Vera Bradley, Inc. (VRA) Q2 2025 Earnings Report, Transcript and Summary

Greetings. Welcome to the Vera Bradley Second Quarter Fiscal 2025 Earnings Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that the conference is being recorded. I'll now turn the call over to Mark Dely, Chief Administrative Officer. Mr. Dely, you may go ahead to proceed.

Good morning and welcome everyone. I'd like to thank you for joining us for today's call. Some of the statements made during our prepared remarks in response to your questions may constitute forward-looking statements made pursuant to and within the meaning of the Safe Harbor provisions of the Private Securities litigation reform act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from those that we expect. Please refer to today's press release and the company's most recent Form 10-K filed with the SEC for a discussion of known risks and uncertainties. Investors should not assume that the statements made during the call will remain operative at a later time. We undertake no obligation to update any information discussed on today's call. I will now turn the call over to Vera Bradley CEO, Jackie Ardrey, Jackie?

Thank you, Mark. Good morning, everyone and thank you for joining us on today's call. As we discussed in our last call, late in the second quarter, we rolled out the initial phase of project restoration to our brand stores and the verabradley.com website. This was a public-facing reintroduction of our iconic Vera Bradley brand, anchored on a renewed vision and positioning as we pivot our organization towards a bright future geared to sustainable long-term profitable growth. The initial phase was designed to elevate and differentiate the assortment and positioning from our outlet channels, attract new customers, and fuel a higher mix of full-price selling. I'm so proud of what the organization delivered in a very short time in the extremely successful marketing campaigns we launched. We targeted a younger, more affluent customer for this launch and were successful at driving traction with this segment at mostly full price. Our modernized brand marketing and products are also attracting partnerships with new retailers like Urban Outfitters that launched this month. Our top of the pyramid collections like Leather and Oxford Canvas sold especially well to existing customers even at higher retails. Average transactions for our brand channels were up 9.3% to last year post-launch, reflecting a higher level of full price selling and a shift to products at the top of the pyramid. Although we were pleased with many aspects of this rollout, our overall results were disappointing and reflected continuation of first quarter macro consumer headwinds, as well as some elements that are within our control. At Pure Vida, we continued to see elevated digital media acquisition costs that prevented further investment and customer growth. Our indirect channel was also cautious in the first part of second quarter as specialty and destination store traffic for our partners was initially down. Overall, for the second quarter, we registered net revenues of $110.8 million, a decline of 13.5%, compared to the prior year, and non-GAAP net income of $3.9 million or $0.13 per diluted share. These results did not meet our internal expectations and largely reflect a challenging consumer backdrop in which consumers continue to be very discriminating with discretionary spending. By segment for the second quarter, Vera Bradley direct revenues totaled $72.2 million with an operating margin of 19.1%. Vera Bradley indirect revenues were $21.8 million with an operating margin of 19.1%. Vera Bradley indirect revenues were $21.8 million with an operating margin of 22.8%. And Pure Vida revenues totaled $16.8 million with an operating margin of 4.1%. We are confident in the direction we are taking the business and remain committed to project restoration key areas of focus, including first, restoring Vera Bradley's brand relevancy, strategically marketing our distinctive and unique position as a feminine, fashionable brand that connects with consumers on a deep emotional level. Second, targeting casual and feminine 35 to 54-year-old women, who value both fashion and function. Third, leaning into our elegantly redesigned product assortment for a modern consumer and her needs while retaining the elements that classically defined Vera Bradley. And fourth, building a balanced multi-channel structure that allows customers to shop when, where, and how they want to shop with us. I'll speak to these key focus areas in a moment. In light of our first-half results and the initial start to third quarter, we are now prudently planning the second-half with a much more conservative lens. Our overall outlook reflects the pressures and trends we have seen and experienced through the midpoint of this year, and we expect those are going to continue through the balance of the year. Michael will share some details on this in a few minutes. I want to be clear though, that we remain confident in the direction we're taking the business and key wins in the quarter, which have continued third quarter to-date, are validation that we are moving in the right direction for long-term health. The pace of our journey is slower than we anticipated, but we are on the right path. With our brand restoration efforts well underway, we will remain agile and flexible throughout the fall and holiday season, while pursuing our vision to inspire people to be bold in their pursuits and brilliant in their self-expression. We enter the second-half in a strong financial position, however, with no debt and $44 million in cash, which allows us to remain nimble, while navigating a dynamic consumer environment. We're committed to strengthening our financial position through operational improvements over the next few years, and Michael will talk more about those as well. We've done a great job managing SG&A this quarter and are down over $6 million to last year across both brands even with the planned incremental marketing investments at Vera Bradley. I would like to take a moment to thank the entire Vera Bradley organization for their hard work and dedication leading up to and throughout the launch of Project Restoration, as well as their unwavering commitment to our brands and our customers. Our mission is to unlock joy and ignite conversations through uplifting color and artistry, and our teams have executed on this mission with passion. We know there is much work ahead of us and we are staying close to both new and existing customers listening, adjusting, and executing with speed and excellence to deliver emotionally connected brand experiences. Now I'd like to give you some more detail on Project Restoration for Vera Bradley. On July 11, we unveiled the first part of the Vera Bradley transformation aimed at reinvigorating the business and restoring brand relevance featuring new product, a new logo, in-store renovations, an optimized website experience, and new marketing campaign featuring Zooey Deschanel as our brand ambassador. Our efforts in this transformation revolved around four pillars of product, brand, customer, and channel. I'd like to note that the outlet portion of this transformation launched late in August, and although it hasn't yet changed sales trends in the outlet store channel, our vboutlet.com site is doing very well. The new product assortment in our brand channel features higher quality fabrics and performance materials such as cotton gabardine, oxford canvas, and genuine faux grain leather in modernized silhouettes based on our traditional best-selling styles. The new styles have been elegantly redesigned, while honoring the heritage and elements that have classically defined Vera Bradley. I'm very pleased to report that we saw strong performance at the top end of our good, better, best product pyramid, particularly with existing and reactivated customers. Leather goods as well as solids and trend right fashion colors, including bronze green and pumice stone, all performed well, which validates that both our existing and new customers are interested in trend right silhouettes and colors. Although the majority of the product enhancements we made have been well received, we did receive some constructive feedback on select product style adjustments such as the need for longer and wider straps, more pockets and zip closures. We embraced this feedback and have made assortment edits in time for the holiday and spring seasons. It's important to us that both new and existing customers find products they love with the functions they need. We also heard that we cut our print assortment back too much, especially in cotton, and we are planning to resolve that in upcoming seasons. Finally, our selection of new collaborations in second quarter was reduced to last year, but will continue to be part of our assortment in all channels. Our new Mickey deliveries in both brand and outlet channels were very well received by customers and fans can look forward to both favorite and new properties that will launch in holiday and future seasons. To address our brand and customer pillars, we engaged in a number of activities and strategies. As part of this, Vera Bradley enlisted actress, musician, and entrepreneur Zooey Deschanel to serve as the face of the brand's fall creative campaign, which spans billboards, print, and digital platforms. We saw strong selling across Zooey’s hand-selected favorite items, including the Astoria shoulder bag, the Springbrook sling crossbody, and the Miramar Weekender. Most of these efforts were about increasing awareness, relevancy, and exposure to our target customer group. We have initially seen great progress as our acquired customers are within our desired age target with higher household income. The pace in acquiring these customers is initially slower than we planned, but continue to make progress. Zooey’s featured in our holiday campaigns and we look forward to the reception of our new prints and giftable items launching next month. Looking across our various channels, the earliest reads have occurred in our indirect business where we were particularly pleased with the on-the-floor selling across our top tier wholesale accounts, including specialty stores, department stores, and airports. We have been especially excited about our August 27 Vera Bradley limited edition launch collection in collaboration with Urban Outfitters. This partnership is off to a fantastic start and will expand significantly for holiday, both in stores and online. We are also in discussions with other retailers and licensing partners who express strong interest in our rebranding, and I look forward to updating you on our progress next quarter. Now I'll turn to Pure Vida. At Pure Vida, we continue to shift our long-term focus to delivering profitability through cost control and gross margin expansion while balancing the e-commerce business with wholesale and appropriate retail store expansion. We remain committed to sharpening our focus on 18 to 24-year-olds and re-centering our brand expression to live life to the fullest. We continue to diversify our marketing spend and concentrate our efforts on customer retention and reactivation. For product, we are turning our focus to core product categories like bracelets and jewelry. Our Harper Charm program is performing well and continues to be a growth opportunity. We also continue to pursue product partnerships with licenses such as Harry Potter, Disney, Shark Week and others. Our stretch program continues to perform well in bracelets and anklets and we will iterate on those successes. For Channel, we continue to focus on profitable e-commerce sales as well as retail. Our stores are performing well and we are especially excited about our new Disney Springs location, which is scheduled to open late this month. I'll turn the call over now to CFO Michael Schwindle to review the financial results. Michael?

Thanks Jackie. Good morning everyone and thank you for joining us. We will open it for questions in a few minutes, but first I'd like to cover some highlights for the quarter and briefly discuss our updated guidance for the year. For the sake of clarity, all the numbers I'm discussing today are non-GAAP and exclude the charges outlined in today's press release. A complete detail of the items excluded from the non-GAAP numbers, as well as reconciliation of GAAP to non-GAAP numbers can be found in that release. For the second quarter, our consolidated revenues totaled $110.8 million, compared to $128.2 million in the prior year second quarter. Our net income for second quarter totaled $3.9 million or $0.13 per diluted share, that's compared to a net income of $10.2 million last year or $0.33 per diluted share. In terms of segment performance, Vera Bradley direct segment revenues for this current year's second quarter totaled $72.2 million, approximately a 16% decrease from $85.7 million in the prior year second quarter. Comparable sales declined approximately 11%. Total revenues year-over-year were also impacted by five store closures, one store opening and the movement of the annual outlet sale from the second quarter last year to first quarter this year. Vera Bradley indirect segment revenues totaled $21.8 million, a 25% increase from $17.4 million in the prior year second quarter. This increase was related primarily to new assortment purchasing by our indirect partners, as well as older assortment liquidations associated with project restoration. As Jackie noted earlier, we are very pleased with many aspects of our indirect business for this quarter. For example, our comparable indirect partner accounts posted amid single-digit increase in orders, as well as experiencing meaningful or average order size increases. We've also seen great business development as evidenced by the success of the Urban Outfitters that Jackie noted just a few minutes ago, along with others that are in the pipeline. Pure Vida’s segment revenues totaled $16.8 million, a 33% decrease from $25.1 million in the prior year second quarter, primarily related to declines in e-commerce and wholesale revenues. As a reminder, our key focus for Pure Vida has been, and it continues to be, managing the business for profitability and not merely revenue growth. In response to rapidly rising digital marketing costs that began in late third quarter last year, the Pure Vida team is focused on marketing efficiency, as well as digital marketing diversification. Non-GAAP first quarter gross margin totaled $56.4 million, or 50.9% of net revenues, compared to $72 million, or 56.2% of net revenues in the prior year. Gross margin declined year-over-year from an increase in liquidation sales along with increased promotional activity, most notably in our outlets. Non-GAAP SG&A expense totaled $52.2 million or 47.1% of net revenues, compared to $58.3 million or 45.5% of net revenues in the prior year of second quarter. Current quarter expenses were lower than the prior year, primarily related to cost reduction initiatives, along with a reduction in variable related expenses from lower sales volumes. We continue to closely examine areas of our organization for both process and cost opportunities and our teams are increasingly diligent and attentive to cost management. Second quarter non-GAAP consolidated operating income totaled $4.3 million or 3.9% of net revenues, compared to operating income of $14 million or 10.9% of net revenues in the prior year. Turning to the balance sheet, our quarter-end cash and cash equivalents totaled $44.1 million, compared to $48.5 million at the end of last year's second quarter. We continued to have no borrowings on our $75 million ABL facility at quarter end. Total quarter end inventory was $133 million, down nearly 5% from $139.3 million at the end of last year's second quarter. We continue to take strategic actions to reduce our inventory levels in addition to structural changes in our merchandising and sourcing processes to improve both product flow and product quality. Our merchandising, merchandise planning, sourcing, and design teams in particular have made substantial progress in redefining our approach to inventory acquisition as well as management. And these efforts have meaningfully impacted our ability to navigate this year and will continue to drive improvements into the future. During the second quarter, we also repurchased approximately $9.5 million of common stock or approximately 1.4 million shares at an average price of $7.01. Bringing the total repurchase for the six months to approximately $15.9 million. At the end of the quarter, we had approximately $9.6 million remaining on our $50 million repurchase authorization, and that authorization expires in December of 2024. Finally, I'd like to go through our revised guidance for fiscal 2025. As a reminder, all forward-looking guidance is on a non-GAAP basis. As a point of context, please also keep in mind that the current year represents 52-weeks, while the prior year, as reported, was comprised of 53-weeks. In light of our first-half performance and the continued macro uncertainty, we are prudently planning the recent business trends to continue for the balance of this year. We have been actively assessing a number of responses to the environment and are accelerating several operational changes to the organization, which will streamline our cost structure and improve our flexibility and responsiveness. Many of these changes are delivering savings and effectiveness in the current fiscal year, while some will continue to deliver future savings and effectiveness in future years as well. For the full-year of fiscal 2025, we expect consolidated net revenues of approximately $410 million. Vera Bradley overall sales year to go are expected to decline in the low-teen range with some sequential improvement in Q4 over Q3, driven by the opening of six new Vera Bradley outlet stores and one new Vera Bradley brand store in Q4. Vera Bradley indirect segment sales are expected to decline in the low-single-digit range with a softer Q3 partially offset by a stronger Q4. Pure Vida sales are expected to decline in the mid-teen range, with Q3 similar to Q2 performance relative to last year, but a single-digit range declined rather in Q4 as the business anniversary is the marketing efficiency challenges from last year, as well as the opening of the new Disney Spring store. We expect consolidated gross margin for the year of approximately 53%, compared to 54.5% in fiscal ‘24. The decline in the gross margin rate is driven by increased promotional cadence in our direct segments along with increased liquidation sales year-to-date, while partially offset by product cost improvements and lower supply chain costs. These trends are expected to continue fairly ratably across the balance of this year. Consolidated SG&A expense is expected to be approximately $215 million, compared to $234.7 million in fiscal 2024. The year-over-year SG&A expense reductions are anticipated to come from decreased variable costs, along with continued structural cost reductions, and will be heavily weighted to the fourth quarter. As I noted a few moments ago, we continue to assess our business processes and standards, and we're committed to right-sizing the overall cost structure of the organization. In the long run, this will establish a new and lower baseline from which business growth can better leverage in the future. All of this is expected to result in consolidated operating income of approximately $3 million, compared to $22.6 million in the fiscal 2024 year, along with diluted earnings per share of approximately $0.10 per share, compared to $0.54 per share last year on a 52-week basis. We also expect net capital spending of approximately $13 million versus $3.8 million last year. This spend level reflects investments associated with new and remodeled stores, as well as technology and logistics enhancements. To wrap up the guidance, we expect continued progress on disciplined inventory management, as I mentioned earlier, such that the end of year inventory is expected to be approximately 5% lower than last year's year-end level, which at that time had decreased approximately 17% from the prior year. As a result, we expect an end of year cash balance of approximately $50 million, which reflects these guidance comments along with the share buyback activity that I noted earlier. And that concludes our formal remarks. So, Rob, can you please open up the line for questions?

Thank you. We'll now be conducting the question-and-answer session. [Operator Instructions] Thank you. Thank you, and our first question is from the line of Daniel Harriman with Sidoti & Company. Please, proceed with your question.

Hey, good morning, Jackie. Good morning, Michael.

Good morning.

Good morning.

Just a couple quick ones for me. On the first quarter call, you highlighted consumer weakness, but in particular, the lower income consumer, which had an impact in the outlet channel. Is that more or less what you're seeing thus far into the third quarter? Is it more evenly spaced out across all income channels? And then I was just wondering, Jackie, I know you mentioned you're going to provide more details on the third quarter call, but if you could just maybe expand a little bit upon some of the new wholesale partners that you've identified and hope to team up with in the future?

Sure. Great question. First of all to your question about the lower income consumer and whether it's spread across all levels or concentrated, I would say we don't share specific detail about our consumer levels, but I have talked about before that our outlet channels, which have really been the most challenged this year, are really highly indexed to a lower income customer, and that's where we're seeing the softness. So that's definitely the answer to your first question. And then in terms of the partners we're looking at, really, we're looking at largely how we can appeal to targets that really align with our customer acquisition targets. So it's too early to comment on anything yet, but what I do want you to take away is that there's a lot of interest that we've never really seen this level before based on all of the new marketing and Zooey and all of the efforts that we've made in the rebranding. So we've definitely seen a lot more interest. We're having a lot more conversations. And the success of our Urban Outfitters Partnership and its expansion into holiday, I think, is a great example of how we are continued to be confident in the direction we're taking the business and how project restoration is really supporting where we're going, although, you know, admittedly again, in my comments, I said a little slower than we planned.

Okay, great. Thank you all so much and I'll hop back into queue.

Thank you. Our next question comes from the line of Doug Lane with Water Tower Research. Please proceed with your questions.

Yes, hi. Thanks and good morning, everybody.

Good morning.

Good morning, Michael. I'm just looking at the cash flow statement. And your free cash flow was negative in the first-half of the year. And you're going to end up slightly positive. So you're optimistic about free cash flow generation in the second-half of the year? Sticking on the first-half, the big swing I see is in inventories where it was a $15 million use this year, and last year it was a $3 million source. Can you put some color around that?

Yes, absolutely. One of the aspects of project restoration, as everyone has heard us talk a number of times, is the new assortments that we were bringing over into the brand channels. Because of the timing of that, that created basically an overlapping period over a couple of, a few months here. We also had a significant amount of in-transit inventories coming across the water in preparation for the fall season as well. So there's a little bit of a timing issue. As I mentioned in my comments earlier, we do continue to expect, we were down 5% to last year on inventories despite that in-transit issue and we expect to continue to be down 5% through the end of this year. Q3 might look a little bit different just from a timing issue, but by the end of the year we expect to be 5% down to last year. I'm really pleased with the work that the team did and that's in context of the revised guidance as well. So our teams have done an exceptionally good job of reacting to the environment, doing so in a very productive way and preserving our ability to maneuver and flex as we look forward.

So we can look at inventories as maybe a key area to be a source of cash in the back half of the year, right? So it was the use of cash in the first-half of the year. Is that fair?

That would be fair. I think, you know, there's a number of things that we've talked a lot about all the different initiatives and things we've been working on. We've not talked until this call about some of the work that we've been doing in our inventory or sourcing and our buying practices. So this is, I think, an example of one of those things that we have been working in the background amidst everything else, knowing that we have to build a very strong and solid organization to carry this business into the future. So we are really pleased with the work that the teams have done in that regard.

Okay, that's helpful. And business is difficult. You said that up front, but your capital spending outlook hasn't changed, which is encouraging. So it's an investment year and it continues to be an investment year. So you mentioned in your first quarter release that you had incremental marketing investment as well. Is that still on tap or are you being a little bit more judicious in your marketing spending given the environment?

I'll start if you want to add any color, Jackie. Yes, this is an investment year across lots of different aspects of the business, as you noted, CapEx and marketing as well. So we are carrying some elevated marketing in the Vera Bradley brand in second quarter and we will continue to carry that through the balance of this year. A significant amount of this is about brand awareness and driving brand awareness, as well as transactional activity, but there's -- it continues to be an investment year.

Yes, and I would add that, you know, again, overall, our goal here is we're pivoting this organization to sustainable, long-term, profitable growth, and it's going to take time. That's the headline, is that it's going to take time. But in the meantime, what we're building on is a foundation of strong business discipline with a highly engaged team, strong balance sheet, and a robust technology platform. So all of those things are really kind of underscore your question about marketing investment. Strong business discipline is the team is looking at all of that in the back half of the year and saying, okay, what are the investments that we need to make to keep moving along this path of pivoting to the sustainable long-term growth. And one big part is brand awareness, and that is critical for us to continue to invest in. But again, they have to be smart investments and that's what we'll do.

Okay, thanks Jackie. Just one last thing, I've had other digital marketing companies comment on the election and the impact that may have in changing the business environment. Do you have any comment on the upcoming election and how it might affect your business?

I don't have comments specifically about the election. I mean, I think we are really heads down and looking at analyzing every part of our business results. I mean, we don't -- we're not discounting the value of where the consumer's mind is going to be as we come up to the election time period. But what we're doing is just controlling the controllables, making sure that we're nurturing all the green shoots that we're seeing in the business and planning the back half with this much more conservative lens, obviously, that is reflected in our guidance.

Okay, thanks, Jackie. Thanks, Michael.

Thank you, Doug.

You're welcome. Thank you.

Thank you. [Operator Instructions] The next question is from the line of Eric Beder with SCC Research. Please proceed with your questions.

Good morning.

Good morning, Eric.

Good morning, Eric.

Good morning. I want to talk about some pieces around the stores. So let's talk about collaboration, first let's talk about collaborations. I know that in the outlets, you've added a direct Disney collaboration, which is the first time we've seen that as on the outlet channel. And I'm curious how collaborations fit in the newer -- the mainline stores in terms of their ability to drive kind of a younger, newer customer. I know that historically that has been a big push there for driving new customer base to get them in with the collaborations?

Yes, great question, Eric. So we did launch the new dedicated Disney collection in outlets for the first time in August, so outside of this quarter, and it was very well received. And I do want to say, and I said in my comments, we did have -- during the launch, we had a reduced level of collaborations with Disney and Peanuts to last year, but those are absolutely part of our go-forward strategy here in all channels. So they're very important for our existing customer. We definitely are kind of reading all of the results that we have from these most recent collaborations to see what kind of customer is bringing, what does the demographics look like, what is she spending, and really ensuring that we're choosing the right properties for the future. So you'll see some new things for us. We're definitely looking at not only keeping the fan favorites that we've had and again deploying them in all channels, but looking at some new properties that we think will -- both new and existing customers will love.

Okay. When you look at -- you also did a very strong rollout last year in leather, which you've expanded here, and now you have faux leather in the outlets also. Again, that's Q3, but it came in at the outlets, I think it's been pretty strong there. Now, what are you seeing in terms of that customer who's focusing on that higher product, and A, their ability to kind of continue to buy on the higher level and B, what you're kind of planning to do with that category and that fabric going forward?

So for leather, like I said, I think one of the big positive surprises was the reception of the leather program, even at the higher retail. So we did launch a leather program last year. We tested it. It was very strong. But this is even, the leather that we just launched for the brand channels is even, even has higher price points. So we're going, there are, you know, there's a good, better, best strategy within leather as well. And what we were -- I think, a little surprised by is that those higher price points actually did very well and they over-indexed to existing consumers or reactivated consumers. So that was a positive surprise for sure. And the leather -- the faux leather in the outlets, that has actually initially is a very positive read as well. So we're kind of regrouping to see what does that mean for future assortments. But overall, we're very pleased with the results of the leather program and our higher price point items. And that will be part of what we're building into our future assortment.

I think there's one other last point on this. Just to recall everybody's memory on this, what we did last year was a very narrow, very tight test of leather. We did not, because of how quickly we were moving, we did not have the ability to get quantities in scale. And so we were very pleased with that, as Jackie said, and as we said at the time. But as we want to make sure we understand, that was a pretty limited amount of business that we did last year. We're really pleased with the business we're doing now and what that portends for the future.

Yes.

Last question. So, when you look at the new stores and the kind of the core customer who wanted to buy cotton pattern product, I know that you do have to kind of move on somewhat, but at the same time that has been somewhat the base of the company for a very long time. What should we be seeing, and I kind of hinted about this already, but I'd like to get a little bit more color on it, going forward for that customer who is drawn to that product and that's the product going forward?

Sure. So, here's what I would say to that and what I'd like you to take away is that, this was never an attempt to move away from our existing customers. I think in my comments I said we did receive some constructive feedback on some style adjustments that we made, which we actually made those style adjustments based on customer feedback that told us that they wanted these things. And so again, when we launched and got feedback the other way, we said, okay, well, we need to make some adjustments. We -- it's really important to us that both our new and existing customers find the products they love with the functions that they need. And what they told us was we need longer and wider straps, more pockets and zip closures, and then ultimately we needed more print assortment. And so those are not difficult adjustments to make. And we're making them on a rolling basis starting in holidays. So we kind of immediately read that. And it's not -- we're making adjustments and we're not going all the way back, but we're making sure that both new and existing customers have a robust assortment that reflects the aesthetic and the pivots that we're making, but doesn't, you know, is inclusive of all of our customers' needs. So it's, you know, I think again, there's -- overall there's -- when we launched this in the stores, there's been less discounting to a much lesser degree than we've had in the past. And that's also been a place where we've -- customers have paused and, we're evaluating all of that as well. But in terms of the styling we're very happy with where we are, but again, you know, always taking customer feedback and analyzing the data and making the right changes, so that we're offering the best assortment we can.

Okay. Good luck with the rest of the year and the holiday season.

Thanks, Eric.

Thank you, Eric.

Thank you. At this time we've reached the end of the question-and-answer session. I'll now turn the call over to Jackie Ardrey for closing remarks.

In closing, our team is dedicated to returning the company to long-term profitable growth and creating value for our shareholders. Thank you for joining us today, and we look forward to speaking with you again on our third quarter earnings call on December 11.

This will conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.