Good morning. My name is Colin, and I'll be your conference operator today. At this time, I would like to welcome everyone to The Roots Q3 Earnings Conference Call for Fiscal 2022. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. On the call today, we have Meghan Roach, President and Chief Executive Officer, and Mona Kennedy, Chief Financial Officer of Roots, and Leon Wu, Vice President of Finance and Strategy, who will take over the role of CFO in January. Before the conference begins, the company would like to remind listeners that the call, including the Q&A portion, may include forward-looking statements of our current and future plans, expectations and intentions, results, level of activities, performance, goals or achievements, or any other future events or developments. This information is based on management's reasonable assumptions and beliefs in light of information currently available to Roots. Listeners are cautioned not to place undue reliance on such information. Each forward-looking statement is subject to risk and uncertainties that could cause actual results to differ materially from those projected. The company refers listeners to its Q3 management's discussion and analysis and/or its annual information form dated April 6, 2022, for a summary of the significant assumptions underlining forward-looking statements and certain risks and factors that could affect the company's future performance and ability to deliver on these statements. Roots undertakes no obligation to update or revise any forward-looking statements made on this call. The Q3 earnings release, the related financial statements and the management's discussion analysis are available on SEDAR as well on the Roots investor relations website at www.investors.roots.com. A supplementary presentation for the Q3 2022 conference call is available on the Roots investor relations site. Finally, please note that all figures discussed on this conference call are in Canadian dollars unless otherwise stated. Thank you. You may begin your conference. Good morning and welcome to our earnings call. Before we discuss our Q3 results, I would like to address the current operating environment. We entered the Q3 in a position of strength, with sales up approximately 19% in the first half of 2022 and gross margins trending meaningfully higher year-over-year. However, since we reported our Q2 results, we've seen a notable shift in the economy which has impacted our sector. Consumer spending has tightened and discounting, particularly in some of our core categories, has become more prevalent. As we walk through our Q3 results, we will highlight how these factors have impacted the business in the short term and what effects we anticipate they will have during the remainder of the year and into 2023. Before we do that, I want to emphasize a few things. For nearly 50 years, Roots has managed through diverse economic conditions, numerous changes in consumer behavior, and most recently, the global pandemic. We have worked tirelessly over the last three years to establish a more robust financial foundation for the business to support long-term growth and enable us to weather uncertain times. We have and continue to be focused on sustainable, profitable growth, creating a differentiated brand and product offering, and further enhancing our customer base. We continue to see increased year-over-year traffic in our stores and feel good about the direction we are taking our product offering, as well as the long-term strategy we have established for the business. As the pressures affecting the economy continue, we anticipate a further impact on results in the Q4 and into 2023. However, we believe the fundamentals of the business remain intact. Turning to our Q3 results, sales decreased 8.5% year-over-year to CAD 69.8 million in the Q3, while net income and adjusted EBITDA declined to CAD 2.2 million and CAD 7.3 million, respectively. While Mona will dive into the financials in her section, I will speak to some of the sales trends. We experienced a notable shift in sales in the second half of Q3, which has continued into the Q4, including year-over-year declines in sales during our Black Friday and Cyber Monday events. We attribute these results to several factors. The first, which I highlighted at the start of the call, are the many factors impacting the economy currently, including inflation and higher interest rates. As noted, while we saw strong traffic in our retail locations, consumer spending has tightened, affecting sales. The second is the more aggressive promotional environment. At the end of the Q3, we saw brands pulling forward Black Friday sales and offering significant discounts to right-size their inventory. This discounting was most notable in some of our core categories like sweatpants. As we discussed in previous quarters, we are choosing to remain promotionally disciplined when it comes to our core categories, as these are products we sell year after year. While we intend to offer some discounts on seasonal products, which may impact near-term margins, we plan to continue our pack-and-hold strategy in core collections. Undoubtedly, we may see an impact on sales in the short term as a result of this strategy. We continue to believe it is important to the brand integrity and building healthy margins over the longer term. Finally, we saw a more prominent shift toward lifestyle products from casual wear as people return to offices and events. While we had anticipated this change in consumer preferences and had been modifying our offerings, it accelerated during the quarter and affected sales due to the relative importance of each category to our business. We saw good growth in our lifestyle products, such as men's woven shirts, our Waffle Collection sweaters. However, it did not offset the impacts of this near-term wardrobe rebalancing on other casual items in our offerings, such as sweatpants and sleeve tops. For the last 50 years, we have offered a mix of lifestyle and more casual items, and we will continue to shift the balance to address the market needs. Our products continue to remain highly centered on quality and comfort and clothing that marries style and function. While we feel confident our core products remain relevant, we do anticipate further shifts in this area that may impact sales in Q4 into 2023. Turning to our recent operating highlights, we completed our website re-platforming, a critical milestone supporting our mobile-first omnichannel growth strategy. The benefits of the new platform include more real-time data on consumer trends, enhanced mobile navigation, better search capabilities, and a more seamless backend for order management and customer support. These technology improvements will offer additional insights into consumer behavior, render the online buying experience more frictionless, and over time, should translate into higher online sales. From a product perspective, our primary focus has been the significant undertaking associated with moving our fabrics to preferred fibers and materials in line with our sustainability objectives. I'm incredibly proud of all the hard work by the team to get us to this position today, where we can say that the majority of our products are now made with sustainable materials. We are continuing to explore new fabric innovations in this area to allow us to move to even more products to sustainable materials in the medium term. We also recently launched several notable collaborations and capsule collections. In October, we dropped a collection with OVO starring Canadian NHL legend Tie Domi that celebrated heritage and our iconic product icons. We followed this drop by making limited edition Toronto Maple Leafs jackets in support of the NHL and OVO. Our partnership with Toronto-based Adidem Asterisks under the inaugural Roots Emerging Creators Project represented another highlight in November. This design mentorship program nurtures and offers exposure to emerging brands led by a new era of creators. By marrying Roots' unique heritage with Adidem's multidisciplinary approach to design and storytelling, the collection created a shared perspective on the Canadian experience. It features 12 gender-free styles, including varsity and bomber jackets, hoodies, sweatpants, and leather goods produced in Canada. Consumers are increasingly shopping across gender categories, and we continue to believe that brands like Roots, which can adapt their collections to ever-evolving market requirements, will attract a wider range of buyers. Early responses to the collection have been very favorable. We also teamed up with Mr. Saturday, who was recently named Canadian Menswear Designer of the Year. He used an irreverent aesthetic to design an exclusive collection that's inspired by the 1970s jet set culture and Roots Air, the brand's short-lived airline from the early 2000s. This capture features iconography derived from vintage travel items in the form of embroidery, patches, and prints, combining Mr. Saturday's retro futuristic construct with the effortless comfort and style that Roots is renowned for. The joint collection, including jackets, hoodies, sweatpants, and T-shirts, along with airline-inspired accessories like leather passport holders, hats, luggage tags, and a blanket, hit the market last week in time for the holiday season. During the quarter, we also continued moving forward with our sustainability commitments by joining the Fair Labor Association, which seeks to drive a positive impact through collective action. The Fair Labor Association provides a framework of best practices, collaboration with peers, as well as ongoing dialogue and support to improve workers' lives through manufacturing, operations, and supply chains. This latest milestone is another step in our efforts to strengthen our focus on CSR initiatives. As previously outlined, CSR is an integral part of our long-term strategy, and we remain fully committed to achieving our objectives for 2022. Looking ahead to the revenue-intensive Q4 and into 2023, we anticipate that sales and margins will continue to be under pressure as long as the current environment remains volatile. To mitigate these effects, we are pulling in a number of levers to maintain our competitive position, including strategically managing our inventory and leveraging our strong balance sheet and liquidity position. Our underlying strategy remains unchanged in the long term. We remain focused on our four growth pillars that include offering an elevated omnichannel experience, reinforcing our brand position with high-quality products that meet the needs of our customers, strengthening our commitment to CSR initiatives, and focusing on operational excellence. While we plan to be prudent with discretionary spending, we do intend to invest in areas necessary to support these four pillars. I want to thank the incredible team at Roots for their continued hard work and dedication to the brand, especially during our peak holiday period. On that note, I will turn the call over to Mona Kennedy, our CFO, who will be leaving Roots in January to pursue other interests in the CPG sector. I've greatly enjoyed partnering with Mona over the last three years, and I appreciate her contributions to the company. On behalf of Roots and the board of directors, we wish her well. We anticipate a seamless transition as Leon Wu will be our new CFO. Leon joined the company in 2016 and has increasingly taken on major financial and operational roles during that time, most recently as the Vice President of Finance and Strategy. He's on the call today, Mona will be delivering the financial overview of the quarter as usual and answering related questions. We look forward to having investors and analysts spend time with Leon in the Q4. I will now pass the call over to Mona. Mona? Thanks, Meghan, good morning, everyone. During the Q3, we faced macroeconomic headwinds and an increasingly promotional environment that negatively affected our sales and pressured our margins. Although this volatile market environment will likely persist in Q4 and into 2023, I firmly believe in the company's underlying strategy to focus on profitable growth by elevating our brand and strengthening the fundamentals of our business over the long term. Our total sales decreased 8.5% to CAD 69.8 million in the Q3, from CAD 76.3 million in Q3 2021. DTC sales were CAD 56.9 million in Q3 2022, down 10.4% year-over-year. This decrease was mainly driven by macroeconomic headwinds in the latter part of the Q3, along with an intensified promotional environment and an accelerated consumer shift from fleece products towards lifestyle assortments. Channel sales rose 0.5% to CAD 12.9 million in Q3. The increase was mainly due to a favorable foreign exchange impact of half a million on US dollar sales in the quarter. Gross margin declined 430 basis points to 56.5% in Q3 2022 from 60.8% in the same period last year. This decline can be attributed to the temporary impact of premium freight costs of 240 basis points and a reduction in government subsidies of 55 basis points. Excluding these items, gross margin was down 135 basis points year-over-year due to higher cost of products, primarily from the shift to organic cotton and increased discounts on targeted inventory. Although premium freight costs negatively affected our gross margin by 240 basis points in the quarter, we still expect the blended impact of such costs in the second half of the year to fall in the lower end of our 150-250 basis points forecasted range. Similar to the industry, we have seen improvements to the global freight markets in recent months. We believe this will represent a meaningful tailwind in reduced transit times and reduced reliance on premium freight in the coming quarters. As it relates to global cotton and commodity prices, we have already made purchases through most of 2023 and will therefore not feel the full extent of the benefits of reduced input costs until 2024. SG&A expenses totaled CAD 33.8 million in Q3 2022, up CAD 4.4 million from CAD 29.4 million in Q3 2021. The 14.9% increase was mainly caused by a CAD 2.6 million reduction in pandemic-related government subsidies and occupancy-related cost abatements in Q3 2022 compared to the same period last year. Excluding these items, SG&A rose CAD 1.8 million year-over-year due to higher store costs related to increased operating hours, inflationary pressure on labor and e-commerce shipping costs, as well as investment in talent and marketing. Adjusted EBITDA amounted to CAD 7.3 million in Q3 2022 compared to CAD 19.2 million in the same period last year. Excluding the impact of government subsidies and occupancy-related cost abatements, the adjusted EBITDA decrease was CAD 8.9 million year-over-year. Net income totaled CAD 2.2 million or CAD 0.05 per share in Q3 2022 versus CAD 10.8 million or CAD 0.25 per share in Q3 2021. As with adjusted EBITDA, government subsidies and rent abatements had a significant impact on the year-over-year variation. Moving to the balance sheet highlights, our inventory position grew 10% year-over-year to CAD 72.9 million at the end of the Q3. We feel comfortable with this level of inventory as two-thirds of the increase was a result of our shift to organic cotton, which comes at a higher cost. We expect to continue to see elevated inventory for the balance of the year due to a combination of factors, including the higher cost of organic cotton products, our pack-and-hold strategy on core inventory, and lower sales. In addition to our healthy inventory, we closed the Q3 in a solid financial position with net debt down 21% year-over-year to CAD 58.7 million and unused borrowing capacity of CAD 56.1 million under our revolving credit facility. Our net leverage ratio meanwhile stood at 1.7x at quarter end. Looking ahead, we intend to remain disciplined with our cash allocation strategy. In a separate release today, we announced our intention to renew our share repurchase program or our normal course issuer bid for the repurchase of up to 2.1 million of our common shares, which represents 10% of our public float. Given the volatile market environment over the past few months, we have been prudent and not repurchased any shares under the existing NCIB in most recent quarters. We are now halfway through our peak period, we plan to be more opportunistic in share buybacks in the near term. The focus will be on controlling spending without compromising the long-term growth of the business and keeping a close eye on how the market unfolds. In closing, this marks my last earnings call as Chief Financial Officer at Roots. I leave with the firm conviction the company is headed in the right direction with its highly differentiated product portfolio, elevated brand equity, longtime customer loyalty and omni-channel growth strategy, all supported by a strong balance sheet. Despite temporary headwinds, I'm confident these competitive advantages will eventually translate into sustainable, profitable growth as the company focuses on its long-term strategy and operational excellence. This concludes our prepared remarks. Operator, please open the line for questions. Thank you. Ladies and gentlemen, we'll now conduct the question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Okay, your first question comes from Matthew Lee from Canaccord Genuity. Matthew, please go ahead. Morning, and congrats, Mona, on taking the next step. Thanks for taking my question. I suppose you know, it's gonna be on inventory. You know, Q4 is traditionally the period where you bring inventory down, but it sounds like it's going to be opposite way based on the press release. You know, given that your inventory is mainly core items, I'd have thought that the level you're at now would be more than sufficient for F23, which, you know, could be a softer retail environment. Can you maybe just expand on the strategy of increasing inventory into Q4? Hi, Matthew, thank you. From an inventory position, we ended the quarter 10% above last year. About two-thirds of this is as a result of the higher cost of organic cotton and the inventory being at a higher cost. As we go into Q4, we do expect our inventory to be above prior year levels for a number of different reasons. Firstly, as I mentioned, the cost of organic cotton. Secondly, as we go into kind of Q4, we know we brought in inventory a little bit earlier, so we have higher levels of inventory. Yeah, we're going into our, you know, our peak season and we haven't seen reduced sales. There's gonna be a little bit of elevated inventory as a result of that and, as you know, our pack-and-hold strategy. We do have two-thirds of our inventory that is core and, as we see lower sales, we do continue on our pack-and-hold strategy. We'll do targeted markdowns on seasonal products. Okay, great. Then maybe on the top line, can you just expand on what you can do as a company to offset customers shifting away from comfort and towards lifestyle? Yeah, I'll take that, Matthew. I think what we've seen in the quarter, which is interesting, is some really good performance in a number of core styles. In our woven tops, our sweaters, you know, we had a number of things that have really performed well. As an example, you know, we had this Farrow cardigan that, you know, was CAD 158 and sold out almost immediately. We, we are seeing places in our category where we've already made that shift into some more lifestyle type products that are performing well. And even within our sleep categories, there are pockets of things that are doing well, like our cloud sleep. What we're seeing, though, is that because the market is much, much more promotional also in our space right now, you know, we saw in the last couple of weeks or into October, people doing, like, 30% off, 40% off, 45% off some of the categories in which we play. We think that's part of what's also impacting the sell-through of our products, is we're not being as aggressive promotionally on some of our core products. We think it's a combination of some of the shifts that we're already doing from a lifestyle perspective, where we are gaining traction. We think it's also kind of a rebalancing effect as people get rid of the inventory that they had overbought coming into the pandemic at the back end of it. We think that we'll kind of see some settling down of the competition in the space also, and that'll benefit us. I think in the longer term, Matthew, as we said, you know, the core products that we bring back year-over-year, it doesn't make sense for us to discount those heavily as we know we're gonna bring them back out next year also, right? We want to continue to be prudent on that, but we do understand that that might impact our sales in the short term. Okay, that's helpful. I appreciate the color. Your next question comes from Stephen MacLeod from BMO Capital Markets. Stephen, please go ahead. Thank you. Good morning. Also congrats, Mona Kennedy, on your next step. Just a couple of questions. Can you just give a little bit of color around what you've seen on a Q4 to date basis in terms of sales or traffic? Yeah. I mean, we've, I think we've mentioned that we've actually seen good traffic in our stores. What we're seeing though is we have seen year-over-year declines in sales during our Black Friday and Cyber Week. Continuation of the trends that we saw at the end of the Q3, we have seen it just before so far. Again, we continue to attribute those to the three factors we've mentioned. The macro environment, kind of the economic impact of consumer tightening on spending due to inflation and interest rates. The second being really the highly promotional environment in which we see people really playing right now. The third thing being this rebalancing of people's wardrobes. Right now, people are obviously really focused on the Christmas holidays and buying things that they think used to go out, like sequin dresses or other things like that. We're seeing a bit of that shift impacting us also. Right. Okay. Thank you. Just on that traffic to sales ratio, Is traffic, is it, is traffic also declining on a year-over-year basis? No. No, it's not. From our store perspective, we're seeing year-over-year increases in traffic. Yeah. Yeah. Okay. Okay, thank you. Then just on the mix of product between lifestyle and more casual wear, can you just remind us of where that sits? We basically view our inventory as kind of two-thirds of it as core. We don't particularly disclose kind of the lifestyle, casual focus in our business. What I would say is that, you know, when you look at our business today, you know, we think of lifestyle things as plaid shirts, as sweaters, you know, things that kind of fall into that category, woolen bottoms. Where we have those items, we are seeing decent performance in them in year-over-year growth. I think in our core fleece category, as I mentioned before, which would be like sweatpants and, you know, sweat tops, there definitely has been a shift in, you know, particularly sweat bottoms over the last couple of months, I think as people are kind of rebalancing their wardrobe to look at offices and obviously events. I think the thing that's important to remember, though, is as a business that has been around for 50 years, and Roots been selling sweats since 1979, you know, from our perspective, we do believe that the core offering continues to remain relevant. What we do think is happening is a bit of a rebalancing, and we continue to expect those core products to be relevant next year. We do believe that in the short term, you're gonna see a bit more of a lifestyle focus and shift as people are thinking about parts of their wardrobe that they haven't built out for many years. Right. Okay. Okay, that dynamic makes sense. Okay, that's all I have right now. Thank you. Thank you. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by one. There are no further questions. Actually, there is. Your next question comes from Sabahat Khan from RBC. Please go ahead. All right, great. Thanks. Good morning. I just wanted to get a little bit more color on this shift that you were talking about in terms of just the type of products that people are buying. I guess, is it just more the world is, you know, a lot more open-ended than it was one, two years ago? Is it kinda just the tougher comps from the past couple of years? Just in terms of, you know, what are you seeing sort of the mix out there in the broader retail space, you know, given at this point? Is it, you know, is the macro also a part of, you know, affecting what people are buying? Just want to get a bit more color. Absolutely. I think I'll walk through a few effects. From a macro perspective, I think you're seeing a bigger impact in Canada than you are in other countries. I think, you know, there's some great results that came out from Salesforce that was showing the difference between Cyber Week in Canada versus Cyber Week in the U.S., with Canada seeing declines in Cyber Week pretty meaningfully and kind of the U.S. seeing growth. I think one of it is the exposure that we have to Canada from a business perspective. You know, that's impacting us, I think the interest rates and inflationary environment from the economic perspective are impacting consumer spending, it seems, more significantly in the Canadian marketplace based on some of these stats. I think that's important. I think the second thing is that, you know, we mentioned the promotional environment. You know, when we look at our core products, you know, we have, during Black Friday, kind of a one-time storewide sale on some of our products. That doesn't include things like Salt & Pepper, it does include, you know, other kind of fleece items. A lot of the businesses that are out there right now, given that they've had excess inventory, are looking at 30%, 40%, 50% off some of the categories in which we offer. Again, we think that's impacting the purchasing of our specific products. The third thing is the category shift. I would say that, you know, we have, again, for 50 years, been a business that offers lifestyle and casual items. I think you've seen us shift that balance of the items between more lifestyle and more, you know, casual items, you know, multiple times during the last 50 years. What we're seeing now is, you know, because of those factors I mentioned at the beginning, and then because of the fact that people don't really have in their wardrobe a lot of items they typically did have for going out or occasions or those types of things, they're focusing a bit more time now on rebuilding those aspects of their wardrobe. We're seeing a bit of a rebalancing. Our perspective is in the longer term. The core categories like, you know, sweats or sweatshirts, those types of things, they continue to remain a core part of our business. We believe strongly in the silhouettes and styles that we have. As I mentioned, we had, you know, really good traction with things like our Cloud Fleece, which again is a sweatshirt and a sweat bottom item. We think there's definitely places within our categories that we're seeing good performance. We do think that the industry right now is seeing a bit of a rebalancing, and we think Roots is well positioned to take advantage of that once we come out to the other side. In the short term, we expect to see impacts on sales, obviously. From a margin perspective, in our non-core categories, when the market is much more highly promotional, we do expect to see some margin impact as we will play more heavily to some of the seasonal discounting happening right now. I guess just, kind of with the, with the promotional activity that's going on out there in this space. Is it because your inventory is a lot more transferable to future seasons and future years, and that's where you're sort of holding off on promotions? Or is this sort of a view on, look, we wanna hold X amount of, you know, gross margin or EBITDA margin, and we're not going to, you know, promote kind of below that level? Just want to get perspective on how you're thinking about. Yeah. how promotional you may wanna be here. I think first off, as you look at Q3, we mentioned our inventory was only up 10% in Q3, which we think is pretty healthy. When you think about that 10% with two-thirds of it being associated with the cost increase to our inventory, as a reminder, we switched almost all of our all of our fleece products predominantly and, you know, a significant portion of our collection to organic or sustainable materials in the Q3. Part of that inventory elevation is coming from cost, right? Because we have a higher cost item. That's one piece of it. The second piece of it as it relates to our core product, you know, we really do fundamentally believe in that balance between understanding, you know, what's the profitability you're generating on that product. If I know I'm gonna sell something, you know, six months from now in full price, it doesn't make sense for me to discount that heavily just to pull forward sales to then buy into that product again next year so I can sell it next year, right? It makes sense for me to think about the products that I'm gonna sell year in and year out, pack those items up, bring them back out at the relevant time, and maintain my full margin perspective. Where we do look at the markdowns more significantly is in seasonal categories where we might say maybe we have a novelty fleece item that we brought in and it might not be performing as well right now. Those items we do take deeper discounts on. We believe it's important to do that to, you know, clean up obviously our store base and our inventory balance and make sure we can bring in more relevant items into next year. We really do think about it kind of broken into multiple different segments as if you're buying a Salt & Pepper item, which we've bought again since 1979 because that's how long it's been in our collection, and we haven't discounted that for years. Going back into a cadence of discounting that heavily, doesn't make sense for us because we know we have a consistent customer that comes back again and again and buys into that product. All right. Great. Just one last one for me. I know this is a topic that we talked about a bunch through the pandemic, but I guess as the world has reopened, traffic patterns are normalizing, sort of have you had a look at sort of the traffic level, the store base, and sort of seeing if there are any that maybe, you know, there's enough of the volume from a certain store has moved online? How are you thinking about the store footprint at this point in the cycle? Hi, good morning, Sabahat. From a store perspective, our strategy hasn't changed. We continue to be very analytical about it. As we've said previously, you know, 95% of our stores are profitable. We continually monitor their profitability. From an expansion perspective, we are using pop-ups as a test and learn strategy. We currently have 13 pop-ups open. There's two of them that we've made permanent in the past year as the tests kind of proved right. You know, our strategy in terms of store footprint hasn't changed, and we continue to monitor it. Traffic in stores have been up for the past quarter. Store traffic is improving and going to pre-pandemic levels, and we don't see any, you know, substantial shift in our store footprint in the near term or mid-term. The only thing I'd add to that is that we have seen, which is interesting, is definitely a significant increase in tourists in urban locations from a traffic perspective. You are seeing that, you know, people are going back to the office more regularly, or we have a more open economy where people can come to our tourist locations. That's definitely positively impacting traffic, and we see some really good results coming out of those locations. Perfect. Thanks so much for the color. Your next question comes from Brian Morrison from TD Securities. Brian, please go ahead. Brian, are you there? Yes, sorry about that. Meghan, apologies. I think you just answered my question, but I presume that you plan to execute for clean of any non-core inventory, correct? That's right. Yeah. We plan to clean up any non-core inventory. Again, the market's incredibly promotional, so, you know, we'll be looking at that in the coming weeks, but that's definitely a focus for us. Just lastly, is there a margin profile difference between your lifestyle offering and your casualization offering? Are you able to or would you want to make a shift to cater to the environment in order to have a greater weighting towards lifestyle? I think that it depends on the product specifically. I mean, we have items, you know, when we look at our. We have this concept called seed to scale. Obviously our seed to scale items, which are, you know, smaller items we invest in to test those in the marketplace and then look at, you know, volume if they gain traction. Those technically have like maybe a little bit of a lower margin, but we tend to focus on achieving the same margins across our collection. We do believe we have the potential to continue to shift more into some lifestyle items. Just to reemphasize again from the Q3 perspective, we did see good growth in things like sweaters and in wovens and those things where we have them. I think that, you know, it's a matter of how quickly we saw the shift in the quarter, especially given that there was a lot of promotions in our sector. That shift was kind of further emphasized. I think that the secondary thing too is that you are again seeing people rebuilding their other wardrobes again. I think there will be some normalization of that kind of comes into the second half probably of next year. We do believe we can and do have a robust lifestyle offering. I think things like our Journey Collection on the activewear side of things, you know, those are continuing to perform well for us. There's a number of pieces within our collection that we do believe will continue to see success. All right. Thanks very much. Good luck Mona on your new endeavor. Thank you. There are no further. Oh, sorry. There are no further questions at this. Actually, we do have a follow-up question from Saba from RBC. Please go ahead. All right. Great. Thanks. Just one quick follow-up. I guess this is more of a longer term question. You know, as, you know, we do look at a potential macro slowdown here, have kind of permanent changes to pricing or maybe a lower price line. Have you guys kind of considered some of those things, or do you think kind of from a brand perspective, maintaining the prices at the current level probably makes more sense? Just thinking more from a longer term perspective, whether it's, you know, a structurally new lower price point line or just moving price points lower, even just outside of promotional activity. Just wanted to get a perspective on how you view that compared to some of the competitors or the other offerings out there. No, I mean, I think we continue to believe that we have a proprietary offering of products that, you know, we think the consumers are willing to pay for. I think, you know, we have seen AUR improvements, you know, continuously, which is, which is positive. What I would say is, I mean, I'll give you a couple of answers, you know, or highlight the product category. We launched this quarter our gender-free One Robe. It's $148. It's been almost entirely sold out. We also launched something called the Farrow, you know, cardigan, $158, sold out, right? These are higher priced items within our collection that we're not seeing, you know, impact from our consumer perspective on that specifically. We mentioned that we've seen some good traffic in the stores. We do think it's a combination of those factors that I mentioned that's causing the performance that we're seeing. It's not necessarily related to specifically, you know, price sensitivity. We haven't seen that, you know, people coming in and having any price sensitivity per se. It's just how they're building their baskets is changing. You know, maybe before they would buy a baby outfit and buy a sweater, pants, a T-shirt, a hat and some socks or something like that. Now they may just buy a pair of pants and a sweater, right? It's, it's really just people are modifying and thinking about their spending habits differently with the combination of the other items I mentioned that we're seeing impacting it. From a price perspective, we feel good about our current prices. We feel good about our current positioning in the marketplace from that perspective. I don't think you'll be seeing us take prices up anytime in the short term because we feel comfortable where we currently are. We do think that that's not an impact right now in terms of what we're seeing. Great. Thanks very much. That's it for me. Okay. If there are no further questions at this time, I'll turn it back to Megan for closing remarks. Thank you for joining us for our Q3 results. We look forward to speaking to you in the new year when we take you through Q4. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.