attention grabbing gift giving collateral.

Doug Howell: Within our brand portfolio organization, we remain focused on cost reduction brand optimization higher product margins and improved SKU productivity through streamlined operations I am pleased to share that we successfully delivered on these goals driving topline growth and margin expansion.

Doug Howe: Within our brand portfolio organization, we remain focused on cost reduction, brand optimization, higher product margins, and improved SKU productivity through streamlined operations. I'm pleased to share that we successfully delivered on these goals, driving top-line growth and margin expansion.

Doug Howell: Let's quickly review some of the financial highlights from the fourth quarter and full year.

Doug Howe: Let's quickly review some of the financial highlights from the fourth quarter and full year. starting with our retail business. In U.S. retail, we were pleased to post comps of 1% in the fourth quarter, reflecting a return to positive comps for the first time since the third quarter of 2022, driven by strength and athletic, women's dress and luxury, accessories and kids. According to Sarkana data, DSW sales growth versus last year outpaced the footwear market in the fourth quarter, resulting in a 10 basis point gain of footwear market share versus last year for DSW. Sales for the quarter were down 7% primarily due to the impact of the 53rd week last year.

Doug Howell: Starting with our retail businesses.

Doug Howell: In U S. Retail we were pleased to post comps up 1% in the fourth quarter, reflecting a return to positive comps for the first time since the third quarter of 2022, driven by strength in athletic women's dress and luxury accessories and kids.

Doug Howell: According to <unk> data DSW sales growth versus last year outpaced the footwear market in the fourth quarter, resulting in a 10 basis point gain in footwear market share versus last year for DSW.

Doug Howell: Sales for the quarter were down 7%, primarily due to the impact of the 50 <unk> week last year.

Doug Howell: For the full year U S retail comps were down a little over 1% driven by weaknesses in seasonal we.

Doug Howe: For the full year, U.S. retail comps were down a little over 1%, driven by weaknesses in season. We saw strength in a number of categories throughout the year, such as athletic, women's affordable luxury, and kids. Sales for the year were down roughly 3% driven by the impact of the 53rd week and the decline in cost. In Canada, fourth quarter comps were up 5% driven by strong performance in most categories, led by athletic and kids. sales were up over 7% the last For the full year, comps were down 2% due to similar trends we saw in the US.

Doug Howell: We saw strength in a number of categories throughout the year, such as athletic women's affordable luxury and Kid.

Doug Howell: Sales for the year were down roughly 3% driven by the impact of the 50 <unk> week and the decline in comps.

Doug Howell: In Canada fourth quarter comps were up 5% driven by strong performance in most categories lead by athletic and kids sales.

Doug Howell: Sales were up over 7% for last year.

Doug Howell: For the full year comps were down 2% due to similar trends we saw in the U S strong athletic casual and kids performance, which was offset by weakness in seasonal and dress.

Doug Howe: Strong Athletic, Casual, and Kids Performance, which was offset by weakness in seasonal and draft. Sales were up 7% to last year primarily as a result of adding Rubino to our storefloor. Turning to our Brand Portfolio segment, for the fourth quarter, sales were up approximately 12%. For the full year, sales were up roughly 14%. In 2024, we were able to reach operating profitability in this segment for the first time as our Brands President, Andrea's initiatives to reset the business have proven successful, and we believe have set this business up for continued profitable growth into the future.

Doug Howell: Sales were up 7% to last year, primarily as a result of adding rubino two our store footprint.

Doug Howell: Turning to our brand portfolio segment for the fourth quarter sales were up approximately 12%.

Doug Howell: For the full year sales were up roughly 14%.

Doug Howell: In 2024, we were able to reach operating profitability in this segment for the first time as our brands' president Andrea as initiatives to reset the business have proven successful and we believe have set this business up for continued profitable growth into the future.

Doug Howe: For the year we expanded our gross margins by 100 basis and reduced our segment operating expenses by nearly 700 days. A combination of the two has led to a significant improvement in operating margin. Operationally, our adoption rate of design proposals has increased from roughly 20% historically to 50% for our fall 2025 collection. We expect for this to continue to increase over time. On the product side, we're excited to have seen continued growth in Topo Athletics and Jessica Simpson. most brands have been significantly outperforming expectations throughout the year. For the year Topo was up nearly 80% and Jessica was up over 20% in wholesale sales.

Doug Howell: For the year, we expanded our gross margins by 100 basis points and.

Doug Howell: <unk> reduced our segment operating expenses by nearly 700 basis points okay.

Doug Howell: The combination of the two has led to a significant improvement in operating margin.

Doug Howell: Operationally our adoption rate of design proposal has increased from roughly 20% historically to 50% for our fall 2025 collection.

Doug Howell: We expect for this to continue to increase over time.

Doug Howell: On the product side, we are excited to have seen continued growth in total athletic and Jessica Simpson.

Doug Howell: Both brands have been significantly outperforming expectations throughout the year.

Doug Howell: For the year Topol was up nearly 80% and Jessica was up over 20% in wholesale sales.

Doug Howell: As we move forward in 2025, we believe our ongoing business transformation will drive continued stabilization and improvement of sales and profitability with expectations to significantly increase our adjusted EPS compared to 2024 result.

Doug Howe: As we move forward in 2025, we believe our ongoing business transformation will drive continued stabilization and improvement of sales and profitability, with expectations to significantly increase our adjusted EPS compared to 2024 results.

Doug Howe: Let me spend a few minutes discussing our strategic focus areas for 2025. In our retail segment, we'll use the pillars of customer and product to guide our focus. First and foremost, we are placing an even more deliberate focus on being customer first in everything we do, leveraging insights and advanced analytics to refine the DSW brand identity and positioning, update our target customer segmentation, and enhance marketing tactic effectiveness. We've executed both qualitative and quantitative research and are embedding the focus into the organization in real time. In 2025, we'll be able to better understand what drives our most valuable customers and where and how we can acquire more.

Doug Howell: Can you spend a few minutes discussing our strategic focus areas for 2025.

Doug Howell: In our retail segment, we will use the pillars of customer and product the guide our focus.

Doug Howell: First and foremost we are placing an even more deliberate focus on being customer first in everything we do.

Doug Howell: Leveraging insights and advanced analytics to refine the DSW brand identity and positioning update.

Doug Howell: Update our target customer segmentation and enhanced marketing tactic effectiveness.

Doug Howell: We've executed both qualitative and quantitative research and are embedding the focus into the organization in real time.

Doug Howell: In 2025, we will be able to better understand what drives our most valuable customers and where and how we can acquire more of them.

Doug Howe: We will continue to evolve our brand positioning throughout 2025, which we believe will be exciting for our loyal customers as well as new customers. We will also be revisiting our robust VIP rewards program, which represents roughly 90% of our transactions. We'll be transforming VIP rewards and perks with an aim to relaunch the program in early 2026. Additionally, we intend to continue evolving our approach to promotions and discounts to help serve customers searching for value. To this end, our semi-annual sale will continue to evolve as it becomes a more important promotional event to DSW. We will also continue to evolve our omnichannel customer experience in ways that are intended to drive both value for consumers and improve financial results.

Doug Howell: We will continue to evolve our brand positioning throughout 2025, which we believe will be exciting for our loyal customers as well as newcomers.

Doug Howell: We will also be revisiting our robust VIP rewards program, which represents roughly 90% of our transactions.

Doug Howell: We will be transforming VIP rewards and perks with an aim to relaunch the program in early 2026.

Doug Howell: Additionally, we intend to continue evolving our approach to promotions and discounts to help serve customers searching for value.

Doug Howell: To this end our semiannual sale will continue to evolve as it becomes a more important promotional event to DSW.

Doug Howell: We will also continue to evolve our omni channel customer experience in ways that are intended to drive both value for consumers and improved financial results.

Doug Howe: We will continue to enhance our in-store selection and displays, a key differentiator when it comes to the in-person shopping experience that drives over 70% of our sales. We'll also be adding DSW net new stores to our fleet for the first time since 2019, expanding access to product and aligning with population migration. In addition, we are rolling out simple, tech-enabled shoe fitting services and post-purchase protective shoe cleaning, which we believe will provide points of differentiation for our brand and incremental margin in 2025. We look forward to sharing updates on these and other initiatives across the course of the year that we expect to drive profitable omni-channel growth.

Doug Howell: We will continue to enhance our in store selection and displayed a key differentiator when it comes to the in person shopping experience that drives over 70% of our sales.

Doug Howell: We'll also be adding DSW net new stores to our fleet for the first time since 2019, expanding access to product and aligning with population migration.

Doug Howell: In addition, we are rolling out simple tech enabled shoe fitting services and post purchase protective shield cleaning, which we believe will provide points of differentiation for our brand and incremental margin in 2025.

Doug Howell: We look forward to sharing updates on these and other initiatives across the course of the year that we expect to drive profitable omni channel growth.

Doug Howell: Our next strategic pillar for 2025 is a continuation of our assortment revitalization journey.

Doug Howe: Our next strategic pillar for 2025 is a continuation of our assortment revitalization journey. This year, we are further enhancing our product offering through a data-driven approach that we expect to drive improved inventory availability and productivity. We are rationalizing unproductive product, which will allow us to amplify our investments in key items and top selling products. We are also optimizing our inventory allocation and digital order management to improve product availability across our network. We expect these enhancements to directly drive increases to in-stock rates, improve conversion on store traffic, and lower fulfillment costs for digital orders. These efficiencies are expected to build over the course of the year.

Doug Howell: This year, we are further enhancing our product offering through a data driven approach that we expect to drive improved inventory availability and productivity.

Doug Howell: We are rationalizing unproductive product, which will allow us to amplify our investments in key items and top selling products.

Doug Howell: We are also optimizing our inventory allocation and digital order management to improve product availability across our network.

Doug Howell: We expect these enhancements to directly drive increases in stock rate improve conversion on store traffic and lower fulfillment costs for digital orders.

Doug Howell: These efficiencies are expected to build over the course of the year.

Doug Howell: As we look to our brand segment for 2025, we have outlined a number of ways, we expect to deliver growth, notably reestablishing our private label brands as margin drivers and building a more profitable wholesale business, which includes investing in core names like CAD and towboat to drive top line revenue.

Doug Howe: As we look to our brand segment for 2025, we have outlined a number of ways we expect to deliver growth, notably reestablishing our private label brands as margin drivers and building a more profitable wholesale business, which includes investing in core names like Keds and Topo to drive top line revenue. Our private label brands are those only sold at DSW, including Kelly & Katie, Mix No. 6, and Crown Vintage. all have a position of strength within key DSW women's categories and we plan to leverage these strengths to grow our top line and drive margins for the business.

Doug Howell: Our private label brands are those only fill the DSW, including Kelly <unk>, Katie mix number six and crown vintage.

Doug Howell: I'll have a position of strength within key DSW women's categories, and we plan to leverage these strengths to grow our top line and drive margins for the business.

Doug Howell: Given our control over the design and production of these brands, we deliver over 500 basis points of incremental margin rate above our national brands, which drives our overall margin.

Doug Howe: Given our control over the design and production of these brands, we deliver over 1,500 basis points of incremental margin rate above our national brand, which drives our overall margin. Private label brands currently penetrate at less than 20% of DSW sales, and we believe this has the opportunity to expand in the future. As Andrea mentioned last year, we are also in the process of advancing our brand and product strategies for our wholesale brands, such as Vince Camuto, Lucky, and Jessica Simpson. Additionally, we will continue to invest in Topo and Keds, two well-positioned brands with strong heritage, growth potential, and solid distribution.

Doug Howell: Private label brands currently penetrate at less than 20% of DSW sales and we believe this has the opportunity to expand in the future.

Doug Howell: As Andrea mentioned last year. We are also in the process of the dancing, our brand and product strategy for our wholesale brands, such as Vince Kabuto, Lucky and Jessica Simpson.

Doug Howell: Additionally, we will continue to invest in <unk> and CAD, two well positioned brands with strong heritage growth potential and solid distribution.

Doug Howe: In the short term, we are focused on rebuilding the foundation of Vince Camuto and Lucky. We have a number of initiatives in place, which include a new marketplace strategy, growing new channels of distribution, diversifying product assortment, and leaning into growing categories like casual for Lucky and dress for Vince Camuto. Jessica Simpson is another brand that is well positioned to continue to capitalize on the resurgence of dress in the market. which we aim to leverage by offering a strong assortment and delivering great value to consumers in this growing category. We plan to continue to invest in fueling growth in our topo athletic and kids.

Doug Howell: In the short term we are focused on rebuilding the foundation of Vince Komodo and Lucky.

Doug Howell: We have a number of initiatives in place which include a new marketplace strategy growing new channels of distribution diversifying product assortment and leaning into growing categories like casual for lucky and dress for Vince Caboodle.

Doug Howell: Jessica Simpson is another brand that is well positioned to continue to capitalize on the resurgence of draft in the marketplace.

Doug Howell: Which we aim to leverage by offering a strong assortment and delivering great value to consumers in this growing category.

Doug Howell: We plan to continue to invest in fueling growth in our total athletic and kids brands. Both brands are uniquely positioned within the portfolio have compelling heritage and are situated in growing categories.

Doug Howe: Both brands are uniquely positioned within the portfolio, have compelling heritage, and are situated in growing categories. They already have access to excellent distribution and are delivering strong operational income contribution to the segment. At Topo specifically, we remain energized by the outsized growth potential the brand represents. Today, Topo represents over 10% of our total brand portfolio sales and grew over 70% in 2024. We anticipate another year of growth in 2025, driven by a strategic approach to distribution within the core specialty running area, strong product launches, and increasing investment in marketing to establish key franchise items, drive volume, and overall build a brand with a strong reputation.

Doug Howell: They already have access to excellent distribution and are delivering strong operational income contribution to the segment.

Doug Howell: At Turbo, specifically, we remain energized by the outsized growth potential of the brand represents.

Doug Howell: Today Towboat represents over 10% of our total brand portfolio sales and grew over 70% in 2024.

Doug Howell: We anticipate another year of growth in 2025.

Doug Howell: Driven by our strategic approach to distribution within the core specialty running area strong product launches and increasing investment in marketing to establish key franchise items drive volume and overall build a brand with a strong reputation.

Doug Howe: Our strategy to reposition the KEDS brand for growth in 2025 is critical to building a healthy and sustainable brand. We will work to reposition ourselves in the comfort casual category, target the Gen X and above customer who already know and trust the brand and add new technology infused at leisure offerings powered by our exclusive BlitzWalk technology. We are seeing positive results from this evolved product already, and are excited about expanding this approach in 2025. We believe that we will see double-digit growth over time, with gross margin improvement as well.

Doug Howell: Our strategy to reposition the keds brand for growth in 2025 is critical to building a healthy and sustainable brand.

Doug Howell: We will work to reposition ourselves in our comfort casual category target the Gen X and above customer, who already know and trust the brand and add new technology infused athleisure offerings powered by our exclusive Blitz swap technology.

Doug Howell: We are seeing positive results from this evolved product already and are excited about expanding this approach in 2025.

Doug Howell: We believe that we will see double digit growth overtime with gross margin improvement as well.

Doug Howell: Before I conclude I wanted to share a few thoughts on our 2025 guidance.

Doug Howe: Before I conclude, I want to share a few thoughts on our 2025 guidance. While we do not expect a material impact on our business from currently anticipated tariff policies, we have seen our consumers being more cautious, starting in the back half of January, as a result of ongoing inflation, rising prices, and less discretionary income. This was a marked change from the trends we were seeing exiting December and we recognize that uncertainty remains as they continue to be selective with their discretionary As such, we are leaning into initiatives to drive demand and value. On balance, we expect to post positive comps for the full year as well as meaningful operating income growth for the year.

Doug Howell: While we do not expect a material impact on our business from currently anticipated tariff policies, we have seen our consumers being more cautious starting in the back half of January as a result of ongoing inflation rising prices and less discretionary income.

Doug Howell: This was a marked change from the trends we are seeing exiting December and we recognized an uncertainty remains as they continue to be selective with their discretionary income.

Doug Howell: As such we are leaning into initiatives to drive demand and value.

Doug Howell: On balance we expect to post positive comps for the full year as well as meaningful operating income growth for the year.

Doug Howe: We anticipate quarterly performance will improve gradually as we move through the year.

Doug Howell: We anticipate quarterly performance will improve gradually as we move through the year Jerry will discuss this more in a moment.

Doug Howe: Jared will discuss this more in a moment. I want to reiterate how pleased I am with our team's execution and unwavering dedication as we continue our transformational journey. I'm confident that strategies we are employing are the right ones to support long-term value creation for DVI.

Doug Howell: I want to reiterate how pleased I am with our team's execution and unwavering dedication as we continue our transformational journey.

Doug Howell: I am confident the strategies, we are employing are the right ones to support long term value creation for DVI with that I'll turn it over to Gerry.

Jared Poff: With that, I'll turn it over to Jared. Thank you, Doug. And good morning, everyone. We were pleased with the results from the fourth quarter, reporting positive comps for the first time since Q3 of 2022, and continue to focus on our financial improvement throughout the year. As noted in our earnings press release, we changed our financial statement presentation related to expenses associated with distribution and fulfillment and store occupancy for the U.S. retail and Canada retail segment. These expenses were previously included within cost of sales and are now included within operating expenses in order to present all of our operating segments on a consistent basis.

Doug Howell: Baird.

Gerry Baird: Thank you Doug and good morning, everyone. We were pleased with the results from the fourth quarter reporting positive comps for the first time since Q3 of 2022 and continued to focus on our financial improvement throughout the year.

Gerry Baird: As noted in our earnings press release, we changed our financial statement presentation related to expenses associated with distribution and fulfillment and store occupancy for the U S retail in Canada retail segments. These.

Gerry Baird: These expenses were previously included within cost of sales and are now included within operating expenses in order to present all of our operating segments on a consistent basis.

Jared Poff: Included in our earnings press release are schedules showing the impact of these reclassifications for each quarter for fiscal 2023 and 2024. We also changed the presentation of segment performance by including an operating profit measurement in addition to the previously reported gross margin measurement for our reportable segment. We have restated quarterly and annual historical results to be on a comparable basis, and our remarks will be based on this restated basis.

Gerry Baird: <unk> in our earnings press release, our schedule showing the impact of these reclassifications for each quarter for fiscal 2023 and 2024.

Gerry Baird: We also changed the presentation of segment performance by including in operating profit measurement. In addition to the previously reported gross margin measurement for our reportable segments. We.

Gerry Baird: We have restated quarterly and annual historical results to be on a comparable basis and our remarks will be based on this restated basis.

Jared Poff: Let me provide a bit more detail on our fourth quarter and full year financial results. For the fourth quarter of fiscal 2024, net sales of $714 million were up 0.5% on a 13-week comp basis. And due to the 53rd week in the fourth quarter of 2023, net sales were down 5.4% versus the prior period as reported. For the full year of fiscal 2024 net sales of $3 billion were down 1.7% on a 52 week comp basis and down 2.1% versus last year, inclusive of the 53rd week. In our U.S. retail segment, comps were up 0.7% in the fourth quarter.

Gerry Baird: Let me provide a bit more detail on our fourth quarter and full year financial results.

Gerry Baird: For the fourth quarter of fiscal 2024, net sales of $714 million were up 0.5% on a 13 week comp basis and due to the 50 <unk> week in the fourth quarter of 2023 net sales were down five 4% versus the prior period as reported.

Gerry Baird: For the full year of fiscal 2024 net sales of $3 billion were down one 7% on a 52 week comp basis and down two 1% versus last year inclusive of the 50 <unk> week.

And our U S retail segment comps were up 0.7% in the fourth quarter, we saw positive comps across the majority of our footwear categories with the strongest performance in kids athletic accessories, namely socks and women's dress.

Jared Poff: We saw positive comps across the majority of our footwear categories with the strongest performance in kids, athletic accessories, namely socks and women's dress. Our Canada retail segment comps were up 4.7% in the fourth quarter, primarily due to strength in athletic and kids, and the reintroduction of Nike, women's casual and dress, and boots, as we became more promotional in the quarter to help clear through our seasonal products. Finally, in our brand portfolio segment, sales were up 12.3% in the fourth quarter. From a segment perspective, full year net sales versus last year ended at down 2.7% for our U.S.

Gerry Baird: Our Canada retail segment comps were up four 7% in the fourth quarter, primarily due to strength in athletic and kids and the reintroduction of Nike womens casual and dress and boots as we became more promotional in the quarter to help clear through our seasonal product.

Gerry Baird: Finally in our brand portfolio segment sales were up 12, 3% in the fourth quarter.

Gerry Baird: From a segment perspective full year net sales versus last year ended at down two 7% for our U S. Retail segment up seven 1% and our Canada retail segment and up 14, 3% and our brands portfolio segment.

Jared Poff: retail segment, up 7.1% in our Canada retail segment, and up 14.3% in our brands portfolio segment. As a reminder, starting in fiscal 2024, we have harmonized our approach to how we transact business between our brand portfolio segment and our retail segments. This change resulted in approximately $21 million of year-over-year additional sales for our brand segment in the fourth quarter that were eliminated in consolidation. The brand portfolio segment also benefited from notable sales growth in Topo Athletic, which was up 57% versus last year, driven by both our wholesale and DTC channels. Consolidated gross profit of 39.6% in the fourth quarter increased 80 basis points versus the prior year, primarily driven by our US retail segment with less promotional offers, as well as decreased DTC shipping associated with lower rates and an improvement in packages per order.

Gerry Baird: As a reminder, starting in fiscal 2024, we have harmonized our approach to how we transact business between our brand portfolio segment in our retail segments. This change resulted in approximately $21 million of year over year additional sales for our brands segment in the fourth quarter that were eliminated in consolidation.

Gerry Baird: The brand portfolio segment also benefited from notable sales growth and Turbo athletic, which was up 57% versus last year, driven by both our wholesale and DTC channels.

Gerry Baird: Consolidated gross profit of 39, 6% in the fourth quarter increased 80 basis points versus the prior year, primarily driven by our U S. Retail segment with less promotional offers as well as decrease DTC shipping associated with lower rates and an improvement in packages per order.

Jared Poff: full year consolidated gross margin of 42.7% in 2024, the leveraged 40 basis points versus the prior year, primarily driven by lower IMU in our US retail segment as a result of our continued penetration shift into more athletic For the fourth quarter, adjusted operating expense was 43.5% of sales, a 40 basis point de-leverage from the fourth quarter last year. Although operating expense was down from last year, the de-leverage was mostly driven by the inclusion of the 53rd week of sales last year against a partial fixed cost base. For the full year 2024 adjusted operating expense was 40.9% of sales, a 50 basis point deleverage from last year.

Gerry Baird: Full year consolidated gross margin of 42, 7% in 2024, Deleveraged 40 basis points versus the prior year, primarily driven by lower IMU and our U S. Retail segment as a result of our continued penetration shift into more athletic footwear.

Okay.

Gerry Baird: For the fourth quarter adjusted operating expense was 43, 5% of sales a 40 basis point deleverage from the fourth quarter last year, Although operating expense was down from last year. The deleverage was mostly driven by the inclusion of the 50 <unk> week of sales last year against a partial fixed cost base.

Gerry Baird: For the full year of 2024, adjusted operating expense was 49% of sales a 50 point 50 basis point deleverage from last year.

Gerry Baird: Similar to the fourth quarter full year operating expense experience deleverage that was primarily driven by the inclusion of the 50 <unk> week of sales last year against a partial fixed cost base delever.

Jared Poff: Similar to the fourth quarter, full year operating expense experienced deleverage that was primarily driven by the inclusion of the 53rd week of sales last year against a partial fixed cost base. The leverage was both was in both retail segments, as well as the corporate costs related to incremental technology expense associated with cloud based service costs. This was partially offset by leverage in our brand portfolio segment operating expense related to cost savings efficiency measures. Recall that we said last quarter, we now have a detailed expense savings roadmap for 2025, which we expect to aid in reducing our cost of sales through things like fewer promotions in 2025.

Gerry Baird: Deleverage was boat was in both retail segments as well as the corporate costs related to incremental technology expense associated with cloud based service cost.

Gerry Baird: This was partially offset by leverage in our brand portfolio segment operating expense related to cost savings efficiency measures.

Gerry Baird: Recall that we said last quarter, we now have detailed expense savings roadmap for 2025, which we expect to aid in reducing our cost of sales through things like fewer promotions in 2025.

Gerry Baird: Okay.

Jared Poff: For the fourth quarter, adjusted operating loss was $23.5 million, an improvement versus an operating loss of $30.2 million last year, inclusive of the 53rd week, which included $6.6 million of additional operating income. It was the second consecutive quarterly year-over-year improvement. For the full year adjusted operating profit was $67.3 million versus $89.6 million last year, which again included operating income generated in the 53rd week as previously noted. In the fourth quarter of 2024, we had $11.1 million of net interest expense compared to $9.9 million last year. Higher interest expense is a direct result of the term loan we installed last year, as well as higher interest rates on our ABL.

Gerry Baird: For the fourth quarter adjusted operating loss was $23 5 million an improvement versus an operating loss of $30 $2 million last year inclusive of the 50, <unk> week, which included $6 $6 million of additional operating income.

Gerry Baird: It was the second consecutive quarterly year over year improvement.

Gerry Baird: For the full year adjusted operating profit was $67 $3 million versus $89 $6 million last year, which again included operating income generated in the 50 <unk> week as previously noted.

Gerry Baird: In the fourth quarter of 2024, we had $11 1 million of net interest expense compared to $9 $9 million last year.

Gerry Baird: Higher interest expense as a direct result of the term loan we installed last year as well as higher interest rates on our ABL for the full year of 2024, we had $45 3 million of net interest expense compared to $32 $2 million last year.

Jared Poff: For the full year of 2024, we had $45.3 million of net interest expense compared to $32.2 million last year. Our effective tax rate in the fourth quarter on our adjusted results was 38.6% compared to 37% last year. For the year, our effective tax rate on our adjusted results was 31.6% compared to 24.8% last year. Our fourth quarter adjusted net loss was $21.3 million versus $25.3 million last year, or a loss of 44 cents in diluted earnings per share for both years. Finally, our full year adjusted net income was $15 million or 27 cents earnings per diluted share compared to $43.2 million or 68 cents earnings per share in fiscal 2023.

Gerry Baird: Our effective tax rate in the fourth quarter on our adjusted results was 38, 6% compared to 37% last year.

Gerry Baird: For the year, our effective tax rate on our adjusted results was 31, 6% compared to 24, 8% last year.

Our fourth quarter adjusted net loss was $21 3 million versus $25 $3 million last year or a loss of 44 cents in diluted earnings per share for both years.

Gerry Baird: Finally, our full year adjusted net income was $15 million or 27 earnings per.

Gerry Baird: Per diluted share compared to $43 2 million or <unk> 68 cents earnings per share in fiscal 2023.

Gerry Baird: Turning to our inventory we ended the fourth quarter with total inventories up 5% versus the prior year as we continue to emphasize a clean inventory position and prioritize placement of our newest product.

Jared Poff: Turning to our inventory, we ended the fourth quarter with total inventories up 5% versus the prior year, as we continue to emphasize a clean inventory position and prioritize placement of our newest product. We feel good about our inventory levels heading into the new fiscal year and our flexibility to continue to chase and take actions on opportunistic buys.

Gerry Baird: We feel good about our inventory levels heading into the new fiscal year and our flexibility to continue to chase and take actions on opportunistic buys.

Gerry Baird: In fiscal 2024, I am pleased to report that designer brands returned $79 million to shareholders through a combination of dividends and share repurchases.

Jared Poff: In fiscal 2024, I'm pleased to report that Designer Brands returns $79 million to shareholders through a combination of dividends and share repurchases. During the year, we repurchased an aggregate 10.3 million Class A common shares at an aggregate cost of $68.6 million and paid $10.5 million in dividends. As of February 1, 2025, $19.7 million of Class A common shares remained available under our share repurchase program, which, as a reminder, has no set expiration date. We have also once again, reaffirmed our commitment to returning cash to shareholders declaring a five cent per share dividend for the first quarter of 2025.

Gerry Baird: During the year, we repurchased an aggregate $10 3 million class a common shares at an aggregate cost of $68 $6 million and paid $10 $5 million in dividends.

Gerry Baird: As of February one 2025, $19 $7 million of class a common shares remained available under our share repurchase program, which as a reminder has no set exploration date.

Gerry Baird: We have also once again reaffirmed our commitment to returning cash to shareholders declaring a five cent per share dividend for the first quarter of 2025.

Gerry Baird: For the full year, we again generated positive cash flow and ended 2024 with $44 $8 million of cash and our total liquidity, which includes cash and availability under our revolver was $172 1 million total debt outstanding was $491 million as of the end of the year.

Jared Poff: For the full year, we again generated positive cash flow and ended 2024 with $44.8 million of cash, and our total liquidity, which includes cash and availability under our revolver was $172.1 million. Total debt outstanding was $491 million as of the end of the year.

Gerry Baird: Okay.

Jared Poff: Before I conclude, I want to share a few thoughts on our 2025 guidance. As Doug mentioned, our guidance incorporates continued macro uncertainty that may impact our consumers' spending habits. On a consolidated basis, we expect sales to be up low single digits for the year. The midpoint of our guidance suggests a nice improvement compared to 2024. But given the soft start to the year, we do anticipate first quarter performance to be below last year. We expect performance will gradually improve as we move through the year. For the U.S. retail segment in 2025, we expect net sales growth in the low single digits versus last year.

Gerry Baird: Before I conclude I want to share a few thoughts on our 2025 guidance.

Speaker Change: As Doug mentioned, our guidance incorporates continued macro uncertainty that may impact our consumers' spending habits on a consolidated basis, we expect sales to be up low single digits for the year. The midpoint of our guidance suggests a nice improvement compared to 2024, but given the soft start to the year, we do an.

Gerry Baird: Dissipate first quarter performance to be below last year.

Speaker Change: We expect performance will gradually improve as we move through the year.

Speaker Change: For the U S retail segment in 2025, we expect net sales growth in the low single digits versus last year.

Jared Poff: We also expect comparable sales to be up low single digit. The comp growth is expected to be driven by our focus on improving our inventory availability, productivity, and assortment strategy, as well as optimizing marketing to drive DSW awareness. and our Canada retail segment for 2025. We expect a mid to high single digit growth versus last year. The majority of this increase is expected through the addition of Rubino, modest comp growth driven by web enhancements and strategic initiatives to grow our base business. We anticipate sales in our brand portfolio segment for 2025 will increase mid-single digits driven by strong growth in Topo Athletic, Tad's, Jessica, and a return to growth of our private label brands at DSW.

Speaker Change: We also expect comparable sales to be up low single digits. The comp growth is expected to be driven by our focus on improving our inventory availability productivity and assortment strategy as well as optimizing marketing to drive DSW awareness.

Speaker Change: In our Canada retail segment for 2025, we expect a mid to high single digit growth versus last year.

Speaker Change: The majority of this increase is expected through the addition of Urbino modest comp growth driven by web enhancements and strategic initiatives to grow our base business.

Speaker Change: We anticipate sales and our brand portfolio segment for 2025 will increase mid single digits driven by strong growth in total athletic Ted's, Jessica and a return to growth of our private label brands at DSW.

Speaker Change: A critical foundation to our transformation as a focus on driving profitable growth.

Jared Poff: A critical foundation to our transformation is a focus on driving profitable growth. As a continuation of efforts that we initiated last year, we are evaluating expenses across the company and executing on roadmaps to drive efficiencies across all of the business. Some of these work streams are straightforward with benefits contemplated in our 2025 guidance, primarily in sourcing costs, which will drive improvement in our gross margin. Others are more complex efforts with benefits that will be realized over a multi-year period unlocked by some technology advancements and or process changes. The inventory productivity work that Doug mentioned earlier is a great example of where we expect to see notable impacts this year, and we anticipate even more opportunity beyond 2025.

Speaker Change: As a continuation of efforts that we initiated last year, we are evaluating expenses across the company and executing on Roadmaps to drive efficiencies across all of the business. Some of these work streams are straightforward with benefits contemplated in our 2025 guidance, primarily in sourcing cost, which will drive improvement in our gross margins.

Speaker Change: Others are more complex efforts with benefits that will be realized over a multi year period unlocked by some technology advancements <unk> process changes.

Doug Howell: The inventory productivity work that Doug mentioned earlier is a great example of where we expect to see notable impacts this year and we anticipate even more opportunity beyond 2025.

Jared Poff: To help accelerate this benefit, we opened a distribution center in Arizona dedicated to store fulfillment, which came online this month. This 3PL facility will reduce time to service our Western stores, which currently can take up to 10 days longer to service than other stores within the fleet. For 2025, this is adding approximately $12 million of operating expense to our expense base. Additionally, this guidance takes into consideration that we are returning to a normalized level of incentive-based compensation in 2025, which will be an impact of roughly $30 million. And our Rubino operations in Quebec will add approximately $5 million of incremental SG&A as we annualize that acquisition.

Doug Howell: To help accelerate this benefit we opened a distribution center in Arizona dedicated to store fulfillment, which came online this month.

Doug Howell: Three P. L facility will reduce time to service our western stores, which currently can take up to 10 days longer to service than other stores within the fleet for.

Doug Howell: For 2025, this is adding approximately $12 million of operating expense to our expense base.

Doug Howell: Additionally, this guidance takes into consideration that we are returning to a normalized level of incentive based compensation in 2025, which will be an impact of roughly $30 million and our rubino operations in Quebec will add approximately $5 million of incremental SG&A as we annualize that acquisition.

Doug Howell: We anticipate the effective tax rate of roughly 30% for fiscal 2025 and expect earnings per share to be in the range of 30 to 50, representing.

Jared Poff: We anticipate the effective tax rate of roughly 30% for fiscal 2025 and expect earnings per share to be in the range of $0.30 to $0.50, representing nearly a 50% increase at the midpoint when compared to our 2024 results. We expect capital expenditures to be in the range of 45 to $55 million for this year.

Doug Howell: Representing nearly a 50% increase at the midpoint when compared to our 2024 results.

Doug Howell: We expect capital expenditures to be in the range of 45% to $35 million for this year.

Doug Howell: I want to Echo Doug's comments and express my gratitude for the hard work of our DVI Associates. We believe we are on a clear path to returning to more consistent top and bottom line growth over the long term and I am excited for what we are set to accomplish this year.

Jared Poff: I want to echo Doug's comments and express my gratitude for the hard work of our DBI associates. We believe we are on a clear path to returning to more consistent top and bottom line growth over the long term, and I am excited for what we are set to accomplish this year.

Unknown Executive: With that, we will open the call for questions. Operator. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone number. If you are using a speakerphone, please pick up your handset before pressing the button.

Doug Howell: With that we will open the call for questions.

Doug Howell: Operator.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.

Unknown Executive: If at any time your question has been addressed and you would like to withdraw your question, press start.

Speaker Change: At any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Mauricio Serna: At this time, we will pause momentarily to assemble our Our first question comes from Mauricio Serna with UBS. Please go ahead. A great good morning and thanks for taking my question.

Speaker Change: Our first question comes from Mauricio Serna with UBS. Please go ahead.

Mauricio Serna: Great. Good morning, Thanks for taking my question.

Mauricio Serna: I just wanted to hear, could you tell us a little bit more on the quarter, the fourth quarter, how much did you see a glacier growth and maybe comment a little bit what you saw in terms of Nike's performance and CSW as you lap, you know, the brand's return at this point. And then maybe, could you elaborate on, you know, you know, any any details on, you know, what you're seeing for today, then, you know, how, what does that imply for your, like, you know, expectation of the the ranging of how much they can be down in the first quarter?

Speaker Change: Just wanted to.

Speaker Change: Could you tell us a little bit more on the quarter or the fourth quarter. How much did you see at leisure growth and maybe comment a little bit what you saw in terms of Nike performance since the unsolvable U as you lap.

Speaker Change: The brand's return at this point.

Speaker Change: And then maybe could you elaborate on I think I mean, you mentioned that you expect first quarter sales to be down versus last year.

Speaker Change: Any any details on what you're seeing quarter to date then.

Speaker Change: What does that imply for your expectation.

Speaker Change: The expectation of the the ranging of how much they can be down in the first quarter.

Doug Howe: Thank you. Yeah, thanks for your question, Mauricio. I'll start and then I'll ask Jared to elaborate on the second part of the question. As it relates to athleisure, I mean, as you heard, we saw a significant increase in the penetration of that business. A lot of that is driven, obviously, through the athletic brands. We're really pleased, in particular, with the top eight brands, which, you know, as we said, had a 25% increase on the full-year basis. So that trend that we've seen continuing, you know, is definitely a tailwind for us. We feel really good about that.

Speaker Change: Yeah. Thanks for your question. So I'll start and then I'll ask <unk> to elaborate on the second part of the question.

Speaker Change: As it relates to that these are I mean as you heard we saw significant increase in the penetration of that business a lot of that is driven obviously through the athletic brands. We're really pleased in particular with the top eight brands, which as we said had a 25% increase on a full year basis, so that trend that we've seen continuing.

Speaker Change: Definitely a tailwind for us we feel really good about that part of that is to offset some of the reliance on the seasonal businesses.

Doug Howe: Part of that is to offset some of the reliance on the seasonal businesses. We had a 900 basis points decrease in the boot category as an example. So, again, the team's done a really nice job of kind of balancing that.

Speaker Change: We had a 900 basis points decrease in the boot category as an example, so again the team has done a really nice job of kind of balancing that.

Jared Poff: I would say, as it relates to, you know, Q1, we don't comment specifically in the quarter that we're in. But as we said, we have started out the year a little slower than anticipated. We're focusing on controlling what we could control. You know, I think there's certainly a lot of uncertainty out there in the macro environment, just given rising prices, less discretionary income, and, you know, lots of tariff conversation on the overall kind of sentiment. So that is incorporated into our guidance that we provided for 25, but I'll let Jared elaborate. Yeah, I mean, the only thing I would add to that, Mauricio, is that while our initial budget and what we were seeing coming out of Q4 certainly showed year-over-year growth, as I mentioned in my comments, given what we've seen so far, we are now seeing a trending towards probably Q1 being a bit below last year's Q1.

Speaker Change: I would say as it relates to Q1, we don't comment specifically in the quarter that we're in but as we said we have started out the year a little slower than anticipated, we're focusing on controlling what we can control I think theres certainly a lot of uncertainty out there in the macro environment, just given rising prices.

Speaker Change: Less discretionary income and.

Speaker Change: But the tariff conversation on the overall kind of sentiment so.

Speaker Change: That is incorporated into our guidance that we provided for 25, but I'll, let Jared elaborate yes, I mean, the only thing I would I would add to that Mario is that while our initial budget and what we were seeing coming out of Q4 certainly showed.

Speaker Change: Year over year growth as I mentioned in my comments, given what we've seen so far we are now seeing a trending towards probably Q1 being a bit below.

Speaker Change: Last year's Q1, and so that's kind of what we've put in there when we put our guidance together.

Mauricio Serna: And so that's kind of what we've put in there when we put our guidance together. You know, what we are anticipating is that that continues to improve as we move throughout the year. But certainly Q1 has started off more challenging than what we thought it would be. Understood.

Speaker Change: What we are anticipating is that that continues to improve as we move throughout the year, but certainly Q1 has started off more challenging than what we thought it would be.

Speaker Change: Understood and then just could you give us a sense of how youre thinking about gross margin for the year and SG&A dollar growth I'm, particularly interested in.

Jared Poff: And then just could you give us a sense of how you're thinking about gross margin for the year and SG&A dollar growth? I'm particularly interested, could you maybe explain a little bit more too about the promotional strategy? Look, so I'm, you know, having a little bit of a hard time understanding like you're going to be more promotional or less promotional, just trying to understand that. And again, the implication for gross margin and SG&A dollar growth. Thank you. Yeah, I'll say just from the financial mechanics, our current guide and the way we've built the budget has our promotional activity actually giving us good news or leverage in the year to our gross margin rate.

Speaker Change: Maybe explain a little bit more too about the promotional.

Speaker Change: <unk> strategy look so.

I'm, having a little bit of a hard time understanding like youre going to be more promotional or less promotional just trying to understand that and the implications for gross margin and SG&A dollar growth. Thank you.

Speaker Change: Yeah, Yeah, I'll say just from the financial mechanics, our current guide in the way we felt the budget has our promotional activity actually giving us good news or leverage in the year to our gross margin rate and that's primarily driven by the efforts that we talked about on inventory availability.

Jared Poff: And that's primarily driven by the efforts that we talked about on inventory availability. A lot of the work that we did with the help of McKinsey and our own analysis showed us where we had opportunities, even on existing traffic patterns, to drive higher conversion just given store availability and kind of what had happened with our digital orders being pulled out of stores, so on and so forth. So we had planned the year relatively flattish from a gross profit rate standpoint, but that's helping to offset some continued pressure on our IMU from continued growth in athletic and national brands being offset by a reduction in promotions.

Speaker Change: The work that we did with the help of Mckinsey and our own analysis showed us where we had opportunities even on existing traffic patterns to drive higher conversion, just given store availability and kind of what what had happened with our digital orders being pulled out of stores. So on and so forth. So we had planned the year relatively flat.

It is from a from a gross profit rate standpoint, but that's helping to offset some continued pressure on our IMU from continued growth in athletic and national brands being offset by a reduction in promotions.

Jared Poff: All that being said, we are certainly starting off Q1 a bit more challenging. We don't want to end with excess inventory, so we'll always be measuring that. But that's kind of how we've positioned that. To answer your second question on the SG&A, there's about $50 million being added over last year's SG&A, primarily anchored on those three items that I talked about in my remarks. The West Coast Logistics Center, which is brand new to the infrastructure, but really to support that initiative, the bonus or management incentive plan, and then annualizing Rubino. product. So I guess like if I take that into consideration, like it seems like the midpoint of the revenue guiding, you know, kind of kind of implies like maybe Modest operating margin expansion.

Speaker Change: All that being said we are certainly starting off Q1, a bit more challenging we don't want to end with excess inventories of all wont always be measuring that but that's kind of how we position that to answer your second question on the SG&A, there's about $50 million.

Speaker Change: Being added over last year's SG&A, primarily anchored on those three items that I talked about in my in my remarks, the West Coast Logistics Center, which is brand new to the infrastructure, but really necessary to support that initiative.

Speaker Change: A bonus or management incentive plan, and then Annualizing, where b now.

Speaker Change: Got it so I guess like if I take that into consideration like it seems like.

Speaker Change: The midpoint of the revenue.

Speaker Change: Our revenue guidance kind of kind of an appliance and then maybe just.

Speaker Change: Modest.

Jared Poff: Is that the right way to think about it? Yep, yep. I think that's that's spot on. Understood.

Speaker Change: Operating margin expansion.

Speaker Change: All right way to think about it.

Speaker Change: Yep Yep, I think that's spot on.

Speaker Change: Understood. Thank.

Mauricio Serna: Thank you so much. Thank you.

Speaker Change: Thank you so much.

Speaker Change: Thank you.

Speaker Change: Again, if you have a question. Please press Star then one.

Unknown Executive: Again, if you have a question, please press star then.

Speaker Change: This concludes our question and answer session.

Unknown Executive: This concludes our question and answer session.

Doug Howe: I would like to turn the conference back over to Doug for any closing I'd like to end where I started by again just expressing gratitude to the DBI team for their continued hard work and dedication. And thanks to all of you who joined us today. We look forward to continuing to update you on our progress as we advance through the year. Thank you.

Doug Howell: I would like to turn the conference back over to Doug for any closing remarks.

Doug Howell: I'd like to end, where I started by again, just expressing gratitude to the DVI team for their continued hard work and dedication.

Doug Howell: And thanks to all of you who joined US today, we look forward to continuing to update you on our progress as we advance through the year. Thank you.

Doug Howell: Okay.

Doug Howell: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation.

Unknown Executive: You may now disconnect.