Good morning, and welcome to Dr. Martens' FY 2023 Q3 trading update. My name is Harry, I'll be coordinating your call today. If you would like to ask a question during Q&A, you may do so by pressing star one on your telephone keypad. I would now like to hand you over to Kenny Wilson, CEO, to begin. Kenny, please go ahead. Thank you very much. Good morning, everyone. Firstly, a big thank you for joining our Q3 results call at such short notice. We've obviously accelerated this call due to a significant reduction to our FY 2023 forecast. This is something that I'm extremely disappointed about. This disappointment is even greater because a large part of our miss should have been within our control, and it is a people and process failure. Due to a large operational challenge in our new Los Angeles Distribution Center and weaker than expected DTC trading in the United States, we now expect full year revenue growth of 11%-13% on an actual currency basis and full year EBITDA between GBP 250 million-GBP 260 million. We are also reducing guidance for FY 2024, which Jon will cover in more detail later on this call. Let me start by explaining the operational challenge, the full extent of which is just emerging and how we are going to fix this. Our new Los Angeles D.C., which opened in July 22, now has significant bottleneck. They are dealing with considerably more inventory than planned and what this means is much lower throughput than planned. This has been caused by three main factors. Firstly, we planned to exit our old Portland DC by the end of September 2022. Our U.S. operations team decided to ship all Portland stock to L.A. early, putting pressure on our capacity. Secondly, some key customers asked us to reroute direct orders to our L.A. D.C. as they had their own distribution capacity challenges. The USA team agreed to this. Thirdly, ironically, transit times from our suppliers to our L.A. D.C. improved a lot versus our plan, meaning that more inventory arrived to L.A. earlier than we had in our plan. The three factors. Individually, we could have coped with any of these factors, not all three together. That is the situation, most importantly, what are we going to do to solve this? Firstly, we have secured three overflow distribution centers to store the goods. This is expensive, but lower cost than storing product in containers or at port, as Jon is going to outline. Secondly, we will be adding a third shift to our Los Angeles D.C. from the end of January into early February. You may ask yourselves, why are they not dealing with this faster? That's because we have to purchase forklifts, we have to find supervisors and the people to run this additional shift. This will increase our throughput. Thirdly, we will accelerate the expansion of our East Coast New Jersey distribution center, which was already in our strategic plan. From July, this DC will be fully operational for both direct to consumer and wholesale to support the Autumn/Winter 2023 season. Today, this DC already handles direct to consumer with a smaller assortment of product. Number four, we have quickly formed a focused task force of our best distribution experts who will support our USA team in fixing these issues. We expect the situation will improve month by month, it will be during Q2 of FY 2024 before these issues are fully resolved. I want to be clear that this is about having too much of the right product at the LA DC. It is not a seasonal markdown problem. We've told you many times before the continuity nature of Dr. Martens product and that four out of every five pairs which we sell are black. Moving to the second issue of USA direct to consumer. In December, our USA DTC business delivered 12% constant currency growth. A good performance. This was below our expectations. Seasonal weather patterns drove a channel shift in the United States within the period. Our wholesale customers sold 32% more pairs to consumers in the month of December, which was a very strong performance. We believe this will have been driven by the heavy storms which hit USA in late December, meaning that customers shopped more locally and outside of key cities. Jon will focus more on the USA DTC business in a moment. Overall, in December, our global DTC business traded +20% on last year, demonstrating the strength of the Dr. Martens brand. This was driven by excellent EMEA performance, with direct to consumer mix reaching 66% in EMEA in the quarter. Today, that is overshadowed by our very disappointing forecast reduction driven by the issues that I've outlined. With that, I'm gonna hand over to Jon to talk about our Q3 numbers, the bridge between our two forecasts, and then we'll take a Q&A. Thank you, Kenny. I'll talk you through our Q3 performance and economic implications of the significant operational issues which created the bottleneck at the LA DC. The new expectation and guidance for FY23. Finally early guidance for FY 2024. This is disappointing. For the third quarter, in the quarter, total revenue grew by 9% to 336 million GBP. This was up 3% on a constant currency basis. D2C revenue grew 11% or 6% constant currency to reach a mix of 65%. Wholesale was poor and declined by 1% constant currency. As we said at the half year, trading through October and November was variable, and across these two months together, D2C was up 5% but down 1% on a constant currency basis. We had a better December, with D2C up 20% or 16% constant currency, led by an excellent EMEA retail performance, which grew by 48% on a constant currency basis. D2C in America was up 12% in the month of December on a constant currency basis. This was below our expectation. Wholesale shipments across all regions were in line with plan in October and November. Wholesale had a poor month in December, which was all in America. Year-to-date revenue was GBP 755 million, up 12% actual currency or 5% on a constant currency basis. Turning to the financial impacts for FY 2023 and economic implications of the LADC bottleneck that Kenny explained. We have today reduced our full year guidance for revenue growth to between 11% and 13%, which is 4% to 6% on a constant currency basis. This is broadly in line with year-to-date performance. EBITDA is estimated to be between GBP 250 million and GBP 260 million. The reduction in both revenue and EBITDA is all in America. Both EMEA and Asia Pacific are trading in line with our expectation. As Kenny has described, in America, the LA DC bottleneck has resulted in a ceiling to the wholesale volume we can pick and pack, which is lower than our expectation through the fourth quarter. This ceiling reduces full year revenue or full year wholesale revenue, sorry, by GBP 15 million, which costs about GBP 8 million of EBITDA. In addition, the distribution costs and supply chain costs expected to be incurred to resolve this bottleneck are around GBP 8 million. Slower than anticipated D2C trading in America experienced through Q3 is estimated to continue through Q4 and reduces revenue by a further GBP 15 million and EBITDA by a further GBP 10 million. The difference in guidance between 13% growth and 11% growth is predominantly in relation to the pace at which we can fix the bottleneck, as Kenny had explained, and subsequently normalize our operations. Turning to FY 2024, the knock on effect from the LA DC bottleneck and uncertain economic outlook will impact revenue growth for that year. As we have explained, it will take time to fully optimize the operational capacity of the New Jersey DC, which we anticipate will not be complete until towards the end of the first half. Secondly, we have taken the strategic decision to reduce the volume we sell into e-tail accounts in EMEA, and whilst this will underpin D2C mix expansion in the out years, this will reduce revenue in the year of implementation. Thirdly, we've taken a more cautious outlook in relation to the economic environment in our core markets. As a result of the above, we now guide FY 2024 growth to be in a range of mid to high single digits on a constant currency basis. Finally, from me, whilst this is all incredibly disappointing, our underlying economic model and strategy do not change. D2C is four times more profitable than wholesale. We have material white space growth opportunity in our core markets. The brand is strong. Our underlying fundamentals are unchanged. Thank you. We can now move on to Q&A. Thank you. If you would like to ask a question, please dial star followed by 1 on your telephone keypad now. Our first question of the day is from the line of David Roux of Bank of America. David, please go ahead. Hi, Kenny and Jon. Just two questions from my side. Just to clarify, you mentioned some impact on the wholesale shipments in Q4 from this issue. What was, what was the impact in Q3, sorry, in Q3 on growth, I mean, compared to the 3% constant currency that you printed? Secondly, if I look at the bridge between your previous guide and the new guide, I get to a difference of around about GBP 40 million. I think about half of that can be explained by the DC issue. What is driving the other GBP 20 million? Thanks. On your Q3 request, we were expecting small single-digit growth in the quarter and we came, this is constant currency, came at -1%. That was all in the U.S. In relation to your second question, it's all one's view on D2C in U.S. As I said, EMEA and Asia Pacific are trading in line. The guide I gave was in relation versus average consensus. So it's broadly U.S. D2C and U.S. wholesale shipments, depending on one's view of what they were going to be. Okay. In the new guide, other than the D.C. issues, there does seem to be a bit more conservatism built in relating to the U.S. Is that? That would be- My understanding correct? That is correct, David. Yes. Thank you. Great. Our next question is from the line of Karina Nugent of Goldman Sachs. Karina, please go ahead now. Brilliant. Thank you for taking my question. It's fairly similar, but more focused on 2024. Compared to the mid-teens medium-term guidance you gave at IPO, that mid to high single digit figure at constant currency is quite different to that. How much of that lowering of expectations is on the kind of underlying trends you're seeing in the consumer versus the other issues that you've highlighted in terms of distribution? If you flip backwards, I think it's fair to say that Take this a different way. I'll answer your question. The LADC, we believe will be fixed by the end of the first half. That has an impact, and that will cause a range depending on the pace that we can fix that. We believe the reduction to e-tailers to be about 3 to 4 percentage points of growth. The balance will be one's view of where the world's economy is going. I don't really wanna give that away. The e-tailer thing is 3% to 4%. To that point, Karina, I think versus, you know, the IPO, which was January 2021, we think the consumer outlook is definitely, you know, more bleak, and therefore, we've reflected that in the guidance which Jon has updated. Brilliant. Thank you. Just a follow-up to that. Jon, you've been really helpful in the past providing building blocks to your guidance, and I presume, you know, the core building blocks in terms of pricing D2C haven't really changed, so the balance would be, you know, like for like volume. That would be correct. That we think is volume that comes through in one's view of the underlying economic health of the core of the core markets we trade in. What we are very confident in, as we said at the half year and still today with some of the data points we've seen, the brand is still very strong. It is all underlying trading and consumer confidence in our core markets. Obviously there, you know, there could be, Karina, if you were looking at this, a peer's impact still of what I outlined, that it will take a bit of time to strategically fix all of the challenges in the U.S. around distribution. You know, some of these things will happen quickly, but some won't be fully fixed until the end of the second quarter. Okay. Perfect. Thank you. As a reminder, if you would like to ask a question, please dial star followed by one on your telephone keypad now. Our next question is from the line of Piral Dadhania of Royal Bank of Canada. Piral, please go ahead now. Thank you. Morning, Kenny, Jon. I just wanted to ask about the midterm growth profile for the business, similar to the previous question. Obviously, we're moving from what we discussed in 2021, which was sort of high teens. I think the expectation is a bit more sort of mid-teens. Could you just give us an indication, if we all take a step back, what the growth profile for Dr. Martens can look like on a midterm basis? I appreciate we're in a slightly different difficult spot, but really what you're guiding to is 2023 revenue growth of mid-single digit, 2024 revenue growth of mid to high single digit. We're quite a far cry away from where we were just a few years ago. As we think about the future potential for this business, you know, where should we hang our hat? Is it sort of 10%? Is it lower than that? Because it doesn't feel like, you know, we can be baking in growth numbers in the teens at this moment in time. I would just like to hear your thoughts on that if possible. Yeah, I think that's a very fair question. You know, clearly when we IPO'd the company, we said we would be growing mid-teens other than the first year where we said we would grow high teens, and we did. I think the destination hasn't really changed here. What has changed, to your point, is the shape of the journey, and clearly reflecting, you know, the macro consumer environment, which we think will be difficult through FY 2024. We've guided to mid to high single digits. We believe going forward beyond that year, that we can start to increase the growth profile of the company. We still believe that we've got strong brand. We've demonstrated that we have the power to increase prices, and nothing has changed around the white space growth opportunity. We saw in our European markets over the holiday period that some of those new markets that we've converted back are delivering very high growth rates. We have a short-term problem here in the United States, and we have to solve it, hence the reason why we've changed the FY24 guidance. It's the shape of the journey that's changed, not the destination. I think if you think at the core, one of the key economic drivers is D2C mix shift. Last year we had 49% of revenue through D2C. As we just reported, this year to date, we've improved D2C mix by 2 percentage points. That and D2C is 4x more profitable than wholesale. That key driver is still valid. As Kenny said, the white space growth opportunity is still valid. I think what we're looking at here is actually pace of expanding into that white space growth as opposed to anything else. The at least if it's in going back to the e-tailer strategic decision we've taken, that will help underpin. Yeah. Drive in the out years D2C mix expansion. It's just a timing issue as we come out of those e-tailers until we get a transfer into our own channels. Well, thank you. Thank you. I mean, if I could, and with all due respect, what I appreciate all the levers that you've just identified, Jon, but in 2021, this was actually. We were talking about volume growth, volume-led revenue growth strategy, and that's kind of the elephant in the room, which is, in my opinion, kind of, you know. There is a slowdown in the volume growth. I think the previous question alluded to that. It's just the extent to which that is still valid in the, in the overall sort of profile at this point, or. I appreciate all the other levers, but I think that maybe where the market and investors will focus is just on the core piece, which is actually the underlying volumes and what's going on there and the extent to which that can grow in the midterm. That's really the focus of my question. No. Okay. Yeah, no, you're absolutely right. It is a volume-led plan and volumes is the explanation of growing into the white space growth opportunity. I think the reason that volumes will be slower for the next 12 to 18 months is a reflection of the current economic environment we are all facing. Sure. A weaker consumer and, weaker consumer spending. I think that's the core driver for slower volume growth or weaker volumes, whichever words you want to use. Yeah. Okay, thank you. Just in terms of timing, obviously it's only been something like eight or nine weeks since your half year results, maybe even a bit less than that. I appreciate the LA DC is something that was maybe outside of your purview until quite recently. Could you just help us understand what's changed in terms of your thinking from then to now? You know, why are you now much more bearish on the U.S. outlook than you were seven, eight weeks ago? And any other factors that relate to the underlying business rather than the one-off factors that we've, that you've already kindly run through. I mean, from my perspective, I think, you know, when we stood up at the end of November, the wholesale piece in the U.S., we had no awareness of that issue because we were shifting high double digits up on prior year. That piece takes care of it. Jon gave two big assumptions. The first was that there was a weaker base in Europe that we thought would come through in December. That has come through. He also said that we would benefit from improved availability in the United States. Oh, somebody's kid is crying. That we would improve off the back of that better availability in the United States. We didn't improve as much as we had expected in our DTC channel with only 12% constant currency growth. We missed. What we did see, as I said earlier, I think that was due to weather driving a channel shift. You know, back to your pairs question, we sold 32% more pairs through wholesale in North America in December. We have reflected out the fact that our DTC channel has not delivered what we wanted, that is the assumption that clearly you can point to just was a miss versus what we said. And just to build- Sure. Sorry, one more build as well. When we stood up at the half year, we had seen early data for the Black Friday, Cyber Monday trading weekend in the U.S., that was good, that was a good performance. I think I shared that as the only data point of support that we had at that moment in time, the benefits from availability. Okay, perfect. Thank you. Thank you very much. Thank you. Our next question of the day is from the line of Edouard Aubin of Morgan Stanley. Edouard, please go ahead now. Yeah. Hi. Hi, Kenny and Jon. two, three questions from me. First of all, you mentioned the hit from the e-tailers, you know, 3%-4%. Why the change of mind regarding your distribution strategy? You know, what's happening there? Is it because these guys are auto promotional and impacting the brand or? You know, just curious to have an explanation there. That would be number one. Then just to follow up on the question about, you know, volume because, you know, with mid-single digit organic, looks like your volumes are now flat to down or you're expecting them to be flat to down. Is it, you know, you've mentioned many times before on this call that, you know, you wanted to act as curators of the brand, which is obviously great for the brand equity, desirability long term. Are you now in a scenario where, you know, most of your competitors are heavily discounting, and that's impacting basically, I mean, the value proposition is maybe not as attractive as you've raised prices, you know, over the past few months. Sorry, a third small technical one, just to clarify. I think, Jon, you said that, you know, your DTC growth in the U.S. was up 12%, if I understood correctly in Q3. Did you also mention that wholesale sellout was up 32%? If so, what, why the difference? Thank you. Thank you, Edouard. I'll take the question around e-tailers and your point about heavy discounting in the market, and I'll let Jon take the financial and technical questions. In terms of the question around e-tailers, you know, It's a European point, just to be super clear. It's not relating to the other territories. In Europe, the brand awareness is growing, and it's growing every quarter. There's no doubt that our wholesale strategy has helped us to introduce more consumers to the Dr. Martens brand. What we've discussed with our key retail partners in Europe is the fact that we want to focus them on a different product range from some of the products they have been selling and focus some of those products on our own DTC channels. We'll continue to trade with e-tailers going forward. We're not eliminating e-tailers, and we've got some good strategic partnerships there. We will curate the products that we put into that channel. We will direct consumers for other products towards our own DTC channel. That's really what we're trying to do. It's a product and brand point, which is we wanna direct different products to different channels. In terms of discounting, yes, you're right. There was a lot of discounting out in the marketplace across December in particular, but really from the Black Friday weekend through to Christmas. We only participated in that in a very small way, through some seasonal markdowns that we took in our two biggest markets in EMEA and in North America. You know, we've said all along, we don't discount the iconic product of the Dr. Martens brand because we believe that the way to build long-term brand value is to have an honest relationship with consumers, where if they wanna buy a pair of black Dr. Martens, they know what the price is always gonna be. I still believe that is absolutely the right decision for the long term. Will consumers have spent their pound or their euro or their dollar on something that was so heavily discounted? Yes, but I don't think that's the right way to manage the brand for the long term. We will not be in an environment of heavy discounting. It's not the right thing to do. On your second question on volume, Edouard, the way to think about it is volumes will probably flat to lower next year, depending on one's expectation, primarily because of taking out the volume that we sell into European e-tailers. A way to think or a simple bridge for next year's growth would be along the lines of we've announced price growth of 6%. We'll have the benefit of annualizing approximately 44 stores that we've opened this year, including the Japanese transfer into next year. There's obviously the reduction from e-tailer volume. There will be a D2C mix shift. As I said, to date, nine months this year, it's +2%, and then it'll be one's view of what is underlying growth in core markets, depending on the economic environments there. That might be flat pairs, marginal reduction in pairs or increase in the pairs, depending on which market you look about. That's the way to look about the key drivers for a volume reduction next year or lower volumes is the volumes we're taking out of European e-tailers. With regards to your final question on December trading for the Americas business. For the clarification, you're absolutely right. In the month of December, D2C in America grew revenue by 12% constant currency, which is about pairs up a smudge, flat to up a smudge. Wholesale sell out to the wholesale final customer was up 32% in December, and that was volume. As Kenny answered your first question, that was volume all at full price because we have MAP pricing in the U.S. Pairs to final customers in the U.S. in December was essentially probably combined D2C and B2B up mid-20%s, something like that. That gives us confidence that we can sell, we can sell in. Our hypothesis of what happened in December is that the extreme cold weather, it's incredible what happened there, because everyone was seeing the news about snow and cold weather. That pushed people away from the larger cities where our stores are located to more local shopping, which is where the vast majority of the wholesale distribution is. Where there's thousands of stores, and we've got what? About 50 stores that are in the bigger cities. That's our hypothesis of what happened. The key is pairs growth into the market, D2C and wholesale together, so to end consumer was up mid-20%s, and that's a positive. Okay. Thank you, guys. Thank you, Edouard. Thank you. As a reminder to ask a question today, please dial star one on your telephone keypad now. Our next question is from the line of Richard Taylor of Barclays. Richard, please go ahead. Yeah. Morning, all. I've got three questions, please. One is again on the U.S. I know you just described in great detail December, but can you just talk in general about the U.S. business? 'Cause it looks like the other territories you're sort of satisfied with, but the U.S. has been poor overall. Just standing back, you know, what is it that you're unhappy with in that business or perhaps is not hitting well as with other markets? Secondly, globally, what's reordering been like from wholesale accounts into FY 2024? You know, what's the sell-through been like and are they reordering at the higher prices? How does that inform your revenue growth guidance for next year? Finally, you've not talked about margins for next year. We can work out roughly a margin range for this year given the data you've given today. What are the thoughts on EBITDA margin into next year, please? Thank you. Yeah. I mean, I think in your first question, Richard, you know, the businesses in Asia-Pacific and EMEA came in exactly in line with what we'd expected. In fact, EMEA did a little bit better than we expected. The U.S. business, clearly the performance is not where we want it to be across the whole... If I take the quarter rather than the month of December, the quarter was disappointing. You know, as we said, when we stood up in November, we felt at that point that that was due to, you know, unseasonably warm weather. December, our sales out through our own channels at 12% up was up, but it wasn't as up as much as we wanted. We're disappointed in that. Actually our sales out to consumers through wholesale at +31% actually was very strong. Our sales into wholesale, which you can see from our numbers, were terrible based on the distribution issue. Overall, we didn't deliver what we said we were gonna do in the U.S. business. We've got to be disappointed in our own performance there. The fact we sold significantly more pairs in December says people still wanted to buy the Dr. Martens brand. That would be my view on it. We've got work to do, clearly. If you don't deliver your numbers, then you've got to be disappointed in your own performance. In terms of your point about global reordering, we know the order file for Spring/Summer 2023 because those bookings have been taken for Jan, Feb, March, April, May, June. We're in a situation where we're happy with those orders. The United States, as we've said today, we won't be able to ship all the orders we've got, ironically, because of the issue we've got in the Los Angeles Distribution Center. We're gonna have to pick and choose exactly which orders out of those we're able to ship. If we look at the Autumn/Winter 2023 season, which is still the biggest part of FY 2024, we're at a point of low visibility, unfortunately, at the moment. What I mean by that is it will be another three or four weeks before we really firm up the order file. Hence why in our guidance for next year, we're being cautious on pairs because we don't know the answer yet. Usually people ordering is a function of how they're selling out. You know, I've got nothing to believe that in the guidance Jon's given for FY 2024, that we won't meet the pairs numbers that, you know, that we've got embedded in there. We won't know the true answer until we take all of the orders for Autumn/Winter 2023. Building on that and picking up on your last question, we purposely have not guided around EBITDA margin for the next financial year because of, as Kenny said, we're at the point of minimum visibility. The current issue has hit us really fast this week. We just need to work through what all of this means in much more detail. We'll come back at an appropriate time. Yeah, thanks very much. Just on the second point now on the wholesale reordering, I mean, I think in the previous statement, Jon sort of noted the position of the key wholesalers. You know, what is that like? You know, you're at a point of low visibility, I understand that. You know, have they sold through well? Your prices are going up. You know, what are the conversations like with those wholesalers? What's your degree of confidence in them reordering next Autumn/Winter at those higher prices, given their balances at the moment? I mean, I think if you look at the situation, Richard, you know, we mentioned that people had healthy inventories going into peak at wholesale. I think the +31% pairs in the United States in December demonstrates they had the stock. We're in the ironic situation that people will be sold out of certain sizes on certain products, but we've got an order file which was pre-booked that we have to ship first. We won't be able to replenish everything that people have sold out. We have visibility on our inventories of our top 10 accounts. Again, because we saw good sales in December and our U.S. team updated us that at wholesale, the December momentum has continued into January. That will further bring down inventory in the wholesale channel. As Jon said in November, we believe that we'll exit this financial year, end of March, with our key wholesale accounts, with our inventories, you know, in better shape than they were at the same time the previous year. That's America. I think for Europe, you know, Europe's wholesale sales were absolutely in line with expectations. A couple of accounts did better. We haven't got all the sellout numbers yet for Europe in the way that we've gone through in infinite detail for the United States. I'm very comfortable. We get the inventory week on week, and I'm very comfortable with where we are on wholesale inventories in EMEA. Other than the pairs that we are gonna take out with our retailer partners, I think, you know, Again, I don't have the order book yet, but I feel pretty good about how the order book is evolving in EMEA, and they're actually slightly ahead on timing versus the Americas business on getting those orders in. In Asia Pacific, there's only real one big, what you'd call wholesale customer, and it's the Australian distributor, and their sales have been extremely good in the last quarter. We feel very confident about that number. Given the fact that wholesale sellout in December has been good, we feel okay about that number. The fourth quarter of this year, we will not be able to replenish all of our sales in the United States because of our distribution issue. I wanna be super clear about that. If you think back in terms of order book build, at the year end last year, we shared with you the order book status for Autumn/Winter 2022, and this is what would have been early June. We were about, I think my recollection is we had about 70% sold then. Well, then we did it again with the expectation to be 100% by the end of September. We'll be able to share those same stats when we get around to the year end. At the moment, as Kenny has said, the order book is just starting to be built, so we can't talk much about it. Understood. Thank you. Just moving on from sort of the inventory comments, playing into your net debt estimates. I don't know if there's anything given in the statement on net debt, but perhaps you can refer to a consensus range on net debt and whether you're comfortable with that, please. I have not looked at the net debt numbers at this moment in time. However, from a net debt cash point of view, I have got no concerns, but can I get back to you on that point, please? Yeah. Thank you very much. Our next question of the day is from the line of Kate Calvert of Investec. Kate, please go ahead. Oh, morning, everyone. two questions from me. Will the issues in the USDC impact upon your new store plans in FY 2024? My second question is just on Asia. Do you think it will return to growth in FY 2024? I think on the first one on will the distribution center issues impact store opening plan, we plan to go ahead with a similar number of stores next year in America, Kate, that we've done this year. I think we'll end up the year at about 15. I might be wrong by one either way. And our plan is to open a similar number of stores in the United States next year. As we've said before, we're very happy with the four-wall performance of stores we're opening in North America. As a strategic lever, we feel good about that. You know, we currently at the moment, the LA DC ships all product codes to our direct-to-consumer business and our existing New Jersey DC ships a selection of product codes to stores on the East Coast. We already ship direct to consumer in the United States from two DCs. As I said earlier, we already had a plan in place. It was part of our strategic plan that we were broadening out the capability of that New Jersey DC. First of all, we were gonna expand the full direct to consumer range in that New Jersey DC. That was already an action that was in progress. As I've said today, for wholesale, we're gonna further expand that. That was a long-winded way of saying direct to consumer shipments, either e-com or stores, you know, we put them first, so therefore. The fact that we've got two DCs, it won't impact it. The store openings will move ahead. In terms of Asia Pacific, Jon can talk a bit more to the detail on this. I mean, what do I think we see? The Japan business, as we mentioned in the statement, is performing well. Everything is going on plan to transfer over the 14 franchise stores in Japan owned and operated, and that will happen, as we said, before the end of the financial year. We feel very good about the business in Japan. China right now with, you know, the removal of zero COVID, it's a small business for us. You know, a high percentage of our employees in China have COVID, which probably means most people in China have COVID. You would assume the situation will get better in China as the year goes on. We also feel cautiously optimistic about the business in Korea. As I mentioned, the Australian business, which is run through distributor, which is one of our biggest businesses in Asia, is also doing well. That was a long-winded way of saying, I think we feel pretty good about Asia for next year. Yeah, just to build, essentially Asia growth next year will be driven by Japan, return on investments in Japan. If you think Japan is an old school, mainly physical retail country, we've got a small website along with it, same as lots of other countries. Think old school retail. Footfall in Japan is still about 25% below pre-pandemic levels, there's opportunity for footfall growth. We've got the annualization of the 14 stores that we're taking back. I think we've opened four or five stores in Japan this year as well. There's a big annualization benefit in Japan, as well as still good, some good headway on footfall recovery. We feel confident that Japan will drive the returns we get from Asia Pacific next year. Great. Thanks very much. Thank you, Kate. We currently have no further questions registered, as a final reminder, please dial star one if you'd like to ask a question. That's star one for any further questions. It appears we are having no further questions registered, I'd like to hand back to Kenny for any closing remarks. Great. Thank you very much. you know, as we said, we've accelerated this call today, because of the reduction in our forecast. I just wanna emphasize how disappointed we are about that and the fact that, you know, some of this should have been within our control. We're not pleased about that, and we will be putting the fixes in place to make sure that we move this forward. I just wanna thank everyone for joining this call because obviously we've had to call it at short notice. Thank you, and obviously we'll be available in the days ahead for follow-up questions. Thank you very much indeed.