Good morning. My name is Madison and I will be your conference operator today. At this time, I’d like to welcome everyone to the Victoria’s Secret & Company’s Second Quarter 2022 Earnings Conference Call. Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Timothy Johnson, Chief Financial and Administrative Officer at Victoria’s Secret & Company. T.J., you may begin.

Thanks, Madison and good morning everyone. Welcome to Victoria’s Secret & Co.’s second quarter earnings conference call for the period ended July 30, 2022. As a matter of formality, I would like to remind you that any forward-looking statements we make today are subject to our Safe Harbor statement found in our SEC filings and in our press releases. Joining me on the call today are CEO, Martin Waters; and EVP of Finance, Brad Kramer. Also with me today is Kevin Wynk, VP of External Financial Reporting and IR. Kevin will be working with me to lead our Investor Relation efforts going forward. We are available today for up to 45 minutes to answer any questions after our prepared remarks. Certain results we discuss on the call today are adjusted results and exclude the special items described in our press release and our SEC filings. Reconciliation of these and other non-GAAP measures to the most comparable GAAP measures are also included in our press release, our SEC filings and the investor presentation posted on the Investors section of our website. Thanks. And I will now turn it over to Martin.

Thanks, T.J. and good morning everyone. Before we dive right into the quarter, as we celebrate our first year as an independent public company, I want to thank all of our associates and partners around the world for their hard work and dedication. After several years of missteps, we collectively undertook and committed to a revolution of our brand and our strategy aspiring to become the Victoria’s Secret our customers deserve, a Victoria’s Secret where everyone feels seen, respected and valued. We have made meaningful progress in a short period of time and I am proud of the company we are today. We continue to enjoy our leading market share position atop the domestic intimates category and are energized by our customers’ response to our brand repositioning. In fact, we have seen growth in our domestic market share for the intimates category for the past two quarters. Now of course, we recognize this transformation as a journey and there is still much more to do. When we last talked with you 3 months ago, we were all aware of the challenging macroeconomic environment and we expected to face significant headwinds in the second quarter. We were not wrong. However, as a result of our relentless focus on execution and costs, we were able to deliver second quarter adjusted operating income and adjusted earnings per share within our guidance range. This was our fourth consecutive quarter since the separation that we delivered adjusted operating income and adjusted earnings per share results within or above our guidance. For the trailing 12-month period, we delivered nearly $1 billion in adjusted EBITDA. We believe this type of performance demonstrates the strength of our brand repositioning, our domestic share leadership and growth in our share of the intimates category and our team’s relentless focus on…

Thank you. [Operator Instructions] Our first question comes from Lorraine Hutchinson from Bank of America. Lorraine, your line is open.

Thank you. Good morning. I wanted to just dive in a little bit on the long-term margin targets. It sounds like you are still comfortable with that mid-teens level. Can you talk a little bit about what factors this year you view as transitory and then maybe paint us a path on how to return back up into the double-digits? Thank you.

Yes. Martin, I can tag team this one, Lorraine. I appreciate the question. And I think I will take a big step back and kind of say, when we think about the progression of the business and the improvement and the stabilization in the operating income base over the last handful of quarters or couple of years, pre-pandemic operating income was around about $100 million. I am going to round for you. During the pandemic and now with the repositioning of the brand, there has been meaningful improvement in both the leverage and efficiency in the model through the profit improvement plan and the gross margin rate improvement around inventory management, and in more normal times, something more like last year, our base operating income was around about $900 million or ever so close to that mid-teens operating income rate very early in the revolution of our strategy and the revolution of our brand. This year, as Martin just mentioned, as we have written in some of our prepared remarks, at the midpoint, our operating income is more like $550 million or 8% or 9% again in a very difficult environment, the key headwinds there being sales and supply chain over the last 12 months. So I just think it’s important to kind of understand the base from which we are coming from last year and around 13% in a more difficult time, 8% to 9%. What does the path forward look like? I think clearly, we are going to go into a lot more detail at our Investor Day in October. So, I don’t want to steal everyone’s thunder. But I think as we understand the business better, as we spend more time on the long-term strategy, we see an opportunity in the core business as we unite the…

Thank you.

Our next question comes from Ike Boruchow from Wells Fargo. Ike, your line is open.

Hey, good morning everyone. I guess maybe, T.J., can you talk about the difference in performance by category. It sounds like you are seeing broadly different reaction to the intimates in the bra business and even beauty versus apparel. Maybe just talk about the weakness you are seeing in apparel, maybe PINK versus VS? How do we kind of like tie that to the inventory go forward? I would just kind of love to know a little bit more about the category dynamics? Thank you.

Yes, I ask Martin to take that one.

Sure, happy to. Good morning, Ike. Good to hear from you. So yes, we have still quite a range of performance within the category. So the best news of the day is that bras is our most important category. We are a bra business with our best performing category overall with a flat performance year-over-year. So we are very happy about that. We are also happy that when we just read the market share data earlier this week that we saw growth in our market share in intimates and particularly, we saw even stronger growth in our market share in bras. So we are pleased with the bra business. The panty business was close to flat, down low single-digits. Beauty business was down in the mid to high single-digits, but there is sort of a tale of two cities there. And through the quarter, performance was pretty strong, but we were impacted by the good news of having less redline inventory in our semiannual sale. So, it’s a bit of a tale of two halves there. Overall, we feel good about momentum in the beauty business and that’s really continued into the third quarter with the launch of the Bare fragrance. So, lots of newness and lots of energy in beauty, which is great. Swim business has been incredibly mixed. Victoria had a disappointing season in swim and PINK had a very, very strong season in swim. So overall, we were down a bit from where we expected to be. On reflection, the first season of Victoria back in the swim business we were probably a little basic. And in the second season back in the swim business, we swung the pendulum a little too hard and we are a little too fashion forward and a little light on basic. So we live and learn and we continue to get better. We continue to get closer to the consumer. You rightly suggest that the apparel category is the most difficult. That’s most impacted in PINK rather than Victoria. Overall, system-wide, it’s close to 25% of our overall sales mix. We are not particularly longer on inventory in that category than elsewhere, but we will be very prudent on our purchases for the back half of the year. So we’ve taken some money out of our open to buy as that category is more difficult, and we will just lead in much harder on intimates and on sleep. So hopefully, that gives you some color. Thanks for the question.

Thanks, Martin.

Our next question comes from Matthew Boss from JPMorgan. Matthew, your line is open.

Great. Thanks. So Martin, could you expand on the actions that you’ve taken to adjust fall inventory receipts also how best to think about AUR for this year? And then, T.J., in what inning would you call the expense efficiencies and savings that you’ve implemented to date as we think about the multiyear opportunity on this front?

Yes, great. Thanks for the questions, Matt. As it relates to fall, we have definitely taken down inventory bias. No question. As we saw softening through the quarter through quarter two, we felt it prudent to take down our sales forecast. And with our sales forecast coming down, comes down our bias. So across the board, we’re being more prudent. Now the really good news is that we have moved our model mix for the fall season very significantly year-over-year. So I think last year, we were at – Brad, keep me honest here, we were at 90% air and 10% sea, which gave us very little opportunity to react. This year, we’re more like 75% sea, 25% air. Now what that enables us to do is if we see momentum in the business, and we all hope that the macroeconomic trends recede somewhat, then we can convert some of that planned merchandise plan for sea to air and get goods in more quickly, which gives us opportunity to chase. So that’s the good news about the agility that we have in the supply chain and the good news of supply chain returning to more normalized levels. So while we see inventories at the start of the fall season up in the 40s, we expect by the end of the season come the end of January to be at a much more normalized state, and we can say more about that if people have appetite for it. I want to just hit the AUR point because there is a lot to unpack. So in AUR, we have been successfully able to pass on price in some areas. I think last time we spoke, I talked about panties moving up from 5 to 30 to 5 to 32. Clearly, that’s a 7% increase. In our MIS business, we’ve been able to pass on price. Overall, we’ve been able to increase prices by something in the range of low to mid-single digits on a year-over-year basis. However, we have seen more promotionality within the quarter, and we also saw more inventory in SAS. And so that dials back the AUR to something closer to down high single digits for the quarter, but up very materially to 2019. So there is kind of a lot to unpack, and I could unpack it even further by category. So trust us that this is a very complex area. It’s one that we manage with a laser focus, and we think we’re particularly good at it. So yes, lots to say there, Matt, and I hope it gives you enough color. T.J.?

Yes. And I think the second part to your question, Matt, again, first or second inning in a nine-inning game. I think on the last call, we indicated that we had visibility out through 2023, out through the end of 2023, and that’s mostly focused on expense type initiatives, also, although some of the benefit does include margin. I think we’re continuing to look for opportunities in both expense and margin to get us out past 2023. Again, we will go through those in more detail in October, but first or second inning.

Our next question comes from Simeon Siegel from BMO. Simeon, your line is open.

Thanks. Hi, everyone. Good morning. Hope you’ve had a nice end to the summer. So I was wondering, sorry if I missed this, did you say how AUR is versus pre-pandemic levels? And then curious if you have any read-on changes in your average customer purchase frequency. So just anything you’re seeing differently in terms of their frequency of shop pre-pandemic, during COVID and then now. Thank you.

Should we go to Brad with that one?

Hi, Simeon. Just in respect to the AUR question, AURs continue to remain up significantly versus 2019, They have been trending directionally in line with our peak, which we would consider around the 2015 timeframe. They were down modestly in the second quarter versus last year as we were up against higher promotionality in the business, as Martin referenced. And then from an outlook perspective, AURs in the back half are planned flat to down low single digits.

And on purchase frequency?

On purchase frequency, we haven’t seen anything from a frequency perspective move meaningfully in the customer file. We have seen penetration in the category shift meaningfully from the pre-pandemic, into the pandemic and then into the post pandemic. But in terms of number of trips per year in total, I’d say results have trended in line with the pre-pandemic patterns. There obviously has been a channel shift that occurred meaningfully within that time frame, where she penetrated higher into digital, and we’re seeing that migration back from trips into the stores currently.

Yes. If I could take a moment just real quick, Simeon, and tie Brad and Martin’s comments on AUR into what does that mean for margins. If we think about second quarter margins being down a little over 500 basis points and we’re guiding to a similar outcome in the third quarter, I would suggest to you that from a margin standpoint, the promotionality from second quarter to third quarter, we expect to be relatively similar as we look at margin rate, promotionality might be approximately half of the gross margin rate decline with the other half being a combination of, depending on the quarter you’re looking at, being a combination of either supply chain pressure we experienced in second quarter or in the third quarter, where supply chain kind of moderates. Clearly, there is a deleveraging impact on B&O that comes from a negative high single-digit expectation from a sales perspective. So I think it’s important for our investors and everybody who follows the company to understand the promotionality quarter-to-quarter we expect to be relatively similar. It’s a portion of the gross margin rate decline. But – and again, to the comment I made with Loraine, as sales returned to more normal levels, obviously, we would expect to start to see an even playing field on B&O or maybe some actual leverage as we move into the future.

Great. Thank you. And then, Martin, I was just wondering if you’d be willing to flesh out the mining for new growth vehicles comment anymore from the prepared remarks.

Yes, sure. I mean there is a lot going on in growth. Under Greg’s leadership, we have the International division, which, as I mentioned in my prepared remarks, it was up close to 30% year-over-year, we see an enormous opportunity there in international. Our partners have a line of sight to over 100 new stores in a 3-year period, plus growth in digital that we didn’t have previously. So stack about that. We see growth in new brands. So Happy Nation was an organic brand, but also there is the investments we made in Love & Lemons and for – and Frankies bikinis and there is other opportunities that are coming our way in that regard. The launch of the Elomi, which is a larger size brand that’s added significantly to our size, it had an instant impact. I mean day 1 impact on our sales last week. So excited about that. And then the broader VS&Co-Lab, the curation of certain third-party brands that get us to categories where we’ve been underrepresented or customer groups where we’ve been underrepresented continues to look like good news. As those are the new channels with Amazon. Our partnership with Amazon, we were out there in Seattle earlier this week, just a terrific partnership, and there is loads of opportunity there. And then probably finally, under growth, I might talk about the Store of the Future, where we’ve got, I think, six stores open. We’re opening 16 – 15 or 16 in total this year. And that looks really interesting. We’re trending towards a mid-single digit growth over its control group. And so too early to declare victory on what that means in terms of capital for future years, but it’s certainly encouraging and energizing. So yes, there is a lot in there, Simeon. Thanks for your question.

Thanks, Martin. Best of luck for the rest of the year.

Thanks.

Our next question comes from Dana Telsey from the Telsey Group. Dana, your line is open.

Hi, good morning, everyone. As you think about the upcoming holiday season and marketing and product initiatives, how will this year be different than last year, any new timing, any new marketing of how you’re positioning it? And then with the store of the future, the learnings from the store of the future, how does that apply to other stores? What’s working? What are you going to shift go forward as you do more of them? Thank you.

Yes. Good morning, Dana, thanks for the question. So when it comes to thinking about newness for holiday, we wouldn’t typically talk about the launches that we’ve got coming because that puts the competitors, this advantage. So I’ll just recap on the exciting newness that we’ve had recently that is a demonstration of our commitment to a pipeline of innovation. So they are so obsessed just a fantastic launch. I said when I came into this role that we would return to having at least two big bra launches per year, and we’ve done that. Love Cloud was a terrific success. And So Obsessed is a super exciting addition to the assortment because through innovation, we’ve been able to give the customer the comfort of an all-day comfort of a wireless bra, but with fit and smoothing and glamour of a constructed bra, the consumer is really responding. It’s our top BSL style. So a new bra launched in 2 weeks, top BSL style and it will offer us a considerable beat year-over-year against the Bare launch that we had last year. So in the most important engine of the company, we’re winning. And that’s – boy, that bodes well for holiday. The second thing I would say is within PINK, the Wear Everywhere franchise was just a fantastic example of newness, not just in the product, but in the way we market it and the way we speak to consumers, both in the channels and in the representation that we have. So excited about that, and I already spoke a little bit about that. By the way, just at the risk of showing up a little bit on Bare. There are a couple of really differentiating points that demonstrate how good we are at beauty. Bare contains a blend…

Thank you.

Our next question comes from Alex Straton from Morgan Stanley. Alex, your line is open.

Great. Thanks for taking my question and good morning. Can you just give us a little bit more color on the sequential deceleration you saw in the quarter on the top line as well as what the exit rate was, perhaps how the business is trending month-to-date? And then you also mentioned less red lines have an impact on the semiannual sales. So if you could just talk about broader learnings from the semiannual sale this year? That would be super helpful. Thank you.

Yes. I think, Lauren, this is T.J. I’ll take the first part and then ask Martin and Brad to speak to the second part. I think from our observation, as we move through the quarter, I think in the last call, we mentioned May was off to a difficult start. We expected June to be the best month of the quarter due to the lengthening of semiannual sale year-over-year, and that July would exit kind of more in line with the quarter. What we experienced was really the month of May down mid to high single-digits, June, relatively flat. So June was the best month of the quarter, as expected. And then the exit rate, to your question, was more like high single-digit declines in the month of July, which have continued on into the early first couple of weeks of August. So exit rate coming out of second quarter helped inform our guide trends within the second quarter outside of semiannual sale helped inform our guide. So we think it’s prudent to listen to those trends, Alex, and make sure we’re setting our inventory expectations, our cost expectations in line with current trends. It doesn’t mean we’re sitting back and letting it happen. We’re doing everything we can to try to improve that trend within reason, but recognizing that sometimes the broader macro trends, specifically at store level or at mall level, are difficult to kind of fight uphill. I do think it’s important to note that our traffic change or deceleration month-to-month in terms of store traffic trends aligned generally with what the mall was seeing from our perspective and align generally with what you are likely seeing from other retailers or I guess, the credit card data or however you monitor that. So again, I think, from our perspective, appropriate reflection of trend is important. Obviously, as Martin mentioned, from a category perspective, there is a lot of encouraging notes within that. But just the overall traffic trends are something that we want to make sure we get our share of, but it’s a little difficult to fight kind of going uphill. So from a semiannual sale?

Yes, Alex, in terms of some annual sales, as T.J. mentioned, June was the best performing sales month of the year. As a reminder, the timing and duration of SaaS this year was different than last year, but it was in line with our historical treatment. So we had additional days and higher inventory levels on a year-over-year basis, but very normalized versus our history. Sales during semiannual [ph] sales were up to last year. However, it was predominantly driven by regular price selling. So one of the learns coming out of this is the penetration and the newness and reg price was higher than it was into our clearance business. We eventually got the sell-through on track from a clearance perspective. It had to go deeper from a markdown perspective. The other call-out is that the penetration into intimates are similar to the total box within the quarter was higher. So, more success at our core than some of the adjacent apparel categories, and then we did have some traffic headwinds during the middle of June that we believe affected some of the performance within semiannual sales. So, there is a lot we are still unpacking from that moment, and we will have insights to try to adjust the January timeframe as well.

Great. Thank you.

Our next question comes from Omar Saad from Evercore Partners. Omar, your line is open.

Thanks. Could you remind us what’s included within apparel, the tough performance there? Is that all loungewear, sleepwear, athleisure type? And were those categories going up against difficult comparisons last year during COVID? And then, Martin, could you also address if there has been any impact from the viral social media song Victoria’s Secret? Thanks.

Great question, Omar. I didn’t expect that last question about social media. Yes, I m happy to take that. Brad, maybe you could unpack the three elements of apparel. But broadly speaking, yes, you are right in your diagnosis, but I will go to Brad in a minute. Look, as it relates to PR, we have had some just fantastic PR over the course of the last 12 months. And particularly in the last quarter, we continue to see really, really favorable PR across the board, but there are a couple of things, headwinds that we had to face. One was the Hulu documentary, which we were extremely well prepared for, and we expect it to be a difficult period for us. And actually, it wasn’t a very, very low viewing figures, even lower completion of the series. And the very relatively few people that did actually make it all the way through to the end of the series had a stronger perception of the brand coming out of it and they are going in. So, Hulu is a kind of a non-event. But the Jax video is super interesting because, I mean look, it’s very clever. It’s very catchy. It’s lighthearted. It raises an important subject. And we agree. We agree wholeheartedly with what Jax is raising, and that’s why 18 months ago, we talked about the revolution in our brand and going in a different direction. So, as I think you know, we reached out to Jax with an open letter from Amy that was very well received. We are on the same page. We agree with her. We are grateful to her for raising the subject. I don’t think it reflects negatively on us. I think it’s an adequate and appropriate reflection of the industry at large as it has been represented consistently over the last decade or so. So, we want to be at the forefront of the change rather than representative of the past, and we are grateful for that opportunity. Brad?

Yes. Hi Omar, in terms of your question on the definition of apparel, it includes for the Victoria business, the sleep and lounge component of that business and for the PINK business and includes apparel and sleep. So, those businesses combined in Q3 – in Q2 represented about 20% of sales and on a 4-year business apparel represents in the 25% to 30% of our business range.

And the comparisons versus last year, were they difficult?

I would say there were some pivot in the business to casualization in the LI that maybe provided some form of a small tailwind to those businesses, but nothing substantial that was abnormal.

Thanks Martin.

Our next question comes from Paul Kearney from Barclays. Paul, your line is open.

Hi everybody. Good morning. Thanks for taking my question. Can you just remind us on the model mix from air to ocean and when it was at its highest last year, assuming it was Q4? And how much is on air this year versus last year? And how much are you expecting a reversal in freight on the cost side? Thank you.

I think I covered this earlier, Paul, maybe you joined late. So, at the beginning of the fall season last year, we were at 90% air, 10% sea. At the beginning of the fall season this year, we are at 75% sea, 25% air. So, very significant change year-over-year. Anything else to address?

Q3 and Q4 last year were both in the 90% range, so very similar.

Thank you.

Our next question comes from Corey Tarlowe from Jefferies. Corey, your line is open.

Hi. Good morning and thank you for taking my questions. One of the things that we have heard is that there is certain companies have seen a bifurcation between higher income customers and lower-income consumers. Is that something that you are seeing as you look at VS and PINK? And then can you just remind us what beauty is as a percentage of sales, how that’s trended over the last several years? And then how you would see that progressing with the launch of the new Bare product?

Yes. Thanks for the question, Corey. I will take the Beauty bit first. Beauty is about 15% of our total sales mix, and that’s been pretty consistent over the years. And we would like it to be – to remain pretty consistent. We are first and foremost, an intimates business. So, while it has a higher profitability than the other elements of the business, I am very comfortable with it being in the mid-teens as a go-forward part of our strategy. We assort accordingly to that kind of mix, so no big change there. On the bifurcation, it’s an interesting question. No question that luxury across the board has been good and the high income consumers have not missed a beat in terms of the change in the macroeconomic environment. That’s well documented. It’s also well documented that low-income consumers are the ones that are most pressured, And they had to fight for every dollar and have to distort the dollars that they do have to food and to gas and to essentials and there is less room in the pocketbook for spending on non-essential. So, clearly, there is a very different impact of these economic times, whether you are a high income or a low income. I would just remind you that our business has the highest – the crossover of competitors for us is most evident with Walmart, Target and Amazon. Our consumer is fundamentally a mid to low-end consumer. And so we are very much impacted by the economic times. And the fact that we enjoy some high-income consumers is insufficient to offset the negative impact of ordinary consumers, shall we call them everyday consumers. Hope that helps.

Very helpful. Thank you very much and best of luck.

Thanks Corey.

Our next question comes from Jonna Kim from Cowen. Jonna, your line is open.

Thank you. Good morning. Thank you for taking our question. Maybe if you can delve a little bit deeper into the international growth. It was very impressive this quarter. Which region outperformed? And what are you seeing quarter-to-date internationally? And then just on the marketing strategy. As you rolled out different new launches throughout the year, how has that changed, if at all? And how are you thinking about marketing strategy in the back half? Thank you very much.

Yes, happy to take that question. So, as it relates to marketing strategy, sort of no change, really. The bit that’s super dynamic in marketing, forgive me, this is Captain Obvious stuff. But the bit that’s super dynamic is the medium that we use and how we use the creative assets that we create, and we can be incredibly agile at how those assets get deployed. So, in the old days, going into a season, you would be pretty clear about what you were producing and where your spend was going to go. We don’t do that anymore. We are super agile based on the receptivity we get to assets that we create, and that’s across the kind of asset that’s generated and the medium that’s deployed. So, very, very dynamic based on what works and what doesn’t work. That’s the overarching sort of headline there. As it relates to international, we have seen growth in all five areas of the business from – in terms of getting traction in international. The biggest and the most important part of the business is the franchise network, which is represented in all continents around the world. The Middle East has bounced back very strongly, but all areas have shown good performance. And as I mentioned earlier, our partners in the franchise network see opportunity for over 100 stores in the 3 years that are coming, all of which will be built in the store of the future likeness. So, that’s good. In the UK, our partnership with Next continues to go from strength-to-strength. We leverage Next capability in real estate and in digital as well as logistics capability to get goods to consumer within the next day of order if you order before midnight, you have your items delivered to home through…

Our next question comes from Jay Sole from UBS. Jay, your line is open.

Great. Thank you so much. Martin, I am just wondering if you can take a step back and you can elaborate a little bit on sort of the big picture transformation, the progress that you see, some of the anecdotal things that you noticed in the quarter that gives you confidence, the brand is moving in the right direction, that consumers are noticing and they are starting to realize that Victoria’s Secret is a much different brand today than it was 3 years, 5 years ago.

Yes. Thanks for the question. The overarching headline would be that we are really pleased with the progress that we have made and the repositioning of the brand. It takes time to reposition a brand. We are 12 months, 14 months, 15 months into it. And I always say the things that we are doing, be it producing merchandise or producing assets or to speak, anything. Anything we do, the way we show up, does it polish or tarnish the brand. And after years and years and years of tarnishing the brand, I would say 99% of what we have done in the last period has polished the brand. We are seeing significant increases in our relevant indicators as we benchmark our research. We are seeing improvements in social commentary. Our most liked post in the last quarter was the Instagram post of our repositioning video about brand transformation, very high receptivity to that. We are seeing market share gains in our key categories. Our associate opinion survey showed incredible affinity for our brand and pride in employment. So, it’s kind of wherever I look around the system, things are going well and the repositioning is being understood and appreciated. That said, I have mentioned previously that when we do our research, there is a significant number of people that just haven’t noticed. They haven’t come across the change. When they do go across the change, they like it, but a lot of people still yet haven’t noticed. And there were a couple of things that have helped us significantly in that endeavor in the last six months or so, more recently in the last quarter. One was the Wall Street Journal article, which got a lot of pickup and a lot of people followed to take a look and say, “Oh, I see there is something going on, what’s happening here.” And the other is the Jax video, where a significant number of people said, “Oh, I have haven’t been to Victoria’s Secret for a while, let’s have a look.” And I actually said, “Wow, there is real diversity here, there is real inclusivity.” You go into our stores and you see mannequins that look like the human race. So, all around the system, there has been positive change, and it’s been well received. All of that said, we are on a journey. We have still got more to do. You will find us chancing louder and louder about the transformation rather than backing away from it. We are on the right track, and we need to stick with it and show up in the way that our customer wants us to show up. So, thanks for asking. And last question?

Thank you, Martin.

Our last question comes from Marni Shapiro from Retail Tracker. Marni, your line is open.

Hey guys. If you don’t mind, I would love to follow-up on that question, actually. Could you talk a little bit, as you look back over the last year as a separated company, independent company, can you talk about the pace of new customer acquisition? And has it been mostly lapsed customers coming back, or are you getting Gen Z in the door? And if she comes in, say, through PINK, which will be, I guess more traditional path, is she now moving over to Victoria’s Secret? And then just on a side note, I actually think in a back-handed way that song has been a good thing for you because the number of girls I hear humming that song in your stores while shopping just makes me laugh.

Thank you, Marni. Good to hear from you. I agree. I find myself humming it around the house as well. And it’s interesting, people who are slower to social media, I must have been sent the video 1,000 times by friends and family. And I still hear people say, hey, I don’t know if you have seen that. Yes, we have seen it. We have seen it. Top of mind, and I think that’s a good thing. So, as it relates to the consumer who is coming in, our file remains remarkably consistent with our history, and it’s stable quarter-over-quarter. I would tell you in the last quarter that about 45% of our customers have been new to the file, and that sounds incredibly encouraging. Actually, it’s pretty consistent with history. That’s about the way in which the file runs in total. We are skewing a little bit younger than we have done previously, a little bit more female than we have done previously. But the trends are not – they are not transformational. They are not enormous. So, it continues to be a steady build. Your point about PINK is a good one. We are – we have an unfair advantage in getting to young women and that we have the PINK brand either inside of our box in physical retail often closely adjacent and inside of our digital box. We, in our history, have not been intentional about marketing the bridge from PINK to Victoria. We have not been intentional about that. And under Amy’s leadership going forward, where those brands are combined, we are going to get seriously after that. I would be much more purposed about encouraging women who shop in the PINK brand to coming to the Victoria’s brand. So, you expect to see more cross-brand activity or total box activities, the way we call it inside the system, or total screen activity than you have done previously. But that’s more about the future than it is about the past, to be honest, Marni. So, thank you, everybody, for your questions and comments and follow-ship of our business. We appreciate it very much.

That concludes today’s conference. Thank you for participating. You may disconnect at this time.