Thank you for standing by. This is the conference operator. Welcome to the lululemon athletica Inc. Fourth Quarter and Year-end 2018 Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Howard Tubin, Vice President, Investor Relations for lululemon athletica Inc. Please go ahead.

Thank you, and good afternoon. Welcome to lululemon's fourth quarter earnings conference call. Joining me today to talk about our results are Calvin McDonald, CEO; Stuart Haselden, COO; and PJ Guido CFO. Before we get started, I'd like to take this opportunity to remind you that our remarks today will include forward-looking statements reflecting management's current forecasts of certain aspects of lululemon's future. These statements are based on current information, which we have assessed but which, by its nature, is dynamic and subject to rapid and even abrupt changes. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business, including those we have disclosed in our most recent filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Any forward-looking statements that we make on this call are based on assumptions as of today, and we expressly disclaim any obligation or undertaking to update or revise any of these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our annual report in Form 10-K and in today's earnings press release. The press release and accompanying quarterly report on Form 10-K are available under the Investors section of our website, www.lululemon.com. Before we begin the call, I'd like to remind our investors to visit our Investors site, where you'll find a summary of our key financial operating statistics for the fourth quarter as well as our quarterly infographic. Today's call is scheduled for 1 hour. [Operator Instructions] And now I'd like to turn the call over to Calvin.

Thank you, Howard, and welcome, everyone, to the fourth quarter earnings call. It was another successful quarter for lululemon as the momentum in our business remains strong. In fact, these results cap off one of the strongest years ever for the company. The leadership team is focused on leveraging the significant opportunities in front of us, both over the course of 2019 and in the coming years. And before going any further, I want to take a moment to express our sincere gratitude to our teams around the world. It is our educators, our store teams and our local brand and community partners around the globe who create that special connection with our guests day in and day out. Turning to our fourth quarter results. We are pleased with how the organization executed exceptionally well over the holiday season. Our preparation and planning allowed us to deliver another quarter of robust performance. And looking at the full year, the results were equally impressive. Our 2018 results demonstrate the strength of lululemon today as we enter the next phase of our growth. Our compelling product assortment, retail experience and community-based brand activations continue to resonate strongly with our guests. Our strategic investments in the business to support our digital expansion and supply chain improvements delivered impressively on both our top and bottom line. All of this, combined with our significant growth outside North America, allowed us to achieve a high level of results for our employees and shareholders. Looking now at 2019. We are focused on building upon our momentum as we pursue many opportunities on the near-term horizon. Starting with product, we will continue to deliver the newest technical product innovations that lululemon has built upon. We will leverage our strength and success in our core categories, while we also…

Thanks, Calvin. Let me also congratulate our store teams as well as our SSC, GEC and DC teams around the world for enabling the strong results we're reporting today. Without their passion and enthusiasm, none of this will be possible. In Q4, strong guest response for our holiday merchandise assortment, coupled with our ability to leverage the strategic investments we've been making in the businesses, drove another strong result. The trends we've seen all year in traffic, guest engagement and product margin continued and contributed to our nearly 40% increase in adjusted EPS in the quarter. I'm also proud to report that we achieved 3 of our 2020 financial targets in 2018, 2 years ahead of schedule. We reported an operating margin of 21.5%, a gross margin of just over 55% and our e-commerce penetration reached 26%. These levels are all at or above the targets we set for 2020 and were made possible by our investments over the last 3 years in supply chain, technology and innovation. 2018 has clearly been an inflection point for our business in both top and bottom line, and we continue to see clear opportunities to expand on this story by building stronger systems and platforms in supply chain, IT infrastructure, omni capabilities, digital commerce and product development capabilities. This sets us on a new course for 2019 and beyond that we are all excited for. I'll now offer some details on our Q4 performance. Comps increased a better-than-expected 17% as our traffic remained strong in the quarter. Gross margin expanded 110 basis points, partially offset by planned increases in SG&A as we continued to lean into growth-driving investments in Q4. These investments included omnichannel and digital capabilities to position us well for 2019 and drive our future growth. Operating margin grew 60 basis…

Thanks, Stuart. Our momentum continued in Q4, and we finished up the year delivering very strong financial performance. Before I provide highlights on Q4 and our guidance outlook, I will refer you to the financial supplement posted on our investor site for additional details. I'd also note that 2018 was a 53-week year for us. For Q4, total net revenue rose 26% to $1.17 billion, driven by strong execution across all parts of the business. In our store channel, we delivered a 7% constant dollar comp store sales increase on top of a 1% increase in Q4 last year. Square footage increased 13% versus last year, driven by the addition of 36 net new lululemon stores since Q4 of 2017. During the quarter, we opened 14 net new stores and completed 9 co-located remodels. In our digital channel, we saw the strongest traffic over the year, which resulted in a 39% constant dollar comp increase on top of a very strong 42% increase last year. For the quarter, e-comm contributed $344 million of top line, reaching close to 30% of total revenue. For the full year, as Stuart mentioned, e-comm penetration was 26%. And I'd add that the impact of foreign exchange decreased revenues by $14.7 million in the quarter. Gross profit for the fourth quarter was $668.6 million or 57.3% of net revenue compared to an adjusted 56.2% of net revenue in Q4 2017. The gross profit rate in Q4 increased 110 basis points versus adjusted gross margin last year and was driven primarily by the following: a 170 basis point increase in overall product margin resulting from lower product costs, favorability in product mix and lower markdowns. We are pleased with the product margin strength we continue to realize on top of the strong gains over the last…

[Operator Instructions] Our first question comes from Matthew Boss with JPMorgan.

This is Steve Zaccone on for Matt. First question, just on product. You've seen amazing strength in the bottoms business in 2018. Do you think that category can continue to be a significant driver of growth in 2019 or do you see some other focus areas for product growth in 2019? Then just secondly, on SG&A, to understand the cadence there in the first quarter and then versus the full year guide, but how should we think about the second quarter through the fourth quarter just on the leverage line?

I'll take the question on product, and then PJ will take your question on SG&A. We see a wonderful path forward for our product both in our core as well as our ability to continue to expand the categories that we're offering our guests. Our bottoms business not only is our #1 category for acquiring new guests, which are continuing to help drive and fuel that, but it's also an area in which we continue to innovate both across men's and women's. So we remain very encouraged with the continual performance of the business in 2018 and moving into 2019. As well as our ability to expand upon categories across all of our guests, existing and new, and that being to OTC, outerwear, bras, and into men's and the other categories, Selfcare and Run, just to name a few that I mentioned. So I'm very encouraged with how our categories are performing as well as into 2019 both on innovation and newness.

And Steve, so on the SG&A question, so just to start. We've committed to and delivered SG&A leverage for the year. And improving profitability is part of our ongoing objective, and that's reflected in our guidance. That said, we've been using good performance during the course of the year to find pockets to invest in long-term sustainable growth, and it's working. We're seeing results there. Specifically, during the quarter, we invested more in digital marketing that was focused more on guest acquisition. And as mentioned earlier, we saw our new guest acquisition up 30% for the quarter. We also expanded our testing in new growth vehicles such as loyalty and Selfcare, and we also continue to operate a higher level of seasonal stores, which is a great way to also acquire new guests and build brand awareness. It's also a low-risk way to test markets for the eventual potential conversion to a full-on store, and we've done several of those as well. So if not for these discretionary strategic investments, we would have seen SG&A flat or even leveraging.

Our next question is from Alexandra Walvis with Goldman Sachs.

My question is on what the biggest drivers are of your confidence in that double-digit comp guide for 2019. You went into some color in response to the last question on some of the categories that are expected to drive that growth. I wonder if you could share some thoughts on how the growth is expected to split between stores and e-commerce or anything you can share on ticket and traffic or any other drivers of the confidence there.

Alex, it's PJ. I'll start off just with traffic has been the key driver throughout 2018, and we expect that momentum has carried over. It always starts with great product and assortment as mentioned. But then we support and fuel that with physical engagement with our guests -- through our guest educators, through community events, our network of over 2,000 ambassadors. Then there's the online dialogue, where we drive traffic both online and in-store through our digital marketing programs, and I think e-mail is a great example of that. We saw higher traffic in Q4 -- higher traffic in Q4 than in any other point in the year, and as I mentioned, we see that carrying over into 2019. Online traffic, also a key driver of e-comm performance was the big component. But we've also seen big gains in conversion as a result of continuing enhancements to our website, which we'll continue to make. So then coming into 2019, we'll continue to fuel traffic, but we'll also invest to improve conversion both online and in-store.

Great. And you mentioned in your comments that you were excited about Selfcare following some of the tests in that category. Anything you can share with us for what's next there?

Other than that, we were happy with the test results, and we're excited to share more on our plans around Selfcare as well as some additional categories on our Analyst Day with you.

Our next question is from Matt McClintock with Barclays.

Following up on the seasonal stores. I'm just wondering, you launched -- you opened 2x the amount this year versus last year. I was wondering if you can give us any insight into the range of outcomes that you experienced and maybe the surprises that you had versus maybe in terms of positive surprises or negative surprises from opening that many stores. I'm just trying to get a little bit more color as you advance down that channel.

Yes. Matt, it's PJ. Well, I mean, the positive surprise is obviously the new guest acquisition that we're able to measure, and so we're really excited about seeing that. The other positive surprise, again, I mentioned seasonal stores are a great way to gauge a market. And we actually converted 8 of those -- or we'll be converting 8 of those to full-on stores in 2019. So those are the positives. Not a whole lot of negatives there. It's a low-risk way to build your brand, to build new guests. And we really like that as a strategy.

Okay. And then staying with marketing, you signed Nick Foles during the quarter, and I was wondering if you could talk to that. Or maybe this is a topic for the Investor Day, I apologize. But it would seem like there's a little bit of shift in terms of the marketing or signing or finding brand ambassadors towards maybe more higher-profile people. Could you maybe talk to that a little bit? Is there a bigger budget for that now? Or how should we think about that from the outside?

Thanks, Matt. Yes, we're excited with the signing of Nick into the elite ambassador family here at lululemon. But I would indicate that it's not a new strategy for us. He's definitely a very high-profile athlete. But we're excited to have him. I think when we look at our ambassador community of 2,000-plus strong and our global and elite ambassadors, it is an area that we're excited to continue to expand. We do not pay typical endorsement fees. We really look to partner with athletes that have an alignment on values. The athletes are authentic that they love the brand. And collectively, we come together excited about the partnership and the potential impact that we can both have in the community and with our guests living the Sweatlife. And with Nick, he's a wonderful ambassador and representative of those things, so we're excited. And it is an area that we think we can continue to expand on and we'll share more on the Analyst Day.

Our next question is from Ike Boruchow with Wells Fargo.

I want to focus on international profitability. I don't know if this is for Stuart or PJ. But maybe you can you let us know where international profitability kind of landed at the end of this year. Any surprises, good or bad, on where you're scaling, both in Asia and in Europe? And then the kind of expectations maybe that's embedded in your guidance for the next 12 months on international margins.

Sure. Ike, it's Stuart, and I apologize. My voice is a little hoarse. Let me -- I'll try to give a little color on our profitability. We're not going to be able to break out the specifics, but what we can say is that we saw strong profitability in Asia and in Australia that more than offsets the operating loss that we saw in Europe. We're still probably 1.5 years from breakeven in Europe but really excited at the momentum that we're seeing in our European business now. And as we mentioned on the call, we saw strong sequential trends in both Asia and Europe. Asia, up 70%; Europe, up 60% in the fourth quarter. That was an acceleration sequentially from the third quarter. And as we also mentioned, we're going to open 25 to 30 stores in 2019 internationally. That's more than half of the total stores that we'll open as a company. The balance of those or more than half of those will be in Asia. And we're seeing strong trends, strong comp trends in both China and broadly across Asia as well as Australia and Europe. I would say in Europe, we've actually seen an acceleration in our store comps. That's been exciting as we are reaching levels of brand awareness that we believe are now helping us achieve that faster pace of comp growth. But overall, I think just the store count reflects the importance of this as one of our growth drivers. We'll certainly offer more details at the Analyst Day. But it will continue to be an area where we're growing our business disproportionate to North America. And the profitability we're excited to see really reaching a point where we're reaching a scale economies situation in Asia, in particular, where we're now seeing very healthy bottom line results. So we'll share more, as I mentioned, on the Analyst Day, but that's, I think, some headlines we can offer now.

And Stuart, could you just maybe talk about between Europe and Asia, is there anything structural that precludes Europe from scaling their margins? I'm just kind of understanding why Europe is kind of lagging and Asia, kind of the puts and takes?

Yes. We have 21 stores in Europe right now. We have 34 in Asia. The stores in Asia tend to have a bigger sales volume than we've seen in Europe. So it's really a function of just the productivity of the store fleet. Importantly, we're also investing aggressively in our digital business internationally. So we're going to open -- or I'd say we're going to launch new websites in France, Germany, China, Japan and Korea, all in the first half of this year, which will dramatically improve our ability to engage with our guests in those regions digitally. But really, it's just as a question of reaching the volume in Europe to leverage our overhead investments there. So we're confident we'll get there, and we're pleased with the progress we're seeing.

Our next question is from Sharon Zackfia with William Blair.

I was hoping you could maybe talk about North America and how the comps are trending in North America relative to the rest of the world. And if you're still seeing healthy comp growth in North America, which I suspect you are, how does Asia in particular look relative to the U.S. or Canada at a similar age?

Yes. Sharon, it's PJ. So I mean, North America, obviously, it's a bigger part of our business, close to -- it's 90%, right? So our international is roughly 10%, 11% but growing at a much faster rate. So we're actually seeing it start to move the needle. So the comp is driven primarily by the U.S. and Canada. And we're seeing traffic continue, good traffic, we're seeing good comp, both in-store and online. So really happy with the way North America has performed and continues to perform.

So Sharon, it's Stuart. From an international standpoint, our stores are younger, and you would expect that they would comp at a higher rate in the first few years of their sort of lifespan as a comp store. That's the case in North America and it's certainly also the case in our international markets. We have -- we still -- we certainly have a brand awareness obstacle to overcome in our international markets, but as we're beginning to gain traction in our community efforts and our brand building efforts, we're seeing that comps accelerate particularly in Europe, as I mentioned. But we're seeing very healthy strong comp trends across our international markets. That would be what you would expect, I think, in terms of the relative age and cohort -- age cohort, if you will, of those stores.

Our next question is from Dana Telsey with Telsey Advisory Group.

Can you talk a little bit about the loyalty program, the learnings from it? And is the package of the loyalty program, is it the same or has it been tweaked? And just on the product margin, thoughts on product margin for 2019. And unpack the components of it and how you're looking at it.

Dana, it's Calvin. On the loyalty program, we've been very happy with the test and pilot so far. As you know, we initially tested in Edmonton, and we've just recently tested in Denver. And our intent over the coming months is to select a few more markets and keep testing. Response from our guests has been very positive. It's exceeded our expectations in both markets. We did test a different price point in Denver. We launched at CAD 128 in Edmonton. We tested USD 148 in Denver and saw wonderful take-up. So it sort of confirmed our thinking, which is there's real value in the memberships. The guest is understanding the value and the demand is there for us. So we're very encouraged and will continue to test as we look into expanding the program and ultimately leading into a national program in the coming sort of quarters to a year.

And on your gross margin question, Dana, so we do see continued upside in the gross margin, specifically driven by product margin. We've guided to modest expansion, and we have a lot of confidence in that. The opportunity is coming from additional scale. It's coming from vendor diversification. It's coming from closer partnerships with existing vendors, having transparency into cost we haven't necessarily had in the past. And it's also enhancing our distribution network. So we do see, again, continued expansion on the product side.

Our next question is from Paul Lejuez with Citi.

Just curious how you're thinking about F '19 comps from a store versus e-comm perspective? Also if you can maybe share how you're thinking about North America versus international. And then just second, the SoulCycle partnership, curious if you see any other opportunities to do something similar, either in the U.S., Canada or international.

So from a comp perspective, we can't talk about too much beyond Q1. And just broad strokes, the traffic patterns we've seen all year at both online and in-store, there's -- the split is we would expect that to continue. I don't know that there's any huge directional change either way. But yes, we expect the stores to continue to comp well, and we're seeing the traffic to back that up. And certainly, our online business, we're really excited about.

And Paul, on the collaborations, we've done collaborations. We're excited when we do it both with a sweat partner, like SoulCycle. And yes, we continue to do more of these and we have some exciting ones planned for 2019 that we'll be announcing and launching to our guests in the coming months. In addition, we also are excited about certain collaborations with designers, where we can bring their particular view on aesthetic with our technical view on product, like the Robert Geller, and we're seeing a wonderful response to that announcement. And that product is pending to be launching very soon and anticipate great demand as well as sort of the ability to attract the new men's guests into our business. So collaborations have been performing well. We see them on both sweats and aesthetic design partner opportunities. And it's bringing in new guests and expanding the basket with our existing guests. So we'll continue to do them.

Our next question is from Paul Trussell with Deutsche Bank.

This is Gabby Carbone on for Paul. So our question is on the men's business. You're seeing very strong results there. What categories have the largest opportunities for growth? And then we discussed the opportunities to build out more co-located stores, but what are you seeing in terms productivity at these stores versus your traditional format?

Gabby, it's Stuart. So we're really excited with the trends at our men's business. As we mentioned, we offered a couple of nuggets in the prepared remarks. It's growing faster than our women's business. Our men's pants has been one of the fastest growing categories within men's. It's become an important way in which we acquire new guys to the brand. And at this point, it's larger actually than our performance tops business, which had -- prior to the last year had been the largest category. So we're excited to see the trends in men's pants. Outerwear has been another success story for us in 2018. A huge increase in our admittedly small outerwear business in men's, which is just an indication of us -- an indication to us rather, how big this business could be. So we're excited to introduce new styles in outerwear as well as in our performance business. And we'll have a nice balance between our technical performance style as well as our -- what we call office travel commute styles, outerwear among them. So there's a lot of runway for us to continue to grow our men's business. We're just over 20% penetration today. We really believe that lululemon can be a dual-gender brand, and that our men's business can ultimately be as big as our women's. And from a channel standpoint, you mentioned co-located. That is an important part of the story. We see huge increases in our productivity of our co-located stores, which are essentially stores that are space constrained, very productive locations that we're able to either expand or find a larger location nearby so that we can have a more effective presentation of our men's product and have an environment that's more appealing to guys to shop in. So we're seeing increases, for example, in our Mall of America location, where we expanded the square footage from 3,000 to 5,000 square feet. We doubled the size of our men's shop there, and we saw our sales in men's up 80%, with essentially the same inventory. Now every co-located expansion is not that successful, but that's a good example of the success that we've seen. But it is an important part of the story for men's and our North American store footprint broadly. And we're still testing just how deep we can go in the portfolio with our strategy.

Our next question is from Kimberly Greenberger with Morgan Stanley.

Stuart, my question is on international. I'm wondering the international sales growth rate seems to be hitting more broadly an inflection, particularly in Europe, over the last year or so. And I was wondering if you could just talk about -- I'm sure there are many contributing factors, but what do you think is driving that inflection? And understanding that in North America, the brand started out as a women's brand and it's growing in men's. It was sort of a dual-gender brand for example, when you brought it to Asia. Are you seeing maybe higher penetration in men's in Asia relative to North America? Or any other learnings on the international front with regard to men's?

Yes. Thanks, Kimberly. Good questions. What I would say is we have a really strong team in Europe led by Gareth Pope, our GM there. And Gareth has done a lot of great work over the last couple of years to reposition, if you will, a number of our stores -- the real estate strategy broadly in Europe. And we found success in Gareth's leadership there. And we continue to invest behind it. And as I mentioned, we've been patient and deliberate in the community building activities in Europe. It's taken us a bit longer than we originally expected. But we're now starting to see traction and momentum there from a guest acquisition and brand awareness standpoint, which we believe is what we attribute the acceleration in the comp in Europe to. So we're thrilled to see that trend. And we'll be evaluating just how we continue to invest behind that, the strategy that Gareth and the team has set in Europe. And good question around men's and how we think about that internationally. We do have the opportunity to introduce the brand as a dual-gender business, dual-gender brand in these international markets where we're not as well known, obviously. And we have taken steps to do that. I would say the mix of business is not remarkably different in our international markets versus North America. We still hold that as an opportunity. And we're evaluating how in markets like Asia, we can show up with a stronger men's positioning. And that's something we can talk more about when we're together at the Analyst Day.

Our next question is from Jay Sole with UBS.

Just kind of curious about the guidance for 1Q. Can you just talk about how the Easter shift might be impacting your business in terms of like just what kind of natural lift you expect in April from where you are today just because of how the calendar falls this year?

Yes. So we would see -- that's a good thing, right, because you have that extra week. And so we are -- we would see -- we would expect the better part -- the best part of the quarter yet to come. And having that late Easter is usually beneficial.

Our next question is from Mark Altschwager with Baird.

Just circling back to the trend with the co-located stores and the expanded stores, I apologize if I missed it. But can you talk about how you're thinking about the pace of renovations and expansions in 2019 and beyond? And then, I think the success with that initiative speaks to some of the constraints you had in the smaller stores in terms of merchandising the expanded assortment, especially in men's. Maybe talk about some of the digital and omnichannel strategies you're leaning into to ensure you're fully capturing that opportunity from the broad base...

Thanks, Mark. On the co-located, we've seen very positive results in 2018, and our intent for 2019 is to maintain the number, which is in and around 20. We are planning to open more new doors this year in the 40 to 50 range, with China picking up a disproportionate number of those incremental doors. So overall, the amount of incremental square footage is in the mid-teen growth range, which is up from 2018. And that's all positive based on how the guest is responding to our assortments, our ability to express our assortment in more locations and are really pleased with the mix. In addition, as you mentioned, we are looking to expand on our omni innovation. We have a very strong BBR program, and that is where our stores access our extended assortment online in order for the guests to either have it shipped to the store for pickup and/or to the guest's home. And very pleased with the results of that, and that continues to grow year-over-year and does help in our smaller doors. But it also helps in our larger doors as well as we continue to add to our assortment and breadth of categories. On buy online, pick up in-store, we tested that over the holiday period in around 35 doors. We're pleased with the results. We are rolling that out across the network, and we plan to be across all doors by holiday 2019, which will give us a wonderful opportunity to promote and move that further up in the guest journey and experience online to make it very clear and aware that, that service exists. But those omni initiatives, combined with how we're approaching our store fleet, both are going to be contributing to the momentum this year.

That's great. And then I think in the prepared remarks, you mentioned a goal of 50% digital penetration longer term. Maybe without previewing too much from the Analyst Day, just curious how you think about that pathway to 50%. How much of it is coming from your mature markets versus maybe higher digital penetration in some of your new international markets?

Thanks for clarifying through your question, Mark. That reference was to our business, particularly in China. We see our dotcom business achieving a 50% ratio. We're very excited about our digital direct-to-consumer business overall, and we'll share at the Analyst Day how we view that across all markets. But that particular statement was linked to China.

Our next question is from Jamie Merriman with Bernstein.

My question was actually about digital channel. So your margins in digital are frankly, extremely impressive, and I don't know that I've seen them elsewhere in the industry. So I was wondering, are there investments that you still need to make as you scale that business up further as penetration increases? Or as you see that mix shift continue, would you expect to be able to maintain margins at that frankly, again, fantastic level?

Jamie, it's Stuart. We are very happy with our digital margins. And as we grow that business faster, it is accretive to our overall operating margin. And I think there's specifics within our business. Our return rates, in particular, are very low, which helps explain why we enjoy a better rate -- margin rate online than other companies. But what I would say in terms of as we look forward and what investments we need to make, we don't feel like we're world champions yet in digital e-commerce, and there's a lot of opportunities we see with the website, with social media, with digital marketing, where we can do much better. And so the upside there is a nice runway of revenue growth in our digital business. So we're excited about that.

Our last question is from Rafe Jadrosich with Bank of America Merrill Lynch.

I wanted to just follow up on some of your comments about the innovation pipeline. At the beginning of the call, you mentioned category expansion opportunities. Can you just give a little bit more color on what's happening there? And then for 2019, will you be launching any new fabrics? Or is there opportunity to expand some of your existing fabrics into more categories?

Thanks, Rafe. Much of that we'll be sharing at the Analyst Day. But what I will queue up is 2. One, from a fabric standpoint, we're excited with the continual performance of our existing. Equally, we see opportunity in sharing well-performing technical fabrics across both men's and women's, which is a big opportunity for us, and we'll share how we're approaching innovation on that Analyst Day. As well as a lot of the categories that we're looking to expand. The one that I will tee up, which will be in market prior to us meeting in April, is run and our run campaign, which we're excited about building on the success of yoga as a key sweat for us. Run is an opportunity for us to continue to grow with our existing guests. Stuart mentioned some of the success of our events, both physical and digital. And our assortment and being known as a run destination for apparel, technical apparel, both for men's and women's, is a large opportunity and we'll be launching in the next week an exciting campaign that will start to build the awareness around that sweat activity, and we see a lot of exciting future growth potential behind that as well. More to share at the Analyst Day.

This concludes the time allocated for our question-and-answer session. I would now like to turn the conference back over to the presenters for any closing remarks.

Thanks, everybody, for your interest. And we look forward to seeing many of you in New York next month at our Analyst Day. Thanks very much. Bye-bye.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.