Q1 2025 Victoria's Secret & Co Earnings Call

June 11, 2025

Operator: Good morning. My name is Amanda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Company's First Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. All parties will remain in a listen-only mode until the question-and-answer session of today's call. I would now like to turn the call over to Mr. Kevin Wynk, head of investor relations at Victoria's Secret & Company. Kevin, you may begin.

Good morning, My name is Amanda and I will be your conference operator today at this time I'd like to welcome everyone to the Victoria's Secret and company's first quarter 2025 earnings conference call.

Amanda: My name is Amanda, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Victoria's Secret & Company's first quarter 2025 earnings conference call. Please be advised that today's conference is being recorded. All parties will remain in a listen-only mode until the question and answer session of today's call.

Speaker Change: Be advised that today's conference is being recorded all parties will remain in a listen only mode until the question and answer session of today's call I would now like to turn the call over to Mr. Kevin Week head of Investor Relations at Victoria's Secret and company, Kevin You may begin.

Kevin Wynk: I would now like to turn the call over to Mr. Kevin Wynk, Head of Investor Relations at Victoria's Secret & Company. Kevin, you may begin. Thank you, Amanda.

Kevin Wynk: Thank you, Amanda. Good morning and welcome to Victoria's Secret & Co.'s Q1 2025 earnings conference call for the period ended 3 May 2025. As a matter of formality, I would like to remind you that any forward-looking statements we may make today are subject to our safe harbor statements found in our SEC filings and in our press releases. Joining me on the call today is CEO Hillary Super and CFO Scott Sekella. We are available today for approximately 30 minutes to answer any questions. Certain results we discuss on the call today are adjusted results and exclude the impact of certain items described in our press release and our SEC filings. Reconciliations of these and other non-GAAP measures to the most comparable GAAP measures are included in our press release, our SEC filings, and the investor presentation posted on the investors section of our website. Thanks.

Speaker Change: Thank you Amanda good morning, and welcome to Victoria's Secret <unk> Company's first quarter earnings conference call for the period ended May three 2025.

Kevin Wynk: Good morning and welcome to Victoria's Secre and Company's first quarter earnings conference call for the period ended May 3, 2025. As a matter of formality, I would like to remind you that any forward-looking statements we may make today are subject to our safe harbor statements found in our SEC filings and in our press release.

Speaker Change: As a matter of formality I would like to remind you that any forward looking statements. We may make today are subject to our safe Harbor statements found in our SEC filings and in our press releases joining me on the call today is CEO Hillary Super and CFO. Scott. So now we are available today for approximately 30 minutes to answer any questions.

Kevin Wynk: Joining me on the call today is CEO Hillary Super and CFO Scott Sekella. We are available today for approximately 30 minutes to answer any questions.

Kevin Wynk: Certain results we discuss on the call today are adjusted results and exclude the impact of certain items described in our press release and our SEC filings. Reconciliations of these and other non-GAAP measures to the most comparable GAAP measures are included in our press release, our SEC filings, and the investor presentation posted on the investor section of our website.

Speaker Change: Certain results we discussed on the call today are adjusted results exclude the impact of certain items described in our press release and our SEC filings reconciliations of these and other non-GAAP measures to the most comparable GAAP measures are included in our press release, our SEC filings and the Investor presentation posted.

Speaker Change: On the investors section of our website.

Hillary Super: Thanks, and now I'll turn the call over to Hillary. Good morning. I appreciate you all being We're pleased to kick off the summer on a strong note with solid first quarter results that reflect continued progress against the pandemic. teams delivered a quarter marked by disciplined execution. and DeepVision.com We're excited by the momentum we're building in a challenging market environment and encouraged by what We have lots to share today, including Q1 performance.

Kevin Wynk: Now I'll turn the call over to Hillary.

Hillary Super: And now I'll turn the call over to Hillary.

Hillary Super: Good morning. I appreciate you all being here. We're pleased to kick off the summer on a strong note with solid Q1 results that reflect continued progress against our strategic priorities. Our teams delivered a quarter marked by disciplined execution, a continued focus on innovation, and a deep commitment to serving our customers across all channels, which drove top and bottom line results exceeding our guidance and broad-based strength across both our brands. We're excited by the momentum we're building in a challenging market environment and encouraged by what lies ahead. We have lots to share today, including Q1 performance, key strategic hires, and our balance of the year expectations. But first, I want to provide an update on a recent security incident. When we identified the incident on 24 May, we immediately initiated our pre-established response protocol, and third-party experts were engaged alongside our own security team.

Hillary Super: Good morning, I appreciate you all being here, we're pleased to kick off the summer on a strong note with solid first quarter results that reflect continued progress against our strategic priorities.

Hillary Super: Our teams delivered a quarter marked by disciplined execution.

Hillary Super: <unk> focus on innovation and a deep commitment to serving our customers across all channels, which drove top and bottom line results exceeding our guidance and broad based strength across both of our brands.

Hillary Super: We're excited by the momentum we're building in a challenging market environment and encouraged by what lies ahead, we have lots of share today, including Q1 performance key strategic hires in our balance of the year expectations, but first I want to provide an update on our recent security incident.

Hillary Super: But first, I want to provide an update on a recent security. When we identified the incident on May 24, we immediately initiated a pre-established response protocol and third-party experts were engaged alongside our own security team. As a precaution, we took some internal systems and our e-commerce site. Throughout, we continue to serve customers in our Victoria's Secret and Pink store.

Hillary Super: When we identified the incident on May 24th we immediately initiated a preestablish response protocols and third party experts were engaged alongside our own security team.

Hillary Super: As a precaution, we took some internal systems and our e-commerce site offline. Throughout, we continued to serve customers in our Victoria's Secret & PINK stores. Our site went back online Thursday, 29 May, and all of our critical systems are fully operational. We're now well into the recovery phase, which includes finalizing our investigation. While I won't share further details while that work is ongoing, I do want to take a moment to recognize the extraordinary efforts of our associates. Their quick, decisive action, collaboration, and resilience in the face of disruption was nothing short of inspiring. I've told you before how proud I am to be leading this business and working with this incredible team. I also want to thank our customers and partners for their understanding and support. Now let's discuss Q1. I'm pleased to share we built momentum month-over-month and ended the quarter strong.

Hillary Super: As a precaution, we took some internal systems and our e-commerce site offline.

Hillary Super: Throughout we continue to serve customers in our Victoria's secret and Pink stores. Our site went back online Thursday may 29, and all of our critical systems are fully operational.

Hillary Super: Our site went back online Thursday, May 29th, and all of our critical systems are fully We're now well into the recovery phase, which includes finalizing our invest— While I won't share further details while that work is ongoing, I do want to take a moment to recognize the extraordinary efforts of our Their quick, decisive action, collaboration, and resilience in the face of disruption was nothing short of. told you before how proud I am to be leading this business and working with this incredible. I also want to thank our customers and partners for their understanding.

Hillary Super: We're now well into the recovery phase, which includes finalizing our investigation.

Hillary Super: I'll share further details while that work is ongoing I do want to take a moment to recognize the extraordinary efforts of our associates, they're quick decisive action collaboration and resilience in the face of disruption was nothing short of inspiring.

Hillary Super: Told you before how proud I am to be leading this business and working with this incredible team I also want to thank our customers and partners for their understanding and support.

Hillary Super: Now let's discuss Q1. I'm pleased to share we built momentum month over month and ended the quarter strong. While we are still in the early stages of our path to potential strategy, in Q1, we made progress across the four initiatives I outlined on our last As a reminder, these are recommit to pink, supercharge bras, fuel growth in lifestyle categories, and modernize our brand projection and go to. This progress was reflected in both net sales and operating income. Net sales for the quarter were flat, and total comparable sales were down 1% compared to As we shared on our Q4 call in March.

Hillary Super: Now, let's discuss Q1.

Hillary Super: I'm pleased to share we built momentum month over month and ended the quarter strong well we are still in the early stages of our path to potential strategy. In Q1, we made progress across the board initiatives I outlined on our last earnings call.

Hillary Super: While we are still in the early stages of our Path to Potential strategy, in Q1, we made progress across the four initiatives I outlined on our last earnings call. As a reminder, these are Recommit to PINK, Supercharge Bras, Fuel Growth in Lifestyle categories, and Modernize Our Brand Projection and Go-to-Market Strategy. This progress was reflected in both net sales and operating income exceeding guidance. Net sales for the quarter were flat, and total comparable sales were down 1% compared to last year. As we shared on our Q4 call in March, the February macroeconomic environment presented headwinds as consumer sentiment softened and inflation concerns heightened. I'm pleased to share that our teams responded with agility, making impactful adjustments to assortment and marketing that, combined with softening headwinds, helped drive results that were mostly above expectations. What did we do?

Hillary Super: As a reminder, these are recommit to pink supercharged bras.

Hillary Super: The old growth in lifestyle categories and.

Hillary Super: Modernize our brand projection and go to market strategy.

Hillary Super: This progress was reflected in both net sales and operating income exceeding guidance net sales for the quarter were flat and total comparable sales were down 1% compared to last year.

Hillary Super: As we shared on our Q4 call in March.

Hillary Super: The February macroeconomic environment presented headwinds as consumer sentiment softened and inflation concerned. I'm pleased to share that our teams responded with agility, making impactful adjustments to assortment and marketing that, combined with softening headwinds, helped drive results that were mostly above expectations.

Hillary Super: The February macroeconomic environment presents a headwind as consumer sentiment softened and inflation concerns heightened I'm pleased to share that our teams responded with agility, making impactful adjustments to assortment and marketing that combined with softening headwinds helped drive results that were mostly above the expectations.

Hillary Super: What did we do? We increased our percentage of newness by pulling forward March and April floor sets in VS, chasing into exciting fashion apparel for pink, and accelerating our new mist collection launch for V. We reshot portions of our creative content with an eye towards sexier and more joyful brand expression and worked across channels to highlight it. The launch of our Lacey Panty franchise exemplified this work, and I'm happy to report that we saw outsized returns with triple-digit comps in this franchise. We also rebalanced our marketing.

Hillary Super: What did we do we increased our percentage of newness by pulling forward March and April force. That's N V S chasing into exciting fashion apparel for pink and accelerating our new Mis collection launch for beauty, we reshot portions of our creative content with an eye towards sexier and more joyful brand expression and worked across channels.

Hillary Super: We increased our percentage of newness by pulling forward March and April floor sets in VS, chasing into exciting fashion apparel for Pink, and accelerating our new Miss Collection launch for beauty. We reshot portions of our creative content with an eye towards sexier and more joyful brand expression, and worked across channels to highlight it. The launch of our Lacey Panty franchise exemplified this work, and I'm happy to report that we saw outsized returns with triple-digit comps in this franchise during its launch. We also rebalanced our marketing funnel, strategically leveraging events, activations, and PR to amplify brand love, and began testing new paid search strategies that we continue to expand upon. Our quick response delivered strong results for the balance of the quarter.

Hillary Super: You highlighted the launch of our Lacey Panther franchise exemplified this work and I'm happy to report that we saw outsized returns with triple digit comps in this franchise during its launch.

Hillary Super: We also rebalanced, our marketing funnel strategically leveraging events Activations N P. R to amplify brand love and began testing new paid search strategies that we continue to expand the partner.

Hillary Super: Todd Clark, and Lacey Arana. THANK YOU FOR JOINING US. Our quick response delivered strong results for the balance of... This reflects our disciplined approach in a dynamic environment and our continued commitment to strengthening the brand, leaning into emotional storytelling, and making agile business decisions when we see an opportunity. This is the VS&Co mindset that I'm so proud of. We have shown the team's capabilities to approach each season with a growth mindset, knowing we are never penciled down and can always learn and iterate. We saw broad-based strength across both brands and made progress on our strategic priority of fueling growth in lifestyle categories led by pink apparel, beauty, and Vietnam.

Hillary Super: Our quick response delivered strong results for the balance of the quarter. This reflects our disciplined approach and a dynamic environment and our continued commitment to strengthening the brands leaning into emotional storytelling, and making agile business decisions when we see an opportunity.

Hillary Super: This reflects our disciplined approach in a dynamic environment and our continued commitment to strengthening the brands, leaning into emotional storytelling, and making agile business decisions when we see an opportunity. This is the VS & Co mindset that I'm so proud of. We have shown the team's capabilities to approach each season with a growth mindset, knowing we are never pencils down and can always learn and iterate on the business. We saw broad-based strength across both brands and made progress on our strategic priority of fueling growth in lifestyle categories led by PINK Apparel, Beauty, and VSX. PINK Apparel delivered its third consecutive quarter of positive comps and significant margin and AUR expansion driven by improved product, high emotion storytelling, and customer engagement. These efforts brought us closer to our goal of reestablishing the brand's magic and market position.

Hillary Super: This is the V. S income mindset that I'm. So proud of we have shown the team's capabilities to approach each season with a growth mindset. Knowing we are never pencils down and can always learn and iterate on the business.

Hillary Super: We saw broad based strength across both brands and made progress on our strategic priority is fueling growth in lifestyle categories led by Pink apparel beauty and V. S X.

Hillary Super: Pink Apparel delivered its third consecutive quarter of positive comps and significant margin in AUR expenses. driven by improved product, high emotion storytelling and customer engagement. These efforts brought us closer to our goal of re-establishing the brand's magic and market. The cross-functional team has done a great job reading and reacting not only to sales and consumer insights, but also chasing into fashion ideas they are seeing. The result has been a more balanced assortment with a wider range of categories, sensibilities, and end-users. The team has successfully continued to grow our pink icon business and introduced new categories such as skirts, dresses, and denim, which our customers love.

Hillary Super: Pink apparel delivered its third consecutive quarter of positive comps and significant margin and AUR expansion driven by improved product high emotion storytelling and customer engagement. These efforts brought us closer to our goal of reestablishing the brands magic and market position.

Hillary Super: The cross-functional team has done a great job reading and reacting not only to sales and consumer insights but also chasing into fashion ideas they are seeing out in the world. The result has been a more balanced assortment with a wider range of categories, sensibilities, and end uses that is resonating with our customer and driving a higher basket size versus last year. The team has successfully continued to grow our PINK icon business and introduce new categories such as skirts, dresses, and denim, which our customers are loving. I am pleased that some of these ideas were created on the faster timelines that we have discussed on previous calls. We continue to push ourselves to be more agile in our product creation process, and it is starting to pay off.

Hillary Super: The cross functional team has done a great job reading and reacting not only to sales and consumer insights, but also chasing into fashion ideas. They are seeing out in the world.

Hillary Super: The result has been a more balanced assortment with a wider range of categories sensibilities and end users that is resonating with our customer and driving a higher basket size versus last year.

Hillary Super: The team has successfully continued to grow our pink icon business and introduce new categories, such as skirts dresses and denim, which our customers love it.

Hillary Super: I am pleased that some of these ideas were created on the faster timelines that we have discussed on previous We continue to push ourselves to be more agile in our product creation process and it is starting now. Pink Break event drove significant traffic and conversion across both stores and digital, as well as increased penetration of Gen Z. We generated a fun, upbeat shopping environment with DJs and embroidery stations while leveraging daily deals and limited-edition drops to drive repeat sales. Similarly, our Pink Wednesday drops are driving a significant increase in repeat visitors. Our beauty business was a standout, achieving our seventh consecutive quarter of sales.

Hillary Super: I am pleased that some of these ideas were created on the faster timelines that we have discussed on previous calls we continue to push ourselves to be more agile in our product creation process and they're just starting to pay off.

Hillary Super: Our PINK Break event drove significant traffic and conversion across both stores and digital, as well as increased penetration of Gen Z customers. We generated a fun, upbeat shopping environment with DJs and embroidery stations while leveraging daily deals and limited-edition drops to drive repeat visits. Similarly, our PINK Wednesday drops are driving a significant increase in repeat visitors each week. Our beauty business was a standout, achieving our seventh consecutive quarter of growth. Driven by Bombshell's 15th anniversary, including an engaging New York City pop-up that resonated with the loyal consumer base that has made Bombshell America's number one selling fragrance, customer favorites like the Miss Collection continue to drive traffic and brand love. But we're most excited about what's next. We launched body care in the final week of Q1 and have seen a strong response from customers.

Hillary Super: Our pink break event drove significant traffic and conversion across both stores and digital as well as increased penetration of Gen Z customers, we generated a fun upbeat shopping environment with D J and embroidery station, while leveraging daily deals and limited edition drops to drive repeat visits.

Hillary Super: Similarly, our pink Wednesday drops are driving a significant increase in repeat visitors each week.

Hillary Super: Our beauty business was a standout achieving our seventh consecutive quarter of growth.

Hillary Super: driven by Bombshell's 15th anniversary, including an engaging New York City pop-up that resonated with the loyal consumer base that has made Bombshell America's number one. Customer favorites, like the Myst Collection, continue to drive traffic and brand. But we're most excited about what's next. We launched Body Care in the final week of Q1 and have seen a strong response. especially encouraging is the enthusiasm for new formats, like our oils, and to new scents trends, showing her willingness to experiment with us, a good indicator as we have an exciting launch plan for the VSX has delivered its fifth consecutive quarter of double-digit growth, reflecting continued progress against our strategic priority of supercharging bras and reinforcing our leadership as the bra.

Hillary Super: Driven by Bombshells, 15th anniversary, including an engaging New York City pop up that resonated with the loyal consumer base that has made bombshell America's number one selling fragrance.

Hillary Super: Customer favorites like the Miss collection continued to drive traffic and brand love.

Hillary Super: But we're most excited about what's next we launched body care in the final week of Q1 and had seen a strong response from customers, especially.

Hillary Super: Especially encouraging is the enthusiasm for new formats like our oils, and new scents trends, showing her willingness to experiment with us, a good indicator as we have an exciting launch plan for the back half of the year. VSX has delivered its fifth consecutive quarter of double-digit growth, reflecting continued progress against our strategic priority of Supercharging Bras and reinforcing our leadership as the bra authority. A key driver of this performance has been our relentless focus on product innovation and advanced fabric technologies, all while delivering style and fashion. Our fabrics are engineered for maximum performance and versatility, offering breathability and anti-shear technology to ensure comfort and coverage, notably with the inclusion of proprietary raw materials such as LYCRA's adaptive fibers and our X-React technology, dynamically adjusting to the wearer's shape and sweat levels, providing a custom fit and cooling effect throughout wear.

Hillary Super: Especially encouraging is the enthusiasm for new formats, like our oils and to new census trends showing her willingness to experiment with us a good indicator as we have an exciting launch planned for the back half of the year.

Hillary Super: V. S X has delivered its fifth consecutive quarter of double digit growth, reflecting continued progress against our strategic priority of Supercharging bras and reinforcing our leadership.

Hillary Super: The raw authority.

Hillary Super: The key driver of this performance has been our relentless focus on product innovation and advanced fabric technology, all while delivering style. Our fabrics are engineered for maximum performance and versatility, offering breathability and anti-shear technology to ensure comfort. Notably, with the inclusion of proprietary raw materials, such as Lycra's adaptive fibers and our X-React technology, dynamically adjusting to the wearer's shape and sweat levels, providing a custom fit and cooling effect throughout. Our products also feature innovative technologies such as patented turbo wick liners for accelerated moisture wicking and injection molded pads for added shape. Bottom line, our sports bras are amazing and our customers love them.

Hillary Super: A key driver of this performance has been a relentless focus on product innovation and advanced fabric technologies, all while delivering style and fashion.

Hillary Super: Our fabrics are engineered for maximum performance and versatility offering breathability and anti shear technology to ensure comfort and coverage, notably with the inclusion of proprietary raw materials, such as Lakers adopted fibers and our extra reactor technology dynamically adjusting to the worse shape and sweat levels.

Hillary Super: Providing accustomed fit and cooling effect throughout ware.

Hillary Super: Our products also feature innovative technologies such as patented Turbo Wick Liners for accelerated moisture wicking and injection-molded pads for added shape and comfort. Bottom line, our sports bras are amazing, and our customer agrees. VSX bras were up 20% in the quarter, driven by continued standout success of the Knockout Front Close, which is now our number two sports bra. Its proprietary bra within a bra technology with exclusive patented design gives her the confidence of a perfect fit and support, seamless comfort, and the freedom to move without distractions. We are also seeing significant integration of VSX into our off-duty bra wardrobe. The Featherweight Max is a standout in everyday wear with designed patented laser-cut perforations for targeted airflow. This is exciting as it shows that we've been listening to the customer and delivering the versatility that she craves.

Hillary Super: Our products also feature innovative technologies, such as patented turbo with liners for accelerated moisture wicking and injection molded pads for added shape and comfort Bottomline, our sports browser amazing and a customer agrees.

Hillary Super: VSX bras were up 20% in the quarter, driven by continued standout success of the knockout front clothes, which is now our number two. Proprietary Bra Within a Bra Technology, with exclusive patented design, gives her the confidence of a perfect fit and support, seamless comfort, and the freedom to move without tension. We are also seeing significant integration of VSX into our off-duty broadwaters. The Featherweight Max is a standout in everyday wear, with design-patented laser-cut perforations for targeted... This is exciting, as it shows that we've been listening to the customer and delivering the versatility that they need.

Speaker Change: Yes X raws were up 20% in the quarter driven by continued standout success of the knockout front close which is now our number two sports bra.

Speaker Change: It's proprietary bra within a broad technology with exclusive patented design gives you the confidence of a perfect fit in support seamless comfort and the freedom to move without distraction.

Speaker Change: We are also seeing significant integration of V. S X into our off duty bra wardrobe. The feather weight Max is a standout in everyday wear with design patented laser cut perforations for targeted airflow.

Speaker Change: This is exciting as it shows that we've been listening to the customer and delivering the versatility that she craves.

Hillary Super: This focus on comfort and innovation also extends to the broader Intimates category, where performance of wireless outpaced total core bras driven by both basics and fashion. Our So Obsessed wireless bra is a standout, driving 30% year-over-year growth, boosted by expanded in-store visuals and deep resonance with the millennial customer. With our expert combination of comfort, performance, and style, we aren't surprised to see that So Obsessed had more customers purchasing two or more at one time than other bra styles. As multi-use bras increasingly gain traction, we are continuing our efforts with new comfort and movement technologies to deliver content and experiences that create emotional connections with our customers. This will be reflected in our new Always On Bra Creative approach, which will highlight the full range of offerings rather than singular campaigns.

Hillary Super: This focus on comfort and innovation also extends to the broader impact of the pandemic. for performance of wireless outpaced total core bras, driven by both basic. Our so-obsessed wireless bra is a standout, driving 30% year-over-year growth boosted by expanded in-store visuals and deep resonance with the millennial. With our expert combination of comfort, performance, and style, we aren't surprised to see that So Obsessed has more customers purchasing two or more at one time than other broadcasters. As multi-use bras increasingly gain traction, we are continuing our efforts with new comfort and movement technologies to deliver content and experiences that create emotional connections with our customers.

Speaker Change: This focus on comfort and innovation also extends to the broader intimates category, where performance of wireless outpaced total core bra is driven by both basics and fashion.

Speaker Change: Are so obsessed wireless bra is a standout driving 30% year over year growth boosted by expanded in store visuals and deep residents with the millennial customer.

Hillary Super: With our expert combination of comfort performance and style, we aren't surprised to see that so obsessed had more customers purchasing two or more at one time than other bra styles.

Hillary Super: As multi use broad increasingly gained traction we're continuing our efforts with new comfort and movement technologies to deliver content and experiences that create emotional connections with our customers. This will be reflected in our new always on bra creative approach, which will highlight the full range of offerings rather than singular campaigns by doing so.

Hillary Super: This will be reflected in our new always-on bra creative approach, which will highlight the full range of offerings rather than singular cases. By doing so, we'll continue to meet customer needs across core, performance, and lifestyle categories, driving deeper connections. on the channel. In stores, we outpaced mall traffic in March and April, while being less promotional than last year. Our stores continue to be a strategic advantage. They are the backdrop for emotional storytelling and meaningful experiences, and we're seeing an encouraging response to our ongoing customer engagement. In fact, we launched a pilot last year in order to further our focus on bra-fitting.

Hillary Super: By doing so, we'll continue to meet customer needs across core, performance, and lifestyle categories, driving deeper connections and sustained growth. On to channel performance. In stores, we outpace mall traffic in March and April while being less promotional than last year. Our stores continue to be a strategic advantage. They are the backdrop for emotional storytelling and meaningful experiences, and we're seeing an encouraging response to our ongoing customer engagement work. In fact, we launched a pilot last year in order to further our focus on bra fitting and service. I'm happy to share that that pilot has been successful, and we are expanding that test with the goal of improving customer experience and driving higher store performance. We are also pleased with the continued outperformance of our Store of the Future concept, which we anticipate will represent 25% of our fleet by the end of this year.

Hillary Super: So we will continue to meet customer needs across core performance and lifestyle categories, driving deeper connections and sustained growth.

Hillary Super: On to channel performance.

Hillary Super: In stores, we outpaced mall traffic in March and April while being less promotional than a lot done last year.

Hillary Super: Our stores continue to be a strategic advantage there the backdrop for emotional storytelling and meaningful experiences and we're seeing an encouraging response to our ongoing customer engagement work.

Hillary Super: In fact, we launched a pilot last year in order to further our focus on broth fitting in service.

Hillary Super: I'm happy to share that that pilot has been successful, and we are expanding that test with the goal of improving customer experience and driving higher store We are also pleased with the continued outperformance of our Store the Future concept, which we anticipate will represent 25% of our fleet. of the stores to her online experience. We see opportunities to sell more full-priced products and let our flow of newness and brand relevance drive the purchase cycle. We continue to outperform digitally within Pink, indicating we are serving our digitally native customer. Finally, we continue to be pleased with the strength of our international community.

Hillary Super: I'm happy to share that that pilot has been successful and we are expanding that test with the goal of improving customer experience and driving higher store performance.

Hillary Super: We're also pleased with the continued outperformance of our store of the future concept, which we anticipate will represent 25% of our fleet by the end of this year.

Hillary Super: In digital, we are beginning to bring some of that excitement and energy of the stores to her online experience. We see opportunities to sell more full-priced product and let our flow of newness and brand relevance drive the purchase cycle. We continue to outperform digitally within PINK, indicating we are serving our digitally native customer well. Finally, we continue to be pleased with the strength of our international business, which saw growth in nearly all categories across all channels, and all regions. I recently had the privilege of spending time with our partner Next's management team and touring several of their UK stores. I was impressed by their execution and the outstanding job they are doing running both physical and digital spaces.

Hillary Super: In digital we are beginning to bring some of that excitement and energy.

Hillary Super: The stores to her online experience, we see opportunities to sell more full priced product and what our flow of newness and brand relevance and drive the purchase cycle. We continue to outperform digitally within pink, indicating we are serving our digitally native customer well.

Hillary Super: Finally, we continue to be pleased with the strength of our international business, which saw growth in nearly all categories across all channels and all regions. I recently had the privilege of spending time with our partner next management team and touring several of their U K stores I was impressed by their execution and the outstanding job. They are doing running both physical and digital.

Hillary Super: which saw growth in nearly all categories across all channels. I recently had the privilege of spending time with our partner NeXT management team entering several of their UK stores. I was impressed by their execution and the outstanding job they are doing running both physical and digital... We continue to partner with our regional experts to share best practices and deepen our understanding of the global customer so we can continue the impressive growth we've seen in the past. And finally, to close on Q1, we exceeded expectations by reading and reacting with an urgency to win. I'm pleased with our progress and proud of the way we achieved our results.

Hillary Super: We continue to partner with our regional experts to share best practices and deepen our understanding of the global customer so we can continue the impressive growth we've seen internationally. To close on Q1, we exceeded expectations by reading and reacting with an urgency to win. I'm pleased with our progress and proud of the way we achieved our results. We are focused on delighting her with emotional product and content she connects with and operating with excellence. What matters is that we embraced early challenges with agility, identified the opportunity, and beat top-line and bottom-line expectations. Our results for the quarter reflect the strength of our strategy and the commitment of our teams. We are excited to build on that momentum to accelerate progress against our Path to Potential strategy, and I remain confident in our direction.

Hillary Super: As we continue to partner with our regional experts to share best practices and deepened our understanding of the global customer. So we can continue the impressive growth we'd seen internationally too.

Hillary Super: To close on Q1, we exceeded expectations by reading and reacting with an urgency to win I'm pleased with our progress and proud of the way we achieved our results. We're focused on delighting her with emotional product and content. She connects with and operating with excellence. What matters is that we embraced early challenges with agility identified the opportunity and.

Hillary Super: We are focused on delighting her with emotional product and content she connects with and operating. What matters is that we embraced early challenges with agility, identified the opportunity, and beat top-line and bottom-line. Our results for the quarter reflect the strength of our strategy and the commitment of our We are excited to build on that momentum to accelerate progress against our path to potential strategy, and I remain confident in our direction.

Hillary Super: Beat topline and bottom line expectations.

Hillary Super: Our results for the quarter reflect the strength of our strategy and the commitment of our teams. We are excited to build on that momentum to accelerate progress against our path to potential strategy and I remain confident in our direction.

Hillary Super: I'd like to talk for a moment about the team we are building to deliver that strategic plan. On the last earnings call, I shared our decision to move to brand president model and hire a chief marketing officer. We've invested in world-class leaders with proven track records of results. That begins with our brand presidents. Anne Stephenson has been named president of Victoria's Secret, Ali Dillon, president of PINK, and Amy Kocourek, president of Beauty. Anne is a seasoned leader and a true expert in the intimates category with over 25 years of experience in product strategy, brand development, and merchandising. As our chief merchandising officer, she has consistently demonstrated her ability to drive innovation and deliver results.

Hillary Super: I'd like to talk for a moment about the team we are building to deliver that strategic On the last earnings call, I shared our decision to move to brand president model and hire a chief marketing We've invested in world-class leaders with proven track records of results. That begins with our brand.

Hillary Super: I'd like to talk for a moment about the team we are building to deliver that strategic plan.

Hillary Super: On the last earnings call I shared our decision to move to brand President model and hire a chief marketing officer, we've invested in World class leaders with proven track records of results that begins with our brand presidents.

Hillary Super: Anne Stevenson has been named president of Victoria's Secret.

Hillary Super: N Stevenson has been named President of Victoria's Secret Ali Dillon, President of Pink and Amy Pisarek President of beauty.

Hillary Super: Allie Dillon, president. and Amy Kucerec's presentation. Ann is a seasoned leader and a true expert in the intimates category with over 25 years of experience in product strategy, brand development. As our Chief Merchandising Officer, she has consistently demonstrated her ability to drive innovation and deliver results. with her deep understanding of Victoria's secret brand and an unwavering commitment to its growth. Anne has played a key role in shaping our future vision, and I'm proud to have her at the table.

Hillary Super: And as a seasoned leader and a true expert in the intimates category with over 25 years of experience in product strategy brand development and merchandising as our chief merchandising officer. She has assistant we demonstrated our ability to drive innovation and deliver results with her deep understanding of Victoria's secret brand and an unwavering.

Hillary Super: With her deep understanding of Victoria's Secret brand and an unwavering commitment to its growth, Anne has played a key role in shaping our future vision, and I'm proud to have her at the helm. Ali joins us from Alex Mill, where she served as president, overseeing strategy, product, operations, and growth. With over two decades in merchandising and brand development, including leadership roles at Gap Inc. and J. Crew, Ali's apparel expertise and knowledge of modern product development models positions her as the right person to lead PINK's next chapter of growth. Amy is a deeply strategic merchant leader with a proven track record in product innovation and business transformation. Previously chief merchandising officer at Kendra Scott, Amy excels in finding white space, innovating business models, and elevating product and partnerships. These experiences make her well-suited to think differently about beauty's mature and successful business and push it further.

Hillary Super: Commitment to its growth and has played a key role in shaping our future vision and I'm proud to have her at the home.

Hillary Super: Allie joins us from Alex Mill, where she served as president overseeing strategy, product, operations. With over two decades in merchandising and brand development, including leadership roles at Gap Inc. and J.Crew, Allie's apparel expertise and knowledge of modern product development models positions her as the right person to lead Pink's next chapter.

Ali: Ali joins us from Alex now, where she served as president overseeing strategy product operations and growth with over two decades, and merchandising and brand development, including leadership roles at Gap, Inc. And J crew alloys apparel expertise and knowledge of modern product development model positions her as the right person to lead Pinks next Cha.

Hillary Super: After a growth.

Hillary Super: Amy is a deeply strategic merchant leader with a proven track record in product innovation and business transformation. Previously Chief Merchandising Officer at Kendra Scott, Amy excelled in finding white space, innovating business models, and elevating product These experiences make her well-suited to think differently about beauty's mature and successful business and push it forward.

Hillary Super: Amy is a deeply strategic merchant leader with a proven track record in product innovation and business transformation.

Sleep: Sleep, Chief merchandising officer at Kendra, Scott, Amy excelled and finding white space innovative business models, and elevating product and partnerships. These experiences make her well suited to think differently about beauty is mature and successful business and push it further.

Hillary Super: In addition, Elizabeth Price has joined us as chief marketing. She will lead brand marketing across the enterprise to deepen customer. with our iconic.

Hillary Super: In addition, Elizabeth Preis has joined us as Chief Marketing Officer. She will lead brand marketing across the enterprise to deepen customer connections with our iconic brands. Elizabeth joins VS & Co as a respected marketing strategist with more than 25 years of experience in fashion, beauty, and lifestyle. She is celebrated for her unparalleled acumen in crafting culturally relevant customer experiences informed by data and driven by creative storytelling. Finally, Adam Selman has been appointed Senior Vice President and Executive Creative Director, reporting to Elizabeth. Adam is a multihyphenate creative who operates at the crossroads of commerce and culture. He has built his own labels and has had notable career creating custom looks for celebrities like Beyoncé and Katy Perry, as well as designing Rihanna looks for the Victoria's Secret fashion show performances. Adam is the ideal expert to steward our brands into their next chapter.

Sleep: In addition, Elizabeth price has joined US as Chief Marketing Officer, She will lead brand marketing across the enterprise to deepen customer connection with our iconic brands Elizabeth joined the S and co is a respected marketing strategist with more than 25 years of experience in fashion beauty and lifestyle. She has celebrated for her.

Hillary Super: Elizabeth joins VS&Co as a respected marketing strategist with more than 25 years of experience in fashion, beauty. She has celebrated for her unparalleled acumen in crafting culturally relevant customer experiences informed by data and driven by creative story.

Sleep: In parallel the acumen and crafting culturally relevant customer experiences informed by data and driven by creative storytelling.

Hillary Super: Finally, Adam Selman has been appointed Senior Vice President and Executive Creative Director of Rapporteurs. Adam is a multi-hyphenate creative who operates at the crossroads of commerce. He has built his own label and has had a notable career creating custom looks for celebrities like Beyonce and Katy Perry, as well as designing Rihanna looks for the Victoria's Secret Fashion Show.

Sleep: Finally, Adam Selman has been appointed senior Vice President and executive Creative Director reporting tool is that Adam is a multi hyphenate creative who operates at the crossroads of Commerce and culture. He has built his own label and has had notable career, creating custom looks for celebrities like beyonce and Katy Perry as well as designing Rihanna.

Sleep: Looks for the Victoria's secret fashion show performances.

Hillary Super: Adam is the ideal expert to steward our brands into their next... These brand and product leaders join our existing team of highly skilled and tenured operational With their combined expertise, I have full confidence in our ability to drive sustainability. Looking ahead to the remainder of the year, our success will be driven by focused expertise. Scott will discuss our outlook shortly, but I'm pleased to say we are maintaining our forecasted net sales range of $6.2 billion to $6.3 billion for fiscal year 2020. This reflects our belief that we're well-positioned to navigate a complex, challenging market environment.

Speaker Change: Adam is the ideal expert to Stewart our brands into their next chapter.

Hillary Super: These brand and product leaders join our existing team of highly skilled and tenured operational leaders. With their combined expertise, I have full confidence in our ability to drive sustained growth. Looking ahead to the remainder of the year, our success will be driven by focused execution. Scott will discuss our outlook shortly, but I'm pleased to say we are maintaining our forecasted net sales range of $6.2 billion to 6.3 billion for fiscal year 2025. This reflects our belief that we're well-positioned to navigate a complex, challenging market environment. We will clarify, differentiate, and elevate our brand identities and projections by redefining PINK to meet the next generation where she is and ushering in a new era of sexy for VS. Deliver product newness and innovation to meet customers' evolving preferences by delivering innovative launches, increasing our fashion relevancy, and continuing to shorten product creation timelines.

Sleep: These brands these brand and product leaders join our existing team of highly skilled and tenured operational leaders with their combined expertise I have full confidence in our ability to drive sustained growth.

Sleep: Yeah.

Sleep: Looking ahead to the remainder of the year, our success will be driven by focused execution, Scott will discuss our outlook shortly but I'm pleased to say we are maintaining our forecasted net sales range of $6 2 billion to $6 3 billion for fiscal year 2025. This reflects our belief that we're well positioned to navigate a complex challenging market.

Sleep: <unk>.

Hillary Super: We will clarify, differentiate, and elevate our brand identities and projections by redefining pink to meet the next generation where she is and ushering in a new era of sexy. Deliver product newness and innovation to meet customers' evolving preferences by delivering innovative launches, increasing our fashion relevancy, and continuing to shorten product creation. Evaluate our entire marketing funnel for both optimization and brand differentiation, focusing on efficient, targeted investment. to drive conversion and maximize return on marketing spend with a sharpened focus on acquisition. Use the power of our global footprint to create best-in-class experiences that resonate across all markets.

Sleep: We will clarify differentiate and elevate our brand identities and projections by redefining pink to meet the next generation, where she is in ushering in a new era of sexy for B S.

Sleep: Deliver product newness and innovation to meet customers evolving preferences by delivering innovative launches, increasing our fashion relevancy and continuing to shorten product creation timelines.

Hillary Super: Evaluate our entire marketing funnel for both optimization and brand differentiation, focusing on efficient, targeted investments to drive conversion and maximize return on marketing spend with a sharpened focus on acquisition. Use the power of our global footprint to create best-in-class experiences that resonate across all markets. We will meet customers where they are while ensuring physical and digital touchpoints that reinforce the high standard of quality, service, and innovation that define our brands. Finally, we will continue to engage with cultural moments, delivering entertaining, inspiring experiences that captivate both new and existing customers, reinforcing our position as the original entertainment brand. In closing, I'm confident in what 2025 and beyond holds for VS & Co. While we anticipate some continued uncertainty in the macro environment, we remain pleased with the strong performance of our core business and our strategy to drive long-term, sustainable growth.

Sleep: Evaluate our entire marketing funnel for both optimization and brand differentiation focusing on efficient targeted investments to drive conversion and maximize return on marketing spend with a sharpened focus on acquisition.

Sleep: He was the power of our global footprint to create best in class experiences that resonate across all markets, we will meet customers, where they are while ensuring the physical and digital touch points that reinforce the high standard of quality service and innovation that define our brands.

Hillary Super: We will meet customers where they are while ensuring physical and digital touchpoints that reinforce the high standard of quality, service, and innovation that define us. Finally, we will continue to engage with cultural moments, delivering entertaining, inspiring experiences that captivate both new and existing customers, reinforcing our position as the original entertainer.

Sleep: Finally, we will continue to engage with cultural moments delivering entertaining inspiring experiences.

Sleep: Debate, both new and existing customers reinforcing our position as the original entertainment brand.

Hillary Super: And in closing, I'm confident in what 2025 and beyond holds for Vietnam. While we anticipate some continued uncertainty in the macro environment, we remain pleased with the strong performance of our core business and our strategy to drive long-term sustainable With our talented team, we are poised to execute on our strategy, delivering the high-emotion fashion and brand stories that resonate with our customers.

Sleep: In closing I'm confident in what 2025 and beyond holds for V. S and co. While we anticipate some continued uncertainty in the macro environment. We remain pleased with the strong performance of our core business and our strategy to drive long term sustainable growth with.

Hillary Super: With our talented team, we are poised to execute on our strategy, delivering the high-emotion fashion and brand stories that resonate with our customers. Most importantly, we are stepping into a new era of sexy. Thank you all for your continued support. I'll now hand it over to Scott.

Sleep: With our talented team we are poised to execute on our strategy delivering the high emotion fashion and brand stories that resonate with our customers.

Hillary Super: And most importantly, we are stepping into a new era. Thank you all for your continued support.

Sleep: And most importantly, we are stepping into a new era of sexy. Thank you all for your continued support I'll now hand, it over to Scott.

Scott Sekella: I'll now hand it over. Thanks, Hillary. I first want to echo Hillary's pride in our organization's exceptional resilience during these dynamic times. Our base business has remained strong despite the environment, navigating tariffs, and a recent security issue. Our teams have demonstrated remarkable focus and have stayed disciplined on the fundamentals we can control while protecting strategic investments in our product innovation, brand strength, and customer experience.

Kevin Wynk: Thanks, Hillary. I first want to echo Hillary's pride in our organization's exceptional resilience during these dynamic times. Our base business has remained strong despite the environment, navigating tariffs, and a recent security incident. Our teams have demonstrated remarkable focus and have stayed disciplined on the fundamentals we can control while protecting strategic investments in our product innovation, brand strength, and customer experience, investments that will drive sustainable growth and competitive advantage over the long term. Now, a review of our results. We delivered Q1 net sales of $1.353 billion and adjusted operating income of $32 million, both exceeding our guidance ranges provided in early March. Our adjusted net income per diluted share came in at $0.09, one cent shy of the upper end of our guidance range.

Scott Sekella: Thanks, Hillary. I first want to echo Hillary's pride in our organization's exceptional resilience during these dynamic times. Our base business has remained strong despite the environment, navigating tariffs, and a recent security incident. Our teams have demonstrated remarkable focus and have stayed disciplined on the fundamentals we can control while protecting strategic investments in our product innovation, brand strength, and customer experience, investments that will drive sustainable growth and competitive advantage over the long term. Now, a review of our results. We delivered Q1 net sales of $1.353 billion and adjusted operating income of $32 million, both exceeding our guidance ranges provided in early March. Our adjusted net income per diluted share came in at $0.09, one cent shy of the upper end of our guidance range.

Speaker Change: Actually the first one is that those deliveries pride in our organization is exceptional resilience during these dynamic times.

Sleep: Our base business has remained strong despite the environment now, Virginia tariffs and a recent security incident.

Sleep: Our teams have demonstrated remarkable focus and have stayed disciplined on the fundamentals, we can control while protecting strategic investments in our product innovation brand strength and customer experience investments that will drive sustainable growth and competitive advantage over the long term.

Scott Sekella: Investments that will drive sustainable growth and competitive advantage over the long term.

Scott Sekella: Now, a review of our results. We delivered first quarter net sales of $1.353 billion and adjusted operating income of $32 million, both exceeding our guidance ranges provided in early March. Our adjusted net income per diluted share came in at 9 cents, 1 cent shy of the upper end of our guide.

Sleep: Now a review of our results we.

Sleep: We delivered first quarter net sales of 1.353 billion and adjusted operating income of 32 million both exceeding our guidance ranges provided in early March our adjusted net income per diluted share came in at nine one.

Sleep: One said shot of the upper end of our guidance range.

Kevin Wynk: On the top line, February's challenging results reversed sharply in the March-April or MARPL period as we registered positive year-over-year growth, benefiting from an increase in traffic, with traffic in our stores nicely outpacing traffic for the balance of the mall. From a brand perspective for the quarter, both Victoria's Secret and PINK registered a slight year-over-year retail sales decline while beauty was up low single digits. From a regional perspective, we registered strong, high single-digit growth in our international operations while our North American business was essentially flat for the period. For both Victoria's Secret and PINK, digital channels slightly outpaced stores. Total Q1 comparable sales contracted 1% compared to the prior year, with a comparative low single-digit decline in traffic in both our stores and digital channels, largely offset by low single-digit growth in the average transaction value across channels.

Scott Sekella: On the top line, February's challenging results reversed sharply in the March-April or MARPL period as we registered positive year-over-year growth, benefiting from an increase in traffic, with traffic in our stores nicely outpacing traffic for the balance of the mall. From a brand perspective for the quarter, both Victoria's Secret and PINK registered a slight year-over-year retail sales decline while beauty was up low single digits. From a regional perspective, we registered strong, high single-digit growth in our international operations while our North American business was essentially flat for the period. For both Victoria's Secret and PINK, digital channels slightly outpaced stores. Total Q1 comparable sales contracted 1% compared to the prior year, with a comparative low single-digit decline in traffic in both our stores and digital channels, largely offset by low single-digit growth in the average transaction value across channels.

Scott Sekella: On the top line, February's challenging results reversed sharply in the March-April, or Marple, period as we registered positive year-over-year growth, benefiting from an increase in traffic, with traffic in our stores nicely outpacing traffic for the balance of the mall. From a brand perspective for the quarter, both Victoria's Secret and Pink registered a slight year-over-year retail sales decline, while Beauty was up low single day. From a regional perspective, we registered strong, high single-digit growth in our international operations. while our North American business was essentially flat for the period. For both Victoria's Secret and Pink, digital channels slightly outpaced.

Sleep: On the top one February was challenging results reverse sharply in the March April or multiple period as we registered positive year over year growth benefiting from an increase in traffic with traffic in our stores basically outpacing traffic for the balance of the mall.

Sleep: From a brand perspective for the quarter, both Victoria's secret and pink registered a slight year over year retail sales declined while beauty was up low single digits from a regional perspective, we registered strong high single digit growth in our international operations, while our North American business was essentially flat for the period for both Victoria.

Sleep: Digital channels slightly out through stores.

Scott Sekella: Total first quarter comparable sales contracted 1% compared to the prior year with a comparative low single-digit decline in traffic in both our stores and digital channels, largely offset by low single-digit growth in the average transaction value across. AURs were up 2% in the quarter, driven by pink and beauty increases, while VS was flat. As I mentioned, we saw continued strength in our international business. Reported first quarter international sales grew 9% to nearly $200 million, while system-wide retail sales increased by low double digits year over year. The strong growth was fueled by a combination of healthy, high-single-digit, comparable sales gains in our existing fleet, as well as continued real estate expansion.

Sleep: Total first quarter comparable sales contracted 1% compared to the prior year with a comparatively low single digit decline in traffic in both our stores and digital channels, largely offset by low single digit growth in the average transaction value across channels.

Kevin Wynk: AURs were up 2% in the quarter, driven by Pink and beauty increases, while VS was flat. As I mentioned, we saw continued strength in our international business. Reported Q1 international sales grew 9% to nearly $200 million, while system-wide retail sales increased by low double digits year-over-year. The strong growth was fueled by a combination of healthy, high single-digit comparable sales gains in our existing fleet, as well as continued real estate expansion. We saw particular strength in our China business, primarily driven by the digital channel as we registered strong double-digit growth in the period. Q1 adjusted gross margin dollars were $476 million, and our adjusted gross margin rate was 35.2%, or a decline of 170 basis points compared to Q1 2024 and below our guidance of approximately 36.5%.

Scott Sekella: AURs were up 2% in the quarter, driven by Pink and beauty increases, while VS was flat. As I mentioned, we saw continued strength in our international business. Reported Q1 international sales grew 9% to nearly $200 million, while system-wide retail sales increased by low double digits year-over-year. The strong growth was fueled by a combination of healthy, high single-digit comparable sales gains in our existing fleet, as well as continued real estate expansion. We saw particular strength in our China business, primarily driven by the digital channel as we registered strong double-digit growth in the period. Q1 adjusted gross margin dollars were $476 million, and our adjusted gross margin rate was 35.2%, or a decline of 170 basis points compared to Q1 2024 and below our guidance of approximately 36.5%.

Sleep: Orders were up 2% in the quarter, driven by Pink and beauty increases will be us was what.

Sleep: As I mentioned, we saw continued strength in our international business.

Sleep: Ported first quarter International sales grew 9% to nearly 200 million or system wide retail sales increased by low double digits year over year the.

Sleep: The stronger growth was fueled by a combination of healthy high single digit comparable sales gains in our existing fleet as well as continued real estate expansion.

Scott Sekella: We saw particular strength in our China business, primarily driven by the digital channel, as we registered strong double-digit growth.

Sleep: Saw particular strength in our China business, primarily driven by the digital channel as we registered strong double digit growth for the period.

Scott Sekella: First quarter adjusted gross margin dollars were $476 million and our adjusted gross margin rate was 35.2% or a decline of 170 basis points compared to the first quarter of 2024 and below our guidance of approximately 36.5%. More than half of the gross margin rate pressure in the quarter was due to a combination of elevated and expected air freight rates. some tariff-related order adjustments, and a higher penetration of GWP activity, partially offset by a reduction in traditional promotional levels. Favorable gross margin rate drivers included cost benefits from our prudent approach to non-customer facing expense buckets, as well as buying and occupancy leverage from rent savings.

Sleep: First quarter adjusted gross margin dollars were 476 million and our adjusted gross margin rate was 35, 2% or a decline of 170 basis points compared to the first quarter of 2024.

Sleep: Below our guidance of approximately 36, 5%.

Kevin Wynk: More than half of the gross margin rate pressure in the quarter was due to a combination of elevated and expected air freight rates, some tariff-related order adjustments, and a higher penetration of GWP activity, partially offset by a reduction in traditional promotional levels. Favorable gross margin rate drivers included cost benefits from our prudent approach to non-customer-facing expense buckets, as well as buying and occupancy leverage from rent savings. Adjusted SG&A dollars were $444 million in the first quarter, and our adjusted SG&A rate was 32.8%, better than our guidance range of 34.5% to 35.5% and leveraging 120 basis points to the prior year adjusted SG&A rate of 34%.

Scott Sekella: More than half of the gross margin rate pressure in the quarter was due to a combination of elevated and expected air freight rates, some tariff-related order adjustments, and a higher penetration of GWP activity, partially offset by a reduction in traditional promotional levels. Favorable gross margin rate drivers included cost benefits from our prudent approach to non-customer-facing expense buckets, as well as buying and occupancy leverage from rent savings. Adjusted SG&A dollars were $444 million in the first quarter, and our adjusted SG&A rate was 32.8%, better than our guidance range of 34.5% to 35.5% and leveraging 120 basis points to the prior year adjusted SG&A rate of 34%.

Sleep: More than half of the gross margin rate pressure in the quarter was due to a combination of elevated than expected air freight rates.

Sleep: Some tariff related order adjustments.

Sleep: Higher penetration of GW P activity, partially offset by a reduction in traditional promotional levels favor.

Sleep: Favorable gross margin rate drivers included cost benefits from our prudent approach to non customer facing expense buckets, as well as buying and occupancy leverage from rent savings.

Scott Sekella: Adjusted SG&A dollars were $444 million in the first quarter, and our adjusted SG&A rate was 32.8 percent, better than our guidance range of 34.5 percent to 35.5 percent. and leveraging 120 basis points to the prior year adjusted STMA rate of 34%. Our better-than-prior-year and expected SG&A dollar and rate performance in the quarter was due in part to our accelerated efforts to pull back on non-product and non-customer investment and expense areas in the business. as well as a strategic shift in marketing span from Q1 into Q2.

Sleep: Adjusted SG&A dollars were 444 million in the first quarter and our adjusted SG&A rate was 32, 8% better than our guidance range of 34, 5% to 35, 5% and leveraging 120 basis points to the prior year adjusted SG&A rate of 34%.

Kevin Wynk: Our better-than-prior-year and expected SG&A dollar and rate performance in the quarter was due in part to our accelerated efforts to pull back on non-product and non-customer investment and expense areas of the business, as well as a strategic shift in marketing spend from Q1 into Q2. In light of the uncertain tariff environment, we are doubling down on our disciplined expense management across all aspects of the business. Adjusted non-operating expenses, consisting principally of interest expense, were $14 million in the quarter, better than our guidance and down from last year, driven by a lower level of weighted average borrowings and interest rates. Our first-quarter adjusted tax rate was 34%. Turning to the balance sheet, total inventories ended the first quarter up 6% compared to last year and in line with our guidance for mid-single-digit year-over-year growth.

Scott Sekella: Our better-than-prior-year and expected SG&A dollar and rate performance in the quarter was due in part to our accelerated efforts to pull back on non-product and non-customer investment and expense areas of the business, as well as a strategic shift in marketing spend from Q1 into Q2. In light of the uncertain tariff environment, we are doubling down on our disciplined expense management across all aspects of the business. Adjusted non-operating expenses, consisting principally of interest expense, were $14 million in the quarter, better than our guidance and down from last year, driven by a lower level of weighted average borrowings and interest rates. Our first-quarter adjusted tax rate was 34%. Turning to the balance sheet, total inventories ended the first quarter up 6% compared to last year and in line with our guidance for mid-single-digit year-over-year growth.

Sleep: Our better than prior year unexpected SG&A dollar in rate performance in the quarter was due in part to our accelerated efforts to pull back on non product in non customer investment and expense areas of the business as well as the strategic shifts in marketing spend from Q1 into Q2.

Scott Sekella: In light of the uncertain tariff environment, we are doubling down on our disciplined expense management across all aspects. Adjusted non-operating expenses, consisting principally of interest expense, were $14 million in the quarter, better than our guidance and down from last year, driven by a lower level of weighted average borrowings and interest rates. The first quarter adjusted tax rate was 34%. Turning to the balance sheet, total inventories ended the first quarter up 6% compared to last year and in line with our guidance for mid-single-digit year-over-year. From a liquidity standpoint, we ended the first quarter with a cash balance of 138 million, a strong balance sheet with sufficient liquidity to continue to execute on our strategic priorities.

Sleep: It might be uncertain tariff environment, we're doubling down on our disciplined expense management across all aspects of the business.

Sleep: Adjusted Nonoperating expenses.

Sleep: And principally of interest expense were $14 million in the quarter better than our guidance and down from last year, driven by a lower level of weighted average borrowings and interest rates, our first quarter adjusted tax rate was 34%.

Sleep: Turning to the balance sheet total inventories ended the first quarter up 6% compared to last year and in line with our guidance for mid single digit year over year growth.

Kevin Wynk: From a liquidity standpoint, we ended the first quarter with a cash balance of $138 million, a strong balance sheet with sufficient liquidity to continue to execute on our strategic priorities. At the end of the first quarter, our outstanding balance was $105 million under our $750 million ABL credit facility, down $40 million from the first quarter last year with seasonal borrowings as expected. In May, we successfully renewed our asset-based lending facility with a $750 million borrowing base and secured a 5-year term extension with favorable enhancements and lower interest rates that will generate annual savings. This refinancing strengthens our liquidity position while reducing our cost of capital and providing greater financial flexibility to execute our strategic initiatives. Now, moving on to our updated outlook for fiscal year 2025 and our outlook for the second quarter.

Scott Sekella: From a liquidity standpoint, we ended the first quarter with a cash balance of $138 million, a strong balance sheet with sufficient liquidity to continue to execute on our strategic priorities. At the end of the first quarter, our outstanding balance was $105 million under our $750 million ABL credit facility, down $40 million from the first quarter last year with seasonal borrowings as expected. In May, we successfully renewed our asset-based lending facility with a $750 million borrowing base and secured a 5-year term extension with favorable enhancements and lower interest rates that will generate annual savings. This refinancing strengthens our liquidity position while reducing our cost of capital and providing greater financial flexibility to execute our strategic initiatives. Now, moving on to our updated outlook for fiscal year 2025 and our outlook for the second quarter.

Sleep: From a liquidity standpoint, we ended the first quarter with a cash balance of $138 million with strong balance sheet with sufficient liquidity to continue to execute on our strategic priorities.

Scott Sekella: At the end of the first quarter, our outstanding balance was $105 million under our $750 million ABL credit facility, down $40 million from the first quarter of last year with seasonal borrowings as expected.

Sleep: At the end of the first quarter, our outstanding balance was $105 million under our $750 million ABL credit facility down $40 million from the first quarter of last year with seasonal borrowings is expected.

Scott Sekella: In May, we successfully renewed our asset-based lending facility with a $750 million borrowing base and secured a five-year term extension with favorable enhancements and lower interest rates that will generate annual savings. This refinancing strengthens our liquidity position while reducing our cost of capital and providing greater financial flexibility to execute our strategic initiatives.

Sleep: In May we successfully renewed our asset based lending facility with the $750 million borrowing base and secured a five year term extension with favorable enhancements and lower interest rates that will generate annual savings.

Sleep: This refinancing strengthens our liquidity position, while reducing our cost of capital and providing greater financial flexibility to execute our strategic initiatives.

Scott Sekella: Now moving on to our updated outlook for fiscal year 2025 and our outlook for the second As Hillary mentioned, for fiscal year 2025, we are maintaining our forecasted net sales range of $6.2 billion to $6.3 billion, compared to net sales of $6.204 billion in fiscal year 2024, which excludes the gift card breakage benefit of $26 million recognized in the fourth quarter of 2021. At this forecasted level of sales, we now expect our adjusted operating income for fiscal year 2025 to be in the range of 270 million to 320 million. The revised outlook includes a gross tariff impact of approximately 120 million, which assumes 30% China tariffs and 10% non-China with tariff mitigation of approximately 70 million for a net impact to fiscal year 2025 of approximately 50 million.

Sleep: Now moving on to our updated outlook for fiscal year, 2025, and our outlook for the second quarter.

Kevin Wynk: As Hillary mentioned, for fiscal year 2025, we are maintaining our forecasted net sales range of $6.2 billion to 6.3 billion compared to net sales of $6.204 billion in fiscal year 2024, which excludes the gift card breakage benefit of $26 million recognized in Q4 2024. At this forecasted level of sales, we now expect our adjusted operating income for fiscal year 2025 to be in the range of $270 million to 320 million. The revised outlook includes a gross tariff impact of approximately $120 million, which assumes 30% China tariffs and 10% non-China, with tariff mitigation of approximately $70 million for a net impact to fiscal year 2025 of approximately $50 million.

Scott Sekella: As Hillary mentioned, for fiscal year 2025, we are maintaining our forecasted net sales range of $6.2 billion to 6.3 billion compared to net sales of $6.204 billion in fiscal year 2024, which excludes the gift card breakage benefit of $26 million recognized in Q4 2024. At this forecasted level of sales, we now expect our adjusted operating income for fiscal year 2025 to be in the range of $270 million to 320 million. The revised outlook includes a gross tariff impact of approximately $120 million, which assumes 30% China tariffs and 10% non-China, with tariff mitigation of approximately $70 million for a net impact to fiscal year 2025 of approximately $50 million.

Sleep: As Hilary mentioned for fiscal year 2025, we are maintaining our forecasted net sales range of $6 2 billion to $6 3 billion compared to net sales of 6.204 billion in fiscal year, 2024, which excludes the gift card breakage benefit of 26 million recognized in the fourth quarter of 2020.

Sleep: Sure.

Sleep: At this forecasted level of sales, we now expect our adjusted operating income for fiscal year 2025 to be in the range of $270 million to $320 million.

Sleep: The outlook includes the gross tariff impact of approximately $120 million, which assumes 30% China tariffs at 10% non China with tariff mitigation of approximately $70 million for a net impact of fiscal year 2025 of approximately 50 million.

Scott Sekella: Our mitigation levers include cost optimization with vendors, additional sourcing diversification, a more efficient air-to-ocean freight mix, and a combination of select pricing adjustments through more targeted promotions and strategic price modifications where we see a value proposition gap in the market. The adjusted non-operating expenses, consisting principally of interest expense, are projected to be about $70 million for fiscal year 2025, down from the $84 million in fiscal year 2024, driven by expected lower levels of weighted average borrowings, along with lower interest We estimate our adjusted tax rate will be approximately 24% to 25% for fiscal year 2025.

Kevin Wynk: Our mitigation levers include cost optimization with vendors, additional sourcing diversification, a more efficient air-to-ocean freight mix, and a combination of select pricing adjustments through more targeted promotions and strategic price modifications where we see a value proposition gap in the marketplace. Adjusted non-operating expenses, consisting principally of interest expense, are projected to be about $70 million for fiscal year 2025, down from the $84 million in fiscal year 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates. We estimate our adjusted tax rate will be approximately 24% to 25% for fiscal year 2025. We estimate weighted average diluted shares outstanding of approximately 82 million for Q2 and 83 million for fiscal year 2025.

Scott Sekella: Our mitigation levers include cost optimization with vendors, additional sourcing diversification, a more efficient air-to-ocean freight mix, and a combination of select pricing adjustments through more targeted promotions and strategic price modifications where we see a value proposition gap in the marketplace. Adjusted non-operating expenses, consisting principally of interest expense, are projected to be about $70 million for fiscal year 2025, down from the $84 million in fiscal year 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates. We estimate our adjusted tax rate will be approximately 24% to 25% for fiscal year 2025. We estimate weighted average diluted shares outstanding of approximately 82 million for Q2 and 83 million for fiscal year 2025.

Sleep: Our mitigation levers include cost optimization with vendors additional sourcing diversification.

Sleep: More efficient air to Ocean freight mix and a combination of select pricing adjustments through more targeted promotions and strategic price modifications, where we see a value proposition gap in the marketplace.

Sleep: Adjusted non operating expenses, consisting principally of interest expense are projected to be about $70 million for fiscal year 2025 down from the $84 million in fiscal year 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates.

Sleep: We estimate our adjusted tax rate will be approximately 24% to 25% for fiscal year 2025.

Scott Sekella: We estimate weighted average diluted shares outstanding of approximately $82 million for the second quarter and $83 million for fiscal year 2025. Given these inputs, we are forecasting fiscal year 2025, adjusted net income per diluted share to be in the range of $1.80 to $2.20 compared to adjusted net income per diluted share of $2.69 in fiscal year 2024.

Sleep: We estimate weighted average diluted shares outstanding of approximately 82 million for the second quarter and $83 million for fiscal year 2025.

Kevin Wynk: Given these inputs, we are forecasting fiscal year 2025 adjusted net income per diluted share to be in the range of $1.80 to $2.20 compared to adjusted net income per diluted share of $2.69 in fiscal year 2024. In light of the uncertain macro environment, we now estimate capital expenditures of approximately $220 million in fiscal year 2025, down from our prior forecast of $240 million. Capital investments will be primarily focused on our store capital program along with investments in technology and logistics related to our strategic initiatives to drive growth and support productivity. Depreciation expense is estimated to be approximately $220 million in fiscal year 2025. We now expect adjusted free cash flow of approximately $150 million to 200 million in fiscal year 2025. In 2025, we plan to open approximately 16 new stores in North America, mostly in the Store of the Future design and off-mall locations.

Scott Sekella: Given these inputs, we are forecasting fiscal year 2025 adjusted net income per diluted share to be in the range of $1.80 to $2.20 compared to adjusted net income per diluted share of $2.69 in fiscal year 2024. In light of the uncertain macro environment, we now estimate capital expenditures of approximately $220 million in fiscal year 2025, down from our prior forecast of $240 million. Capital investments will be primarily focused on our store capital program along with investments in technology and logistics related to our strategic initiatives to drive growth and support productivity. Depreciation expense is estimated to be approximately $220 million in fiscal year 2025. We now expect adjusted free cash flow of approximately $150 million to 200 million in fiscal year 2025. In 2025, we plan to open approximately 16 new stores in North America, mostly in the Store of the Future design and off-mall locations.

Sleep: Given these inputs we are forecasting fiscal year 2025, adjusted net income per diluted share to be in the range of $1 80 to $2 20 compared to adjusted net income per diluted share of $2 69 in fiscal year 2024.

Scott Sekella: In light of the uncertain macro environment, we now estimate capital expenditures of approximately $220 million in fiscal year 2025, down from our prior forecast of $240 million. Capital Investments will be primarily focused on our store capital program, along with investments in technology and logistics related to our strategic initiatives to drive growth and support product Appreciation expense is estimated to be approximately $220 million in fiscal year 2020. We now expect adjusted free cash flow of approximately $150 million to $200 million in fiscal year 2022. In 2025, we plan to open approximately 16 new stores in North America, mostly in the store of the future design and off-mall locations.

Sleep: In light of the uncertain macro environment, we now estimate capital expenditures of approximately $220 million in fiscal year 2025 down from our prior forecast of $240 million.

Sleep: Capital investments will be primarily focused on our store capital program, along with investments in technology and logistics related to our strategic initiatives to drive growth and support productivity.

Sleep: Depreciation expense is estimated to be approximately $220 million in fiscal year 2025.

Sleep: We now expect adjusted free cash flow of approximately $150 million to $200 million fiscal year 2025.

Sleep: The 2025, we plan to open approximately 16, new stores in North America, mostly in the store of the future design and off mall locations.

Kevin Wynk: We estimate approximately 30 to 40 store closures in 2025, which will mostly be consolidations of co-located Victoria's Secret and PINK stores. We also expect about 40 renovations in North America in the Store-of-the-Future design in 2025, with the majority consisting of square footage reductions or consolidations of co-located Victoria's Secret and PINK stores. Square footage in our North America stores in 2025 is expected to decrease approximately 2 to 3% compared to 2024. At the end of 2025 in North America, we estimate our Store-of-the-Future presence will be approximately 190 stores or approximately 25% of the fleet. Internationally, we estimate our Store-of-the-Future presence at the end of 2025 will be approximately 230 to 250 stores or nearly 40% of the international fleet.

Scott Sekella: We estimate approximately 30 to 40 store closures in 2025, which will mostly be consolidations of co-located Victoria's Secret and PINK stores. We also expect about 40 renovations in North America in the Store-of-the-Future design in 2025, with the majority consisting of square footage reductions or consolidations of co-located Victoria's Secret and PINK stores. Square footage in our North America stores in 2025 is expected to decrease approximately 2 to 3% compared to 2024. At the end of 2025 in North America, we estimate our Store-of-the-Future presence will be approximately 190 stores or approximately 25% of the fleet. Internationally, we estimate our Store-of-the-Future presence at the end of 2025 will be approximately 230 to 250 stores or nearly 40% of the international fleet.

Scott Sekella: We estimate approximately 30 to 40 store closures in 2025, which will mostly be consolidations of co-located Victoria's Secret and Pinky. We also expect about 40 renovations in North America in the store of the future design of 2020. with the majority consisting of square footage reductions or consolidations of co-located Victoria's Secret Investments. Square footage in our North America stores in 2025 is expected to decrease approximately 2-3% compared to 2024. At the end of 2025 in North America, we estimate our store-of-the-future presence will be approximately 190 stores, or approximately 25% of them. Internationally, we estimate our store of the future presence at the end of 2025 will be approximately 230 to 250 stores, or nearly 40% of the international.

Sleep: Estimate approximately 30 to 40 store closures in 2025, which will mostly be consolidations of co located Victoria's secret and pink stores we.

Sleep: We also expect about 40 renovations in North America in the store of the future design in 2025 with the majority consisting of square footage reductions or consolidations of co located Victoria's secret and pink stores.

Sleep: Square footage in our North American stores in 2025 is expected to decrease approximately 2% to 3% compared to 2024.

Sleep: At the end of 2025 in North America, we estimate our store of the future presence will be approximately 109, new stores or approximately 25% of the fleet.

Sleep: Nationally, we estimate our store of the future presence at the end of 2025 will be approximately 230 to 250 stores or nearly 40% of the international fleet.

Scott Sekella: Turning to our outlook for the second quarter, we are forecasting net sales in a range of $1.38 billion to $1.41 billion, compared to net sales of $1.417 billion in second quarter 2025. This forecast assumes an approximate $20 million debt sales impact from the security. The forecast also assumes down-low single-digit top-line performance in our North American business. The semiannual sale is scheduled one week earlier than last year, running for the same duration, and positioned with units down double digits compared to last year. The forecast assumes continued strength in our internet. The tariff headwind built into our second-quarter forecast is approximately $10 million, the bulk of which, due to timing of the rate changes, we were not able to impact through the mitigation levers I just mentioned.

Kevin Wynk: Turning to our outlook for the second quarter, we are forecasting net sales in a range of $1.38 billion to 1.41 billion compared to net sales of $1.417 billion in second quarter 2024. This forecast assumes an approximate $20 million net sales impact from the security incident. Our forecast also assumes down low-single-digit top-line performance in our North American business, with the semi-annual sales scheduled one week earlier than last year, running for the same duration and position with units down double-digit compared to last year. Our forecast assumes continued strength in our international business. At this forecasted level of sales, including known costs related to the security incident, we expect second quarter 2025 adjusted operating income to be in the range of $15 million to 35 million compared to adjusted operating income of $62 million in the second quarter of 2024.

Scott Sekella: Turning to our outlook for the second quarter, we are forecasting net sales in a range of $1.38 billion to 1.41 billion compared to net sales of $1.417 billion in second quarter 2024. This forecast assumes an approximate $20 million net sales impact from the security incident. Our forecast also assumes down low-single-digit top-line performance in our North American business, with the semi-annual sales scheduled one week earlier than last year, running for the same duration and position with units down double-digit compared to last year. Our forecast assumes continued strength in our international business. At this forecasted level of sales, including known costs related to the security incident, we expect second quarter 2025 adjusted operating income to be in the range of $15 million to 35 million compared to adjusted operating income of $62 million in the second quarter of 2024.

Sleep: Turning to our outlook for the second quarter, we are forecasting net sales in a range of $1 38 billion to $1 four 1 billion compared to net sales of 1.417 billion in second quarter 2024.

Sleep: This forecast assumes an approximate 20 million net sales impact from the security and so.

Sleep: Our forecast also assumes down low single digit top line performance in our North American business with the semiannual sale scheduled one week earlier than last year running for the same duration and position with units down double digits compared to last year.

Sleep: Our forecast assumes continued strength in our international business.

Sleep: At this forecasted level of sales, including known costs related to the security incident, we expect second quarter 2025, adjusted operating income to be in the range of 15 million to $35 million compared to adjusted operating income of $62 million in the second quarter of 2024.

Kevin Wynk: The tariff headwind built into our second quarter forecast is approximately $10 million, the bulk of which, due to timing of the rate changes, we were not able to impact through the mitigation levers I just mentioned. In addition, the strategic marketing shift benefit I called out for Q1 will unfavorably impact Q2. Offsetting to these higher year-over-year costs is our continued non-customer-facing expense actions, lower incentive comp, and a slight improvement in our selling margin due to the significantly lower level of units in our semi-annual sale this year compared to last year. This forecast also assumes an approximate $10 million operating income impact from the security incident in the second quarter, excluding any consideration of insurance reimbursement.

Scott Sekella: The tariff headwind built into our second quarter forecast is approximately $10 million, the bulk of which, due to timing of the rate changes, we were not able to impact through the mitigation levers I just mentioned. In addition, the strategic marketing shift benefit I called out for Q1 will unfavorably impact Q2. Offsetting to these higher year-over-year costs is our continued non-customer-facing expense actions, lower incentive comp, and a slight improvement in our selling margin due to the significantly lower level of units in our semi-annual sale this year compared to last year. This forecast also assumes an approximate $10 million operating income impact from the security incident in the second quarter, excluding any consideration of insurance reimbursement.

Sleep: The tariff headwinds built into our second quarter forecast is approximately $10 billion, the bulk of which due to timing of the rate changes, we were not able to impart through the mitigation levers I just mentioned.

Scott Sekella: In addition, the strategic marketing shift benefit I called out for Q1 will unfavorably impact Q2. Offsetting to these higher year-over-year costs is our continued non-customer facing expense actions, lower incentive comp, and a slight improvement in our selling margin due to the significantly lower level of units in our semi-annual sale this year compared to last year. This forecast also assumes an approximate $10 million operating income impact from the security incident in the second quarter, excluding any consideration of insurance reimbursement. We are forecasting second quarter 2025 adjusted net income per diluted share to be in the range of zero to 15 cents compared to adjusted net income per diluted share of 40 cents in the second quarter.

Sleep: In addition, the strategic marketing shift benefit I called out for Q1 will unfavorably impact Q2.

Sleep: Offsetting these higher year over year cost as our continued non customer facing expense actions lower incentive comp and a slight improvement in our selling margin due to the significantly lower level of units and our semiannual sale this year compared to last year.

Sleep: The sport test also assumes an approximate $10 million operating income impact from the security incident in the second quarter, excluding any consideration of insurance reimbursement.

Kevin Wynk: We are forecasting Q2 2025 adjusted net income per diluted share to be in the range of $0.00 to $0.15 compared to adjusted net income per diluted share of $0.40 in Q2 2024. We expect the Q2 2025 adjusted gross margin rate to be approximately 35% compared to Q2 2024's adjusted rate of 35.4%. The adjusted SG&A rate in Q2 2025 is expected to be approximately 33% compared to Q2 2024's adjusted rate of 31%. SG&A dollars are forecasted to increase approximately 5%. We anticipate net adjusted non-operating expense, again consisting principally of interest expense, of approximately $17 million in Q2 2025, down from $20 million in Q2 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates.

Scott Sekella: We are forecasting Q2 2025 adjusted net income per diluted share to be in the range of $0.00 to $0.15 compared to adjusted net income per diluted share of $0.40 in Q2 2024. We expect the Q2 2025 adjusted gross margin rate to be approximately 35% compared to Q2 2024's adjusted rate of 35.4%. The adjusted SG&A rate in Q2 2025 is expected to be approximately 33% compared to Q2 2024's adjusted rate of 31%. SG&A dollars are forecasted to increase approximately 5%. We anticipate net adjusted non-operating expense, again consisting principally of interest expense, of approximately $17 million in Q2 2025, down from $20 million in Q2 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates.

Sleep: We are forecasting second quarter 2025, adjusted net income per diluted share to be in the range of zero to 15 cents compared to adjusted net income per diluted share of <unk> 40 in the second quarter of 2024.

Scott Sekella: We expect the second quarter 2025 adjusted gross margin rate to be approximately 35%, compared to second quarter 2024's adjusted rate of 35.4%. The adjusted SG&A rate in the second quarter 2025 is expected to be approximately 33% compared to the second quarter 2024's adjusted rate of 31%. As G&A dollars are forecasted to increase approximately $500,000. We anticipate net adjusted non-operating expense, again, consisting principally of interest expense of approximately $17 million in the second quarter of 2025, down from $20 million in the second quarter of 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates.

Sleep: We expect the second quarter 2025, adjusted gross margin rate to be approximately 35%.

Sleep: <unk> second quarter 2024, as adjusted rate of 35, 4%.

Sleep: The adjusted SG&A rate in the second quarter 2025 is expected to be approximately 33% compared to the second quarter 2020 fours adjusted rate of 31% S.

Sleep: SG&A dollars are forecasted to increase approximately 5%.

Sleep: We anticipate.

Sleep: Just the nonoperating expense again, consisting principally of interest expense of approximately $17 million in the second quarter 2025 down from $20 million in the second quarter of 2024, driven by expected lower levels of weighted average borrowings along with lower interest rates.

Kevin Wynk: We estimate adjusted tax expense in Q2 2025 will be approximately $0 to 5 million. We expect total inventories in Q2 2025 up mid-single digits compared to last year. In closing, I want to reinforce what we shared throughout today's call. While we continue to navigate an uncertain macro environment with ongoing tariff dynamics and the impacts from our recent security incident, our base business fundamentals remain solid and resilient. We are maintaining our disciplined approach, focusing on what we can control: operational excellence, strategic capital allocation, and continued investment in the capabilities that differentiate us in the marketplace. Our team's ability to execute through these challenges gives me confidence in our positioning as we move forward. We remain committed to delivering value for our shareholders while building the foundation for sustained long-term profitable growth. With that, we will open the lines for your questions.

Scott Sekella: We estimate adjusted tax expense in Q2 2025 will be approximately $0 to 5 million. We expect total inventories in Q2 2025 up mid-single digits compared to last year. In closing, I want to reinforce what we shared throughout today's call. While we continue to navigate an uncertain macro environment with ongoing tariff dynamics and the impacts from our recent security incident, our base business fundamentals remain solid and resilient. We are maintaining our disciplined approach, focusing on what we can control: operational excellence, strategic capital allocation, and continued investment in the capabilities that differentiate us in the marketplace. Our team's ability to execute through these challenges gives me confidence in our positioning as we move forward. We remain committed to delivering value for our shareholders while building the foundation for sustained long-term profitable growth. With that, we will open the lines for your questions. Operator?

Scott Sekella: We estimate adjusted tax expense in the second quarter of 2025 will be approximately $0 to $5 million. We expect total inventories in the second quarter of 2025 of mid-single digits compared to last year.

Sleep: We estimated adjusted tax expense in the second quarter 2025 would be approximately zero to $5 million.

Sleep: We expect total inventories in the second quarter of 2025 up mid single digits compared to last year.

Scott Sekella: In closing, I want to reinforce what we've shared throughout today's call. While we continue to navigate an uncertain macro environment with ongoing tariff dynamics and the impacts from our recent security This is a Team's ability to execute through these challenges gives me confidence in our positioning as we move forward. We remain committed to delivering value for our shareholders while building the foundation for sustained long-term profitable.

Sleep: In closing I want to reinforce what we shared throughout today's call. While we continue to navigate an uncertain macro environment with ongoing tariff dynamics and the impacts from our recent security incident, our base business fundamentals remain solid and resilient, we're maintaining our disciplined approach focusing on what we can control.

Sleep: Parishional excellence strategic capital allocation and continued investment in the capabilities that differentiate us in the marketplace. Our teams ability to execute through these challenges gives me confidence in our positioning as we move forward we remain.

Sleep: Committed to delivering value for our shareholders while building the foundation for sustained long term profitable growth.

Operator: With that, we will open the lines for your questions. Operator? Ladies and gentlemen, if you wish to ask a question, please press star 1 and record your name clearly when prompted. To withdraw your question at any time, you may press star then 2.

Sleep: With that we will open the lines for your questions operator.

Kevin Wynk: Operator? Ladies and gentlemen, if you wish to ask a question, please press star one and record your name clearly when prompted. To withdraw your question at any time, you may press star then two. As a reminder, we ask that each participant limit themselves to one question and one follow-up to allow ample time to respond to each participant that may wish to participate in this portion of the call. For our first question, we will go to the line of Brooke Roach from Goldman Sachs. Your line is open. Good morning, and thank you for taking my question. Hillary, I was hoping you could dive a little bit deeper into the marketing strategy that you're planning for the rest of the year and into the future following the hiring of the new chief marketing officer.

Operator: Ladies and gentlemen, if you wish to ask a question, please press star one and record your name clearly when prompted. To withdraw your question at any time, you may press star then two. As a reminder, we ask that each participant limit themselves to one question and one follow-up to allow ample time to respond to each participant that may wish to participate in this portion of the call. For our first question, we will go to the line of Brooke Roach from Goldman Sachs. Your line is open.

Speaker Change: Ladies and gentlemen, if you wish to ask a question. Please press star one and record your name clearly when prompted.

Sleep: Draw. Your question at any time, you May Press Star then two as a reminder, we ask that each participant limit themselves to one question and one follow up to allow ample time to respond to each participant that may wish to participate in this portion of the call.

Operator: As a reminder, we ask that each participant limit themselves to one question and one follow-up to allow ample time to respond to each participant that may wish to participate in this portion of the call.

Brooke Roach: For our first question, we will go to the line of Brooke Roach from Goldman Sachs. Your line is open. Good morning, and thank you for taking my question.

Speaker Change: Our first question, we will go to the line of Brooke Roach from Goldman Sachs. Your line is open.

Brooke Roach: Good morning, and thank you for taking my question. Hillary, I was hoping you could dive a little bit deeper into the marketing strategy that you're planning for the rest of the year and into the future following the hiring of the new chief marketing officer. What plans do you have to engage customers in a stronger way to drive better comp sales in the back half of the year, and what changes should we expect in terms of the messaging for the customer on a go-forward basis?

Brooke Roach: Good morning, and thank you for taking my question Hillary I was hoping you could dive a little bit deeper into the marketing strategy that you're planning for the rest of the year and into the future. Following the hiring of a new chief marketing officer, what plans do you have to engage customers in a stronger way to drive better comp sales in the.

Hillary Super: Hillary, I was hoping you could dive a little bit deeper into the marketing strategy that you're planning for the rest of the year and into the future following the hiring of the new chief marketing officer. What plans do you have to engage customers in a stronger way to drive better comp sales in the back half of the year? And what changes should we expect in terms of the messaging for the customer on a go-forward basis? Thanks, Brooke. I'm happy to talk about that. So, as you know, Elizabeth joined us, I think this is the beginning of her third week.

Kevin Wynk: What plans do you have to engage customers in a stronger way to drive better comp sales in the back half of the year, and what changes should we expect in terms of the messaging for the customer on a go-forward basis? Thanks, Brooke. Happy to talk about that. So, as you know, Elizabeth joined us. I think this is the beginning of her third week. So definitely early days. Adam joined us probably about four to six weeks ago. So he has been involved in the fall shoots and creative content. They were already in flight when he started, but he has definitely been involved. And what you will see creatively is it's an evolution. There's not going to be a flip of a switch and all of a sudden you feel something very, very different, but you will start to see both brands being pushed farther apart.

Brooke Roach: Back half of the year and what changes should we expect in terms of the messaging for the customer on a go forward basis.

Hillary Super: Thanks, Brooke. Happy to talk about that. So, as you know, Elizabeth joined us. I think this is the beginning of her third week. So definitely early days. Adam joined us probably about four to six weeks ago. So he has been involved in the fall shoots and creative content. They were already in flight when he started, but he has definitely been involved. And what you will see creatively is it's an evolution. There's not going to be a flip of a switch and all of a sudden you feel something very, very different, but you will start to see both brands being pushed farther apart. You will start to see a visual evolution with VS. You will start to see a younger expression in PINK.

Hillary Super: Okay. Thanks, Brad I'm happy to talk about that so as you know Elizabeth joined US I think this is just the beginning of her third week.

Hillary Super: So, definitely early days. Adam joined us probably about four to six weeks ago. So, he has been involved in the fall shoots and creative content. They were already in flight when he started, but he has definitely been involved. And what you will see creatively is it's an evolution. There's not going to be a flip of a switch and all of a sudden you feel something very, different, but you will start to see both brands being pushed farther apart. You will start to see a visual evolution with VS. You will start to see a younger expression in pink.

Speaker Change: <unk> early days, Adam joined Us probably about four to six weeks ago.

Hillary Super: He has been involved in the fall shoots in creative content and they are already in flight. When he started but he has definitely been involved and what you will see creatively is it's an evolution and there's there's not going to be a flip of the switch and all of a sudden you feel something very very different but you will start to see the brands both brands being pushed farther apart.

Kevin Wynk: You will start to see a visual evolution with VS. You will start to see a younger expression in PINK. And in terms of the marketing strategies, I would just say we're very focused on, number one, acquisition, targeted acquisition through a very segmented media plan, and that's really one of the first orders of business. An always-on bra campaign primarily expressed through media. And as we have said before, we know we are up against the fashion show. We're not ready to talk about our plans to comp that, but we will have some sort of activation in the back half of the year that is entertainment-based. And I would just say much more optimization of the funnel. So less spend on creating the content, more spend on getting it out in the world, pullback in direct mail, and an optimization of lower funnel.

Hillary Super: You will start to see a visual evolution with the us.

Hillary Super: You will start to see a younger expression in pink.

Hillary Super: And in terms of the marketing strategies, I would just say we're very focused on number one, acquisition, targeted acquisition through a very segmented media plan. And that's really one of the first orders of business. And always on bra campaign, primarily expressed through media. And as we have said before, we know we are up against the fashion show. We're not ready to talk about our plans to comp that, but we will have some sort of activation in the back half of the year that is entertainment-based. And I would just say much more optimization of the funnel.

Hillary Super: And in terms of the marketing strategies, I would just say we're very focused on, number one, acquisition, targeted acquisition through a very segmented media plan, and that's really one of the first orders of business. An always-on bra campaign primarily expressed through media. And as we have said before, we know we are up against the fashion show. We're not ready to talk about our plans to comp that, but we will have some sort of activation in the back half of the year that is entertainment-based. And I would just say much more optimization of the funnel. So less spend on creating the content, more spend on getting it out in the world, pullback in direct mail, and an optimization of lower funnel. So those are some of the things that are in the works, and we're pushing very hard to impact as much as we can in the back half.

Speaker Change: And in terms of the marketing strategies I would just say, we're very focused on number one acquisition targeted acquisition them through a very segmented media plan and that's really one of the first orders of business.

Hillary Super: And always on umbrella campaign, primarily expressed through media.

Hillary Super: And as we have said before we know we're up against the fashion show, we were not ready to talk about our plans to come out, but we will have some sort of activation in the back half of the year that as entertainment based.

Hillary Super: And I would just say a much more opt ins and optimization of the funnel so less spend on creating the content more spend on getting out in the world pullback in direct.

Hillary Super: So less spend on creating the content, more spend on getting it out in the world, pullback in direct mail, and then optimization of lower funnel. So those are some of the things that are in works, and we're pushing very hard to impact as much as we can in the back.

Hillary Super: Direct mail and an optimization of lower funnel. So those are some of the things that are in works and we're pushing very hard to impact as much as we can in the back half.

Kevin Wynk: So those are some of the things that are in the works, and we're pushing very hard to impact as much as we can in the back half. Great. And then just one follow-up for Scott. What level of price increases is embedded in your guide as a result of tariffs, and how are you thinking about elasticity of demand as you take some of those strategic price increases? Yeah. I mean, from a pricing standpoint, the thing we're doing first and foremost is kind of optimizing our promos. And so both in Q1 and throughout the year, you're going to see a little bit more headwinds on GWPs, gifts with purchase, and a pullback on sort of what I would say are our traditional promos percent off type deals. So that's the first way we're thinking about it.

Brooke Roach: Great, and then just one follow-up for Scott.

Brooke Roach: Great. And then just one follow-up for Scott. What level of price increases is embedded in your guide as a result of tariffs, and how are you thinking about elasticity of demand as you take some of those strategic price increases?

Speaker Change: Great and then just one follow up for Scott what level of price increases is embedded in your guide as a result of tariffs and how are you thinking about elasticity of demand as you take some of those strategic price increases.

Scott Sekella: What level of price increases is embedded in your guide as a result of tariffs? And how are you thinking about elasticity of demand as you take some of those strategic price increases? Yeah, I mean, from a pricing standpoint, the thing we're doing first and foremost is kind of optimizing our promos. And so both in Q1 and throughout the year, you're going to see a little bit more headwinds on GWPs, gifts with purchase, and a pullback on sort of what I would say are our traditional promos, percent off type deals. So that's the first way we're thinking about it.

Scott Sekella: Yeah. I mean, from a pricing standpoint, the thing we're doing first and foremost is kind of optimizing our promos. And so both in Q1 and throughout the year, you're going to see a little bit more headwinds on GWPs, gifts with purchase, and a pullback on sort of what I would say are our traditional promos percent off type deals. So that's the first way we're thinking about it. We're being very strategic across categories and mindful of opening price points and sort of not to exceed price points. And so we're going to sort of play in the middle where we see value. And it won't be across all categories as we think about our business. So it's really that strategic case-by-case, category-by-category look that we're taking.

Hillary Super: Yeah, I mean from a pricing standpoint, the thing we're doing first and foremost as kind of optimizing our promos and so both in Q1 and throughout the year youre going to see a little bit more headwinds on DWP gifts with purchase and a pull back on sort of what I would say all of our traditional promos percent off the plate type deal.

Hillary Super: So that's the first way we are thinking about it.

Scott Sekella: We're being very strategic across categories and mindful of opening price points and sort of not to exceed price points. And so we're going to sort of play in the middle where we see value, and it won't be across all categories. as we think about our business. So it's really that strategic case-by-case, category-by-category look that we're taking.

Kevin Wynk: We're being very strategic across categories and mindful of opening price points and sort of not to exceed price points. And so we're going to sort of play in the middle where we see value. And it won't be across all categories as we think about our business. So it's really that strategic case-by-case, category-by-category look that we're taking. Great. Thanks so much. I'll pass it on. Thank you. Our next question comes from Alex Straton with Morgan Stanley. Your line is open. Great. Maybe for Hillary first. Just when you think about the evolution of the brand and sort of the goals when we started here, can you just highlight where you made the most progress in Q1? And then I've got one follow-up for Scott. Sure. Happy to. I continue to be really bullish on PINK. I'm sure that's not a surprise.

Hillary Super: We're being very strategic across categories, and mindful of opening price points and sort of not to exceed price points and so we're going to sort of play in the middle where we see value. So it wont be across all categories.

Hillary Super: As we think about our business. So it's good.

Hillary Super: Its really that strategic case by cheese category by category, we look that we're tracking.

Brooke Roach: Great. Thanks so much. I'll pass it on.

Brooke Roach: Great, thanks so much. I'll pass it on.

Hillary Super: Great. Thanks, so much I'll pass it on.

Operator: Thank you. Our next question comes from Alex Straton with Morgan Stanley. Your line is open.

Speaker Change: Thank you. Our next question comes from Alex Straighten with Morgan Stanley. Your line is open.

Alex Straton: Our next question comes from Alex Straton with Morgan Stanley. Your line is open. Great.

Alex Straton: Great. Maybe for Hillary first. Just when you think about the evolution of the brand and sort of the goals when we started here, can you just highlight where you made the most progress in Q1? And then I've got one follow-up for Scott.

Hillary Super: Maybe for Hillary first, just when you think about the evolution of the brands and sort of the goals when you started here, can you just highlight like where you made the most progress in the first quarter?

Alex Straighten: Great maybe for Hillary farmers, just when you think about the evolution of the brand and sort of the goals. We started here can you just highlight where you made the most progress in the first quarter and I've got one follow up for Scott.

Hillary Super: And then I've got one follow up for Scott. Sure, happy to.

Hillary Super: Sure. Happy to. I continue to be really bullish on PINK. I'm sure that's not a surprise. We've made incredible progress, especially as it relates to the apparel piece of that business. I would also say that beauty continues to be an absolute standout with year-over-year growth and lots in the pipeline to further those efforts. We are really starting to dig into VS. We see that we have an opportunity to have a more energetic, more joyful expression of VS. We think we got just a little bit too serious in past seasons, and so we are seeing that the more energy we bring, the more joy we bring to our campaigns, the more color and pattern we bring to our assortments, we're really seeing payback. So early stages in VS, but definitely lots of progress on the PINK side.

Speaker Change: Sure happy to I continue to be really bullish on pink I'm sure. That's not a surprise, we've made incredible progress, especially as it relates to the apparel piece of that business.

Hillary Super: I continue to be really bullish on pink. I'm sure that's not a surprise. We've made incredible progress, especially as it relates to the apparel piece of that business. I would also say that beauty continues to be an absolute standout with year-over-year growth and lots in the pipeline to further those efforts. And we are really starting to dig into VS. We see that we have an opportunity to have a more energetic, more joyful expression of VS. We think we got just a little bit too serious in past seasons. And so we are seeing that the more energy we bring, the more joy we bring to our campaigns, the more color and pattern we bring to our assortments, we're really seeing payback.

Kevin Wynk: We've made incredible progress, especially as it relates to the apparel piece of that business. I would also say that beauty continues to be an absolute standout with year-over-year growth and lots in the pipeline to further those efforts. We are really starting to dig into VS. We see that we have an opportunity to have a more energetic, more joyful expression of VS. We think we got just a little bit too serious in past seasons, and so we are seeing that the more energy we bring, the more joy we bring to our campaigns, the more color and pattern we bring to our assortments, we're really seeing payback. So early stages in VS, but definitely lots of progress on the PINK side. Great. And maybe just for Scott, just on the gross margin, the qualitative commentary was helpful in the quarter.

Alex Straighten: I would also say that beauty continues to be an absolute standout with year over year growth.

Alex Straighten: And lots in the pipeline to further those efforts.

Alex Straighten: And we are really starting to dig into V. S. We we see that we have an opportunity to have a more energetic more joyful expression is yes. We think we got just a little bit too serious in past seasons and so we are we are seeing that the more energy we bring the more joy.

Alex Straighten: Joy, we bring to our campaigns in more color and pattern, we bring to our Assortments. We are really seeing payback. So early stages M. D. S Ah, but definitely lots of progress on the bank side.

Hillary Super: So early stages in VS, but definitely lots of progress on the pink side. Great.

Alex Straton: Great. And maybe just for Scott, just on the gross margin, the qualitative commentary was helpful in the quarter. But is it possible to quantitatively break down the components of that 170 basis point decline as well as how those should evolve for the remainder of the year? It looks like you're embedding less compression in the second quarter, but I'm just curious if that can change, perhaps the expansion in the back half.

Alex Straighten: Okay.

Speaker Change: Great and maybe just for Scott just on the gross margin. The qualitative commentary was helpful. In the quarter, but is it possible to quantitatively break down the components of that 170 basis point decline.

Scott Sekella: And maybe just for Scott, just on the gross margin, the qualitative commentary was helpful in the quarter, but is it possible to quantitatively break down the components of that 170 basis points decline as well as how those should evolve for the remainder of the year? It looks like you're embedding less compression in the second quarter, but I'm just curious if that can change perhaps to expansion in the back half. Yeah, so in the quarter, the biggest headwind year-over-year was sort of inbound rates both air and ocean. I do expect that to subside, potentially even be a slight tailwind in the back half of the year, but it'll continue to be a headwind in Q2 as well.

Kevin Wynk: But is it possible to quantitatively break down the components of that 170 basis point decline as well as how those should evolve for the remainder of the year? It looks like you're embedding less compression in the second quarter, but I'm just curious if that can change, perhaps the expansion in the back half. Yeah. So in the quarter, the biggest headwind year-over-year was sort of inbound rates, both air and ocean. I do expect that to subside, potentially even be a slight tailwind in the back half of the year, but it'll continue to be a headwind in Q2 as well. The next biggest piece in Q1 was a headwind. We had some tariff-related order cancels that we had to take on raw materials.

Speaker Change: As well as how they should've all for the remainder of the year.

Speaker Change: It looks like you're embedding a lot of compression in the second quarter, but I'm just curious if that can change perhaps expansion in the back half.

Scott Sekella: Yeah. So in the quarter, the biggest headwind year-over-year was sort of inbound rates, both air and ocean. I do expect that to subside, potentially even be a slight tailwind in the back half of the year, but it'll continue to be a headwind in Q2 as well. The next biggest piece in Q1 was a headwind. We had some tariff-related order cancels that we had to take on raw materials. So as we resourced product out of China, given the tariff changes, we did have to write off some raw materials there. The other piece in the quarter, and I touched on a little bit on the pricing question, we had a headwind as we did more GWPs. It was partially offset by a pullback in traditional promos. And I do expect that construct to continue through the balance of the year.

Speaker Change: Yeah, so in the quarter the biggest headwind year over year was sort of inbound rates, both air and ocean.

Speaker Change: Do expect that to subside potentially even be a slight tailwind in the back half of the year, but it will continue to be a headwind in Q2 as well the other the next biggest piece in Q1. It was a headwind we had some tariff related order cancels that we had to take on.

Scott Sekella: The other, the next biggest piece in Q1 was a headwind on, we had some tariff-related order cancels that we had to take on raw materials. So as we resourced product out of China, given the tariff changes, we did have to write off some raw materials there. The other piece in the quarter, and I touched on a little bit on the pricing question, we had a headwind as we did more GWPs. I was partially offset by a pullback in traditional promos, and I do expect that construct to continue through the balance of the year. We really like what the GWPs bring, even if it's a slight headwind on gross margin, because it drives a higher basket size as well as is a little bit of a marketing vessel for us as the consumer takes that product out into the world.

Speaker Change: The raw material, so as we resource product out of China, given the tariff changes we did have to write off some raw materials there.

Kevin Wynk: So as we resourced product out of China, given the tariff changes, we did have to write off some raw materials there. The other piece in the quarter, and I touched on a little bit on the pricing question, we had a headwind as we did more GWPs. It was partially offset by a pullback in traditional promos. And I do expect that construct to continue through the balance of the year. We really like what the GWPs bring, even if it's a slight headwind on gross margin because it drives a higher basket size as well as is a little bit of a marketing vessel for us as the consumer takes that product out into the world. We did have some favorability in the quarter from a B&O standpoint, and I think that construct will largely continue for the year.

Speaker Change: The other piece in the quarter and touch on a little bit on the pricing question. We had a headwind as we did more GW piece was partially offset by a pullback in traditional promos and I do expect that.

Speaker Change: The construct to continue through the balance of the year, we really like what the GW piece break even if it's a slight headwind on gross margin because it drives a higher basket size as well as there's a little bit of a marketing vessel for us as the consumer takes that product out into the world.

Scott Sekella: We really like what the GWPs bring, even if it's a slight headwind on gross margin because it drives a higher basket size as well as is a little bit of a marketing vessel for us as the consumer takes that product out into the world. We did have some favorability in the quarter from a B&O standpoint, and I think that construct will largely continue for the year. So when you balance up the full year, the biggest headwind we're going to have year-over-year is tariffs. And expect that to be over $100 million headwind. And then we'll have a little bit of the residual inbound headwind that I talked about in the first half of the year, partially offset by some favorable B&O.

Scott Sekella: We did have some favorability in the quarter from a B&O standpoint, so I think that construct will largely continue for the year.

Speaker Change: We did have some favorability in the quarter from a P&L standpoint, so I think construct will largely continue for the year. So when you balance out the full year the biggest headwind, we're going to have year over year as tariffs.

Scott Sekella: So when you balance up the full year, the biggest headwind we're going to have year over year is tariffs, and I expect that to be over a 100-bit headwind, and then we'll have a little bit of a residual inbound headwind that I talked about in the first half of the year, partially offset by some favorable B&O. Off. Good luck. Thank you.

Kevin Wynk: So when you balance up the full year, the biggest headwind we're going to have year-over-year is tariffs. And expect that to be over $100 million headwind. And then we'll have a little bit of the residual inbound headwind that I talked about in the first half of the year, partially offset by some favorable B&O. Ask a block. Thank you. Our next question comes from Simeon Siegel with BMO Capital Markets. Your line is open. Thanks, Hillary. Good morning. Hillary, as you work through your progress, any way to help frame how you're thinking about sizing the revenue opportunity at Pink? And then just, Scott, how are you thinking about revenue by brand and gross margin embedded within the full-year guide that you gave? Thanks. Simeon, I didn't catch your first question. So you're seeing the great you're talking about the qualitative opportunity at Pink, Hillary.

Speaker Change: Expect that to be over 100.

Speaker Change: Headwind.

Speaker Change: And then we'll have a little bit of the residual inbound headwinds.

Speaker Change: Talked about it in the first half of the year.

Speaker Change: We offset by some favorable Bureau.

Alex Straton: Ask a block.

Speaker Change: Yeah.

Speaker Change: Good luck.

Operator: Thank you. Our next question comes from Simeon Siegel with BMO Capital Markets. Your line is open.

Speaker Change: Thank you. Our next question comes from Simeon Siegel with BMO capital markets. Your line is open.

Simeon Siegel: Our next question comes from Simeon Siegel with BMO Capital Markets. Your line is open. Thanks, everyone. Good morning.

Simeon Siegel: Thanks, Hillary. Good morning. Hillary, as you work through your progress, any way to help frame how you're thinking about sizing the revenue opportunity at Pink? And then just, Scott, how are you thinking about revenue by brand and gross margin embedded within the full-year guide that you gave?

Simeon Siegel: Thank you Pedro and good morning.

Simeon Siegel: Hillary, as you work through your progress, any way to help frame how you're thinking about sizing the revenue opportunity at pace? And then just, Scott, how do you think about revenue by brand and gross margin embedded within the full year guide that you gave?

Speaker Change: Let me as you work through your progress any way to help frame, how you're thinking about sizing the revenue opportunity at pace and then just Scott how you think about revenue by brand gross margin embedded within our full year guide that you gave.

Hillary Super: Thanks. Simeon, I didn't catch your first question.

Hillary Super: Simeon, I didn't catch your first question. So you're seeing the great, you're talking about the qualitative opportunity at pay Hillary. I'm just curious if you thought about how you see the revenue, just how you would size the recapture opportunity. over the long term? Exactly. Very, very significant.

Speaker Change: I mean, I didn't catch what you and your first question.

Simeon Siegel: So you're seeing the great you're talking about the qualitative opportunity at Pink, Hillary. I'm just curious if you thought about how you see the revenue, just how you would size the recapture opportunity.

Speaker Change: So you're seeing it would be great. You can talk about the quality of opportunity I think Hillary I'm just curious if you've thought about how you see the revenue and just how you would size the recapture opportunity.

Kevin Wynk: I'm just curious if you thought about how you see the revenue, just how you would size the recapture opportunity. Over the long term? Exactly. Very, very significant. We are still in the process of modeling that, but at this moment in time, PINK's top-line volume is significantly below its high, over $1 billion below its high. So there is an incredible amount of runway there. I think as we start to build out the full lifestyle component, there's a beauty opportunity in PINK. There's an accessories opportunity in PINK. There's an enormous opportunity to regain share in apparel and to maintain our intimates business in that brand. So I see this as our number one volume opportunity. When you think about gross margin by brand, not much differentiation between VS and PINK, but beauty is several points higher.

Hillary Super: Over the long term?

Speaker Change: Over the long term.

Simeon Siegel: Exactly.

Hillary Super: Very, very significant. We are still in the process of modeling that, but at this moment in time, PINK's top-line volume is significantly below its high, over $1 billion below its high. So there is an incredible amount of runway there. I think as we start to build out the full lifestyle component, there's a beauty opportunity in PINK. There's an accessories opportunity in PINK. There's an enormous opportunity to regain share in apparel and to maintain our intimates business in that brand. So I see this as our number one volume opportunity.

Speaker Change: Exactly.

Speaker Change: Very very significant.

Hillary Super: We are still in the process of modeling that, but at this moment in time, Pink's top line volume is significantly below its high, over a billion dollars below its high, so there is an incredible amount of runway there, and I think as we start to build out the full lifestyle component, there's a beauty opportunity in Pink, there's an accessories opportunity in Pink, there's an enormous opportunity to regain share in apparel, and to maintain our intimates business in that brand, so I see this as our number one volume opportunity. When you think about gross margin by brand, not much differentiation between VS and paint, but beauty is several points higher.

Speaker Change: We're still in the process of modeling that but at this moment in time Pink is pinks topline volume is.

Speaker Change: Secondly below its high.

Speaker Change: Oh over $1 billion below.

Speaker Change: Hello.

Speaker Change: So there is an incredible amount of runway there and I think as we start to build out.

Speaker Change: The full lifestyle component, there's a beauty opportunity in paint because theres, an accessories opportunity in pink there is an enormous opportunity to regain share in apparel and to maintain our intimates business.

Speaker Change: And that brand so I I see this as our number one volume opportunity.

Scott Sekella: When you think about gross margin by brand, not much differentiation between VS and PINK, but beauty is several points higher. And so as we continue to grow there, that mix will be a positive benefit to gross margin rate through the balance of the year.

Speaker Change: So when you think about gross margin by brand.

Speaker Change: Not much differentiation between views in beauty.

Speaker Change: Beauty is.

Speaker Change: Several points higher and so as we continue to grow over that will that mix will be positive.

Kevin Wynk: And so as we continue to grow there, that mix will be a positive benefit to gross margin rate through the balance of the year. Great. Thanks a lot, guys. Best luck for the rest of the year. Thank you. Our next question comes from Dana Telsey with the Telsey Group. Your line is open. Hi. Good morning, everyone. Hillary, as you think about the intimates market and how it's performing, you had mentioned before the slow start. It got off, I think, at the end of the fourth quarter. Where is it now, and how do you think of your core categories of bras, panties, and what you're seeing in terms of performance? And then, Scott, in terms of tariff mitigation measures, when do they come into play? How do you think about that opportunity going forward? Thank you. Sure, Dana.

Simeon Siegel: And so as we continue to grow there, that mix will be a positive benefit to gross margin rate through the balance sheet. Great. Thanks a lot, guys. Best of luck for the rest of the year.

Speaker Change: Positive benefits of gross margin rate through the balance of the year.

Simeon Siegel: Great. Thanks a lot, guys. Best luck for the rest of the year.

Speaker Change: Great. Thanks, a lot guys best of luck for the rest of year.

Operator: Thank you. Our next question comes from Dana Telsey with the Telsey Group. Your line is open.

Speaker Change: Thank you. Our next question comes from Dana Telsey with the Telsey Group. Your line is open.

Dana Telsey: Our next question comes from Dana Telsey with the Telsey Group. Your line is open.

Dana Telsey: Hi. Good morning, everyone. Hillary, as you think about the intimates market and how it's performing, you had mentioned before the slow start. It got off, I think, at the end of the fourth quarter. Where is it now, and how do you think of your core categories of bras, panties, and what you're seeing in terms of performance? And then, Scott, in terms of tariff mitigation measures, when do they come into play? How do you think about that opportunity going forward? Thank you.

Dana Telsey: Hi, good morning, everyone. Hillary, as you think about the intimates market and how it's performing, you had mentioned before the slow start, it got off, I think, at the end of the fourth quarter. Where is it now? And how do you think of your core categories of bras and panties and what you're seeing in terms of performance?

Dana Telsey: Hi, Good morning, everyone. Hello me as you think about the intimates market and how it's performing but you had mentioned before the slow start it got off I think at the end of the fourth quarter, where is it now and how do you think of your core categories of bras and panties and what you're seeing in terms of performance and then Scott in terms of tariff mitigation.

Dana Telsey: And then Scott, in terms of tariff mitigation measures, when do they come into play? How do you think about that opportunity going forward? Thank you.

Speaker Change: <unk> measures when do they come into play how do you think about that opportunity going forward. Thank you.

Hillary Super: Sure, Dana, let me start by saying in the quarter, we definitely, I'll start non-intimates and then go to intimates. So we saw share growth in sports bras, beauty, pink apparel, really, really nice gains there. As you know, and as we've talked about in previous calls, intimates market continues to be a little bit pressured. I think some of that is about it going to value, some of that is about a younger consumer interacting with intimates, specifically bras, in a different way. And so we have seen a little bit of a decline in our intimate share this quarter.

Hillary Super: Sure, Dana. Let me start by saying in the quarter, I'll start non-intimates and then go to intimates. So we saw share growth in sports bras, beauty, PINK apparel, really, really nice gains there. As you know, and as we've talked about in previous calls, the intimates market continues to be a little bit pressured. I think some of that is about it going to value. Some of that is about a younger consumer interacting with intimates, specifically bras, in a different way. And so we have seen a little bit of a decline in our intimate share this quarter. I would say it's a tale of two stories, bras versus panties. In bras, I think it's very much isolated to that February challenging business and that miss at Valentine's Day that I talked about on the last call. We rebounded in March and April.

Speaker Change: Sure Dana let me start by saying in the quarter, we definitely I'll start non intimates and then go to Internet. So we saw share growth and sports Bras beauty pink apparel really really nice gains there as you know and as we've talked about in <unk>.

Kevin Wynk: Let me start by saying in the quarter, I'll start non-intimates and then go to intimates. So we saw share growth in sports bras, beauty, PINK apparel, really, really nice gains there. As you know, and as we've talked about in previous calls, the intimates market continues to be a little bit pressured. I think some of that is about it going to value. Some of that is about a younger consumer interacting with intimates, specifically bras, in a different way. And so we have seen a little bit of a decline in our intimate share this quarter. I would say it's a tale of two stories, bras versus panties. In bras, I think it's very much isolated to that February challenging business and that miss at Valentine's Day that I talked about on the last call. We rebounded in March and April.

Speaker Change: It's called the intimates market continues to be a little bit pressured.

Speaker Change: I think I think some of that is about it go into value. Some of that is about a younger consumer consumer interacting with intimate specifically bra is in a different way.

Speaker Change: And so we have seen a little bit of a decline in our intimates share. This quarter I would say, it's a tale of two stories abroad versus panties and bra is I think it's very much isolated to that February challenging business and not Miss it downtime day that I talked about on the last call. We rebounded in March and April we had positive business and browser.

Hillary Super: I would say it's a tale of two stories, bras versus panties. In bras, I think it's very much isolated to that February challenging business and that miss at Valentine's Day that I talked about on the last call. We rebounded in March and April. We had positive business in bras in April. And as we think more about how she's wearing bras, so shifting a little bit into sports bras, looking for comfort, looking for wireless, we are in the process. We have a very, very robust innovation pipeline. I actually just came back from a trip to Asia to really review all of that.

Kevin Wynk: We had positive business in bras in April. As we think more about how she's wearing bras, so shifting a little bit into sports bras, looking for comfort, looking for wireless, we are in the process. We have a very, very robust innovation pipeline. I actually just came back from a trip to Asia to really review all of that, and we have the ability to move and shake and pull things forward. We are in the process of really thinking about comfort and what role that plays in our total ecosystem. We're seeing lots of positive results, and we have all kinds of innovation in the pipeline there. In panties, it's a little bit different of a story. Our business was softer throughout the quarter in panties. We were less promotional in panties than a year ago, while our competition was more promotional.

Hillary Super: We had positive business in bras in April. As we think more about how she's wearing bras, so shifting a little bit into sports bras, looking for comfort, looking for wireless, we are in the process. We have a very, very robust innovation pipeline. I actually just came back from a trip to Asia to really review all of that, and we have the ability to move and shake and pull things forward. We are in the process of really thinking about comfort and what role that plays in our total ecosystem. We're seeing lots of positive results, and we have all kinds of innovation in the pipeline there. In panties, it's a little bit different of a story. Our business was softer throughout the quarter in panties. We were less promotional in panties than a year ago, while our competition was more promotional.

Speaker Change: April and as we think more about how she's wearing bras, so shifting a little bit in the sports bras.

Speaker Change: Looking for comfort looking for wireless we are in the process, we have a very very.

Speaker Change: Robust innovation pipeline I actually just came back from a trip to Asia to really review all of that and we have the ability to move and shake and pull things forward and so we are in the process.

Hillary Super: And we have the ability to move and shake and pull things forward. And so we are in the process. I'm really thinking about comfort and what role that plays in our total ecosystem. We're seeing lots of positive results, and we have all kinds of innovation in the pipeline there.

Speaker Change: Really thinking about comfort and what role that plays in our total ecosystem. We're seeing lots of positive results and we have all kinds of innovation in the pipeline there and panties, it's a little bit different of a story of our business was softer throughout the quarter and panties, we were less promotional in panties and a year ago, while our competition was more.

Hillary Super: In Panties, it's a little bit different of a story. Our business was softer throughout the quarter in Panties. We were less promotional in Panties than a year ago, while our competition was more promotional. So I think as we move forward, we have to internally answer the question, do we want to continue to gain share, or do we want to pull back on promos here? We know that it drives traffic, and it is an entry point to our brand. So it is a more complicated topic that we're still thinking through, but we're watching very carefully. And the good news is, in Panties, we have, in some cases, down to two-week lead times to get back into things.

Speaker Change: Promotional so I think.

Kevin Wynk: So I think as we move forward, we have to internally answer the question, do we want to continue to gain share or do we want to pull back on promos here? We know that it drives traffic, and it is an entry point to our brand. So it is a more complicated topic that we're still thinking through, but we're watching very carefully. And the good news is in panties, we have, in some cases, down to two-week lead times to get back into things. So we can be very agile here and think through this strategy as we move forward. And then on the tariff mitigation, I mean, simple answer is the bulk of the mitigation is in the back half. I did call out we do have an impact in Q2.

Speaker Change: As we move forward, we have to internally answer the question do we want to continue to gain share or do you do we want to pull back on promos here, we know that it drives traffic.

Speaker Change: And it is an entry point to our brand. So it is a more complicated topic that we're still thinking through but we're watching very carefully and the good news is in panties we have.

Speaker Change: In some cases down to two week lead times to get back into things. So we can be very agile here and think through the strategy as we move forward.

Scott Sekella: So we can be very agile here and think through this strategy as we move forward.

Scott Sekella: And then on the tariff mitigation, I mean, simple answer is the bulk of the mitigation is in the back half. I did call out we do have an impact in Q2. There's a little bit of mitigation in that number, but when you think about when the rate changes took place, those first goods before we could have any mitigation impacts are starting to roll through. The actions we did take early on, though, resourcing out of China, while those actions took place in Q1 and here into Q2, it's going to take some time for those to roll through as they're produced in their new origins and all of that. So when you think about just how it flows, but once we hit that back half, the mitigation really comes into effect.

Scott Sekella: And then on the tariff mitigation, I mean, simple answer is the bulk of the mitigation is in the back half. You know, I did call out, we do have an impact in Q2. There's a little bit of mitigation in that number, but when you think about when the rate changes took place, those first goods before we could have any mitigation impacts are, you know, starting to roll through. The actions we did take early on though, resourcing out of China, all that, those actions took place in Q1 and here into Q2, it's going to take some time for those to roll through as they're produced in their new origins and all of that.

Speaker Change: And then on the tariff mitigation I mean simple answer is the bulk of the litigation is in the back half.

Speaker Change: Call out we do have an impact in Q2, theres a little bit of introducing the number but when you think about when the rate changes took place.

Kevin Wynk: There's a little bit of mitigation in that number, but when you think about when the rate changes took place, those first goods before we could have any mitigation impacts are starting to roll through. The actions we did take early on, though, resourcing out of China, while those actions took place in Q1 and here into Q2, it's going to take some time for those to roll through as they're produced in their new origins and all of that. So when you think about just how it flows, but once we hit that back half, the mitigation really comes into effect. Thank you. Thank you. Our next question comes from Matthew Boss with JP Morgan. Your line is open. Great. Thanks.

Speaker Change: Those first goods before we'd have any mitigation impacts are starting to roll through.

Speaker Change: Actions, we did take early on though resourcing out of China.

Speaker Change: But those actions took place in Q1 and here into Q2, it's going to take some time for those to roll through as they are produced in our new origins and all of that so when you think about just how it flows but once we hit that backup litigation really comes into effect.

Scott Sekella: So when you think about just how it flows, but once we hit that back half, the mitigation really can roll through. Thank you.

Dana Telsey: Thank you.

Speaker Change: Thank you.

Operator: Thank you. Our next question comes from Matthew Boss with JP Morgan. Your line is open. Great. Thanks.

Speaker Change: Okay.

Matthew Boss: Our next question comes from Matthew Boss with J.P. Morgan. Your line is open. Great, thanks.

Speaker Change: Thank you. Our next question comes from Matthew Boss with Jpmorgan. Your line is open.

Speaker Change: Great. Thanks, So Hillary how how do you see the product assortment position today at both V S and Pan core or where do you see the largest low hanging fruit with your strategic priorities across categories that you could impact either in the back half of this year versus opportunities you see slated for next year and then Scott on.

Hillary Super: So, Hillary, how do you see the product assortment position today at both VS and Pink, or where do you see the largest low-hanging fruit with your strategic priorities across categories that you could impact, either in the back half of this year versus opportunities you see slated for next year?

Kevin Wynk: So, Hillary, how do you see the product assortment positioned today at both VS and Pink, or where do you see the largest low-hanging fruit with your strategic priorities across categories that you could impact either in the back half of this year versus opportunities you see slated for next year? And then, Scott, on SG&A, what's the best way to think about permanent savings you've realized relative to reinvestments in the business that you see over time, or what's the level of revenue growth to leverage fixed costs in the business over time? Thanks, Matt. I'll start. Where do I see the lowest hanging fruit? First and foremost, it's marketing optimization, and it's developing a very focused acquisition strategy. So we continue to do very, very well with our existing customer. We're at sort of all-time level, AOVs, profitability, trips, so very healthy current customer file.

Matthew Boss: So, Hillary, how do you see the product assortment positioned today at both VS and Pink, or where do you see the largest low-hanging fruit with your strategic priorities across categories that you could impact either in the back half of this year versus opportunities you see slated for next year? And then, Scott, on SG&A, what's the best way to think about permanent savings you've realized relative to reinvestments in the business that you see over time, or what's the level of revenue growth to leverage fixed costs in the business over time?

Scott Sekella: And then, Scott, on SG&A, what's the best way to think about permanent savings you've realized relative to reinvestments in the business that you see over time, or what's the level of revenue growth to leverage fixed costs in the business over time? Thanks, Matt.

Speaker Change: SG&A, what's the best way to think about permanent savings that you've realized relative to reinvestments in the business that you see over time or or what's the level of revenue growth to leverage fixed costs in the business over time.

Hillary Super: Thanks, Matt. I'll start. Where do I see the lowest hanging fruit? First and foremost, it's marketing optimization, and it's developing a very focused acquisition strategy. So we continue to do very, very well with our existing customer. We're at sort of all-time level, AOVs, profitability, trips, so very healthy current customer file. So we're very much focused on acquisition as a priority in marketing. We also know that we can optimize our spend. We know we can be more targeted in our media spend and have bigger tentpole moments throughout the year. So lots to do there. That's not even covering the creative piece of things, pushing the two brands apart, utilizing collaborations in a very strategic way.

Speaker Change: Thanks, Matt I'll start where do I see the lowest hanging fruit first and foremost it's marketing optimization and it's developing a very focused acquisition strategy. So we continue to do very very well with our existing customer we're at sort of all time level.

Hillary Super: I'll start. Where do I see the lowest hanging fruit? First and foremost, it's marketing optimization, and it's developing a very focused acquisition strategy. So we continue to do very, very well with our existing customer. We're at sort of all-time level AOVs, profitability, trips, so very healthy current customer file. So we're very much focused on acquisition as a priority in marketing. We also know that we can optimize our spend. We know we can be more targeted in our media spend and have bigger tentpole moments throughout the year. So lots to do there. That's not even covering the creative piece of things, pushing the two brands apart, utilizing collaborations in a very strategic way.

Speaker Change: <unk> profitability trips, so very healthy current customer file. So we're very much focused on acquisition as a priority in marketing.

Kevin Wynk: So we're very much focused on acquisition as a priority in marketing. We also know that we can optimize our spend. We know we can be more targeted in our media spend and have bigger tentpole moments throughout the year. So lots to do there. That's not even covering the creative piece of things, pushing the two brands apart, utilizing collaborations in a very strategic way. So tons and tons of things to do on the brand and marketing side. In terms of categories, we're bullish about PINK. We are bullish about Beauty. And we believe that we have made a number of corrections and innovations, including some innovation launches in the back half of the year in intimates that we do think will shore up the intimates business and further differentiate us in the space. So very excited about the back half of the year overall.

Speaker Change: We also know that we can optimize our spend we know we can be more targeted in our media spend and hum.

Speaker Change: A bigger tent pole moments throughout the year so.

Speaker Change: Lots to do there.

Speaker Change: That's not even covering the creative piece of things pushing the two brands apart.

Speaker Change: Utilizing collaborations and a very strategic way, so tons and tons of things to do on the brand and marketing side in terms of categories.

Hillary Super: So tons and tons of things to do on the brand and marketing side. In terms of categories, we're bullish about PINK. We are bullish about Beauty. And we believe that we have made a number of corrections and innovations, including some innovation launches in the back half of the year in intimates that we do think will shore up the intimates business and further differentiate us in the space. So very excited about the back half of the year overall.

Hillary Super: So tons and tons of things to do on the brand and marketing side. In terms of categories, we're bullish about pink. We are bullish about beauty. And we believe that we have made a number of corrections and innovations, including some innovation launches in the back half of the year in Intimates that we do think will shore up the Intimates business and further differentiate us in the space.

Speaker Change: We are bullish about pink.

Speaker Change: We are bullish about beauty and we believe that we have made a number of corrections and innovations, including some innovation launches in the back half of the year and intimates that we do think will shore up the intimates business and further differentiate us in this space. So very excited about the back half of the year overall.

Scott Sekella: So very excited about the back half of the year overall. On the SG&A part of the question, you know, what we've been driving through Q1 and the mindset we're taking is find those efficiencies in non-customer areas. So those we do expect to be permanent savings, things that won't impact, you know, the customer experience, the brand, the product. The other thing we're doing is what I would say is sort of fewer projects or being very selective with our investments too. We want to do fewer but do them better and have them have better returns and improve the customer experience.

Kevin Wynk: On the SG&A part of the question, what we've been driving through Q1 and the mindset we're taking is find those efficiencies in non-customer areas. So those we do expect to be permanent savings, things that won't impact the customer experience, the brand, the product. The other thing we're doing is what I would say is sort of fewer projects or being very selective with our investments too. We want to do fewer, but do them better and have them have better returns and improve the customer experience. So I think some of it is not necessarily a cost takeout, but some of it is just being very selective where we're making those investments in these uncertain times. As far as our leverage point from both B&O and SG&A, it's around a 1% to 2% sort of growth rate.

Scott Sekella: On the SG&A part of the question, what we've been driving through Q1 and the mindset we're taking is find those efficiencies in non-customer areas. So those we do expect to be permanent savings, things that won't impact the customer experience, the brand, the product. The other thing we're doing is what I would say is sort of fewer projects or being very selective with our investments too. We want to do fewer, but do them better and have them have better returns and improve the customer experience. So I think some of it is not necessarily a cost takeout, but some of it is just being very selective where we're making those investments in these uncertain times. As far as our leverage point from both B&O and SG&A, it's around a 1% to 2% sort of growth rate.

Speaker Change: On the SG&A part of the question, what we've been driving through Q1 and the mindset. We're taking is find those efficiencies in non customer areas. So those we do expect to be permanent savings.

Speaker Change: Things that won't impact the customer experience the brand the product the other thing we're doing.

Speaker Change: But what I would say is sort of fewer projects or being very selective with our investments two we want to do fewer but do them better and have them have better returns and improve the customer experience. So I think some of it is not necessarily a cost take out but some of it is just being very selective where we're making those investments will be done.

Scott Sekella: So I think some of it is not necessarily a cost takeout, but some of it is just being very selective where we're making those investments in these uncertain times. As far as our leverage point from both B&O and SG&A, it's around a 1% to 2% sort of growth rate. So if we're growing 1% to 2%, we're going to really start leveraging. And with some of these savings, we're realizing that leverage point is going to continue to go down. It's great color.

Speaker Change: Certain times as far as our leverage point from both BMO and SG&A, it's around a 1% to 2% sort of growth rate. So we're growing 1% to 2% we're going to really start leveraging that with some of these savings. We're realizing that leverage point is going to continue to go down.

Kevin Wynk: So if we're growing 1% to 2%, we're going to really start leveraging. And with some of these savings, we're realizing that leverage point's going to continue to go down. That's great color. Best of luck. Thank you. Our next question comes from Corey Tarlo with Jefferies. Your line is open. Great. Thanks. Hillary, I was wondering if you could just talk about your team. Do you feel like you have the right team in place at present? Because I know you mentioned that you made a couple of hires, and we'd just be curious to get your perspective there. Is this the final team that you feel is best positioned to take the company into the future?

Scott Sekella: So if we're growing 1% to 2%, we're going to really start leveraging. And with some of these savings, we're realizing that leverage point's going to continue to go down.

Matthew Boss: That's great color. Best of luck.

Speaker Change: That's great color best of luck.

Scott Sekella: Best of luck.

Matthew Boss: Thank you. Our next question comes from Corey Tarlo with Jefferies. Your line is open.

Corey Tarlowe: Thank you.

Speaker Change: Thank you. Our next question comes from Cory <unk> with Jefferies. Your line is open.

Corey Tarlowe: Our next question comes from Corey Tarlowe with Jefferies. Your line is open. Great. Thanks.

Corey Tarlowe: Great. Thanks. Hillary, I was wondering if you could just talk about your team. Do you feel like you have the right team in place at present? Because I know you mentioned that you made a couple of hires, and we'd just be curious to get your perspective there. Is this the final team that you feel is best positioned to take the company into the future? Then just, Scott, on the inventory for the balance for the quarter, is there any sort of guardrails or guidance that you can give us around what we might expect for the path for inventory growth for the year going forward?

Speaker Change: Great.

Hillary Super: Hillary, I was wondering if you could just talk about. You feel like you have the right team in place at present. I know you mentioned that you made a couple hires, and we'd just be curious to get your perspective there. Is this the final team that you feel is best positioned to take the company into the future?

Speaker Change: Hillary I was wondering if you could just talk about.

Speaker Change: Your team you feel like you have the.

Speaker Change: And the right team in place at present.

Speaker Change:

Speaker Change: Because I know you mentioned that you made a couple of hires and would just be curious to get your perspective. There is this it.

Speaker Change: Yeah.

Speaker Change: The the final team that you feel is best positioned to take the company into the future and then just Scott on the inventory for the balance for the quarter.

Kevin Wynk: Then just, Scott, on the inventory for the balance for the quarter, is there any sort of guardrails or guidance that you can give us around what we might expect for the path for inventory growth for the year going forward? Thank you. Sure. I'll start. I don't know if you saw the article that referred to our team as a super squad, but they truly are the super squad, the entire ELT. I think we have built a best-in-class team who really complements each other, a good combination of tenure and new, a good combination of operational experts and brand experts. We're all in the process of getting to know each other and gelling as a team. It's very early days, but I feel very, very passionately that this is the team that will drive the strategy forward.

Scott Sekella: And then just, Scott, on the inventory for the balance for the quarter, is there any sort of...

Speaker Change: Is there any sort of.

Scott Sekella: guardrails or guidance that you can give us around what we might expect for the path for for inventory growth for the for the year going forward. Thank you.

Speaker Change: Guardrails or guidance that you can give us around what.

Speaker Change: What we might expect for the past her for inventory growth for the for the year going forward. Thank you.

Hillary Super: Thank you. Sure. I'll start. I don't know if you saw the article that referred to our team as a super squad, but they truly are the super squad, the entire ELT. I think we have built a best-in-class team who really complements each other, a good combination of tenure and new, a good combination of operational experts and brand experts. We're all in the process of getting to know each other and gelling as a team. It's very early days, but I feel very, very passionately that this is the team that will drive the strategy forward.

Hillary Super: Sure, I'll start. I don't know if you saw the article that referred to our team as a super squad, but they truly are the super squad, the entire ELT. I think we have built a best-in-class team who really complements each other, a good combination of tenure and new, a good combination of operational experts and brand experts, and we're all in the process of getting to know each other and joining as a team. It's very early days, but I feel very, very passionately that this is the team that will drive the strategy forward. From an inventory perspective, in the quarter, as I said, we were up mid-single digits, and basically expect that trend to continue through the year, but the color's a little bit different.

Speaker Change: Sure I'll start I don't know if you saw the article that referred to our team as a super squad, but but they truly are the super squad. The entire ELC I think we have built a M best.

Speaker Change: Best in class team, who really complement each other a good combination of tenure and new a good combination of operational experts and brand experts and you know we're all in the process of getting to know each other and gelling as a team. It's very early days, but I feel very very passionately that this is the team that will draw.

Speaker Change: The strategy forward.

Kevin Wynk: From an inventory perspective in the quarter, as I said, we were up mid-single digits and basically expect that trend to continue through the year, but the color's a little bit different. So in the first half, the up sort of mid-single digits will continue because we've been bringing our European distribution center up. So you think about filling that, and that'll start to lap in the back half of the year. And then in the back half of the year, inventory will be up basically on a rate basis because of tariffs. If you exclude tariffs, inventory by year-end would have largely been flat. Great. Thank you so much, and best of luck. Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Your line is open. Thank you. Good morning.

Scott Sekella: From an inventory perspective in the quarter, as I said, we were up mid-single digits and basically expect that trend to continue through the year, but the color's a little bit different. So in the first half, the up sort of mid-single digits will continue because we've been bringing our European distribution center up. So you think about filling that, and that'll start to lap in the back half of the year. And then in the back half of the year, inventory will be up basically on a rate basis because of tariffs. If you exclude tariffs, inventory by year-end would have largely been flat.

Speaker Change: From an inventory perspective in the quarter as I said, we were up mid single digits, but basically expect that trend to continue through the year, but the colors a little bit different so in the first half.

Scott Sekella: So in the first half, the up sort of mid-single digits will continue because we've been bringing our European distribution center up. So you think about filling that, and that'll start to lap in the back half of the year. And then in the back half of the year, we'll...inventory will be up basically on a rate basis because of tariffs. If you exclude tariffs, inventory by year-end would have largely been flat.

Speaker Change: Sort of mid single digits will continue because we.

Speaker Change: Bringing our European distribution center up so you think about filling that and that'll start to wind up in the back half of the year and then in the back half of the year.

Speaker Change: Thats, where it would be up basically on a rate basis because of tariffs if you exclude tariffs.

Speaker Change: It's already about your own would have largely been flat.

Corey Tarlowe: Great. Thank you so much, and best of luck.

Speaker Change: Oh, great. Thank you so much and best of luck.

Scott Sekella: Thank you so much and best of luck.

Lorraine Hutchinson: Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Your line is open. Thank you. Good morning. Hillary, you made a comment earlier that younger customers are interacting with the Intimates business differently.

Operator: Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Your line is open.

Speaker Change: Thank you. Our next question comes from Lorraine Hutchinson with Bank of America. Your line is open.

Lorraine Hutchinson: Thank you. Good morning. Hillary, you made a comment earlier that younger customers are interacting with the intimates business differently. Could you elaborate on that and also how this plays into your AURs, margins, and attachment rate for the intimates business?

Lorraine Hutchinson: Thank you good morning, Hilary you made a comment earlier that younger customers are interacting with the intimate business differently could you elaborate on that and and also how this plays into your AUR as margins on attachment rate for the intimates business.

Kevin Wynk: Hillary, you made a comment earlier that younger customers are interacting with the intimates business differently. Could you elaborate on that and also how this plays into your AURs, margins, and attachment rate for the intimates business? Sure. Yeah. We know that the younger customer is wearing traditional bras less frequently. She's wearing sports bras. In some cases, she's wearing bra tops. She's just thinking differently about end use. I think also just in the post-COVID days, sports bras are definitely part of sort of her work-from-home wardrobe. And so we are seeing some level of shift out of traditional bras into sports bras. But we also know that wireless is a huge piece of that and a category that is growing for us and we're continuing to invest in, as well as other comfort technologies.

Hillary Super: Could you elaborate on that and also how this plays into your AURs, margins, and attachment rate for the Intimates business? Sure. Yeah, we know that the younger customer is wearing traditional bras less frequently. She's wearing sports bras. In some cases, she's wearing bra tops. She's just thinking differently about end use. I think also just in the post-COVID days, sports bras are definitely part of Thank you. Thank you.

Hillary Super: Sure. Yeah. We know that the younger customer is wearing traditional bras less frequently. She's wearing sports bras. In some cases, she's wearing bra tops. She's just thinking differently about end use. I think also just in the post-COVID days, sports bras are definitely part of sort of her work-from-home wardrobe. And so we are seeing some level of shift out of traditional bras into sports bras. But we also know that wireless is a huge piece of that and a category that is growing for us and we're continuing to invest in, as well as other comfort technologies. So I think it's just generally no longer acceptable to not be comfortable, and especially with this younger generation. And we know that and have known that for some time and have a number of innovations in the pipeline to address that.

Lorraine Hutchinson: Sure.

Lorraine Hutchinson: We know that the younger customer is wearing traditional bra is less frequently she's wearing sports bras and some cases, she's wearing broad tops. She's just thinking differently about end use I think also just in the post Covid days sports Bras are definitely part of them.

Speaker Change: Sort of her work from home wardrobe and so we are seeing some level of shift out of traditional garage into sports bras, but.

Speaker Change: But we also know that wireless is a huge piece of that and in a category that is growing for us and we're continuing to invest in them as well as other comfort technology. So I think you know it.

Kevin Wynk: So I think it's just generally no longer acceptable to not be comfortable, and especially with this younger generation. And we know that and have known that for some time and have a number of innovations in the pipeline to address that. From a margin perspective, that switch, I mean, sports bras are lower margin, but when you look at the size of bras versus sports bras, the impact that'll have on the total business is kind of minimal. Thank you. Thank you. Our next question comes from Mauricio Cerna with UBS. Your line is open. Great. Good morning. Thanks for taking my question. Maybe could you talk about what you're seeing quarter to date? I know you included a $20 million impact on Q2 guide based on the security incident, given the security incident.

Speaker Change: Just generally no longer acceptable to not be comfortable and I'm, especially with this younger generation and we know that and have known that for some time and have a number of innovations in the pipeline to address that.

Scott Sekella: From a margin perspective, that switch, I mean, sports bras are lower margin, but when you look at the size of bras versus sports bras, the impact that'll have on the total business is kind of minimal. Thank you.

Speaker Change: From a from a margin perspective that switch I mean sports Roes are lower margin, but when you look at the size of Roes versus sports bras.

Speaker Change: Cockpit it'll have on the total business is kind of a minimal.

Lorraine Hutchinson: Thank you.

Speaker Change: Thank you.

Speaker Change: Yeah.

Operator: Thank you. Our next question comes from Mauricio Cerna with UBS. Your line is open.

Speaker Change: Yeah.

Mauricio Serna: Our next question comes from Mauricio Serna with UBS. Your line is open. Great. Good morning. Thanks for taking my question. Maybe could you talk about what you're seeing quarter to date? I know you included like a 20 million impact on Q2 guide based on the security incident, given the security incident, but just thinking about, you know, excluding this impact, any sense of how the quarter to date trend is going. And also just going back to the Q1 gross margin result, I guess just relative to your expectations when you provided the guidance, it's fair to assume that the biggest, the one unexpected thing was the freight or was there anything in particular that, you know, drove the, you know, the miss relative to your expectations?

Speaker Change: Thank you. Our next question comes from Marine C O Serna with UBS. Your line is open.

Mauricio Serna: Great. Good morning. Thanks for taking my question. Maybe could you talk about what you're seeing quarter to date? I know you included a $20 million impact on Q2 guide based on the security incident, given the security incident. But just thinking about excluding this impact, any sense of how the quarter-to-date trend is going? And also just going back to the Q1 gross margin result, I guess just relative to your expectations when you provided the guidance, is it fair to assume that the one unexpected thing was the freight, or was there anything in particular that drove the miss relative to your expectations? Thank you.

Speaker Change: Great. Good morning, Thanks for taking my question, maybe could you talk about what you're seeing quarter to date I know you included like a $20 million impact on Q2 guide.

Speaker Change: Based on the security incidents given the security incident, but just thinking out you know excluding this impact any any sense of how the quarter to date.

Kevin Wynk: But just thinking about excluding this impact, any sense of how the quarter-to-date trend is going? And also just going back to the Q1 gross margin result, I guess just relative to your expectations when you provided the guidance, is it fair to assume that the one unexpected thing was the freight, or was there anything in particular that drove the miss relative to your expectations? Thank you. I'll start and then hand it over to Scott. So we saw our business trajectory turn in MARPL. It went positive in MARPL for all brands, and it continued into May independent of the cyber event. So we are seeing our base business. It has strengthened over the course of spring season, and we see that to have been sustained through May. So feeling really good about the base business.

Speaker Change: Trend is going and also just.

Speaker Change: Going back to the Q1.

Speaker Change: Gross margin resolved I guess just relative to your expectations. When we provided the guidance it's fair to assume that the biggest one unexpected it's being watched now right.

Speaker Change: Or was there anything in particular that dropped off.

Speaker Change: The Miss relative to your expectations. Thank you.

Hillary Super: Thank you.

Hillary Super: I'll start and then hand it over to Scott. So we saw our business trajectory turn in MARPL. It went positive in MARPL for all brands, and it continued into May independent of the cyber event. So we are seeing our base business. It has strengthened over the course of spring season, and we see that to have been sustained through May. So feeling really good about the base business.

Scott Sekella: I'll start and then hand it over to Scott. So we saw our business trajectory turn in Marple. It went positive in Marple for all brands, and it continued into May independent of the cyber event. So we are seeing our base business, it has strengthened over the course of spring season, and we see that to have been sustained through May. So feeling really good about the base business. In terms of the Q1 gross margin versus expectations, I mean, we largely expected the inbound headwind. What we didn't expect was the raw material write-off from resourcing out of China.

Speaker Change: Well I'll start and then hand it over to Scott.

Speaker Change: We saw our business trajectory turn in marble. It went positive in merkle for all brands and it continued into May independent of the cyber event. So we are seeing our base business. It has strengthened over the course of the spring season, and we see that two have been sustained through may so feeling feeling really good about the base business.

Kevin Wynk: In terms of the Q1 gross margin versus expectations, I mean, we largely expected the inbound headwind. What we didn't expect was the raw material write-off from resourcing out of China. We also made the call. We were expecting favorable promos, which on traditional promos, they were favorable, but we amplified our GWPs a bit in the quarter more than expected given how things started and then just reacting to what the consumer was reacting to. So those were the biggest differences versus expectation on gross margin. Got it. A quick follow-up on the tariff impact. You expect a $50 million net impact. You said Q2 will include $10 million.

Scott Sekella: In terms of the Q1 gross margin versus expectations, I mean, we largely expected the inbound headwind. What we didn't expect was the raw material write-off from resourcing out of China. We also made the call. We were expecting favorable promos, which on traditional promos, they were favorable, but we amplified our GWPs a bit in the quarter more than expected given how things started and then just reacting to what the consumer was reacting to. So those were the biggest differences versus expectation on gross margin.

Speaker Change: In terms of the Q1 gross margin versus expectations I mean, we largely expected the inbound hardware and what we didn't expect was the raw material write off from a resourcing out of China and we also made the call we were expecting a favorable promos, which on traditional promos as they were a favor.

Scott Sekella: And we also, you know, made the call we were expecting favorable promos, which on traditional promos they were favorable, but we amplified our GWPs a bit in the quarter more than expected given how things started and then just reacting to what the consumer was reacting to. So those were the biggest differences versus expectation on gross margin. Got it. And a quick follow-up on the...

Speaker Change: But we amplified our GW piece a bit in the quarter more than expected due to them, helping started and then just reacting to what the consumer was reacting to so those were the biggest.

Speaker Change: France's versus expectation on gross margin.

Mauricio Serna: Got it. A quick follow-up on the tariff impact. You expect a $50 million net impact. You said Q2 will include $10 million. Is it fair to assume the rest of $40 million is, I guess, mostly skewed towards Q4 given the volumes, or is there a way maybe that you might have more of your mitigation strategies fully applied that would lead to more balanced impact in the second half between Q3 and Q4?

Speaker Change: Got it quick follow up on the Hum.

Scott Sekella: Thank you all. So, if you're looking at the current impact, you expect a $50 million net impact. You said Q2 will include $10 million. Is it fair to assume the rest of $40 million is, I guess, like mostly skewed towards Q4 given the volumes, or is there a way maybe like that you might have more of your mitigation strategies fully, you know, applied that would lead to like more balanced impact in the last, you know, in the second half of, between Q3 and Q4? Yeah, so I think it's going to be over Q3 and Q4 and fluctuate with the size of the volume in each of the quarters, is how I would think about it.

Speaker Change: Tariff impact.

Speaker Change: You expect $50 million net impact.

Speaker Change: So Q2 will include.

Speaker Change: $10 million.

Kevin Wynk: Is it fair to assume the rest of $40 million is, I guess, mostly skewed towards Q4 given the volumes, or is there a way maybe that you might have more of your mitigation strategies fully applied that would lead to more balanced impact in the second half between Q3 and Q4? Yeah. So I think it's going to be over Q3 and Q4 and fluctuate with the size of the volume in each of the quarters is how I would think about it. So there is more of an impact dollar-wise just because it's a bigger quarter in Q4. But from a sort of rate or basis point impact, it should be relatively similar across Q3 and Q4. Thank you so much. Thank you. Our next question comes from Marnie Shapiro with Retail Tracker. Your line is open. Hey, guys. Congrats.

Speaker Change: Fair to assume the rest of 40 million.

Speaker Change: I guess like mostly skewed towards Q4, given the volumes or is there a way of maybe like you.

Speaker Change: You might have more of your mitigation strategies fully.

Speaker Change: Hum.

Speaker Change: Apply that lead.

Speaker Change: You need to make more and more balanced impact in Nevada and Utah.

Speaker Change: Second half.

Speaker Change: Between Q3 Q.

Scott Sekella: Yeah. So I think it's going to be over Q3 and Q4 and fluctuate with the size of the volume in each of the quarters is how I would think about it. So there is more of an impact dollar-wise just because it's a bigger quarter in Q4. But from a sort of rate or basis point impact, it should be relatively similar across Q3 and Q4.

Speaker Change: Yeah. So I think it's going to be over Q3, and Q4 and fluctuate with the size of the volume in each of the quarters is how I would think about it. So you know there is more of a impact dollar wise just because it's a bigger quarter in Q4, but you know from a sort of a grade or basis point impact should be relatively similar across Q.

Scott Sekella: So you know, there is more of an impact dollar-wise just because it's a bigger quarter in Q4, but you know, from a sort of greater basis point impact, it should be relatively similar across Q3. Thank you so much.

Mauricio Serna: Thank you so much. Thank you.

Speaker Change: Three in Q4.

Speaker Change: Thank you so much.

Marni Shapiro: Thank you. Our next question comes from Marni Shapiro with Retail Tracker. Your line is open.

Speaker Change: Thank you. Our next question comes from Marni Shapiro with retail tracker. Your line is open hey.

Operator: Our next question comes from Marnie Shapiro with Retail Tracker. Your line is open.

Operator: Hey, guys. Congrats. Congrats on building a really exceptional team with so many women leading a broad business and loving that. Can we talk just a little bit about PINK because I've been very impressed with the drops that you've had there? Are you getting a new shopper in? I'm assuming so because they're younger, but are you also getting back the lapsed shopper? And when they come in to buy those fashion drops like the spring break set, are they also buying bras along with the fashion? Can you just give us a little color as to what this is looking like?

Hillary Super: Hey guys, congrats and congrats on building a really exceptional team with so many women leading a bra business and loving that. Can we talk just a little bit about Pink because I've been very impressed with the drops that you've had there. Are you getting a new shopper in, I'm assuming so because they're younger, but are you also getting back the lab shopper? And when they come in to buy those fashion drops like the Spring Break set, are they also buying bras along with the fashion? Can you just give us a little color as to what this is looking like?

Speaker Change: Guys. Congrats on congrats on building a really exceptional team with so many women, leaving a proposition loving that we talk just a little bit about paying because I've been very impressed with the drops that you've had there are you getting a new shopper and I'm, assuming so because they're they're younger but are you also getting back the lap shopper and when they come.

Kevin Wynk: Congrats on building a really exceptional team with so many women leading a broad business and loving that. Can we talk just a little bit about PINK because I've been very impressed with the drops that you've had there? Are you getting a new shopper in? I'm assuming so because they're younger, but are you also getting back the lapsed shopper? And when they come in to buy those fashion drops like the spring break set, are they also buying bras along with the fashion? Can you just give us a little color as to what this is looking like? Sure thing. I would say the strength that we're seeing in PINK right now is coming primarily from existing/lapsed customers and less from new than we would like. So as I speak to Elizabeth's focus really being on acquisition for both brands, it is absolutely our top priority.

Speaker Change: In to buy those fashion drops like the spring breaks that are they also buying raws along with the fashion could you just give us a little color as to what this is looking like.

Hillary Super: Sure thing. I would say the strength that we're seeing in PINK right now is coming primarily from existing/lapsed customers and less from new than we would like. So as I speak to Elizabeth's focus really being on acquisition for both brands, it is absolutely our top priority. We are seeing a shift, an uptick in consideration for actually both brands. So I think that's probably a leading indicator, but definitely a little bit of work to do on new. We are seeing this primarily being driven by apparel and swim. We had AURs up almost to the 20% range. So very, very strong AUR performance. And the intimates business is a little bit softer but continues to be very significant.

Hillary Super: I would say the strength that we're seeing in pink right now is coming primarily from existing slash lapsed customers and less from new than we would like. So as I speak to Elizabeth's focus really being on acquisition for both brands, it is absolutely our top priority. We are seeing a shift, an uptick in consideration for actually both brands. So I think that's probably a leading indicator, but definitely a little bit of work to do on new. We are seeing this primarily being driven by apparel and swim. We had AURs up almost to the 20% range.

Speaker Change: Sure thing I would say the strength that we're seeing in pink right now is coming primarily from existing slash lapsed customers and less from new than we would like so as I speak to.

Speaker Change: Elizabeth focus really being on acquisition for both brands. It is absolutely our top priority. We are seeing a shift I'm an uptick in consideration for actually both brands. So I think that's probably a leading indicator, but definitely a little bit of work to do on new we are seeing this primarily be.

Kevin Wynk: We are seeing a shift, an uptick in consideration for actually both brands. So I think that's probably a leading indicator, but definitely a little bit of work to do on new. We are seeing this primarily being driven by apparel and swim. We had AURs up almost to the 20% range. So very, very strong AUR performance. And the intimates business is a little bit softer but continues to be very significant. Wherever Your Bra is, our number is our number one bra and continues to be. So some real strengths in that intimate business, but also I would say a little bit pressured by the macro things we saw going on. And we're working to definitely defend that business. And can we just also follow up in PINK about the active segment?

Speaker Change: Being driven by apparel and swim we had AUR is up.

Speaker Change: Almost to the 20% range, so very very strong AUR performance and the instruments. The intimates business is a little bit softer, but but continues to be very significant or.

Hillary Super: So very, very strong AUR performance. And the Intimates business is a little bit softer, but continues to be very significant. Where Everywhere Bra is our number one bra and continues to be. So some real strengths in that Intimate business, but also I would say a little bit pressured by the macro things we saw going on and we're working to definitely defend that business.

Hillary Super: Wherever Your Bra is, our number is our number one bra and continues to be. So some real strengths in that intimate business, but also I would say a little bit pressured by the macro things we saw going on. And we're working to definitely defend that business.

Speaker Change: We're everywhere bra is our number is our number one bra and continues to be so some real strengths in that Internet business, but also I would say a little bit pressured by the macro things we saw going on in.

Speaker Change: We're working to definitely defend that business and can we just as a follow up and think about the active segment because pink has at times had a very strong active business and then it's been pulled back.

Marni Shapiro: And can we just also follow up in PINK about the active segment? Because PINK has at times had a very strong active business, and then it's been pulled back. What are your thoughts on PINK Active?

Hillary Super: And can we just ask a follow-up in pink about the active segment, because pink has at times had a very strong active business and then it's been pulled back. What are your thoughts on pink active? I think it's a little bit less about true sport and performance and a little bit more about lifestyle and how she's dressing and I think in the past we've done a lot of sort of head-to-toe matching set looks and that seems to be losing a little bit of relevance with her and she's looking to mix it and create more dynamic, interesting outfits.

Kevin Wynk: Because PINK has at times had a very strong active business, and then it's been pulled back. What are your thoughts on PINK Active? I think it's a little bit less about true sport and performance and a little bit more about lifestyle and how she's dressing. And I think in the past, we've done a lot of sort of head-to-toe matching set looks, and that seems to be losing a little bit of relevance with her. And she's looking to mix it and create more dynamic, interesting outfits. So we're seeing that active piece of the business being mixed in to what we would call the more apparel side of the business. And quite honestly, we think that looks fresher and more modern. So we're still working on it but seeing some success in the mix of apparel. Great. Thank you so much.

Speaker Change: What are your thoughts on Pincock deaths.

Hillary Super: I think it's a little bit less about true sport and performance and a little bit more about lifestyle and how she's dressing. And I think in the past, we've done a lot of sort of head-to-toe matching set looks, and that seems to be losing a little bit of relevance with her. And she's looking to mix it and create more dynamic, interesting outfits. So we're seeing that active piece of the business being mixed in to what we would call the more apparel side of the business. And quite honestly, we think that looks fresher and more modern. So we're still working on it but seeing some success in the mix of apparel.

Speaker Change: I think it's a little bit less about to sport and performance in a little bit more about lifestyle and how she's dressing and I think in the past we've done a lot of.

Speaker Change: Sort of head to toe matching set looks and that seems to be losing a little bit of relevance with her and she is looking to mix it and create more dynamic interesting outfits. So we're seeing that active piece of the business being mixed in.

Hillary Super: So we're seeing that active piece of business being mixed in to what we would call the more apparel side of the business and quite honestly we think that looks fresher and more modern. So, you know, we're still working on it but seeing some success in the mix of apparel.

Speaker Change: To them, what we would call more apparel side of the business in and quite honestly, we think that looks fresher and more modern so.

Speaker Change: First of all we're still working on it but seeing some success in the mix the mix of apparel great. Thank you so much special fucking last quarter.

Marni Shapiro: Great. Thank you so much. Best of luck in the next quarter.

Hillary Super: Great. Thank you so much. Best of luck in the next quarter. Thank you.

Kevin Wynk: Best of luck in the next quarter. Thank you. Our next question comes from Jonakin with TD Securities. Your line is open. Thank you for taking my question. Just curious on the performance of swim, what you're seeing there. And then just the second question is around beauty. How big is the business now, and where do you think that could go? And any commentary on the second half units that you're thinking in the beauty would be great. Thank you. Sure. So I'll start with swim. Swim was a growth vehicle in both brands. I would say we were super, super pleased with PINK Swim, both in our iconic PINK branded swim at PINK Break. That's a lot to say in one mouthful, as well as the Frankie's Bikinis collaboration, which I talked about on the last call being great for basket size and customer acquisition.

Operator: Thank you. Our next question comes from Jonakin with TD Securities. Your line is open.

Speaker Change: Yes.

Speaker Change: Thank you. Our next question comes from John Kim with TD Securities. Your line is open.

Jonah Kim: Our next question comes from Jonah Kim with TD Securities. Your line is open. Thank you for taking my questions. Just curious on the performance of Swim, what you're seeing there. And then just a second question is around beauty. How big is the business now and where do you think that could go? And any commentary on the second half units that you're thinking in the beginning would be great. Thank you.

Jonna Kim: Thank you for taking my question. Just curious on the performance of swim, what you're seeing there. And then just the second question is around beauty. How big is the business now, and where do you think that could go? And any commentary on the second half units that you're thinking in the beauty would be great. Thank you.

John Kim: Thank you for taking my question just curious on the performance of twin what Youre seeing there and then just a second question is on beauty, how big is that business now and where do you think that could go and any commentary on the second half.

John Kim: So youre thinking and the people would be great. Thank you.

Hillary Super: Sure. So I'll start with swim. Swim was a growth vehicle in both brands. I would say we were super, super pleased with PINK Swim, both in our iconic PINK branded swim at PINK Break. That's a lot to say in one mouthful, as well as the Frankie's Bikinis collaboration, which I talked about on the last call being great for basket size and customer acquisition. On the VS side, it was definitely a growth story. I think we had learnings there. We definitely have some store real estate learnings. We have some assortment learnings. Really, the more classic core side of that business outperformed. So lots and lots to build on there.

Hillary Super: Sure. So I'll start with SWIM. SWIM was a growth vehicle in both brands. I would say we were super, super pleased with Pink Swim, both in our iconic pink-branded swim at Pink Break, that's a lot to say in one mouthful, as well as the Frankie's Bikinis collaboration, which I talked about on the last call being, you know, great for basket size and customer acquisition. On the VS side, it was definitely a growth story. I think we have learnings there. We definitely have some store real estate learnings. We have some assortment learnings, really the more classic core side of that business outperformed.

Speaker Change: Sure So I'll start with swim.

Speaker Change: So and with our growth vehicle in both brands I would say we were Super Super pleased with Pink swim both in our iconic pink branded swim at Pink break that's a lot to say in one mouthful as well as the franke as bikini collaboration, which I talked about on the last call being great for basket.

Speaker Change: Size and customer acquisition.

Kevin Wynk: On the VS side, it was definitely a growth story. I think we had learnings there. We definitely have some store real estate learnings. We have some assortment learnings. Really, the more classic core side of that business outperformed. So lots and lots to build on there. And I'm already looking forward to swim next season. Beauty. Beauty is very significant, about 25% of our business, even stronger on the international side of our business. And we see lots of opportunity to innovate and expand here. We have a new product category dropping in fall that we're excited about. Amy and team have really hit the ground running. And I think that there's still a tremendous amount of runway there. And it's something that drives incredible loyalty in our brands. So business, we're extremely excited about. Thank you. Thank you.

Speaker Change: On the <unk> side. It was definitely a growth story I think we have learnings there.

Speaker Change: We have some store real estate learnings, we have some assortment learnings.

Speaker Change: Really the more classic course out of that business outperformed.

Hillary Super: So lots and lots to build on there.

Speaker Change: Lots and lots to build on their and I'm already looking forward to swim next season.

Hillary Super: And I'm already looking forward to swim next season. Beauty. Beauty is very significant, about 25% of our business, even stronger on the international side of our business. And we see lots of opportunity to innovate and expand here. We have a new product category dropping in fall that we're excited about. Amy and team have really hit the ground running. And I think that there's still a tremendous amount of runway there. And it's something that drives incredible loyalty in our brands. So business, we're extremely excited about.

Hillary Super: And I'm already looking forward to SWIM next season.

Hillary Super: Beauty. Beauty is very significant, about 25% of our business, even stronger on the international side of our business. And we see lots of opportunity to innovate and expand here. We have a new product category dropping in fall that we're excited about. Amy and team are really, you know, have hit the ground running. And I think that there's still a tremendous amount of runway there. And it's something that drives incredible loyalty in our brands. So business we're extremely excited about. Thank you.

Speaker Change: Beauty is very.

Speaker Change: Very significant about 25% of our business even stronger.

Speaker Change: <unk> on the international side of our business and we see we see lots of opportunity to innovate and expand here, we have a new product category dropping in fall that we're excited about.

Speaker Change: Amy and team are really you know have hit the ground running and I think that there.

Speaker Change: There is still a tremendous amount of runway there and its and its something that drives incredible loyalty and our brands. So business. We're extremely excited about.

Jonna Kim: Thank you. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Thank you our last question comes from Janet Kloppenburg with J J K Research Associates. Your line is open.

Janet Kloppenberg: Our last question comes from Janet Kloppenberg with GHAK Research Associates. Your line is open. Hi, everybody. Thank you for taking my.

Kevin Wynk: Our last question comes from Janet Kloppenberg with JJK Research Associates. Your line is open. Hi, everybody. Thank you for taking my questions. Hillary, I wondered what you thought of the general pricing structure at VS PINK and your major competitors. I mean, is the customer looking for the same quality at lower prices? Do you have to adjust your sourcing and your vendor partnerships to achieve that? It just feels like there's been a lot of pricing pressure in the sector for a while. And on the marketing side, with the increase in the GWPs, does that pressure your gross margin going forward? But is it a vehicle to drive traffic and something that you think is a permanent part of the marketing mix? Thank you. Sure. Happy to talk about those things. There definitely is pricing pressure in the intimate sector.

Operator: Our last question comes from Janet Kloppenberg with JJK Research Associates. Your line is open.

Janet Kloppenburg: Hi, everybody. Thank you for taking my questions. Hillary, I wondered what you thought of the general pricing structure at VS PINK and your major competitors. I mean, is the customer looking for the same quality at lower prices? Do you have to adjust your sourcing and your vendor partnerships to achieve that? It just feels like there's been a lot of pricing pressure in the sector for a while. And on the marketing side, with the increase in the GWPs, does that pressure your gross margin going forward? But is it a vehicle to drive traffic and something that you think is a permanent part of the marketing mix? Thank you.

Speaker Change: Hi, everybody.

Janet Kloppenburg: Thank you for taking my.

Hillary Super: Hillary, I wondered what you thought of the general pricing structure at BS Pink and your major competitors. I mean, is the customer looking for the same quality at lower prices? Do you have to adjust your sourcing and your vendor partnerships to achieve that? You know, it just feels like there's been a lot of pricing pressure in the sector for a while. And on the marketing side, with the increase in the GWPs, does that pressure your gross margin going forward? But is it a vehicle to drive traffic and something that you think is a permanent part of the marketing mix?

Janet Kloppenburg: Questions Hello.

Janet Kloppenburg: I wondered.

Janet Kloppenburg: What's your thought on the general pricing structure, Sps pink and.

Janet Kloppenburg: And your major competitors I mean is the customer looking for the same quality at lower prices.

Janet Kloppenburg: Do you have to adjust your sourcing and vendor partnerships to achieve that.

Janet Kloppenburg: It just feels like there's been a lot of pricing pressure in the sector for a while and on the marketing side.

Janet Kloppenburg: With the increase in the <unk> PS.

Janet Kloppenburg: Does that make sense.

Janet Kloppenburg: Is that pressure your gross margin going forward, but is it.

Janet Kloppenburg: A vehicle to drive traffic and something that you think is the permanent part of our marketing mix. Thank you.

Hillary Super: Thank you. Sure, happy to talk about those things. There definitely is pricing pressure in the intimate sector. We know that a big piece of the share is in value and off price. I do not think that our pricing strategy is inherently wrong, but I think that we need to do a better job of expressing, showing that value, and creating that emotional connection and storytelling with our customer. I think that our execution has gotten, rather than thinking about how to elevate and differentiate, I think that for a long period of time, we were attempting to compete with value, and I think that, you know, sure, there are categories that will be value-driven, panties being one, miscollection being another, that are really traffic-driving and basket-building items, but I think it's all about the storytelling and the brand positioning and the product and making sure that it is so clearly differentiated that we can warrant those prices, and it will be a journey.

Hillary Super: Sure. Happy to talk about those things. There definitely is pricing pressure in the intimate sector. We know that a big piece of the share is in value and off-price. I do not think that our pricing strategy is inherently wrong, but I think that we need to do a better job of expressing, showing that value, and creating that emotional connection and storytelling with our customer. I think that our execution has gotten, rather than thinking about how to elevate and differentiate. I think that for a long period of time, we were attempting to compete with value. And I think that sure, there are categories that will be value-driven, panties being one, Miss Collection being another, that are really traffic-driving and basket-building items.

Janet Kloppenburg: Sure happy to talk about those things, they're definitely is price pricing pressure in the intimate sector. We know that a big piece of the share is in value in off price I do not think that our pricing strategy is inherently wrong, but I think that we need to do a better job of expressing showing that valley.

Kevin Wynk: We know that a big piece of the share is in value and off-price. I do not think that our pricing strategy is inherently wrong, but I think that we need to do a better job of expressing, showing that value, and creating that emotional connection and storytelling with our customer. I think that our execution has gotten, rather than thinking about how to elevate and differentiate. I think that for a long period of time, we were attempting to compete with value. And I think that sure, there are categories that will be value-driven, panties being one, Miss Collection being another, that are really traffic-driving and basket-building items. But I think it's all about the storytelling, the brand positioning, and the product and making sure that it is so clearly differentiated that we can warrant those prices. And it will be a journey.

Janet Kloppenburg: And creating that emotional connection and storytelling with our customer I think that our execution has gotten.

Janet Kloppenburg: Rather than thinking about how to elevate and differentiate I think that for a long period of time, we were attempting to compete with value and I think that you know sure. There are categories that will be value driven panties being one miss collection being another.

Janet Kloppenburg: That are really a traffic driving and basket building items, but.

Hillary Super: But I think it's all about the storytelling, the brand positioning, and the product and making sure that it is so clearly differentiated that we can warrant those prices. And it will be a journey. As it relates to GWPs, we definitely like them better than traditional promos. As an example, in this quarter, we actually did 6 days less of entire box promos. We were much, much less promotional in categories like PINK apparel. Like I said, we were less promotional in panties. We could debate whether or not that's the right thing going forward, and we're going to spend some time strategizing that. But it is a shift.

Janet Kloppenburg: I think it's all about the storytelling and the brand positioning and the product and making sure that it is so clearly differentiated that we can warrant those prices and it will be a journey.

Hillary Super: As it relates to GWPs, we definitely like them better than traditional promos. As an example, in this quarter, we actually did six days less of entire box promos. We were much, much less promotional in categories like Fink Apparel. Like I said, we were less promotional in panties. We could debate whether or not that's the right thing going forward, and we're going to spend some time strategizing that, but it is a shift, so do I think that it will put pressure on promotions? It is a headwind, but it needs to and will be offset by our more traditional promos, which I like because it feels better.

Kevin Wynk: As it relates to GWPs, we definitely like them better than traditional promos. As an example, in this quarter, we actually did 6 days less of entire box promos. We were much, much less promotional in categories like PINK apparel. Like I said, we were less promotional in panties. We could debate whether or not that's the right thing going forward, and we're going to spend some time strategizing that. But it is a shift. So do I think that it will put pressure on promotions? It is a headwind, but it needs to and will be offset by our more traditional promos, which I like because it feels better. It does drive traffic. It drives a higher basket size, and it's a walking billboard. I mean, in New York City alone, you see these totes everywhere. And I think that's a good thing.

Janet Kloppenburg: As it relates to GW piece, we definitely like them better than traditional promos as an example in this quarter, we actually did six days less of entire box promos, we were much much less promotional in categories like pink apparel like I said, we were less promotional and panties.

Janet Kloppenburg: Could debate, whether or not that's the right thing going forward and we're going to spend some time strategizing that but it does it is a shift so do I think that it will put pressure on promotion. It is a headwind, but it needs to and will be offset by our more traditional promos, which I like because it feels better it does drive traffic it drives a higher basket size.

Hillary Super: So do I think that it will put pressure on promotions? It is a headwind, but it needs to and will be offset by our more traditional promos, which I like because it feels better. It does drive traffic. It drives a higher basket size, and it's a walking billboard. I mean, in New York City alone, you see these totes everywhere. And I think that's a good thing. The team has done a really good job, I think, making them much, much better looking. And so all in all, we view that as progress in our journey to reduce promos.

Hillary Super: It does drive traffic. It drives a higher basket size, and it's a walking billboard. I mean, in New York City alone, you see these totes everywhere, and I think that's a good thing. The team has done a really good job, I think, making them much, much better-looking, and so all in all, we view that as progress in our journey to reduce promos.

Janet Kloppenburg: And it's all walking Billboard I mean in New York City alone you see these folks everywhere and I think that's a good thing the team has done a really good job I think making them much much better looking and so all in all we view that as progress in our journey to reduce promos.

Kevin Wynk: The team has done a really good job, I think, making them much, much better looking. And so all in all, we view that as progress in our journey to reduce promos. Great. Thank you very much. And lots of luck to you and the team. Thank you. Thanks, Janet. Okay. Thanks, everyone. That concludes our call this morning. We appreciate your time this morning and your interest in VS & Co. Have a great day. Thank you for participating in the Victoria's Secret & Co.'s First Quarter 2025 Earnings Conference Call. That concludes today's conference. Please disconnect at this time and enjoy the rest of your day.

Hillary Super: Great. Thank you. Thank you very much and lots of luck to you and the team. Thanks, Janet. Okay. Thanks, everyone.

Janet Kloppenburg: Great. Thank you very much. And lots of luck to you and the team.

Speaker Change: Great. Thank you. Thank you so much and lots of luck to you and the team. Thank you.

Hillary Super: Thank you.

Kevin Wynk: Thanks, Janet. Okay. Thanks, everyone. That concludes our call this morning. We appreciate your time this morning and your interest in VS & Co. Have a great day.

Speaker Change: Thanks, Shannon Okay. Thanks, everyone that concludes our call. This morning. We appreciate your time this morning, and your interest in <unk> have a great day.

Operator: That concludes our call this morning. We appreciate your time this morning and your interest in VS&S Cal. Have a great day.

Operator: Thank you for participating in the Victoria's Secret & Co.'s First Quarter 2025 Earnings Conference Call. That concludes today's conference. Please disconnect at this time and enjoy the rest of your day.

Operator: Thank you for participating in the Victoria's Secret & Company's 1st Quarter 2025 Earnings Conference Call.

Speaker Change: Thank you for participating in the Victoria's Secret <unk> Company's first quarter 2025 earnings Conference call that concludes today's conference. Please disconnect at this time and enjoy the rest of your day.

Operator: That concludes today's conference. Please disconnect at this time and enjoy the rest of your day.

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