Q4 2024 Lulu’s Fashion Lounge Holdings Inc Earnings Call
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Thank you for standing by. The conference will begin momentarily. Again, thank you for standing by. The conference will begin momentarily.
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Thank you very much.
Speaker Change: Good afternoon and welcome to Lulu's fourth quarter and fiscal year 2024 earnings conference call.
Speaker Change: Today's call has been recorded and we have allocated one hour for the prepared remarks and Q&A. At this time, I'll take to the conference over to Lulu's General Counsel and Corporate Secretary, Naomi Beckman-Schatz. Thank you. You may begin.
Naomi Beckman-Strauss: Good afternoon, everyone, and thank you for joining us to discuss Lulu's fourth quarter and fiscal year 2024 results. Before we begin, we would like to remind you that this conference called will include forward-looking statements within the meaning of the Private Security's Litigation Reform Act of 1995.
Naomi Beckman-Strauss: including but not limited to statements regarding management's expectations, plans, strategies.
Naomi Beckman-Strauss: goals and objectives and their implementation, opportunities for growth and a return to profitability in the coming quarters.
Naomi Beckman-Strauss: The long-term growth trajectory of our business are expectations around the continued impact of the macroeconomic environment, including as a result of the imposition of tariff, consumer demand, and return rates on our business.
Naomi Beckman-Strauss: Our future expectations regarding financial results. Our ability to realize the intended impact of cost reduction measures.
Naomi Beckman-Strauss: Our ability to pursue alternative debt financing options, references to the fiscal year ending December 28, 2025, including our financial outlook for fiscal year 2025, market opportunities, product launches, and other initiatives.
Naomi Beckman-Strauss: These forward-looking statements are subject to various risks, uncertainties, assumptions, and other important factors, which could cause our actual results, performance, or achievements to differ materially from results, performance, or achievements expressed or implied by these forward-looking statements.
Naomi Beckman-Strauss: These risks, uncertainties, and assumptions are detailed in this afternoon's press release, as well as our filings with the SEC, including our annual report on Form 10-K for the fiscal year ended December 29, 2024, filed with the SEC this afternoon.
Naomi Beckman-Strauss: All of which can be found on our website at investors.lulu.com
Naomi Beckman-Strauss: Any such forward-looking statements represent management's estimates as of the date of this call. While we may elect to update such forward-looking statements at some point in the future, we undertake no obligation to revise or update any forward-looking statements or information except as required by law.
Naomi Beckman-Strauss: During our call today, we will also reference certain non-GAAP financial information, including adjusted EBITDA, adjusted EBITDA margin, net debt, and free cash flow.
Naomi Beckman-Strauss: We use non-GAAP measures in some of our financial discussions as we believe they are more accurately represent the true operational performance and underlying results of our business.
Naomi Beckman-Strauss: The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP measures may be different from non-GAAP measures used by other companies.
Naomi Beckman-Strauss: Reconciliation of GAP to non-GAP measures as well as the description, limitations, and rationale for using each measure can be found in this afternoon's press release and in our SEC filings.
Naomi Beckman-Strauss: We also used certain key operating metrics, including growth margin, average order value, and total orders placed. The description of these metrics can be found in this afternoon's press release and in our SEC filing.
Naomi Beckman-Strauss: Joining me on the call today are our CEO, Crystal Landsem, our CFO, Tiffany Smith, our President and CIO, Mark Vos.
Naomi Beckman-Strauss: Following our prepared remarks, we'll open the call for your questions. With that, I'll turn the call over to Crystal.
Crystal Landsem: Thank you, Naomi, and good afternoon, everyone. We appreciate you joining us today.
Crystal Landsem: In a year defined by challenging consumer backdrop and rapidly evolving macro environment, we made meaningful progress identifying underperforming areas of the business and executing strategic realignments to position Lulu's for long-term success.
Crystal Landsem: In 2024, we sharpened our focus on our core strengths, our unique position as a premier destination for occasion dresses, while optimizing our cost structure to align with our current business needs.
Crystal Landsem: Simultaneously, we refocused our commitment to three initiatives designed to enhance brand strength, elevate market positioning, and drive sustainable, profitable growth.
Crystal Landsem: As a reminder, these initiatives include continued product assortment optimization to support margin expansion, continued investment in brand initiatives to fortify customer engagement and brand differentiation,
Crystal Landsem: and investments in our proprietary stack and analytics programs to drive technology enablement, including improved decisioning, efficiencies and customer experience.
Crystal Landsem: Throughout the year we made measurable progress against these strategic initiatives, paving the way for us to accelerate momentum in the years ahead and as the macro and consumer backdrop begins to stabilize.
Crystal Landsem: Sitting where we are today, with our cost rationalization and reduction measures nearly complete and behind us, we are focused on continuing to drive these key initiatives into 2025.
Crystal Landsem: We expect our vision for a more curated and focused assortment to positively impact our separates and shoe categories in the coming quarters.
Crystal Landsem: We believe our wholesale channel is gaining momentum, supported by targeted expansions and strong brand partnerships that are driving increased visibility and reach.
Crystal Landsem: At the same time, we expect continued investments in our tech stack and AI capabilities to fuel operational optimization and deeper personalization, enhancing the customer experience, improving retention, and supporting long-term profitable growth.
Crystal Landsem: Importantly, we remain disciplined in our approach to financial management, prioritizing a planned refinancing of our revolver into a more flexible ABL, supporting our commitment to improving liquidity, driving sustainable profitability, and generating positive cash flow.
Crystal Landsem: While we continue to see macro uncertainty in 2025, we are working diligently to best position our business for success in the years ahead.
Crystal Landsem: As it relates to tariffs, we do expect tariff impact on the business in 2025. Our full year guidance contemplates the known tariffs as well as our proactive mitigation efforts.
Crystal Landsem: While we've taken steps to decrease our exposure to China over the last year, China continues to be one of our primary sourcing locations today.
Crystal Landsem: Importantly, our buys for the first half of the year are generally locked in from a pricing perspective, alleviating tariff exposure through mid-June.
Crystal Landsem: In the second half of the year, we plan to have a larger portion of our receipts directly sourced from factories across multiple geographies, which is intended to mitigate tariff pressures as they are outlined today.
Crystal Landsem: We are actively working to accelerate our direct sourcing efforts through year-end and into 2026, which we expect will continue to support margin expansion over the long term, given less than 5% of our sales are currently driven from products sourced directly from factories.
Crystal Landsem: In addition to these efforts, we are closely managing the incremental impact of tariffs, as we've done successfully in the past, by sharing the impact across vendors, customers, and our own margins.
Crystal Landsem: We continue to closely monitor the evolving situation and our teams remained highly focused on executing our mitigation efforts of calculated sourcing, pricing adjustments, and leaning on our strong vendor partnerships.
Crystal Landsem: In summary, we believe we are positioned to navigate these challenges while maintaining flexibility and our focus remains on executing with discipline and driving long-term growth.
Crystal Landsem: Shifting now to our performance in the fourth quarter, we continue to deliver positive double-digit sales growth in our special occasion, bridesmaids, and bridal categories, reinforcing our leadership in event dressing, even amid a seasonally softer sales period.
Crystal Landsem: However, these gains were offset by continued softness in our casual wear segment, which we are actively repositioning to better align with our core focus on event attire.
Crystal Landsem: We continue to make strong progress against our strategic initiatives and have implemented the majority of our cost reduction efforts, including the successful consolidation of our West Coast distribution facilities in late February 2025. Additionally, securing alternative debt financing remains a top priority.
Crystal Landsem: Return rates improved for the second consecutive quarter after eight quarters of year over year increases with an improvement of 150 basis points highlighting the material improvements we have made in fit and quality.
Mark Vos: On the brand front, we launched several successful campaigns in collaborations on the fourth quarter driving higher reach engagement and media interest, which mark will share more details around shortly.
Mark Vos: Earlier this month, we launched a new brand campaign, we are Lou lose to further solidify our position as a go to dress destination and deepen brand affinity engagement and loyalty.
Mark Vos: In wholesale we made meaningful progress with key retailers, while expanding into new collaborations Q.
Mark Vos: Q4 wholesale revenue grew 76% year over year, driven by high double digit gains among major partners and strong momentum in specialty retail, notably this February we announced our new partnerships with newly posh Mark in Venmo.
Mark Vos: We also deepened our presence with Dillard's and nordstrom's, while expanding third party brand collaborations with Hunter Reebok and Dingo 1969 to name a few.
Mark Vos: These growing partnerships reflect our focus on reaching customers across diverse shopping channels, while maintaining an efficient scalable growth model given our strong momentum we expect a robust wholesale growth to continue through 2025.
Mark Vos: Now addressing the challenges in Q4.
Mark Vos: Separate tissue categories continue to weigh on performance driving the majority of the year over year net sales declines as.
Mark Vos: As outlined last quarter, we have reevaluated, our assortment strategy to better align with our core strength in occasion, we're shifting our separates and footwear assortment towards dressier options more focused around date nights social events vacations in workwear.
Mark Vos: The occasions that our customers already engaged with us.
Mark Vos: This strategic realignment is underway and we are optimistic that a more curated assortment and reduced SKU count will enhance the customer experience, while also improving profitability.
Mark Vos: Our teams are executing on our refined vision of a dressier aesthetic with these changes expected to take place over the next few quarters.
Mark Vos: Gross margin declined 120 basis points for the quarter and 50 basis points for the full year compared to the prior year periods impacted by higher markdown sales and increased promotional activity to maintain inventory health in response to softer than anticipated sales, leading up to and following the election cycle.
Mark Vos: Additionally, profitability remained under pressure due to elevated mark down activity aimed at maintaining a healthy inventory position the deleveraging of fixed costs on a smaller net revenue base and the initial one time costs related to the consolidation of our northern California distribution center with associated impacts expected to continue through part of Q1 2025.
Mark Vos: Yeah.
Mark Vos: In the second half of 'twenty 'twenty four we implemented targeted cost reduction measures alongside our high impact initiatives with the goal to improve profitability and position the company for sustainable growth.
Mark Vos: In Q4, we began realizing the benefits of Q3 cost reductions related to payroll capital expenditures and a smaller board of directors aligning our cost structure and work closely with sales.
Mark Vos: Notably, we outperformed our expectations of 10% to 15% operating expense reductions, achieving 19% and reductions in the second half of 'twenty 'twenty four compared to the first half of 2024.
Mark Vos: We believe these collective measures will drive ongoing efficiencies strengthen profitability and support long term objectives, all while maintaining a robust operating model that fuels, our priorities generates positive cash flow protect brand integrity and paves the way for long term sustainable growth.
With that I'd like to turn the call over to Mark Foss, Our President and Chief Information Officer, Mark will provide updates around progress we are seeing against strategic priorities Marc Thank.
Mark Foss: Thank you Crystal.
Speaker Change: Active customer accounts remained stable through year end holding flat quarter over quarter, despite a year over year decline.
Speaker Change: New customer loyalty adoption rates continued to gain momentum.
Speaker Change: I Love rewards membership saw another quarter of double digit growth driving an overall increase in total membership.
Speaker Change: We are encouraged by the consistent quarterly improvement in these key metrics, which we believe reflect the strength of our targeted focus on brand assortment and customer engagement.
Speaker Change: We continued to successfully reactivate lapsed customers at a higher rate in Q4 2023 and at a similar rate as Q3 2024.
Speaker Change: With many customers returning after 12 months left for high performing categories like Brotzman with special attention.
Speaker Change: Dresses.
Speaker Change: Well our international presence is still in its early stages. It's continued to show strong year over year growth in Q4 fiscal year 2020 for a high double digit international growth.
Speaker Change: We will continue optimizing our U S based international shipping model.
Speaker Change: Proofing, our net international sale margins and intentionally building brand awareness in select markets.
Speaker Change: I'll now share some progress updates around our strategic initiatives during the quarter.
Speaker Change: Starting with our product assortment optimization and related margin expansion efforts.
Speaker Change: Alongside key year end campaigns like heritage Prep holiday in the Dolce Vita, we leveraged AI driven signs merchandising to enhance product discovery and better connect with our customer.
Speaker Change: Many cases, driving strong engagement and purchase intent.
Speaker Change: We continue to explore AI capabilities to further optimize displaying our new and existing assortments to our customers in a data driven and where possible personalized way.
Speaker Change: Our fit enhancement efforts continue to deliver results.
Speaker Change: With return rates improving for the second consecutive quarter.
Speaker Change: Our holistic approach focused on fifth flexibility and consistency across key categories remains a priority as we work to further reduce fits related to returns.
Speaker Change: Following the rollout of our new return policy in Q2 2024, we saw an uptick in reported status in Q4 2024.
Speaker Change: To address this we realized our policy in Q1 of 2025 to a flat fee rather than acre units returned free.
Speaker Change: Move we expect will curb fraudulent claims while maintaining positive return rates trends.
Speaker Change: The rollout of signs of double XL is progressing as planned and initial reads continue to show that return rates across the sciences extra large XXL combined have improved.
Additionally, we also see in crushing startup for new customer acquisition based on science XXL and expect that the addition of this size over time will contribute to expanding our customer base.
Speaker Change: We're also adding double excess sizing two or more products, resulting in a broad sizing range from double in excess to double XL across various product classes.
Speaker Change: Additional extended sizing from onex to three ex U predominantly bridesmaid trusses.
Speaker Change: This full size range and supports the notion that loses to dress destination for all of life's moments and the healthy sell through we see underscores the demand across our customer base.
Speaker Change: While we've made progress diversifying our sourcing out of China, a significant portion of our products are manufactured there.
Speaker Change: As we discussed last quarter, we are confident in our ability to largely mitigate the impact of recent stars using tactics successfully deployed in prior years.
Speaker Change: Distributing costs across vendors customers and our own margins.
In the near term, we believe the value and quality of our newest products allow for sufficient price elasticity to absorb a portion of the impact to surgical price adjustments.
Speaker Change: Over the medium to long term, our direct sourcing initiatives and country of origin diversification.
Speaker Change: Fishing us to offset tariff related pressures, while maintaining product quality and a competitive pricing structure.
Speaker Change: Turning to our investments in strengthening brand awareness and customer engagement.
Speaker Change: We continue to elevate the lose brands through calculated investments in awareness engagement and customer loyalty.
Speaker Change: In the fourth quarter, we launched high impact <unk> third party and Influencer partnerships brand campaigns and feasibility programs and substantially grew our ambassador program by more than 50% private and increased social engagements by 33% quarter over quarter.
Speaker Change: These efforts helped to deliver new customers lowered.
Speaker Change: Lowered acquisition costs, we created strong momentum.
Speaker Change: Reactivated the numerous brands around key pump cultural moments showing up where it matters most to our customers.
Speaker Change: <unk> conclude attending Sabrina carpenters, shorten suites tour and taking advantage of full formal season, featuring partnerships with collegiate sororities nationwide.
Crystal Landsem: So curated events and content with our ambassador and Influencer network, we drove strong reach and elevated brands impressions. Additionally, as Christal mentioned, we launched this March our new out of home brands campaign, we are loose to kickoff international women's month.
Building on the success of last year's French of life's campaign, which nearly doubled branch recall over looses 2021 digital campaign.
Crystal Landsem: This multi face initiatives highlights our positioning as a dress destination and features our loose team through customer facing activations any sense influencer collaborations and out of home market such as prime Billboard placements in New York's times square and targeted placements in key college cities to foster early.
Crystal Landsem: <unk> loyalty and capture the attention of a high value demographic at a peer.
Crystal Landsem: It'll stage.
Crystal Landsem: We see a significant opportunity to continue investing in awareness as a long term growth driver.
Crystal Landsem: Our third initiative focuses on driving technology enablement to improve decisioning efficiencies and create seamless customer experience across channels.
Crystal Landsem: In Q4, the loose apps, so significant increase in usage conversion and year over year revenue growth fuels.
Crystal Landsem: Fueled by extended performance marketing integration into the App.
Crystal Landsem: We see continued outgrowth opportunities and we will be testing first time App only features.
Speaker Change: Personal lines the customer experience.
Crystal Landsem: Further.
Crystal Landsem: Additionally, we released return policy updates and enables robotics, driven fulfillment and returns in our southern California distribution facility.
Crystal Landsem: We also launched the loose and posh Mark integration and we are very excited that our customers can now Mr High quality Louis products on Pockmark directly and effortlessly from their lose order history page and in that way extensive life in usage of Google products.
Crystal Landsem: We recently consolidated two of our distribution facilities by moving operations from our former distribution facility in Chico, Northern California to our existing logistics facility in Southern California.
Crystal Landsem: Consolidation started in Q4 2024 and was successfully completed in Q1 2025.
Crystal Landsem: Kudos to all the teams involved who did a fantastic job ensuring that our customers were never impacted by this move of operations and continued to receive their orders on time.
Crystal Landsem: A special thanks, and shout out to all Chico distribution center colleagues, who care deeply about our customers and the quality of their work.
Crystal Landsem: We'll always remain an essential part of the little story.
Crystal Landsem: All in all we are encouraged by the continued momentum across our strategic initiatives as we enhance cost efficiency and more effectively expand our reach to a broader customer base.
Crystal Landsem: And now I'll hand, you over to Tiffany Smith, who is chief financial officer to provide more color on our financials.
Tiffany Smith: Thanks, Mark and good afternoon, everyone as anticipated our Q4 net revenue was approximately $66.1 million down 12% year over year, driven by a 12% decrease in total orders placed at a 5% decrease in average order value, partially offset by improved return rates, which improved for the SEC.
Tiffany Smith: <unk> consecutive quarter on a year over year basis.
Tiffany Smith: For the full year net revenue totaled 315.9 million down 11% versus 2023, primarily due to a 12% decline in total orders placed and higher return rates, partially offset by a 3% increase in average order value.
Tiffany Smith: Gross margin for the quarter was 37, 9% down 120 basis points versus the prior year impacted by higher markdowns and discounts and ongoing softness in casual wear.
Tiffany Smith: For the full year gross margin declined 50 basis points to 41.2 compared to 2023.
Tiffany Smith: On the expense side, Q4, selling and marketing expenses totaled $12 $7 million down about 2.6 million year over year, as we shifted our investment toward higher markdowns and discounts for the full year, selling and marketing expenses were $72 $9 million a reduction of $3 4 million versus 20.
Tiffany Smith: 23, reflecting disciplined cost management as well as a higher mix of markdowns and discounts.
Tiffany Smith: General and administrative expenses decreased $2 9 million to $18 9 million in Q4, 2024% to 13.3% decline year over year due to lower employee related costs, driven by fixed cost reduction and lower variable labor and supply cost due to the lower sales.
Tiffany Smith: For the full year general and administrative expenses were $81 $3 million downturn point 8 million or 11, 7% from 92.1 million in 2023, driven by a combination of fixed cost reductions lower variable costs, resulting from lower revenues and lower insurance costs.
Tiffany Smith: Net loss for Q4 worsen to $31 $9 million from $7 2 million year over year, reflecting the impact of a noncash $28 $4 million goodwill impairment charge.
Tiffany Smith: Excluding the goodwill charge, our adjusted net loss for the quarter of $3 5 million represents the narrow with loss of the last six quarters and more than a 50% reduction in the net loss in Q4 of last year.
Tiffany Smith: Our focused cost reduction efforts drove $5 5 million or 15% and savings across selling and marketing and general and administrative expenses more than offsetting the gross profit decline of 4.3 million Q.
Tiffany Smith: Q4's net loss also benefited from a state income tax receivable accrual contributing to a $2 $7 million year over year increase in the income tax benefit and a realized Q1 2025 cash benefit.
Tiffany Smith: For the full year, our net loss was $55 3 million compared to $19 3 million in 2023 included in the current year's net loss was a noncash goodwill impairment charge of $28 $4 million, excluding the goodwill impairment our adjusted net loss for the year was $26 $9 million Q4's adjusts.
Tiffany Smith: But the loss was approximately $3.3 million compared to a $2 million loss in Q4, 2023, driven primarily by the impact of lower gross profit, partially offset by lower expenses adjusted EBITDA margin was negative 5% versus negative 2.6% in the prior year for the full year adjusted EBITDA loss.
Tiffany Smith: It was approximately $9 7 million compared to a gain of $3 2 million in 2023 with full year adjusted EBITDA margin of negative three 1% versus positive <unk>, 9% in 2023.
Tiffany Smith: Interest expense totaled $313000 in Q4 versus 337000 in Q4, 2023 and $1.3 million for the full year 2024, compared to $1 7 million in 2023.
Tiffany Smith: Diluted loss per share for the quarter was 76 cents compared to a diluted loss per share of 18 cents in Q4 of 2023, excluding the impact of the goodwill impairment our adjusted diluted loss per share for the quarter would have been eight cents, representing a 10% improvement compared to Q4 of 2023.
Tiffany Smith: Our full year diluted loss per share was $1 33, which was 85 cents worse compared to 2023.
Tiffany Smith: Excluding the goodwill impairment, our adjusted dilutive loss per share for the year would have been 65 cents or <unk> 17 cents worse in 'twenty two 'twenty three in Q4 2024 net cash used in operating activities was two and a half million dollars an improvement from 5.7 million net cash used last year.
Tiffany Smith: Free cash flow used in the quarter of $3 million improved by $3 7 million year over year. We ended the quarter with net debt of $8 $6 million, an increase of $3 1 million compared to Q4 of 2023.
Tiffany Smith: For the full year net cash provided by operating activities was $2.6 million compared to $15 4 million in 2023 free cash flow used for the year was point $3 million compared to free cash flow generated of $11 5 million in 2023.
Tiffany Smith: Our inventory balance at quarter end was $34 million down about 1.4 million year over year, reflecting ongoing disciplined inventory management inventory levels were down 4% year over year, while our fiscal year 2024 sales were down 11%. This reflects the impact of prior year inventory carryover sales, which boost the 'twenty two 'twenty three.
Tiffany Smith: <unk> results, but did not recur in 2024 to.
Tiffany Smith: To provide further context on our credit facility.
Tiffany Smith: At the end of Q4, we had 13.1 million borrowed under the $15 million revolving line.
Tiffany Smith: During the first quarter of 2025, we made a $3 million repayment and do not have access to additional borrowings under our credit facility.
Tiffany Smith: Outlined in our 10-K, we've executed an additional amendment to our credit agreement, which provides a limited waiver to compliance with the financial covenants for the period of four fiscal quarters ended on or about December 31, 2024, as well as a suspension of measurement of certain financial covenants for the first quarter ending on or about March 31st.
Tiffany Smith: 2025, while we continue to pursue alternative financing.
Tiffany Smith: Amendment contemplates that we will complete a refinancing it exit the credit agreement with Bank of America by June 15th 2025.
Tiffany Smith: Moving on to guidance.
Tiffany Smith: For fiscal year 2025, we anticipate net revenue to be between 280 and $310 million, which represents a decrease of between 11 and 2% compared to 2024.
Tiffany Smith: Low end of our range contemplates further macroeconomic pressures and challenges to consumer confidence and demand.
Tiffany Smith: The upper end of the range assumes stable demand and continued improvements in our product assortment and brand.
Tiffany Smith: As noted last year, we began implementing cost reduction measures in the second half of 'twenty 'twenty four to improve profitability and align our cost structure with sales growth trends. The benefit of these reductions is expected to drive an inflection to positive adjusted EBITDA of 2025, our adjusted EBITDA outlook for 2025 is expected to be.
Tiffany Smith: Between zero and $6 million, representing an increase of between $9 $7 million and $15 $7 million compared to 2024.
Tiffany Smith: The downside of our adjusted EBITDA outlook contemplates, a worsening consumer backdrop and margin pressure related to inability to mitigate the impact of tariffs.
Tiffany Smith: Related to liquidity, we anticipate our Q1 2025, ending net debt position to be between 3 million and $4 million down from $8 6 million as of the end of Q4 2024, and we expect to be operating cash flow positive in 2025, including in Q1 2025.
Tiffany Smith: Lastly, we expect another well controlled year of capital expenditures, which are planned to be between two and a half million and $3 million.
Tiffany Smith: Between 13% to flat versus the prior year.
Crystal Landsem: And with that I'll pass it back to Crystal for closing remarks.
Crystal Landsem: Tiffany we are confident that our clear focus on assortment optimization brand awareness to drive customer engagement and investments in our tech enabled business model alongside disciplined cost management positions us for sustainable growth and improve profitability in the year ahead.
Crystal Landsem: While work remains to reset our shoes and separate the businesses. We are encouraged by the strong momentum in dresses and wholesale.
Crystal Landsem: By optimizing our business model and refining our casual segment towards Dressier separates we are reinforcing our commitment to operational excellence adaptability and long term success and an evolving consumer landscape.
Crystal Landsem: I'd like to thank our leu crew for their tireless commitment to our brand and our customers are.
Crystal Landsem: Our loyal customers for their continued trust and our valued shareholders for their continued support as.
Crystal Landsem: As we strengthen our position as the go to dress destination for life special moments, we remain confident in our path forward. We look forward to sharing our progress on our next earnings call and with that I'll turn it over to questions now.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Crystal Landsem: Information tone will indicate your line is in the question queue you.
Speaker Change: You May press star two to remove yourself 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: One moment, please while I pull for questions.
Speaker Change: Once again Thats star one if you'd like to ask a question.
Speaker Change: This does conclude the question and answer session as well as todays teleconference. Thank you for your participation you may disconnect your lines at this time.
Speaker Change: Hum.