Good morning, everyone. Today, we are hosting an extended earnings call to discuss our fourth quarter and fiscal 2023 financial results, as well as our new Powering Profitable Growth strategy and three-year financial targets. The call will include prepared remarks from Jay Schottenstein, Executive Chairman and Chief Executive Officer, Jen Foyle, President, Executive Creative Director for AE and Aerie, and Mike Mathias, Chief Financial Officer. This will be followed by a question and answer session. We expect to conclude the call at approximately 1:00 PM. Before we begin, I would like to refer you to our safe harbor statement and additional disclosures around non-GAAP results posted on screen. Reconciliations of adjusted results to the GAAP results are available in the tables attached to the earnings release, which is posted on our corporate website at www.aeo-inc.com in the Investor Relations section. Following today's call, this is also where you will find a replay and our fourth quarter investor and powering profitable growth strategy presentations. Now, I will turn the call over to Jay to kick it off with a quick review of key highlights of our fourth quarter and fiscal 2023 results. Jay? Good morning. Thanks for joining us. Earlier today, we unveiled our new long-term strategy and financial roadmap. Our focus is simple: powering profitable growth. We are excited to share the details of our plan with you, but first, let me begin with a quick overview of last year. I'll start with a huge thanks to our teams for their perseverance and commitment throughout 2023. I am especially proud of the strength we delivered in the second half of the year as we began to implement actions from our profit improvement project. Building on momentum in the third quarter, we achieved record fourth quarter revenue, and adjusted operating income reached the highest in over a decade. With strong execution, we nicely exceeded expectations, even after raising guidance in early January. While Mike will provide greater details, during the fourth quarter, we took a non-GAAP charge as we look to strengthen overall profitability. Our 2023 revenue reached a record $5.3 billion, and we registered $375 million of adjusted operating income. With the exception of 2021, this was our highest adjusted operating income result since 2012. We generated strong cash flow, and we ended the year in a very healthy financial position. Cash and investments more than doubled from last year, reaching $454 million at year-end. We exited 2023 with clean inventory, well-positioned for our go-forward plans. Reflecting improved financial performance and a healthy balance sheet, in December, we announced a 25% increase in our quarterly cash dividend, and in February, we authorized 30 million shares for repurchase. This underscores our confidence in the strength of the business and our commitment to returning cash to shareholders. We enter 2024 well-positioned with industry-leading brands, a solid balance sheet, and best-in-class operations. Our profit improvement initiatives are taking hold, and we expect to deliver nice revenue and profit growth in 2024, which Mike will detail shortly. We remain steadfast in operating the business with balance, staying agile and flexible to capitalize on demand opportunities while optimizing profitability for the foreseeable future. With that, I will pass it over to Jen for some brief merchandise and marketing highlights of the fourth quarter. Thanks, Jay, and good morning, everyone. I'm very proud of our fourth quarter performance. We saw sequential improvement across brands and channels, and we achieved record revenue for both AE and Aerie. Merchandise margins were strong, driven by inventory discipline and favorable product costs. We brought excitement with newness, including a fresh take on some tried and true classics. Collections were on trend, including an amazing array of gifting options that did very well over the holiday season. As I will review in today's strategy presentation, we saw early results from a number of new brand initiatives. Strong product, engaging marketing, and an unparalleled shopping experience is delivering customer growth. In fact, at over 22 million, our total customer count expanded across brands, reaching an all-time high. Now, some brand highlights. American Eagle revenue grew 11%, fueled by a 6% increase in comps. The extra week contributed approximately four points to brand revenue. Strength was broad-based across jeans, pants, tops, sweaters, and outerwear. Women's outperformed men's, yet both saw meaningful sequential improvement. The AE brand operating margin expanded 100 basis points to 17%. As we have turned our attention to driving growth at AE, we are placing a renewed emphasis on top sellers and expanding availability across the store base. Our new store design is showing nice results, providing a positive lift to comps. I'll talk more about these initiatives later. However, we are incredibly pleased with the early results. They provide a strong proof point of our strategy to deliver profitable growth, which we are excited to share with you later today. Now, turning to Aerie, revenue grew 16%, with comps increasing 13%, locking in yet another record fourth quarter.... The extra week contributed approximately four points to brand revenue. Growth was led by soft apparel and our flourishing OFFLINE activewear business, both of which posted double-digit growth. Aerie's operating margin of 16.2% hit an all-time fourth quarter high. This is a 400 basis point expansion to last year as the brand continued to scale. We also saw improved markup and lower markdowns. New stores are providing a tailwind to comp growth as they enter the comp base and are boosting margins as they ramp up through the maturity curve. All in all, we had a very successful holiday season and fourth quarter across our brands. I'd like to thank our amazing teams for their hard work, talent, and commitment. We made tremendous progress throughout the year, and I look ahead, I'm very optimistic as we build on positive momentum. I look forward to sharing our go-forward plans in a little bit, and now I'll turn the call over to Mike to review the rest of our financial results. Thanks, Jen, and good morning, everyone. As noted in our press release and earlier in the call, fourth quarter of 2023 results are presented for the 14 weeks ending February 3, 2024, compared to the 13 weeks ending January 28, 2023. Comparable sales metrics are presented for the 14 weeks ending February 3, 2024, compared to the 14 weeks ending February 4, 2023. We're very pleased with how we performed during the second half of the year when our profit improvement work began to take hold. We saw a sequential acceleration in revenue growth across brands with an exciting return to growth for American Eagle. This came hand in hand with a significant improvement in profit flow-through, where we saw a 320 basis point improvement in our second half adjusted gross margin over last year. As we'll discuss shortly, the early results from these initiatives gives us tremendous confidence in our go-forward plans. Fourth quarter revenue of $1.7 billion marked a new company record, rising 12% to last year. The 53rd week contributed $57 million or approximately four points to growth. The adjusted operating margin increased 200 basis points to 8.4%. Compared to last year, adjusted gross profit dollars increased 23% to $626 million, and the gross margin rate expanded 340 basis points to 37.3%. Merchandise margins improved, reflecting strong demand, lower costs, and a number of benefits from our profit improvement initiative. Inventory discipline drove lower markdowns and BOW expenses also leveraged. This was led by rent, delivery, distribution, and warehousing costs, with a partial offset from higher incentives as we lap zero accruals last year. SG&A expense of $427 million was up 22% to last year. Consistent with strong business trends, roughly half of the increase was driven by incentive expense. Store payroll also increased, driven by higher wages and additional hours associated with the 53rd week. As a rate to revenue, store payroll was flat to last year. Depreciation was down slightly year-over-year, leveraging 50 basis points. As we will discuss today, with incentives now in our base and an ongoing focus on cost efficiencies, we're well-positioned to leverage our expense base moving forward. Adjusted EPS for the fourth quarter of $0.61 per share was up 65% to last year. Consolidated ending inventory cost was up 9% year-over-year, with units up 11%. As Jane noted, inventory levels remain healthy, and we ended the year with a strong balance sheet. CapEx totaled $39 million, bringing full year spend to $174 million, in line with our guidance. We have entered 2024 well-positioned with a clear path to value creation from here. As I will discuss throughout today, our profit improvement initiative remains a top priority. As part of this work, in the fourth quarter, we took a number of additional steps to streamline business priorities and strengthen the organization. This included restructuring the company's distribution network, international operations, and associated corporate overhead. We recorded a $131 million impairment and restructuring charge in the fourth quarter, of which $119 million was non-cash. This will result in approximately $20 million in annualized savings beginning in 2024. Now on to guidance. For the year, we are guiding operating income of $445 million-$465 million. This reflects revenue growth in the range of 2%-4%, including an approximately one-point negative impact from one less selling week. As we control expenses, we expect to drive SG&A leverage. Based on the current plan, full-year SG&A dollars will be flat at the low end of our revenue outlook. As a result of restructuring actions taken in the fourth quarter, we expect D&A of approximately $220 million for the full year. Our tax rate assumption for the year is in the high 20s%, and at this time, we are projecting a weighted average share count in the high 190s. Now, I want to provide a little more color on 2024, as a few important factors will impact the cadence of the year. With easier year-over-year comparisons, we are guiding comp sales growth to be stronger in the first half at positive mid-single digits. For the second half, we are currently estimating comp growth in the low single digits. In addition, given the retail calendar shift and 1 less selling week in the fourth quarter, we expect total revenue and profit growth to be skewed to the first half of the year. Now, specifically by quarter, in the first quarter, we expect to pick up approximately $15 million in revenue as we capture a higher volume spring week. In the second quarter, we will gain approximately $55 million as we pick up a week of back to school, which are some of our busiest weeks of the year. In the third quarter, we will see a net shift of about $45 million in revenue out of the quarter. Lastly, in the fourth quarter, we expect a $85 million impact as a result of one less selling week in addition to the calendar shift. These revenue shifts are important as you model out the year by quarter. Now, as we look at the first quarter, we are pleased to see business momentum continue. For the quarter, we're expecting operating income to be in the range of $65 million-$70 million on revenue growth in the mid-single digits. We expect SG&A to grow in line with sales in the first quarter and begin leveraging in the second quarter as we continue to build on our profit improvement initiatives. Now, I'll turn the call back to Jay to kick off our strategy discussion. Thanks, Mike. Building on our strong 2023 performance, I'm pleased to now introduce our long-range strategy and financial plan. This is our multi-year roadmap for powering consistent, profitable growth. Our plan is centered on three main pillars: amplify our brands, execute with financial discipline, and optimize our operations. This strategy plan is a direct result of our profit improvement project started last year. We reviewed every area of our business to set AEO up for profitable growth moving forward. The early stages of this project helped fuel a significant turnaround in revenue and profit during the second half of 2023. Yet we are just getting started. I'll start with a quick look back. We have a strong history and heritage of building great brands. American Eagle is over $3 billion in revenue. Aerie is closing in on $2 billion. We provide excellent customer service and have best-in-class operations. We've been successful over the past several years, driving fairly steady revenue growth despite a lot of macro volatility. However, flow-through to the bottom line has not been consistent. The plan we are presenting today is designed to address this head-on. Building on our strong results in 2023, our target is to generate annual profit growth in the mid- to high-teens on 3%-5% top line. We are transforming how we operate to deliver steady profit growth. We have formalized this change with clear responsibility and accountability, and as Mike will discuss, we've instilled a culture of continuous improvement. Before we get into the details, I'd like to begin with a refresh on who we are today and what I see as our unique competitive strength. This is what gives me confidence in our strategy and future potential. So let's get started. AEO has been on an incredible journey since its founding in 1977. My father, Jerome Schottenstein, set out to build a brand with heart and purpose. It was his priority to offer quality merchandise that was accessible to all. From the very beginning, we were open-minded, optimistic, and inclusive. Over 45 years later, these remain the core tenets of our brands and the foundation of our company and culture. Our success has been underpinned by distinct and undeniable set of competitive advantages. These are strengths that have been fortified over decades. They set us apart and have enabled us to endure through both good and difficult times. As we move on to the next chapter of our growth, we will lean into these strengths to drive further success. Our brands are the very heart and soul of AEO. American Eagle and Aerie have incredible brand equity. Amplifying their strong foundation is at the center of our future growth plans. We are especially excited about the OFFLINE by Aerie activewear sub-brand. It's expanding rapidly, and we see a big growth opportunity here. We also have two emerging brands in the luxury space. Todd Snyder, a premium menswear brand, which we acquired in 2015, and Unsubscribed, a unique women's brand offering consciously made clothing and accessories, launched in 2021. Our commitment to quality is a significant competitive advantage. We are not fast fashion. We sell merchandise that is built to last. We ensure our finishes and fits are best in class and that our customers feel comfortable, confident, and on-trend. We believe that price is what you pay, quality is what you remember. Innovation is woven within everything we do. We have a long history of creating superpower categories that reinforce brand loyalty and drive repeat purchases. Our franchise categories are the cornerstone of our business and give us the authority and credibility with customers to build more. Today, you'll hear more on this theme and the opportunities we see across brands to grow into adjacent categories, some new businesses and some that are being reignited. We have invested in best-in-class operating capabilities. We have an extensive and diversified global supply chain network. Our strong partnerships ensure we can chase costs effectively and with speed. We have modernized our distribution network with Edge Fulfillment, which has delivered significant benefits to our business over the past two years. We have a powerful and profitable store fleet and a significant $1.8 billion digital platform. Together, this is a winning set of capabilities that enable us to operate with strength and agility. Top talent is a differentiator. This team is highly experienced in the retail industry with a broad range of expertise. The passion at AEO to build the best brands in retail and operational excellence is second to none... We have two new members of our leadership team. Sarah and Valerie joined us in October, bringing strong backgrounds with years of retail experience. They have hit the ground running, introducing new ideas and ways of working. We're also supported by a deep bench of strong talent at all levels across the organization. With these competitive strength, we have a solid foundation. We are built to last and well-positioned for success. As we embark on this next chapter, I cannot be more excited about our future. With that, I'll turn it over to Jen to walk you through our growth strategy for American Eagle and Aerie. Thanks, Jay. We have an amazing portfolio of brands, and we've made great strides over the past several years. As I will share with you today, we continue to see incredible opportunities to amplify our potential and fuel the next chapter of growth. Let's start with American Eagle. As I said at the last investor meeting in 2021, when I first took responsibility for American Eagle, I love this brand. I love its strong platform and everything AE stands for, true today as it was then. Jay, his father, Jerome, and Roger Markfield built something very special, a brand with heart that has always embraced individuality and diversity. It has truly stood the test of time. American Eagle is the largest, most consistent youth brand, dressing generations of customers. And today, I'm going to tell you why I'm more excited than ever about our future. American Eagle is perfectly positioned for growth. But first, I'd like to show you a short video that captures the essence of AE and what we stand for. They're just the type of friends that are usually down for everything and anything. I trust them. I don't know. I, I like to have people in my life that I trust. You can just feel the love that we have for each other, and that's a really magical thing. In addition to its strong brand positioning, American Eagle is also a financial powerhouse. In fact, it was the fuel that built Aerie, with steady growth, strong margins, and healthy cash flow, enabling us to invest and grow. As we reviewed back in 2021, we saw potential for even better profit flow-through. Three years later, I could not be more proud of how far we've come. AE's operating margin has expanded nearly 300 basis points relative to 2019. With margins restored, we are excited to turn our sights to growth once again, while maintaining a firm focus on profitability. So here we are, our pillars to power profitable growth at American Eagle. We will continue to lead in jeans. That's what we're known for, building brand loyalty and repeat purchases. Next, we have a real opportunity to complete the outfit by offering a broader assortment of tops, expanding into adjacencies where we know we have a right to play, modernizing our store fleet with a beautiful new store design to elevate the customer experience, and lastly, enhancing how we allocate inventory to better support our best ideas. So let's get started with jeans. We are the number one denim brand for 15- to 25-year-olds, the go-to for women of all ages, and a preferred shopping destination. We love this for so many reasons. First, jeans are a huge driver of new customer acquisition. Almost half of new customers have jeans in their first basket. Second, brand loyalty within jeans and bottoms overall is very sticky. In fact, it's our best retention business across genders. We are upping our focus on test and scale, innovating in new fabrications, and ensuring that we're offering the very latest in trends while balancing our tried and true. The acceleration we saw in the second half of the year is a great proof point. Women's return to growth, led by unique franchise fabrications like Strigid and Dreamy Drape. Men's also saw improvement as we deepened our assortment of more relaxed fits. With 60% of our business in bottoms, we have an enormous opportunity to grow tops and other categories. The industry standard is a tops-to-bottoms ratio of two-to-one, and we are below one-to-one. Bridging this gap is not just a revenue opportunity, but also a margin opportunity. Over the past year, our creative teams have been zeroing in on fueling our tops assortment, better fabrics, better fits, more on-trend designs, and standing behind hero collections, and we are seeing these efforts begin to deliver results. Women's tops returned to growth in the second half. Men's accelerated, fueled by strength in graphic tees, as well as new fabric innovation in core tees and flannels. Another smaller example is men's underwear. It's over $100+ million in annual revenue and a great basket builder for the men's business. Starting this spring, you'll see new innovation around fabric and function as we build out a more robust assortment, and as you can see here, a dedicated marketing campaign. We are also excited about driving growth for AE by expanding into category adjacencies where we know we have a right to play. American Eagle appeals to a 15- to 25-year-old target customer, and we are the go-to for everyday casual looks. Whether it's going to school, going to the movies with friends, or running errands, American Eagle offers amazing comfort and quality in everyday staples. This is what we're known for, and we will continue to lead in this core occasion. Additionally, as we are positioned for growth, we are expanding into three new areas: two new dressing occasions that complement our core, social casual, and men's active, and we are going to broaden our customer focus, extending into the 25- to 34-year age demo. Let's start with social casual. To a party, date night, or brunch with friends. Still comfortable, still casual, but just a little bit more fashionable. Here's a look at how we're beginning to address this with our spring assortment in women's, offering skirts, dresses, and fashion, and tops. Here's a taste of it in men's. Again, more style and greater outfitting. You'll see this build as the year progresses. Turning to men's active, we see a huge opportunity here. It's a $27 billion market. As casual dressing continues to evolve, men are increasingly adding activewear to their look, both in and out of the gym. We see multiple ways to leverage AE's strong brand equity to capture our fair share in this exciting opportunity. In 2023, we launched 24/7, a men's activewear capsule. Early results are very encouraging. It's already a $100 million business. Looking ahead, we see continued potential growth as we leverage learnings and innovate deeper into performance offerings. Now, here's how we're thinking about our customer base. Gen Z is our core, yet the fact is, we resonate strongly across a broader age range. Over the past few years, we've seen more 25- to 35-year-olds in AE's customer base, and we wanna capitalize on this. Here are some looks we've introduced into our spring assortment: more neutrals, interesting fabrications, and more elevated marketing, and we are seeing a strong customer response. Last year, we also relaunched AE77, a capsule collection offering more premium fabrics and looks at competitive price points. A pair of jeans averages $130, compared to the $250-plus market for premium denim. With our four focus areas, everyday casual, social casual, men's active, in a broader demo, we have a clear merchandising strategy moving forward and multiple avenues to drive growth. Now, a few words about our store fleet. We are updating stores, many of which are dated. Stores are the strongest customer acquisition channel, so it's important that we invest and stay best in show. Last year, we launched a new Lived-In store design, bringing a fresh aesthetic to a handful of test stores. We've also explored relocations to stronger shopping centers. Results have been very exciting, which are showing a positive lift. To give you a feel of our new store design, here's a walkthrough of our Polaris store in Columbus. As you can see, it's incredibly inviting, with an exciting new look that showcases our product in a fresh and modern way. The design offers greater flexibility and merchandising options. The fitting room areas are a nice place to gather and feel very welcomed and comfortable. We have plans to remodel approximately 50 stores in 2024. We are just as proud and excited about our digital channel, and Mike will cover the opportunities in a few minutes. In our recent review of the business, product allocation was revealed as a significant opportunity. We have two priorities: to amplify our best sellers and improve localization. We see room to stand behind our biggest ideas and categories with greater conviction across our fleet. As we do this, we will also offer more fashion choices in key markets where we know there is demand, for example, urban stores. As we look to amplify AE in all these ways, we will continue to leverage innovative marketing strategies, positioning AE as a center of culture. This past year, we had strong success with limited edition product collaborations. The Summer I Turned Pretty, Outer Banks, and e.l.f. Cosmetics drove strong buzz, creating urgency and excitement, and we have a robust influencer strategy to engage our customers on social media. Looking ahead, we are excited to launch a new marketing platform for Back to School in 2024, celebrating AE's heritage of self-expression, acceptance, and optimism. Before I move to Aerie, a big thank you to the AE team for working so diligently to execute our transformation over the past few years. We've come so far together, and our future is even brighter. And now Aerie. Aerie has a powerful brand platform with an amazing community of customers. There's so much love for our product and what we stand for, and an incredible opportunity to amplify the magic from here.... Before I get into that, here's a short video highlighting what makes Aerie truly special. I'm from Nashville. The Milwaukee area. San Francisco, California. I'm I'm from Atlanta. Jacksonville, Florida. Austin, Texas. I'm from Minneapolis, Minnesota. Aerie really helped me feel confident in my skin. Aerie is about loving one another, loving yourself. We have generations of girls and women growing up with Aerie. I love who I am. I am Aerie Real. Generation Real! What does the word generation mean to you? Ooh, generation. Generation, for me, it's an expression of our human potential. You think of generation, you think families, and you think change, 'cause all generations are different. There's always something that is gonna be passed down: tradition and love. This generation is inspiring. Keep going, and the next generation inspires the next. It's just like this ripple effect. Generation Real- is defined by uniqueness. It's empowering. We're freethinkers. We're different. We're beautiful. Having that sense of realness feels authentic. Generation Real- is introducing change that's never been seen before. The whole point is the next generation has it better than we did. Loving the next one just a little bit harder. Generation Real is the future. I am Generation Real. I am Generation Real. This is Generation Real. As we have welcomed more customers into the Aerie community, the brand has seen explosive growth, reaching almost $1.7 billion in revenue last year, and we are just getting started. Importantly, our growth has come with strong profit flow-through. As we have gained scale and introduced new, higher-margin categories, overall profit margins have expanded significantly. Intimates continues to be the foundation of the Aerie brand, yet two of our biggest categories today are soft apparel and activewear. We have seen standout performance in loungewear and cozy collections, benefiting revenue and margins. Looking at the total addressable market for Aerie, we still have significant runway for growth. Our core product lines represent an over $70 billion market. Aerie today commands just over 2% of that pie, making the growth opportunity exponential. Here's our strategy to go after that growth: to amplify Aerie. We are focused on winning across the Aerie lifestyle. This includes fueling intimates and soft apparel and building on OFFLINE's explosive growth in activewear. We will also expand awareness of the Aerie brand as we target under-penetrated markets, new customer growth, and build the basket across more categories. So let's dig in. Here's a snapshot of Aerie's brand positioning. Aerie is chill. It's effortless. We are famous for intimates, cozy dressing, sleep, and swim. In addition to being your favorite first layer, key customer occasions are chill out, girls' night in, beach, and pool party. Now, starting with intimates, this continues to be a very powerful category for Aerie. It's the number one driver of new customer acquisition. Great fit, quality, and comfort are key, and Aerie excels at all three. As trends evolve, we are constantly innovating. For example, in 2022, we launched SMOOTHEZ, a differentiated second-skin fabrication: super soft, barely there, and light as air. This is now our number one bra collection. Last year, we expanded SMOOTHEZ into bodysuits, an exciting new trend. This has been a tremendous success, and we are bringing new cuts and colors to this fan-favorite style in addition to other exciting SMOOTHEZ launches later this year. This past fall, we also introduced more matching sets, which were a great hit. Aerie's soft apparel business has been our highest growth category, expanding double digits last year. It drives repurchases, and we see more upside from here. We recently expanded sleepwear, where we are seeing great reads. It's a natural adjacency to Aerie's intimates and lounge offerings, and we are looking forward to building this collection over time. Now, moving on to activewear, where we see significant growth ahead. This is a very attractive category. It's large, it's growing, it has great margins, and it's ripe for disruption. We launched into activewear with OFFLINE in 2020, and let me tell you, this business has been on a tear, and we expect to cross $600 million in 2024. It's also highly incremental. In fact, our OFFLINE Bottoms business was the number two driver of new customer acquisition across all OFFLINE and Aerie categories in 2023. OFFLINE brings a unique and fresh take to the activewear category, one that is fun, empowering, and body-positive, and this is resonating. We are now the number three leggings brand, and we are right up there at number four in sports bras, too.... We are very excited about this new platform, a fresh take on the activewear category. OFFLINE is active, fashionable, with the perfect blend of style, quality, and function. On the team, on the go, on and off the court. We are bringing more performance activewear for the upcoming back-to-school season. As we invest in our assortments, we are also heavily focused on building our customer base in key markets. Customer penetration in our strongest markets is in the high teens, compared to an average in the mid-single digits. Brand awareness at 55% compares to American Eagle and other more established brands at 80%. As with AE, stores are the main source of customer acquisition for the Aerie brand and a key driver of revenue growth. We've had great success in driving expansion with different store formats. Houston, one of our focus markets, has seen rapid growth. Ross Park is our best mall in our strongest state. We've moved Aerie to a bigger box and nearly doubled mall sales. In Green Hills Mall, we added an offline standalone store in a mall where we had an Aerie store. The offline store's revenue is almost on par with the Aerie box. This is a very strong proof point of the power and the future opportunity for offline. We are also very focused on building the basket across Aerie's categories. Multi-category customers spend more and shop more frequently. Expanding these customers is a major priority. This year, we celebrate 10 years of Aerie Real, and we're going to do it with a bang. Look out for some great throwbacks to our biggest product hits and exciting content, elevating the voice of our community, the faces of Aerie Real. We will continue to leverage various marketing platforms to drive awareness and build the Aerie community. We had great success last year with a 360-degree campaign in intimates, targeted engagement in focus markets, and of course, our incredible grassroots and paid influencer community. In 2024, we're excited to launch a dedicated marketing platform for offline as we look to mirror this excitement in activewear. Before I turn the call over to Mike to take you through our optimized pillar, I want to thank the incredible Aerie team for the passion and excitement they bring to our brand every day. This is a very talented team of seasoned leaders, and together, we are ready to take on the next chapter. And Mike, now I'll turn the call over to you. Thanks, Jen. As Jay and Jen described, we are energized by the work we've undertaken over the past year to set us on a path to greater profitability. The focus and drive across the organization is very exciting to see. As part of this project, we uncovered a number of opportunities to sharpen our operations and support profitable growth. I'll provide some key examples today, and then we'll round out our presentation with our financial targets and capital allocation plans. Let's get started. As Jay noted, our operations are second to none. As we look ahead, we're focused on elevating our capabilities even further to unlock incremental growth and create greater efficiencies. These are four focus areas: stores, digital, supply chain, and marketing. First, I'll talk about our selling channels. Let me start by saying we are channel agnostic. We operate as a single channel. Our customers shop across stores and digital, and we're well positioned to capture demand through both at comparable margins. Just to underscore, we're similarly profitable across both digital and stores. We aim to maximize our profits per transaction, regardless of the channel. Now, looking at the store portfolio, we have a very healthy and profitable fleet and are four-wall positive in over 90% of our comp stores. Our average lease term is approximately two years, providing good flexibility. We've been pleased to see customers return to in-person shopping, underscoring the importance of having a strong physical footprint. Given our strong portfolio of brands, we've been successful in achieving favorable rent terms. Our investment priorities moving forward start with Aerie and OFFLINE store expansion. This continues to be our highest return on investment, with the majority of new stores paying back in under three years. We expect to add 100 Aerie OFFLINE stores over the next three years. As we open stores, we see a digital halo as more and more customers get introduced to the brand. We need to upgrade and modernize the American Eagle store fleet. Today, the average age of our AE stores is 12 years, and we've not had a new store design in over 15 years. We're targeting 300 remodels over the next three-five years, using varying degrees of investment, from full upgrades to simpler refreshes, depending on the market opportunity. As Jen noted, test stores have shown a nice positive sales lift, and we're targeting a minimum ROI of 15%. As we make these changes, we're also investing in new technologies to drive efficiencies in our store operations. Jen talked about product allocation to make sure best sellers are available across all stores, and this is already having a positive impact. We're using AI-driven forecasting tools that are improving inventory allocation. This is providing more precise information by store, creating greater in-stocks, and strengthening the customer experience. We're implementing RFID technology, which for the first time in our history, will enable us to have a real-time view of inventory counts in our stores. While still in early days, we're very encouraged by what we're seeing in our initial 100 stores, and we're targeting roll out to approximately 500 stores by the end of the year. Together, these investments greatly improve our ability to redemand and keep fast-turning items in stock. We also anticipate significant upstream benefits to how we manage inventory, ultimately allowing us to buy more accurately and fuel sales with less inventory.... Turning to digital, at $1.8 billion in annual revenue, we have a very powerful digital business. In the last five years alone, revenue has grown 61%, with digital penetration expanding six points to 34% today. Last year, we appointed a new head of digital, David Zhang, to lead the business. He's bringing a new level of analytical rigor to how we operate, with particular success in improving online conversion. To highlight one small example, we're using tests as a means to roll out new engagement tactics. With one million visitors coming to our website every day, our scale is an incredible and competitive advantage when it comes to testing, allowing us to build real-time insights very quickly. As we've implemented learnings, we've seen small changes to how we engage with customers lead to very dramatic results. In aggregate, this work drove a strong acceleration in digital conversion and comps in the second half of last year. With this work in very early stages, there are material benefits still to come as we continue to test and scale new insights. Moving on to our supply chain. Let me address our fulfillment business and the restructuring taken in the fourth quarter. Due in large part to macro volatility, which has impacted demand for e-commerce fulfillment, third-party business component of Quiet has not met our expectations. As a result, in the fourth quarter, we took charges to streamline the operation and focus on core capabilities that serve our brands and our best customers. Now, as we talk about the Edge Fulfillment capabilities we acquired with this network, I want to underscore the significant benefits it has provided to AEO and our brands. Let me start by looking at how we used to operate prior to the acquisition. Like the traditional model in retail, we had a small number of large distribution centers. Ours were located in Pennsylvania, Kansas, and Mississauga, Ontario. This was simple but not terribly efficient, and as our brands were growing, we were running out of capacity. The decision back in 2020 was to buy or build. In anticipation of our future needs and many of the changes we're seeing unfold in the industry today, including demand for faster shipping and rising costs, we made the decision to buy a regionalized fulfillment network. Here's how we operate today. We're customer-focused, built for efficiency, speed, and agility. Inventory is closer to customers, aligning with population density in big metro areas. Inventory is also closer to stores, enabling faster delivery times and lower costs. In the last two years, we've lowered our cost per order by 8% relative to 2021, even as some of the industry's largest shipping companies have taken double-digit rate increases. We've done this while speeding up our delivery times, with over 80% of orders now delivered in three business days or less. This network has also given us the needed capacity to fuel long-term growth. Separately, in terms of logistics business, as discussed earlier, we're refocusing on core capabilities. This will greatly simplify our operations and result in cost efficiencies, which will drive structural, ongoing benefits beginning this year. Lastly, I'll talk about marketing, which typically averages 3%-4% of sales annually. It's an important driver of the business. We'll continue to spend and support our brands, yet we see opportunity to make our marketing dollars work harder for us. We are enhancing our capabilities here, leveraging advanced marketing analytics. This has been a game changer in improving our return on media spend. We've reallocated how and when we're spending to be more efficient and effective. We saw excellent results from this over the holiday season and expect continued benefits as we implement new learnings. Now, a few minutes on our international opportunity. We are the partner of choice in licensed international markets across the globe. We have a successful capital-light model, and we continue to pursue opportunities for expansion with existing and new franchise partners. The largest part of our business outside of the U.S. is our company-owned operations in Mexico and Canada. Mexico, in particular, has been especially successful, more than doubling since 2019. We continue to expand this market where we have strong brand recognition and customer loyalty. This includes introducing and further expanding Aerie and OFFLINE in key markets across the country. Now the final pillar of our strategy, executing with financial discipline. Last year, we kicked off Project Breakthrough, our profit improvement initiative. As Jay said, we left no stone unturned. Keep in mind, this is a growing business and there are variable expenses associated with fueling that. However, through this project, we've identified efficiencies and savings that will enable us to keep operating expenses across BOW and SG&A flat this year, and repeating this structure is our intent for the next several years. Importantly, this work is ongoing. It's been formalized into an office of continuous improvement to identify incremental efficiencies and drive accountability and results. As Jay shared with you a little earlier, here's another look at our financial algorithm. We are driving to $5.7 billion-$6 billion in revenue and an operating margin rate of approximately 10% by 2026. On the revenue front, we have multiple levers we can flex to achieve our 3%-5% growth target. We're very encouraged by the opportunity at the American Eagle brand as we position for category growth and expansion into new adjacencies. As Jen said, our plans here are strategic and thoughtful. We will test and scale, fueling areas with clear proof points. Our expectation for AE is low single-digit revenue growth, with potential for upside as we continue to understand the benefits from new initiatives. Aerie and OFFLINE present very exciting growth potential. We're encouraged by the level of customer excitement around activewear and soft apparel. Our plans here are modest as well. Growth expectations are mid- to high-single, with the ability to chase into stronger demand. Our 10% operating margin goal embeds a gross margin outlook of 39%-40%. We closed out 2023 above 38%, reflecting the start of our profit improvement work... As we move forward, we expect to maintain inventory discipline and continue to optimize promotions and markdowns. We're also seeing favorability in product costs and pursuing other opportunities across sourcing and the offline. Delivery and transportation are also areas where efficiencies and cost savings will continue as we leverage our Edge Fulfillment model and benefit from the recent restructuring activity. We expect rent to continue to be controlled as we focus on maintaining a favorable cost structure across the fleet. Moving to SG&A, we expect to be in the range of 25%-26%. We closed out 2023 a little over 27%. Over the long term, we're structuring the business to keep SG&A dollar growth below revenue growth. We have work streams that will continually address 85% of our expense base, with focus areas being store and corporate compensation, professional fees and services, and optimization of marketing spend. So all that said, here's a view of the major building blocks that take us to approximately 10% over the next three years. Our outlook is balanced, anticipating both puts and takes. As I reviewed, we have a number of initiatives to control expenses and drive efficiencies across the business. As we grow American Eagle and scale Aerie offline, we also expect to see leverage from a higher revenue base. These initiatives will allow us to comfortably absorb pressure from wage inflation, new store openings, and investments we are making to incubate emerging brands like Todd Snyder and Unsubscribed. As we build profitability, we expect to generate even stronger cash flow. We're focused on providing healthy returns to shareholders and have a long history of doing so. In fact, over the past decade, these returns totaled nearly $2 billion. We recently announced a 25% increase in our quarterly cash dividend, and we also have a new $30 million share repurchase authorization in place to offset dilution and fuel opportunistic repurchase. So here it is, our model for driving shareholder value. Starting with our financial algorithm to drive mid- to high-teens operating income growth, we believe we are set up to deliver double-digit total shareholder returns over the next three years. We are extremely confident in the roadmap we shared with you today. The levers at our disposal to drive growth and profit provide multiple paths for us to deliver on our three-year plan, with potential for upside. Our priorities are clear, and the teams are focused. And now back to Jay. Thanks, Mike. As I hope we conveyed clearly to you today, this is an incredible company with powerful brands, capabilities, and talent, and we have significant opportunity to scale further. We are at an inflection point in our journey, having undergone a huge cultural transformation over the past year to align our strategy and priorities towards delivering consistent, profitable growth. From here, we are focused on execution, and we know we are set up for success. With that, I will open it up for questions. Judy, over to you. Thanks, Jay. Before we start our question and answer session, we'll take a quick three-minutes break O kay, thanks everyone for joining us for the question and answer first portion of our meeting today. We're back from our break, and we wanna get right to your questions. So, first up is Matt Boss from J.P. Morgan. Over to you, Matt. Great, thanks, really appreciate all the color. This was great today. So maybe to start off, Jen, could you speak to the total addressable market and customer file opportunity, just as we think about the market share opportunity for the AE brand? Or more specifically, how are you positioning the assortment across key destination categories and price points to drive that consistent, profitable growth that Jay cited? Yeah, sure. The total addressable market is $70 billion, which is incredible, and there's huge white space here that we can go after. You know, what AE owns is the social casual. I love this new term. It's our new term that we're using to describe our core assortments, which are gonna be strong across all of our fleet. That's what we're up to, getting all of our fleet robust, certainly managing the inventory and the, you know, and obviously doing it with prudent disciplines. But we've really been up to just going back, really rationalizing the fleet, rationalizing our SKU count. So we've really built a baseline now that we can sort of leap off and introduce all these new expanded categories. Men's active, $27 billion market, that we've only just begun. You heard that number, $100 million. We're only just getting at this. Keep in mind, when we launched offline, that's where it started, $100 million, and now look where it is. It's almost over $600 million this year. So think about that. So we have huge expansion there. And we're already seeing results in the 25-35 age group there. You know, men, our denim category is a rite of passage. We love denim, and getting denim on all ages is really what we're up to. But if you noticed in the slides, wow, we have such opportunity to round out the assortments, and we're so excited about that. Yes, and we didn't even mention the premier denim collection we launched last year. We love the early reads, so we have categories now that we can expand on. We have a great baseline, and we're looking forward to building on this. Great. Then maybe just a follow-up for Mike. With SG&A expected to leverage roughly 200 basis points, I think, relative to 2023, maybe just could you elaborate on the expense buckets where you found savings and efficiencies to support the plan, while at the same time funding brand marketing reinvestments? Sure. I think, I mean, just to highlight again, the proof point around this initiative this past year was definitely the expenses up in Gross Margin. That's where we started. We've talked, we've articulated that for a few quarters now. Every quarter this past year, not only did we expand product margins, but we leveraged expenses within Gross Margin every quarter, even in the first half of the year when revenue was a little tougher. We've expanded that to SG&A now. So we've talked about the big buckets in SG&A. 85% of the total expense is within store compensation, corporate compensation, related incentives and taxes, marketing dollars, and services. So the big areas that we can, that we have gone after, reflected in this 2024 plan and the guidance we're providing, and that, and within this continuous improvement office, program office, as we call it, underneath Project Breakthrough, that work is going to continue and not stop. So those are the buckets. Store labor, we found, efficiency offsets to what has been wage growth and wage inflation pressures in the industry. We're looking at flat rate of revenue for store dollars, so it's, you know, stores and marketing are place where we—places we will continue to invest to fuel growth, but we wanna maintain as a rate. The savings or reduction areas or the leverage areas are other compensation, corporate compensation, incentives, taxes, and services is the other bucket that we are, going after to actually more aggressively reduce. So that's where your puts and takes are. We'll continue to invest in store, store compensation and advertising to fuel growth, but we'll not be looking to deleverage, but just maintain rate there. Other compensation areas along with services, then some other areas, smaller areas like supplies and repairs and maintenance, we're looking is where the leverage will be, you know, continuously providing leverage in those, in those areas. Great color. Best of luck. Thank you. Thank you. Thanks, Matt. Okay, next question comes from Jay Sole from UBS. Okay, Jay. Jay, are you muted? You may wanna unmute. Can you hear me now? There you go. Okay, thank you so much. Hi there. Mike... Hi, Judy, thank you so much for taking the question. You know, I wanna ask about some of the newer topics that came up in the presentation. One is about Todd Snyder. You mentioned you've been doing this since 2015. It's grown nicely. Just wanna talk about what's implied in the guidance from Todd Snyder and what gives you confidence that Todd Snyder can become a bigger business? And then also, you know, international, how does the international opportunity play into the three-year outlook and maybe beyond? Like, what's the ultimate aspiration for the international business for the company? We, you know, Jay, we bought Todd Snyder around 2015. At that time, Todd was only doing, like, $2 million. Here in the last few years, you know, we've grown it to a $100+ million business. We see a big opportunity with it. You know, this year, I think we're scheduled for six-seven additional stores. We think when it's all done, you know, it could be a $500-$600 million brand in the next couple years. Yeah, I can expand upon that. It's reaching the point of profitability, so, a nice growth this past year, right around that break-even mark, and our plans for 2024, and this three-year plan, is for Todd to contribute profit to the bottom, to the company. So that's a great milestone. Double-digit top line growth is the continued expectation, and profit increases from here. For the international opportunity, I think the one thing we wanna highlight, we, we hit Canada and Mexico from an in-- they're our own, own markets and our biggest contributors from a revenue perspective. Mexico specifically has been a source of growth, especially it's really 90% plus AE brand. The size of the business in Mexico actually contributes, you know, the trajectory it's on contributes one point to total AE brand revenue growth at this point. So as we talk about AE brand expectations being in the low single digits, Mexico alone, with its growth, is providing about a point. Also, Mike, you know, as far as the international goes, like, I got reinvolved in the company back in 2014, and we were losing money, $20-$30 million on the international business. Today, it's become a very good profit center, and we haven't. We're just on the tip of the iceberg. We're not in Europe yet. There's a big opportunity there. With, with, you know, like we're only in a couple countries in, like, South America, you know, major opportunity. So we see, you know, we see a major opportunity with our international business, and it's being very well received. Yeah, we have very strong partnerships with our franchisees, and we're looking to expand with them and with new franchisees. That's, that's the model from here. But the Mexico business and Canada business is our own business. Yes. We own North America. There is plans for expansion in Latin America attached to that, which is a natural progression from the success in Mexico. So there's... Jay said there's runway here. We're not banking on a ton of growth within this next three years, but there's continual runway for multiple years from here. Yeah, as a global brand. But we'll do it, I think we, we mentioned in the presentation, it's asset light outside of North America. We like that model, franchise revenue drop straight to the bottom line. We have a few joint ventures that are really just in early stages, so we will be, you know, we'll be ROI oriented with that expansion, and not overinvest to go after it. Okay, great. Okay, next up, we have Janet Kloppenberg, JJK Research. Hi, everybody. Thanks for a great presentation. For Jen, I like the adjacencies I'm seeing in the AE stores. I'm just wondering about maybe a risk of building SKUs, and also, as you move a bit older, do you worry at all about losing that young, that older teen customer that's always had a strong loyalty to your brand? And in the intimates category, which you, which I think you've done a great job on with the SMOOTHEZ line, do you see that category growing, or hearing from others that the intimate sector is experiencing a downturn in the range of mid-single-digit revenues? And for Michael, when you talk about SG&A going from 27% to 25%-26%, that's a three-year period. Do you see more of that coming in the later year, or more, or should it be linear as we move along? Thanks a lot. Yeah, look, everything we do is with discipline. You know, American Eagle, we went back to our heritage. We completely, over the past three years... And by the way, may I add, we rationalized profitly, profitably. It's really hard to do that when you're getting rid of thousands of SKUs, and we did. We got rid of thousands of SKUs to focus on the core assortments, this new social casual that we're talking about. We are not gonna comp with just buying our comp, which means we're not gonna just add SKUs randomly. We're gonna do it with integrity. There's always trends that ebb and flow, and as we do so, we're gonna make sure that we're leaning into the categories that are trending without overassorting. I cannot see an overassortment. We are the most disciplined teams around that. I think you can see it, see it in our stores. They look incredible, and I think we're outfitted better than ever. So certainly not. We're gonna do this with integrity and pride, and that's what we're up to. As far as intimates is concerned, look, there has been a slowdown, but we held our market position, number one. Number two, we leaned into new categories that are behaving like intimates. So you saw the SMOOTHEZ. I mean, I hope you love the pictures. The SMOOTHEZ, SMOOTHEZ collection is just amazing. We love it. Not only is it around bras, and by the way, that's our number one bra within that collection, but other collections outside of just bras, the bra, the bodysuits, the crop, crop tops are all doing incredible. So, there's a little bit of a wear out trend that's been happening, and it began last year, and we were on it. Bra tops were completely trending, and we still see that business working. However, intimates, that business is a huge untapped category, and may I remind you, it's just incredible the way Aerie tapped into that business. We were disruptive, and we did it. I mean, looking at that business now, the Aerie business is $1.7 billion. This growth has been exceptional, and it's still a huge market that's ripe for the taking. So, we're highly focused on new bra launches. Undies, we haven't even spoken about undies. There's new categories in undies. So we're gonna keep on innovating there and delivering newness, and continue to dominate the way I think we have, leveraging our platform. Then on SG&A, yes, I think, first I wanna make sure, just underscore just the results that we're providing in our guidance for 2024. Flat, flat operating expense dollars across the entire P&L is a milestone for us, and flat SG&A dollars also within that is a milestone for us. We're providing that guidance of, you know, dollar growth being in line with revenue in the first quarter, but we're expecting to leverage SG&A every quarter thereafter, even with some of the revenue shifts that we outlined for the day, but today, based on the calendar shift. The work is continuous. It's not a one and done. So I think... And then it's very much correlated to revenue. So the guidance we're providing down to that 25%-26% range is more about sort of probably the low to mid of that 3%-5% revenue guide. If we achieve the higher end of that guide, we expect to get to the 25% faster. So if you want to assume linear for now, you'd be assuming sort of us, basically, us achieving the mid-range of the revenue guide. High end of that revenue guide, even further, we would five sooner, and the expectation is to continue to leverage there or leverage from there in out years beyond this three-year plan. Thanks so much. And, Jen, I just wanted you to know we all think the stores look... the assortments look amazing. So good luck. Oh, thank you. Thank you. The teams have been really working hard, and I'm really proud of them. Love to see AE back on the growth trajectory, and Aerie certainly has growth that we can talk about later, if we get questions. We can see how hard you worked. Thank you. Thanks, Jen. Okay, up next, we have Kelly Crago from Citi. Hi, Kelly. Hi, everyone. I'm on for Paul today. Thanks for taking our questions. One on the long term and one on the near term. First, to Jen, just wondering if you could elaborate on the opportunity to broaden the demo at AE. What% of your business currently is in that 25- to 34-year-old demo, and where can that go over time? And just, you know, curious what tools you're using to market to that customer differently than the core Gen Z consumer. And then secondly, to Mike, just on the near term, you know, congrats on the great results. You made a comment that momentum is continuing 1Q quarter to date. Wondering if you could elaborate on that comment, just given some of the other retailers calling out weakness in February. Thank you. Sure. As we, you know, as the business grew in 2023 in American Eagle, you know, quarter-over-quarter, we actually saw this happening. Roughly about 20%-30% of our share is in this 25-35, and I think it's because our jeans are so sticky. You know, like I mentioned, jeans are a rite of passage for us, and once you get into our jeans, they grow with us. So we've seen our retention rates continue to accelerate, something that wasn't happening in the past. And I believe the biggest reason, well, we know, is because of jeans. Now, as we round out the tops business, like I said, I think it's gonna really just add on and win new customers. So, look, we're leaning up a little bit, but it's not to say we're gonna ever walk away. Our core is our core. It's our tried and true. But if we still extend new ideas, which, 24/7 or AE77, some of these new offshoots, I think we're gonna gain these new customers and win them over time. It's something we are highly focused on. We were losing customers after, you know, roughly the age, between the age of 18 and 25, so we've been focused on this, and certainly doing it through most tactics, right? We have new brand collabs that we worked on. You saw them on the screen. The Summer I Turned, you know, Summer I Turned Pretty, the number one hit last summer. You know, and we're gonna continue to work on these collabs. There's so many exciting ones coming your way. Influences or influencers are certainly a big win for us, leveraging them. But again, we're always gonna protect our core, and now we're gonna expand into this age demo, and we're excited about it. And like I said, we're already saw the results. It's happening as we speak, so now we're just gonna lean in a little bit more. Then on the first quarter guide, we're pleased with the momentum that we saw in February coming off of Q4. As always, at this point, our guide has some caution in it. February is the smallest month of the quarter. We've got our peak spring break and Easter holiday periods coming up in March and April. March and April are obviously bigger months than February. So again, pleased with the momentum, and guide reflects that with some caution. Okay, next we have Adrienne Yih from Barclays. Hi, Adrienne. Great. Thank you very much. Jen, just let me add, the tops look phenomenal. The denim always looks great, so it's really nice to see the entire kind of top to bottom looking fantastic. So I just wanted to shout out to your merch team. Thank you. So on that... You're welcome. On that, on the, so there's a fashion bottom thing that's been happening. It's sort of percolating, simmering, and now it's really happening, right? So you walk the mall, and everywhere, it's kind of the wider bottom finally here. Can you just remind us sort of the denim penetration at AE? I think it's like north of 30, mid 30%. And then just remind us, like, the skinny legs emerged in 2011, and then it really peaked in the next two years, and it's been there for a decade. So this could be, you know, potentially something that continues to help kind of, kind of, you know, drive that piece of the business. And then for Mike, on the... Can you give us just the markdown rates relative to mean, like, average, kind of over the past? Where are you in that continuum? And then remind us, Aerie is probably up, you know, 20% relative to 2019, and how much are Aeries contributing to the LRP? Thank you. Yeah, you know, in denim and bottoms, we're seeing wide legs trend, and honestly, it started for us last year. We were ahead of the cargo trend, I would say. First, bikini on the beach there, and the teams did a great job testing and scaling in wider legs. And the beauty of our denim business and how we approach it is we have such a incredible testing model, and we are now on testing so many new silhouettes, not just wide legs. So we're ahead of the curve as new fashion silhouettes trend. So I can't tell you just what this team does as we, you know, build out new assortments towards the future and learn, and we're just so agile to do it and balance out our assortments. When I started, you know, jeggings dominated our business and women's in particular, you know, huge percentage of the business, over 80%. Now, we're seeing fashion emerge and other silhouettes, where we can really lean into what's trending, and that's what we're all... That's what we're up to. Honestly, it's about as simple as that, and the team is executing with style. Fantastic. Now, on markdown rates, we've been really since 2021, we've been managing the markdown rate very consistently, and we found a sweet spot. We maintained our AUR that we gained post-pandemic a couple fiscal years ago. And in some of our... a few years prior, to even 2019, I'd say we were running markdown rates in the mid-50s. We're now in the mid-40s, and we've been able to do that consistently for a few years. So we have no intent of giving any of that back. I think on initial retails, we have seen markup benefits. And I think the mix of our categories, as Jen outlined in the entire Amplify section of today's presentation, the mix of categories will continue to be beneficial there, with tops being a driver, Aerie apparel being a driver, offline within Aerie. All those growth drivers have mixed benefits to initial tickets and to margin rate in general. I will say, in these three-year targets, we actually are not assuming much product margin improvement. Most of this three-year target, color today is based on expense leverage. Expense leverage within the gross margin line and expense leverage nested in depreciation. Jen outlined a lot of initiatives and a lot of opportunity within categories for that product margin to expand. That would be beneficial to these targets. So I think that's something to, I think we should all understand, is that when... We've pushed product margins over the last three years, up 300 basis points. We're in a very healthy place. We're not assuming much improvement in these targets, but there is opportunity there, on top of the expense leverage that we're seeing. Fantastic. Thank you very much. Best of luck. Thank you. Next up is Dana Telsey from Telsey Advisory. Hi, everyone. Congratulations on a terrific presentation. I could tell the thought and the hard work that went into it. One of the areas that you touched on is modernizing the fleet. As you think about the fleet and modernizing the existing stores, opening new stores, what's the cost model and the return model that you're thinking of for each, and how do you see the role of malls versus open air in your, in your network? And lastly, Jen, with the enhancements to the product offering that you're doing and the category adjustments, what is the impact on margin that you see? Is there a higher merch margin potential from new categories versus existing? Thank you. I can start with the fleet remodel. I think we outlined it very well. I think, you know, the average AEO fleet is 12 years. Definitely paused on some plans to update the fleet during the pandemic, for obvious reasons. Jen and team come up with amazing designs, been well accepted in the test stores that we rolled out in 2023. Saw nice sales lifts, as we outlined. But sales doesn't always translate to income and cash, so we have an ROI focus for that investment as well. I think we said, 15% is a good target for our remodel. So we are managing inventory, managing store labor, managing investments, you know, beyond, underneath the capital investment to generate that kind of type of return, to drive income and cash flow generation, incremental to what the store was doing prior to the remodel. Then for Aerie, as we outlined, for new store growth, whether it's Aerie stores, repositions of American Eagle stores, Todd Snyder, three-year payback is our target, and we, we get no better return on investment than these, than these store openings. But we have a very refined process around those decisions, and we've known, again, that three-year payback is consistent, and no reason to believe that we won't continue to see that kind of payback. Yeah, and as we build into these assortments, we like what we already saw in Q4. The margins were great, so we're gonna be really careful. We're not gonna over-skew. I already mentioned that. You know, these businesses typically are higher-margin businesses. Tops, T-shirts, wear out tops typically are, like I said, higher-margin businesses. So the one thing we have to be careful of is not over assort, okay? And turn those items fast. That's what that business is all about, and that's what we're gonna be focused on. Thank you. Thanks, Dana. Okay, up next, we have Dan Stoller at BMO Capital Markets. Hey, guys. Thanks for all the details this morning. So let's see if there's any color for the next several years on how the general corporate expense line should trend or if there's a percent of sales target. So anyway, if that's a tailwind to margin or any way to think about that. Thank you. Yeah, I think this past year, the growth in corporate, that corporate expense bucket definitely correlated with incentives against non-GAAP approvals in 2022. We'll see that dollar amount come down in 2024 within our plans, and as we talked about, addressing 85% of our expense base, there are definitely expense lines within the corporate segment there that we are looking to continue to optimize, either hold the dollars flat to then leverage that rate down, or like I said, like I've outlined, places where we would be looking to reduce dollars. So I know we've been historically, you know, around, I think that 7-8%, a little higher this past year for all the reasons we just said. As we look to leverage that line item within this 3%-5% revenue target, we'd see that rate come down on the higher end of the revenue result faster, but sequential leverage from here is the intent for that expense line as well. Got it. Thanks very much. Good luck. Okay, next we have Jonna Kim from TD Cowen. Thank you for taking our question. Just curious, a little bit more details around the promotional strategy. You've mentioned how it changed over time, but if you can provide any more colors around that and what the new promotional discipline will look like going forward. And also, if you can just talk to your current lead time now and how much you plan to leave open for buy across both banners going forward. And then just the near term, any color around gross margin cadence will be helpful. Thank you so much. Sure. I think as, you know, just to underscore again and reiterate that our markdown rates used to run in the 50s pre-pandemic. And really, for the last three years, we've been articulating, talking about inventory optimization, reductions in choices and SKUs, which, you know, that tail of inventory had a lot of markdowns attached to it. So now, it's largely an American Eagle brand initiative. Jen outlined the fact that that's been the case. We are now reset for profitability. That inventory work is never done, but that tranche of work is completed. So now we're looking to actually expand and grow the brand. But we'll do that prudently, and choice counts and SKU counts will represent what's needed there to do that. So there's sort of the end-of-season impact or that tail of inventory markdown, kind of pre-pandemic phenomenon that, that will no longer be part of our operating model. From there, we've learned over these last three years how to pace promotions. So we, yeah, we used to BOGO jeans almost every day. Jen and team are not doing that anymore. That we don't intend to ever go back to that type of promotional strategy. That was a big markdown driver, a big rate driver as well. But then even within key periods, key holidays, key weekends, we have... we might run our 40% off or whatever the deal, but we're doing it in less, with less days, pulsing it in a way that customers react to more positively. Those strategies are intact. They've been proven for three years now. So this mid-40% is, we think we've settled in at a sweet spot in terms of the balance of kind of value to the customer and driving traffic and conversion and not having to over promote to do that. I think open-to-buy, we are back to chase mode. So I think that's the only thing you should really, everybody should understand, that the supply chain disruptions that we saw for a few years are behind us. With some minor issues out there that we all know around things happening in the Middle East, but we have very little exposure to that. That won't change our timelines drastically. Any product coming from that region, we have adjusted timelines for the remainder of the year, so you don't see that being a big impact. But chase mode is the mantra. We're putting a 3%-5% revenue growth number out there. We've achieved the high end of that historically for the last 10 years, setting ourselves up structurally to leverage on that, but then chase a higher revenue amount is the formula to win, and that's what we'll continue to do. And like I said earlier, you know, we're not really looking for product margin expansion in these three-year plans. So when you ask about the gross margin outlook inputs and pace, the gross margin of 39%-40% that we're outlining for the next three years is more about expense leverage than it is about product margin expansion. But I know Jen and team will be disappointed if we don't see that. There are a ton of initiatives that she's outlined earlier that could benefit product margin beyond what we're expecting right now. So gross margin leverage to that 39% or expansion to that 39%-40% is all about expenses at the moment. And we would get there faster on the high end of the revenue guide at 5% than we would at 3%, but expecting to expand within that range in total. All right. Next question comes from Chris Nardone, of Bank of America. Thanks, guys. Good afternoon. So within your Aerie growth expectations over the three years amid the high single digits, can you clarify what you're assuming for comp growth and then how we should think about growth by category? And then one follow-up on this, gross margin topic we've been discussing. Can you remind us how long you have visibility into both freight and cotton costs, given the recent price moves in both of those inputs? Thank you. I can tell you, comp is we're only opening 30 stores a year now. That kind of gap between total growth and comp growth closes. We're at one-two points now. So if we're guiding mid- to high single-digit expectations, which is modest, we believe that's modest, there's more opportunity than that. You can assume about a one point differential, so you're, you know, call it mid-single-digit comp then, on a mid-to-high single-digit total growth. Yeah, and I think, if you just think about Aerie, this brand platform, you saw the video. It's incredible, this community that we're building. And guess what? We only have 55% brand awareness out there. There's still tons of expansion that we can do to introduce the current categories to our customer base. So we're pretty excited about just getting the brand out there in more markets. And, secondly, this is another, like, incredible stat. 65% of our customer base only purchase one category. So the marketing team is really up to introducing all the other categories that we're in on, and ensuring that the customers can see it. Like, right now, if we could get them to buy two of our categories, there's expansion right there. I mean, we see the Aerie business getting to well above $2 billion in the near, couple of years, and with that, we're gonna definitely introduce our current categories. But, but again, it's our job to introduce innovation in those categories, excite the customers in those categories, and make sure we're expanding in trends in those categories. So, but those are the two really important facts that I, I would love you to hear, because it just proves, it proves that we have just so much more opportunity. Okay, next is Corey Tarlow at Jefferies. Hi, Corey. Great, thanks. I was wondering if you could talk a little bit about how you intend to leverage AI within your long-term plan to enhance the customer experience, drive better sales, and enhance profitability. And then second question is, within your long range plan, what's your outlook for wages over the multi-year time horizon, and how do you expect that to trend as we move ahead? Yeah, I can address the AI question. I think, some of what we've already seen benefits from this past year as we continue to expand upon our machine learning forecasting capabilities within our inventory allocation work. And the more data we gather there, the more we kind of, you know, see the optimization of that tool. We're seeing better in stocks and stores, better fulfillment rates, than, you know... But But we expect those things to continue to convert to benefits both in stores and digitally. And also, Mike, if I could add that from the customer standpoint, in the next couple of years, we'll be introducing new concepts on our online in the store with store AI to make a better shopping experience for the customer. A combination of those capabilities with our RFID rollout, we'll be able to expand the customer experience, not just the inventory optimization or inventory benefits that we see with those efforts. We see a big opportunity, tremendous opportunity. On wage growth, yeah, there's two components we've always talked about historically. One would be in our distribution centers, and part of our supply chain, which with the expansion and to this Edge Fulfillment network and the Quiet nodes, that's mitigated some of our peak needs during like back-to-school and holiday peak hiring, which is where some of that wage pressure has come into play. So there's some mitigation efforts there or some mitigation impact there, you know, expanding the supply chain the way we have. On the storefront, yeah, since the pandemic, wage growth has been a hurdle. That subsided in this last year and a half, kind of come back to the mean in terms of annual expectations for around just typical annual increases, minimum wage increases by market. And that is a massive, major focus for us within the profit improvement work to offset that wage growth with efficiencies in our stores, especially in the area of kind of non-selling task hours. Somewhere else where AI can come into the mix, to Jay's point, not only just on the customer experience within stores, but efficiency from both RFID and AI capabilities in store to mitigate some sort of non-selling tasks wage to offset some of that wage challenge that we have out in the stores. Next is Alex Straton from Morgan Stanley. Go ahead, Alex. Perfect. Thanks a lot for taking the question. I just have two for you. The first is on the American Eagle banner. Can you just break down that businesses? It looks like 300 basis points of improvement versus pre-COVID. Just, you know, big picture, what, what's happened there? And then also explain kind of how... What your 10% target over time assumes American Eagle can get to. I'm looking at that low 20s that it did, I think, in the pandemic. I'm wondering if that's within the realm. And I just have a quick follow-up. Yeah, the 300 basis points improvement over the last several years has been very much tied to product margin and gross margin benefits from both product margin and then the leverage of expenses within gross margin benefiting both brands. And that's sort of stagnant, like, flat to even revenue being down slightly. So we've reset the brand to profitability through all of that inventory work and optimization of gross margin. Now, as we're turning our attention to growth, even with modest growth, we can leverage other areas through the P&L and other areas within the brand to drive bottom line operating rate. So as we pass to, you know, this year's guidance is implying another 100-150 basis points of operating rate improvement to the mid-8s. We would expect, really, the brands to get to that high teen range and start the path towards 20%, while we're also optimizing or leveraging that corporate overhead bucket. So now, brand growth, revenue growth will be part of the leverage story or part of the operating rate improvement that we expect to see over the next several years. Great. That's, that's super helpful. Maybe same question on Aerie in terms of... And it might be the same story in terms of that profitability improvement versus pre-COVID, and then also what you're assuming in terms of what that business gets to within the 10% target as well. Thank you. So it is very similar. I mean, Aerie's product margins have reached some new milestones this past year as they've closed the gap to where AE has gotten to. And that's again, from here, I think with even on the modest mid-to-high single-digit revenue, we expect that to continue, both leveraging, again, expenses and gross margin, SG&A expenses. But even beyond that, where the growth is coming from in soft apparel, in offline, there's even product mix benefits on top of that, you know, product margins should also expand. So I think both brands have their path to this high-teens, 20%, brand operating rate, over the next several years. Thanks a lot. Thank you. Okay, now we have Marni Shapiro from The Retail Tracker. Hey, guys. Congrats on a great quarter, and thank you for doing this. It's very helpful. Mike, just a couple of housekeeping questions. I just wanna make sure. Mm-hmm. Did you just say mid-eights operating margin for 2024? And did you put a dollar value to that? You gave out a bunch of numbers, and my hands couldn't write as fast as you were speaking. Yeah, the math on three to five... or two to four percent revenue growth, knowing there's a point of impact from the 53rd week, so we're basically getting 3%-5% consistently, but then this year is a one-point impact. The $445-$465 on that growth would put you in the low to mid-8% operating rate range. Different ways to get to that income, but, and just off of that guidance, you get to a low to mid-8% operating rate for 2024. Great. And then, did you guys give any guidance about store openings and closings for 2024? I know you talked about some renovations, but did you talk about store openings and closings for the year? Yeah, there's about 30 Aerie offline that we're expecting. Todd Snyder stores, we're looking at about five. And then for the AE brand, still a net closure amount, but we are, you know, as the brand is seeing growth now, that's becoming, you know... The net number will be less than we closed about 130 stores over the last three years. Another 25-30 this past year, wouldn't be more than that, and we're actually seeing opportunities and the repositions in some of these markets. So that net number, we expect to continue to come down. So net net for the year, 30 openings for Aerie offline, net closures for AE still being maybe around that 20 mark, but that's being refined. Mm. A handful of other stores for Todd Snyder, Unsubscribed. Plus, the results and the remodels, we like what that's doing, so hopefully that can close the gap to continue to do this low single digit- Correct F or AE. Jen, I did have a couple of quick questions for you on the product side. The first is just, you made two comments, one about skewing a little bit older in spots, but then also about the urban stores. Where you wanna add a little bit more product, a little more variety, would this slightly older skewed product just belong in those urban stores? Is that how you're thinking about it? I've seen it in some of the other stores as well, but I'm just curious. Can we talk about the Tops business? 'Cause AE's Tops, you started spring off with a bang. Congrats! I'm curious, do you have this ratio issue in Aerie as well? 'Cause I feel like you have a very solid Tops business in Aerie. As you grow back or grow the Eagle Tops business, how do you make sure that you can keep Aerie's Tops business also very strong? Yeah. Thank you for the compliments, by the way. We're really proud of what we're delivering. Loved what happened in Q4, love what we're seeing as we head into Q1. Look, it's not even just about urban. We're gonna put the best assortments where they belong. We've done a deep dive on how we approach our assortments by store. Once, we used to tier, so we had tier one, tier two, doesn't really mean anything to you. Now, we're calling them clusters, where it's about a market cluster, where we can put the best assortments in the best markets. It's essentially that, so it's not just necessarily urban. So that's where we're up to there. Tops to bottoms, yes, you're right. AE has tons of, you know, opportunity here to round this out in the assortments. I love what I'm seeing. If you even saw our denim launch more recently, as you noticed, it was head to toe. Really fun to do this because basically, we're leaning into, you know, our key category in American Eagle and doing it differently. I love how we showed up with our, you know, initial spring campaign. We called it denim on denim. Looking at Aerie, you know, yes, you are right. We're definitely more balanced on the head-to-toe assortments. Leggings are very strong, as you know, and it's a very strong pillar for the offline business. So if you think of offline, we'll always lean in heavier on the legging side of the business and the bottom side of the business. Aerie, we will always be definitely more balanced, and keep in mind, we still have intimates and other categories to think about. Great, thanks. Best of luck for spring. Thank you. Thank you. All right, well, that wraps up our question and answer session today. Thanks, everyone, for joining us, and we look forward to speaking to you soon. Have a great day!