Good day, ladies and gentlemen, and welcome to the Urban Outfitters, Inc. First Quarter Fiscal '25 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Oona McCullough, Executive Director of Investor Relations. You may begin.

Good afternoon, and welcome to the URBN first quarter fiscal 2025 conference call. Earlier this afternoon, the Company issued a press release outlining the financial and operating results for the three-month period ending April 30, 2024. The following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements. Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the Company’s filings with the Securities and Exchange Commission. On today’s call you will hear from, Richard Hayne, Chief Executive Officer of URBN; Frank Conforti, Co-President and COO, URBN; and Melanie Marein-Efron, Chief Financial Officer, URBN. Following that, we will be pleased to address your questions. Please note, today we will be speaking to our financial results on an adjusted basis which does not include non-recurring adjustments for one-time store closure and impairment charges. The effect of these items is detailed in our press release as well as the investor presentation that is posted to our URBN investor relations website at www.urbn.com. I will now turn the call over to Dick.

Thank you, Oona. Good afternoon, everyone, and thank you all for joining our call today. In my introduction I’ll make some quick remarks regarding our results, give some updates on the Urban brand, and then discuss the mood of our customers. After that I will turn the call over to Frank and Mel for a more in-depth review of our results and our thoughts on the remainder of the year. Put simply, URBN’s first quarter results were outstanding and topped our expectations. Four of our five brands posted record first quarter revenues and three posted record operating income. The Anthropologie, Free People, FP Movement and Nuuly brands all produced double-digit revenue growth. These brands are delighting their customers, capturing additional market share, and executing at a best-in-class level. Combined, the four brands more than offset continued softness at the Urban Outfitters brand. At the Urban brand in North America, the new senior team has begun to make changes in how the brand operates. This includes initiating a more robust read and react process to take advantage of our speed to market capabilities; lowering some prices in several product categories including women’s accessories and home goods; and changing the marketing strategy by investing more and differently in social media. At the same time the team began to fashion a strategy based on information gleaned from surveys, focus groups and brand history. Toward the end of the quarter and into May, customer reaction to these changes has been encouraging. Both the women’s accessories and home categories have delivered positive comps and we’ve registered more new digital customers in the last few weeks. Small wins for sure, but trending in the right direction. Frank will speak more about the Urban brand in his commentary, and Sheila and Shea will share more about the strategic review on our call in August. Rest assured that returning the Urban brand to profitability and growing their customer base remains our number one priority. Turning now to the health of our customers at all brands. As a group, we believe they are currently in good shape enjoying both solid job security and incomes that are rising slightly faster than inflation. They are still excited by our new fashion offerings, and traffic in stores and on-line remains strongly positive, but their purchases are slightly more considered than last year. Overall, I would classify the customer mood this, versus last year, as enthusiastic rather than exuberant. We believe this new mood is healthier because it’s more sustainable. With that I’ll now turn the call over to Frank.

Thank you, Dick, and good afternoon, everyone. Today I will discuss our total company first quarter results versus the prior year followed by some more detailed notes by brand. As Dick noted, the first quarter performed ahead of our expectations as discussed on the fourth quarter call. Total URBN sales grew by 8% to a Q1 record of $1.2 billion and four of our five brands continue to perform exceptionally well, posting record first-quarter sales. Our sales growth was driven in part by a retail segment comp of 5%. The Anthropologie, Free People and FP Movement brands all produced double-digit retail segment comp growth more than offsetting the negative double-digit comp at the Urban Outfitters brand. Nuuly also delivered robust double-digit revenue growth due to a 56% increase in subscribers versus the prior year. Additionally, the wholesale segment increased revenue by 3% driven by an increase in the regular price sales at Free People. So far in May, trends have remained solidly positive for total company and four of our five brands. Although the second quarter comparison from the prior year is difficult, we believe retail segment comps could grow in the low single-digit range. Positive retail segment comps combined with robust revenue growth from Nuuly and single-digit revenue growth in the wholesale segment could result in a mid-single-digit increase in total Q2 URBN sales. Moving on to URBN gross profit. Adjusted gross profit dollars excluding the one-time store closure and impairment charges totaling $4.6 million, increased 11% to $413 million, while our adjusted gross profit rate increased by 106 basis points to 34.4%. The improvement in adjusted gross profit rate was primarily due to increased initial margins at all brands. These improvements were partially offset by a higher markdown rate at Urban Outfitters as the brand continues to need…

Thank you, Frank, and good afternoon everyone. Now I will discuss our thoughts on the second quarter financial performance. We are pleased that overall consumer demand has remained strong to start the quarter and we're planning for this strength to continue throughout the second quarter. Right now, we believe that second quarter total company sales growth could be mid-single-digits. Sales growth in Q2 could result from low single-digit growth in retail segment comp and wholesale sales. In addition, we believe that new lease segment sales growth could be mid-double-digits. Now on to gross profit margin. We believe URBN's gross margin rate for the second quarter could decline by approximately 75 basis points compared to the prior year second quarter. While we believe we can continue to see improved initial product margins at Anthropologie and Free People, those improvements are unable to offset the continued weakness at the Urban Outfitters brand. The reduction in gross profit margin at the Urban Outfitters brand could be primarily due to depressed product margins and occupancy deleverage because of negative sales performance. We do believe URBN can return to delivering gross profit margin growth in the back half of the year as well as our full year plan of approximately 50 to 100 basis points of gross margin improvement compared to the prior year. Now moving on to SG&A expenses. Based on our current sales performance and plan, we believe SG&A growth for the second quarter will increase in the high single digits. Our planned growth in SG&A could be primarily driven by higher marketing expenses to support growth in customers and sales at Anthropologie, Free People, FP Movement, and Nuuly. The deleverage in SG&A primarily relates to the Urban Outfitters brand where we have reduced expenses but not at the rate of sales decline.…

Thank you, Mel. Before turning the call over for your questions, I wish to thank our Co-Presidents, the brand design and shared service leaders and their teams, and all associates worldwide. Our outstanding Q1 results are a direct product of your creativity, determination, and hard work. So thank you. Thanks also to our many partners around the world. We appreciate your significant contributions to our success. And finally, thanks to our shareholders for your continued support. That concludes our prepared remarks, now for your questions.

[Operator Instructions] Our first question comes from the line of Adrienne Yih with Barclays. Your line is open.

Good afternoon and congratulations. So, Dick, this question is directed for you. I think you're uniquely qualified to speak about kind of the -- what I call the silhouette shift, sort of going from the big over little to the little over big trend. I want to know where are you seeing sort of the biggest confidence in uptake at the different brands. And I guess this seems such a trend for Urban Outfitters. So what categories are you exiting? And have you clearly identified some of the key trends that you're going to chase in June, July? Thank you.

Well, let the Urban Group talk about that. But I'd tell you, overall, I would say, from a silhouette point of view, I think we started talking about this, what in '18 or '19, that there was a switch in the silhouette to a little over big, I would say we're about midpoint in that -- in adoption of that right now. And I would say, it's firmly established in not only our customer group, but in the mass. And I think that you might start in the next few years seeing little hints of a reversal. But let me talk -- let me see if people -- or Free People or entered people want to talk about what they're seeing in silhouette in their brands.

Hi, Adrienne, it's Shea. I can start. I think, as I would describe it, one of the biggest things happening is proportionality in silhouette. And I think we're definitely seeing that and being new to the brand, your question was, what are we chasing into? I would just say it's been really exciting to see the opportunity that we have here to leverage, speed to market, which is a real gift as we're able to actually chase into stuff. And we're really focused on the proportionality, whether that's big on big or little on little, or the mix of both.

Yeah. I think, Adrienne, it's Tricia. The full adoption of a wide range of bottoms is really driving some pretty significant results for Anthropologie. The range of silhouettes and bottoms, but also the proportion, I think, within Anthropologie has changed pretty significantly in a really exciting way. And we're continuing to chase down those trends as we go forward.

Thank you. You want to say anything about Free People?

Yeah, I don't want Free People to be left out.

No, we're not going to leave Free People out, believe me.

Yeah. I think the Free People brand has been embracing this trend. They quite like it, and it's been fun to sort of see them maximize this over the past several months. We are excited to start testing it to what's next. So to stay ahead of the game. Okay?

Okay, thanks. Thank you, Adrienne.

Thank you. Please stand by for our next question. Our next question comes from the line of Matthew Boss with JPMorgan. Your line is open.

Great. Thanks. So, Dick, you cited robust demand for spring and summer fashion supporting the second quarter. Could you just elaborate on more recent trends you've seen in May, across banners, maybe relative to the first quarter? And then, Melanie, just on inventory at the Urban Outfitters brand as you look across categories, what are you seeing? What are the actions that you've put into place and just your confidence in back half merchandised margin expansion.

Okay. Matt, the retail segment comp performance for Q2 so far in May, it's just slightly softer than our Q1 print, with the biggest difference in the Free People brand. Free People is currently posting mid-single-digit positive comps. And this is because they're anniversarying, what I would call an ultra-positive 27% comp from Q2 last year. But if you look at it on a two-year stack, Free People comps remain very consistent across the two quarters. Now at the Urban brand, we're experiencing somewhat better retail segment comps, as both I and Frank alluded to, with brand comps improving to a high single-digit negative from where they were in Q1, at a teen-related negative. Overall, we think that the Urban retail segment comp for Q2 should be about 3%, that's our best guess.

And then -- hi, Matt, this is Melanie. Just wanted to cover your inventory questions. So at a URBN basis, we're really in a much improved position with total inventory down 2% versus last year. And in total and by business segment, our inventory is in line or below our sales growth, with retail segment inventory down 5% and retail segment growth of 5% sales and wholesale inventory levels were up just 2% on sales growth of 3%. Your question about Urban Outfitters, the inventory is down 10% on negative 14% retail segment comp. And as Frank mentioned, we are planning to take additional markdowns in the quarter at Urban in order to ensure that the inventory is clean, as we exit spring and summer and we enter the all-important back-to-school fall selling season. We believe that at this point, the cleaner inventory will allow us to produce improved margins in the back half of the year.

And just to add to that, Matt, I think, all brands still have continued IMU opportunity as it relates to the back half of the year. And then as we get into that back-to-school and holiday selling season for the Urban Outfitters brand, they have significant opportunity as it relates to being able to lower their markdown rate due to a better inventory-to-sales ratio. And I think some of the work that we're going to do in the second quarter is only going to enhance that. So, which is why we still feel very confident today, obviously, it's May 21, but very confident today on what we're guiding to or what we're thinking about for the full-year gross profit margin expansion of 50 to 100 basis points.

Thank you. Please stand by for our next question. Our next question comes from the line of Paul Lejuez with Citi. Your line is open.

Hi, can you hear me?

Yes.

Hi, this is Kelly on for Paul. Thanks for taking our question. I guess if we could just elaborate on some of your thoughts on how you present the UO brand to the Gen Z customer, how that's different than your prior playbook. Any initial thoughts there? And you mentioned some changing of pricing architecture. If you could just elaborate on that a bit and then just on the gross margin guidance, well, first in 1Q what drove the upside versus plan and how much of an impact should we expect the markdowns that you owe to be offsetting some of the other drivers of gross margin in 2Q? Thanks.

Kelly, I can take the gross profit margin and then let the Urban brand respond to the Gen Z customer. So in the first quarter, obviously we exceeded top line a little bit more than what we thought we were going to deliver, so that helped gross profit margin. I would also say, some of the transitory logistics expenses at Nuuly came in a little bit lower than what we were anticipating. So all of that contributing to better gross profit margin in the first quarter. As it relates to the second quarter, we still think IMU is going to be a positive, but please keep in mind, that we're now really starting to anniversary multiple years of really strong IMU growth. So the IMU improvement will start to abate as the year progresses each quarter from now on. And then the overall gross profit margin decline that we're currently believing that we're going to deliver in the second quarter is really just being driven by the Urban Outfitters brand. Having those elevated markdowns in order to clear through some of that aging out women's and men's inventory and just leaving them much cleaner heading into the important back-to-school and then holiday season for the back half of the year. Shea, do you want to take the Urban question?

Sure. Hi, Kelly. If I understand your question correctly, you're asking about brand positioning and some of the efforts that have been underway as we've been reviewing that position. First and foremost, everything that we do needs to start with a firm understanding of who our customers are. So we have been conducting pretty extensive research, both with our current customers, but also with those customers who aren't shopping with us. And we've learned a lot. We've looked at things like purchase drivers and detractors, lifestyle attributes, and occasions. And I think one thing stands out particularly clear and that is the pace of change for these customers is pretty rapid and we have to keep pace and evolve fairly quickly. And so, as you heard Dick mention earlier, there is two primary goals for us right now. First, we need to rebuild that customer base. We need to rebuild our customer base. And second, restoring profitability. And so it's really in that spirit that we have identified two areas that we've already started to attack and see some early indicators. First, as you mentioned, is the pricing architecture. And really that's about leveraging great price elasticity, but being very mindful of the price value that we want to offer our customers, particularly in certain categories where price accessibility and opening price matters. And we've seen some early wins in the accessory area and even in some of our apparel areas like [indiscernible] for example. And then secondly is really how we reach and serve these customers. And to that, we've really just been amplifying our efforts across social platforms where we know these customers are really living their lives. And it's been exciting to see again some very early indicators there that have led to some good wins on customer.

Thank you. Please stand by for our next question. Our next question comes from the line of Mark Altschwager with Baird. Your line is open.

Thank you. Good afternoon. A follow-up on gross margin. You're reiterating the plus 50 to 100 basis points for the year. Q1 seemed to come in a bit better than planned, sounds like Q2 perhaps a bit lower than you initially thought, given the more aggressive markdown. So I guess, putting that together may be speak to your level of confidence in the high end versus the low end of that 50 to 100. And then separately -- just UO, I think overall margins were negative mid-single-digit last year. Could you just speak -- the path back to breakeven, cycling some of those heavier markdowns get you there or do you need to return to some level of revenue growth to get back to get back to breakeven? Thank you.

Good day, Mark. Sure, I can take that. So, Mark, I think we feel right now, obviously the second half is far away. It feels like we feel very comfortable with the 50 to 100 basis points. I think with the continued IMU improvement, which we have a pretty healthy amount of visibility to, followed by a really significant markdown rate opportunity for the Urban Outfitters brand. I think we feel very comfortable with that plan today and I think we feel comfortable on the high end of that. Obviously, a lot can change between now and the holiday but that's where we sit today. I think we feel pretty comfortable with where those numbers are. The biggest opportunity for Urban Outfitters certainly is to improve that markdown rate, focus on reg price, and then get the top line going. But they're really up against significantly elevated markdown rates in Q3 and Q4 of last year that we think just solely based on having the inventory-to-sales ratio improved should provide for a nice healthy improvement there.

Thank you. Please stand by for our next question. Our next question comes from the line of Alex Straton with Morgan Stanley. Your line is open.

Hi. Thank you. This is Katie Delahunt on for Alex. I just wanted to circle back on the comment you had made about the Urban brands [to-day comps trending] (ph). I think it was negative high single digits. What do you attribute that improvement to? Is it because of the promotions that you're taking in select categories? And then should we expect further improvement throughout the year? I think you had previously said, back-to-school could be a time when we could see a further inflection at Urban. Thank you.

Yeah, I'm not sure we understood it very well, Katie. Urban Outfitters, did you say, they were positive double-digit?

We said we were having a positive digital growth on consumers, new consumers to the brand, which felt like a momentum forward from our Q1 execution. So that, us getting back our customer, Katie is what it's all about. So that's the early what we're experiencing currently within the UO digital business. And I think it's a combination of strategic promotions along with some of the social efforts that Shea's team is making in the US. We also are seeing some nice momentum within our European business, and we feel like they might accelerate their growth recovery throughout the quarter based on their reactions to spring and summer being quite strong. So we have some strong positive momentum in the EU business as we stand today.

Thank you. Please stand by for our next question. Our next question comes from the line of Marni Shapiro with The Retail Tracker. Your line is open.

Hey, everybody, congrats on the consistency as well. Tricia, I'd like to talk to you a little bit just digging in at Anthro, you've had quite a while] of success and specifically with your own brands, which have had some really nice growth. And I think in all the years I've been following Anthropologie could be two of the most successful own brands I've seen there. And I like what I see coming out of daily practice. If you could talk a little bit about how you're using own brands, are they allowing you to have sort of a base in the store so you could kind of pick up on the other trends a little more quickly in the market? And then just one quick question about some of the customers you're bringing in there. Your TikTok [ph] situation is unhinged, it's so good. And there's so many younger influencers and affiliate people that are on there that are killing it. And I'm curious if this is helping to bring in a younger customer base and if it's having an impact on your business.

Yeah, Marnie, thank you for the question. I'll start with the customer piece. As Frank mentioned, our teams are doing a really great job at acquiring new customers, but also younger customers. The first quarter new customers grew by 19% and that really has come from a really concerted effort in acquiring new and acquiring new younger customers in the average age, where customers come down pretty significantly and are definitely engaging on our social platforms, as you referenced, particularly in TikTok. I think most exciting to me in that is our active customer customers are growing, as Frank mentioned, by 18% as our team really are focused on improving retention rates and repeat purchases and that's working very well. From a product perspective, thank you for your comments about our own brands. Our team has been working really, really hard on modernizing and expanding our product assortment, and really apparel has been the driver within that. Most particularly, I would say, in the Denim category, the PILCRO brand has grown really significantly and there's been a ton of effort put into both the design, the way we think about, the way we display the brand in stores, and PILCRO and Maeve and our Anthropologie brands are in our top search brands month after month. So the customer knows them, they seek them out. Daily Practice is an active lifestyle brand that we've introduced. And really, I think, as Dick had mentioned, in the stores in particular, we're thinking about how to expand the footprint of the Daily Practice brand, as well as some other new emerging categories. And that's going incredibly well. So we increased the footprint of those brands by almost 50% in six stores that we tested in the month of February, and it's proving remarkably well. So we have 50 stores lined up to be able to expand that footprint. So overall, our own brand penetration and our total mix has never been higher. The profit that those brands are producing is incredible, but mostly proud of the fashion that the teams are serving up in our own brand offer, and just glad that you recognize that. Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Dana Telsey with Telsey Advisory Group. Your line is open.

Hi, good afternoon, everyone. If you think about the marketing spend, which obviously is helping to drive some of the top line, what's your expectation for marketing spend as we go through the remainder of the year and how you're allocating versus brand and how does that differ? And then just on Europe, what did you see there? How is that performing relative to expectations? And lastly, the wholesale operating income was up significantly. What are you noting there in terms of order trends and sell-through promotionally versus full price? Thank you.

Thanks, Dana. Let me talk about Europe first and then maybe Frank or Mel will talk about the marketing spend. As I think it was mentioned, the Urban brand in Europe posted negative high single digits in Q1 is showing signs of revival. Up until very recently, they were flat and now they're just down a couple of percentage points versus last year. When we look at the other brands, Anthropologie and Free People in sales in Europe are quite strong. They were strong in Q1 and they continued to both comp gains in Q2. So we're very excited. Actually, we're not as optimistic going into this year about Urban, given all the problems that had, but we've been very pleasantly surprised. Mel, would you like to?

Sure. So marketing spend is generally allocated based on where the growing brands are. So, that's why we've talked about the fact that in the first quarter, you know, the growth in marketing has really come from Nuuly, Anthropologie, FP Movement, and the Free People brand. So our allocation will continue to work toward where the -- toward the growing brands. And as we go through the year though, I do think the rate of growth may be closer to sales growth in the back half of the year versus the first half of the year. But our allocation is similar.

Thank you. Please stand by for our next question. Our next question comes from the line of Ike Boruchow with Wells Fargo. Your line is open.

Hey, everyone, just to go back to UO, so to Mark's point earlier, the margins negative double digit -- sorry, negative mid-single-digits last year. Still having issues on the promo and the comp side. I guess my question is just at a higher level, how long of a leash do you guys have on the brand in the sense that when would you look to maybe make more material changes to either the store base or geographies, just something to kind of rightsize the margin structure of the business. Just going to understand how -- like what are the goalposts you guys are kind of looking at there. Thank you.

Okay, I think we've said over the last quarter or two that we were engaged with a -- in a strategic review that is fairly broad and making some decisions about that as we speak. But I think we're not ready to talk about it in depth. We are, as been mentioned on the call now a couple of times, seeing some positive signs. And our thoughts are that we will be able to turn the ship around. There are definitely some issues. Some of the stores are too large. We know that. And as we said earlier, we have to change up some of the spend on our social media to reflect more accurately where the customer is showing up. So those are the types of things that we're engaged in right now. Shea, would you like to say anything more about it other than we're going to give a more thorough review of this in August, on the call.

Yeah. I think, I would acknowledge though, that we do anticipate a more appropriate sales to inventory perspective as we enter into the back half of the year. And the second quarter markdown adjustments will allow us to first and foremost clean our inventories. But that will just perpetuate hopefully more educated and better buying decisions as we bring those decisions closer to the customer. But the first step is really cleaning up the inventory. We think that that is a big unlock in terms of the profitability. And then, as Dick said, as we're working through the research and insights, we definitely will come back in August with more detail on those things. But right now, we're entirely focused on first and foremost our customer and understanding them, and secondly, getting our inventory in a position that we can react closer to them.

Thank you. Please stand by for our next question. Our next question comes from the line of Janet Kloppenburg with JJK Research. Your line is open.

Hi, everybody, and congrats on a great quarter.

Thanks, Janet.

I wanted to -- you're welcome, Dick. I wanted to just touch base. It sounds like trends in Europe for UO have turned. And I'm wondering, Shea, if the plan is to -- is it feasible that the apparel trends in Europe can transition to the US? And is that what's giving you the confidence in the brand's comps churning? I think you said turning positive, but I could be wrong on that for the second half of the year. And then just a point of clarification on the Anthro on current comps at Anthropologie, are you suggesting that they're up mid-single-digits right now and that's actually outlook for the second quarter? I may have misinterpreted that. And if I did, I apologize. Thank you.

Hi, Janet. This is Tricia, I'll start with Anthropologie.

Hi, Tricia.

Hi. We're cautiously optimistic as we enter Q2. At Anthropologie, I think, as Dick mentioned, the first two weeks of May are very important weeks for Anthropologie as a brand as we prepare for Mother's Day. And our comps are fairly aligned with where our Q1 performance was. With -- but I think some fun headlines that week leading into Mother's Day, we delivered our brands record high dress sales as…

You ought to say that one again.

We did more dress volume in the week leading up to Mother's Day than we ever had in a week as a brand. So really optimistic about as the weather has warmed, as we are leaning into events like Mother's Day, we're cautiously optimistic that we've got some nice trends growing in the business.

So this is Sheila. I'm going to take the Urban question. Just to reiterate that the brand believes it's going to be a gradual change in comp sales. So because we're really focused on the profitability of the sales, so we want to get our inventory clean and be able to continue to react to the consumer. We are seeing probably more speed on that happening in Europe, more so than the US, because I think their customers are positioned slightly differently than our US consumer. But we work very closely with them hand-in-hand and are constantly sharing information. So I just want to reiterate, it's a slow and gradual sales change, not aggressive.

Yes. And I think, Janet, if I could, about Urban Outfitters in Europe, they have been probably borrowing more of the fashion from the North American group than they ever have in the past. And particularly, I think the major difference or the major change that they've experienced is they've gone more into what I would call the feminine looks, and that seems to be working very well for them right now. We in North America have those same looks and they are performing well, but I think that, there's probably a higher penetration of those looks in the European business right now than there is in the North American business.

Thank you. Please stand by for our next question. Our last question comes from the line of Jay Sole with UBS. Your line is open.

Great. Thank you so much. I'm just wondering if you can elaborate a little bit on Nuuly. Just maybe talk to us about the sales trend, what you've learned in the last 90 days, profitability, how you see that trending versus where you were 90 days ago. That'd be super helpful. Thank you.

Dave, you want to take that?

Yeah. Sure. Thanks for the question, Jay. I guess, I would just start by saying that the first quarter was just a fantastic quarter for us. We saw a tremendous amount of growth, a lot of subscribers that joined the platform for the first time, more new subscribers than we've ever had in our history. From a profitability standpoint, we did call out already, Frank mentioned that we were not profitable in the first quarter. We probably would have been if not for the transition to our Kansas City facility. I think longer term we're expecting to be profitable through the rest of this year and just very excited about the growth we saw in the first quarter and actually what we've seen continue in May in the second quarter. So just a very, very exciting time for Nuuly.

Okay, I think that wraps up the questions. I thank you all very much for joining and look forward to talking to you again in August.

Ladies and gentlemen, that concludes the conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.