Good day, ladies and gentlemen, and welcome to the Abercrombie & Fitch Third Quarter Fiscal Year 2023 earnings call. Today's conference is being recorded. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your touchtone phone. You will then hear an automatic message advising your hand is raised. At this time, I would now like to turn the call over to Mohit Gupta. Please go ahead. Thank you. Good morning, and welcome to our third quarter 2023 earnings call. Joining me today on the call are Fran Horowitz, Chief Executive Officer, and Scott Lipesky, Chief Financial Officer and Chief Operating Officer. Earlier this morning, we issued our Third Quarter earnings release, which is available on our website at corporate.abercrombie.com under the investors section. Also available on our website is an investor presentation. Please keep in mind that we will make certain forward-looking statements on the call. These statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions we mention today. These factors and uncertainties are discussed in our reports and filings with the Securities and Exchange Commission. In addition, we will be referring to certain non-GAAP financial measures today during the call. Additional details and reconciliations of GAAP to adjusted non-GAAP financial measures are included in the release and investor presentation issued earlier this morning. Finally, references to Abercrombie brands includes Abercrombie & Fitch and Abercrombie Kids, and references to Hollister brands includes Hollister, Gilly Hicks, and Social Tourist. With that, I will turn the call over to Fran. Thanks, Mo. Good morning, and thank you all for joining us. We are excited to report outstanding third quarter results, which is a testament to our global team delivering on our goal of aligning product, voice, and experience to our customers' needs at each brand. We continued to build on the momentum from Q2, with sequential acceleration in both sales growth and profitability. On the top line, growth trends were strong throughout the third quarter, driving sales results above our expectations. For the quarter, net sales increased 20%, with growth across all regions, brands, and direct selling channels, including both stores and digital. We also exceeded expectations on the bottom line with a 13.1% operating margin, driven by 570 basis points of gross profit rate expansion and operating expense leverage on higher sales. The 13.1% operating margin was an expansion of over 1,100 basis points compared to third quarter 2022. For the year-to-date period, net sales were up 13% to last year, with an operating margin of 9.3%, over 900 basis points better than 2022 through the third quarter. These results show the powerful response from our customers as we continue to execute on our playbook. I am so impressed with what our team has delivered, pushing boundaries and challenging ourselves to grow while staying close to our customers and remaining agile. As we enter the fourth quarter, we are poised to continue this momentum with our brands and regions strategically positioned to win. As such, we are raising our sales and operating margin expectations for 2023, capping off a significant year of improved growth and profitability for the company. I'm proud to share it was a strong quarter across our brand portfolio, and the time we've spent reinvigorating Hollister brands is resonating with our customer. With a refreshed brand aesthetic and evolved assortment, Hollister brands achieved 11% growth for the third quarter, showing nice progress as we comp a disappointing 2022 back-to-school season and what remains a dynamic teen apparel environment. Hollister delivered growth in all regions, showing balance as we further localize our assortment and experience. We continue to prioritize driving a healthier business in Q3, improving the gross profit rate on lower freight costs and higher AUR from lower promotions, consistent with the first half of the year. As we enter the peak holiday season, our inventory is in a significantly better place compared to last year, giving us the opportunity to be strategic with promotions. Turning to product wins, the Hollister women's business continued to lead the way for the brand, growing nicely and showing balance as tops, bottoms, and dresses all helped drive sales improvement to last year. As we discussed last quarter, we entered back to school with purposeful distortions to dresses, non-denim bottoms, and select top categories, all of which did well for the balance of the quarter. Importantly, we have used these learnings to chase into winners for the holiday season. The overall men's trend was similar to the second quarter, with solid performance in non-denim bottoms, fleece, and sweaters, all of which were areas of focus for newness as we rebuilt the assortment. This holiday season, as teen customers head to the mall, we'll be ready to meet them with an evolved assortment. We expect to complement the in-store business with increased digital marketing, particularly on social channels, where our teams are spending an abundance of their time. Although it's early, we're pleased with Hollister brand's start to the fourth quarter, and we remain on the path to deliver growth for 2023, a key point for progress for the brand. Moving to Abercrombie brands, wow! The team delivered their 11th consecutive quarter of sales growth with an impressive 30% sales increase year-over-year. We continue to find new ways to win with our target audience, resulting in great balance and consistency in addition to growth acceleration. Similar to Q2, we saw growth in units, AUR, genders, regions, and both stores and digital direct channels. On the assortment, both men's and women's posted double-digit sales growth in the quarter. Looking at women's, Q3 marks the thirteenth consecutive quarter of double-digit sales growth. I've been impressed with how our teams have continued to build on strong franchises across tops, bottoms, and dresses. For men's, Q3 marked our fifth consecutive quarter of growth, an important milestone as we strongly comp the beginning of our growth path in Q3 2022. Following our successful playbook for women's, we are building into franchises in essential fleece and knits, while driving newness across jeans and pants. I'm excited about our cold weather assortment in both genders across sweaters, fleece, and outerwear as we approach holiday. Abercrombie continues to find compelling ways to connect with customers through unique collaborations and brand experiences. For example, our recent collections with influencer Kathleen Post and Harlem's Fashion Row designer, Nicole Benefield, have driven engagement with new and current customers, particularly on social media and our digital shopping platforms. On in-person experience, we continue to see traction in our neighborhood stores, and we were thrilled to open four additional locations in the quarter, including Soho in New York, Brickell Street in Miami, King Street in Charleston, and Harbor East in Baltimore. We have and will continue to use our digital and store experiences in concert to drive a seamless customer experience. Looking forward to the fourth quarter, Abercrombie Brands has had a great start to November, continuing a historic 2023, and we're confident our customers will love what we have for them this holiday season. Moving to regional performance. As we discussed last quarter, we are seeing positive results from our evolved regional operating model, which provides better support for our local teams and a greatly improved customer experience. Each region delivered growth in the quarter, also building on second quarter sales increases. On a comparable sales basis, the Americas grew 16% in Q3, EMEA grew 15%, and APAC grew 32%. On the localization efforts, our EMEA and APAC teams have made key updates to our assortments, pricing, and floor set cadence as we have moved through 2023, contributing to our sales performance in those regions. In EMEA, our teams have also localized marketing content and prioritized spend in our two largest markets, the UK and Germany, where we are seeing outsized positive results compared to the rest of Europe. We've seen similar progress from our APAC team as well. As you know, Singles Day is an important retail holiday for us in the region, and the team tailored promotions and product positioning, leading to a nice increase in sales this year. There's more work ahead, but our improved trends give me the confidence that we are focused on the right aspects of the customer experience, and that we can continue to recoup lost volume over the past few years following the COVID pandemic. Before I turn it over to Scott, I want to share a few additional thoughts on the upcoming holiday period. Fourth quarter is off to an encouraging start, and we're ready and focused to compete with the large volume still ahead of us. Our teams have worked hard to align our product and promotional messaging to set us up for a successful holiday across brands. With strong brand positioning and holiday product strategies in place for each brand, we are accelerating our marketing investment in the fourth quarter to capitalize on heavier traffic and drive customer acquisition and retention. While the macro environment remains challenging and uncertain, we have proven that we can deliver growth across brands and regions if we stay focused on our customer and execute our playbook. I'm so proud of what our teams have achieved so far, and we expect to finish 2023 showing the strength of our customer relationships in addition to sales growth and profitability. I'd like to thank all global associates for making this happen through their unrelenting customer focus and unwavering commitment to our Always Forward plan. We all look forward to continuing our momentum in the important holiday period and sharing our full year accomplishments with you soon. With that, I'll hand it over to Scott. Thanks, Fran. I'll start with adding my thanks and congrats to our global teams for delivering a strong third quarter. We drove net sales, gross profit rate, and operating margin above our expectations, while continuing to manage inventory tightly. For the quarter, total net sales of $1.056 billion were up 20% to last year, with growth across brands and regions. Comparable sales for the quarter were up 16%, with both stores and digital contributing. The 400 basis point spread between comps and total sales was primarily driven by net new store activity. As a whole, our new stores have exceeded our expectations and are expected to deliver productivity per square foot at a rate more than double the stores we closed last year and will close this year. On a regional basis, our growth was more balanced in the quarter compared to recent past. Better balance was driven by an acceleration outside the Americas. By region, net sales grew 22% in the Americas, 14% in EMEA, and 13% in APAC. On a comp basis, sales grew 16% in the Americas, 15% in EMEA, and 32% in APAC. In our EMEA and APAC regions, we have seen a good response to localization efforts made this year, including product and inventory distortions, pricing adjustments, and timing of product drops. On a brand basis, Abercrombie Brands delivered another great quarter of growth at 30%, while Hollister Brands grew 11%. On a comp basis, Abercrombie grew 26% and Hollister grew 7%. Similar to the second quarter, Abercrombie Brands growth was consistent across genders, while the women's business drove the growth in Hollister Brands. Moving on to gross profit. The gross profit rate for the quarter was 64.9%, up nicely compared to 59.2% in 2022. The 570 basis point rate improvement was driven by a few key factors. We saw approximately 250 basis points contribution from AUR growth, driven by higher mix of Abercrombie business to the total and lower promotional activity, enabled by lower inventory levels compared to last year. Next, we saw a freight benefit of approximately 200 basis points, and we saw a benefit of approximately 200 basis points from lower levels of inventory write-downs compared to last year. These benefits were offset by higher raw material costs of approximately 80 basis points. We expect slight raw material cost pressure in the fourth quarter of 2023, flipping to a benefit beginning in 2024.... Touching on the supply chain, we continue to see freight costs, shipping times, and performance at good levels. Inventory was down 20% to last year at the end of the quarter, and we continue to chase across brands. As we look to year-end, we expect inventories to be down to last year. Our teams have done an amazing job building agility into our inventory decisions, and we are excited to see our customers respond to our holiday assortments. Taking a look at expenses, total operating expense, excluding other operating income, was $546 million, compared to adjusted operating expense of $501 million last year. We had no exclusions this year and excluded $4 million of pre-tax asset impairment charges last year. Year-over-year increase was driven by inflation, investments in digital and technology, higher incentive-based compensation, and marketing. Marketing dollars were higher than last year, but were steady as a percent of sales. With strong sales growth, we delivered nice expense leverage in the quarter, with operating expenses representing 51.7% of sales this year, compared to 57.3% last year. Operating income was $138 million, or 13.1% of sales, compared to adjusted operating income of $21 million last year. Operating income exceeded our expectation, driven primarily by the strong flow-through of better-than-expected sales. Net income per diluted share was $1.83, compared to an adjusted net income per share of $0.01 last year. With strong earnings inventory management in the quarter, we continued to strengthen the balance sheet. We ended the quarter with cash of $649 million and liquidity of approximately $1 billion. During the quarter, we drove $134 million in operating cash flow. We repurchased $50 million of senior secured notes at par value for a total of $51 million, and ended the quarter with $250 million of senior secured notes outstanding. Consistent with the past few years, we will continue to focus on debt and share repurchases as our primary means to put excess cash to work, pending business performance, share price, and our ability to increase investments in the business. For the first nine months of 2023, we had operating cash flow of approximately $350 million and capital expenditures of approximately $129 million. We ended the third quarter with 765 stores. Shifting to our thoughts for the rest of 2023, as mentioned, we have had an encouraging start to the quarter, and we are excited about the opportunity ahead as the majority of the volume is yet to come. For the fourth quarter of 2023, we expect net sales to be up low double digits compared to fiscal fourth quarter 2022 level of $1.2 billion. As a reminder, we have the 53rd reporting week this year, which we expect will add $45 million or 375 basis points of contribution to sales growth this quarter. We are assuming growth across regions and brands, and we expect minimal impact from foreign currency. For operating margin, we expect to be in the range of 12%-14%, compared to an adjusted operating margin of 7.7% last year, with the increase driven primarily by a higher gross profit rate on lower freight costs and higher AURs. For operating expense, we expect to see similar themes as we saw in Q3, with higher technology and incentive compensation expense, as well as increased marketing. For tax, we expect an effective rate around 30%. Embedding the fourth quarter outlook in the full year, our updated full year outlook is for net sales growth of 12%-14% from the 2022 level of approximately $3.7 billion. This is up to our previous outlook of growth of around 10% due to outperformance in the third quarter and our expectations for the fourth quarter. For stores, we now expect approximately 35 new stores, 20 combined remodels and right- sizes, and 35 closures. For operating margin, we expect to be around 10% for the year, up from our previous outlook in the range of 8%-9%. We continue to expect a net benefit from freight and raw materials of approximately 250 basis points for the full year. We expect an effective tax rate in the low 30s% compared to our previous expectation of low-to-mid 30s% due to higher expected profitability levels, and we continue to expect CapEx of approximately $160 million. To finish up, we are pleased with the continued progress across regions and brands, giving us confidence that our playbook is working. While we are laser focused on delivering a great holiday, we are confident in our path forward and are making progress on long-term strategic investments that will better enable speed, agility, and a seamless omni-channel customer experience as part of our Always Forward plan. With that, operator, we are ready for questions. Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question coming from the line of Dana Telsey with Telsey Advisory Group. Your line is open. Hi, good morning, everyone, and congratulations on the very nice results. Nice to see the improvement in Hollister. When you unpack the comps, men's, women's, what did you see in terms of performing any categories to note? How was the difference between online and physical stores, and how are you thinking about promotions? How were they in the third quarter and plans for the fourth? Thank you. Thanks, Dana. Good morning. So specifically to Hollister, I mean, it was really exciting to see our second quarter of consecutive growth up 11%, led by women's again. So just like our—you know, we saw happen in Abercrombie, you know, women's led the way there, too, and girls was leading the way for Hollister. What specifically worked for us, non-denim bottoms, so we've had an expansion in our bottoms category. You know, they still love denim, but a lot of opportunities to a lot of other non-denim bottoms, which are happening actually in both the guys and the girls business. Categories to note, lots of exciting things, a very balanced assortment. Our inventories are very clean. ... I'm excited that we can enter the fourth quarter with really fresh inventories, and promotions. As you know, the fourth quarter is certainly always the most promotional quarter of the year. We're prepared to compete, but it'll be based on our own internal selling. You know, what's working? What's not working? We work with the teams very closely during the fourth quarter to make sure that we're agile and focusing those promotions specifically. Yeah, picking up the online versus stores, you know, good balance, you know, across the total company, for the quarter. Thinking about Hollister, you know, a little tilted towards the store business in the quarter, which is great to see. You know, we've opened some new stores throughout the year, have done some remodels and right sizes, and good to see that store traffic coming back, and that's really on a global scale, which is very, very exciting. Just one last item. Given that you're hitting a 10% operating margin this year, is a 13%-15% in the purview in the future, or how do you think of the framework? Thanks, Dana. Yeah, very, very exciting to put a 10% outlook out there for the year. You know, we started the year at 4-5, and as the business has improved throughout the year, you know, we're looking out there at 10% now. You know, we're not gonna talk about 2024 today. We are very focused on delivering an amazing holiday, but super exciting to be putting a number out there at 10% that we talked about, you know, last year in 2022, that 8%-10% longer term. Excited to get here quickly. Thank you. Thank you. Our next question coming from the line of Corey Tarlowe with Jefferies. Your line is open. Great. Thanks. Good morning. So Fran, as it relates to the really impressive growth that you've seen at Abercrombie in the quarter, what are some things that surprised you as you think about the upside that was driven versus your original plan? And, what were some items that really resonated with customers this quarter across products and, and geographies that really worked for you and that you see working into the fourth quarter and upcoming holiday season? Hey, Corey. What's super exciting to have just finished our eleventh consecutive quarter of growth for Abercrombie Brands is just such a big win for the company. Super excited and proud of the team of what they've been able to accomplish. What's really terrific about that is it's balanced growth. We saw balance across actually brands, the genders, the regions, the channels. I could keep going. To have accomplished that was really, really terrific. You know, we have a playbook that we are focused on, delivering that product, voice, and experience. It's aligning really well for our consumer. And most excitingly, we built this business to run with speed and agility, and that's what the team is doing this year. And they've really been able to test and react and learn about our assortment. I'm excited for fourth quarter. We've got a lot of known product in there that the consumer is already loving. And lastly, as you know, you know, we've really expanded the addressable market for Abercrombie. And so we're seeing the opportunity to, you know, have that customer from 20 to 40, you know, shop with us, as well as these expanded categories. So lots of exciting things happening. Great. And then, Scott, on the gross margin that you saw in the quarter, close to 65%, that's the highest we've seen in quite a while, which is so that's quite impressive as well. As you think about the drivers of that and as we look ahead, just qualitatively, is there any way to think about within that construct what is perhaps sustainable going forward and what may come out, just to get a sense for the puts and takes of the gross margin as we look ahead? Thanks. Yeah. Yeah, great question, and this is something we've talked about a lot, you know, over the last couple of years, really, is the sustainability of the AUR. And what we always say is, if we have great product and lean inventory, you have a great chance of delivering strong AURs, and that's really what we've done. Last year, we had a little step back, you know, with the Hollister inventory as that business fell off pretty abruptly in Q2. But we've gotten through that, and each of the brands is in chase. So what you're seeing this year is now the freight coming back in and normalizing, you know, cotton getting kinda to the end of the tailwinds and really strong AURs and a, and a really great Abercrombie business that Fran just explained. So we want this margin to be sustainable. We're working hard at that, and the pieces that we can control will be the inventory levels and great product, and we feel confident in that. Great. Thanks so much, and best of luck. Thanks. Thank you. Our next question coming from the line of Matthew Boss with JP Morgan. Your line is open. Great, thanks, and congrats on another nice quarter. Thanks, Matt. So, Fran, at the Abercrombie brand, if we take a step back, could you speak to product versus pricing? Meaning, how have you repositioned the assortment and maintained competitive pricing? And then what elements of this turnaround are you applying to the Hollister brand today? And then, Scott, with inventories down 20 exiting the quarter, could you just speak to the ability to chase into continued demand, momentum, and holiday? Hey, Matt, so A&F, you know, it's really exciting. So as you watch the evolution with us of the brand, we've gone really from a jeans and T-shirt brand to a lifestyle brand. And that has afforded us the opportunity to expand both our age demographic as well as the categories that we are offering. Now, the journey, you know, reaching our eleventh consecutive quarter of growth is probably less based on reduced promotions for A&F, because we've made a lot of progress over the years, and there's a lot of mix happening. You know, the consumer is responding to categories like outerwear and dresses, and we're seeing her respond, you know, based on, obviously, the value and the fashion that we put out there for the price point. So as I like to say, you know, product plus voice plus experience actually equals AUR, and what the consumer is willing to play and pay for their goods. How do we apply that to Hollister? We work on playbooks here. So we had a playbook for A&F. We started with women's, we then went to men's. Same thing in Hollister. We're seeing nice progress in girls. You know, now we're working on the guys business, and we'll continue to roll that playbook out now geographically, right? We're rolling into international and seeing success across all of our regions as well. On the inventory side, yeah, our ability to chase, we've been doing it all year. I mean, we started the year with a sales outlook, kinda low single digits, 1-3, and now we're talking about 12-14 for the year. And we've been able to chase into that inventory as we've come throughout the year. You know, huge thanks to our teams, planning, merchandising, sourcing. It's hard to run the business this way, and we put up a lot of process, and it takes a lot of hard work. But the teams have just chased into millions and millions of units this year. And so if there's upside to be had here in Q4, we'll go get it. You know, we'll turn our inventory faster. We'll bring in the next, and so I'm confident in that ability. Congrats again. Thank you. Thank you. Our next question coming from the line of Marni Shapiro with The Retail Tracker. Your line is open. Hey, guys, congratulations, and if I forget, best of luck this holiday weekend. Can you talk a little bit just about two quick things? How are you thinking about store growth for next year with the success of these smaller neighborhood stores for Abercrombie? And then could you also just talk a little bit about, you know, dipping back into Hollister? 'Cause really great improvement in the assortment there. I guess, what are the thoughts on the guys' side? Has it not been as strong, or is it just a harder customer to sell to because they're so picky and difficult, and so trying to figure out what they want? All right, let's start with the first question on store growth. Mm-hmm. So we, as you know, have been on a journey with our stores for many years now. Mm-hmm ... and it's exciting that we've actually been able to open up these neighborhood stores. That is probably not something we could have done years ago, but with the- Mm ... where the brand is today, we're seeing nice growth in them. I was just actually in New York last week walking our Soho and our Flatiron store, and it's so fun and exciting to see this local customer coming in. Mm-hmm. telling us they're coming in. They're, they're continuing to come in. We have an opportunity, as mentioned, running on several more of these locations throughout the U.S. and possibly internationally as time goes on. We haven't declared total stores for 2024, but what I can tell you is that we've been a net store opener for the last couple of years. Mm-hmm ... with the expectation that that will continue to be so. Now for Hollister. Mm. You know, the girl customer does tend to be more open and excited about testing and trying new things. So she did turn first for us for Hollister, just like she did in A&F. Mm-hmm. Hope that she will bring along. We are seeing nice improvement, though, in Hollister guys. I mean, the non-denim bottoms have been very strong, our fleece business, our sweaters business. So we're seeing category improvements, and our expectation is to continue to push at it and continue to see that growth. Great. Would you consider, like, a Your Personal Best store or side by side, or is Gilly Hicks really the vehicle with which you would grow that part of the business? Yes, so YPB, you know, Your Personal Best, our active line for Abercrombie- Mm-hmm ... we're seeing really nice growth in it. We have opened up some, Yeah ... I guess I would call them, expanded assortment. Niches. Marni, thank you. For example, like in our Fifth Avenue store, we just opened one up down in Aventura. So again, you know us, Marni, we are a test and learn culture. You know, we're gonna understand what the appetite is for this product, and we're gonna continue to push on it. Fantastic. Thanks, guys. Thanks, Marni. Thank you. One moment for our next question. Our next question coming from the line of Alex Straton from Morgan Stanley. Your line is open. Great. Thank you. So do you view this as a Hollister inflection? And what processes have you put in place or changed to kind of keep the brand from devolving back to where it was before? Thank you. Yes, yes. I mean, it's exciting to see two consecutive quarters of growth. We're seeing lots of opportunity within the brand. You know, we—as you know, we've repositioned it, and we have certainly come out with some nice new marketing that the consumer is really responding to. We have a playbook that is working, where we focus on our, you know, our assortment architecture, our product, our voice, our experience, and our expectation is to stay close to that customer and continue to see growth. Yeah, and also for Hollister, just like Abercrombie, we've been talking, you know, the inventory's in a great place, you know, down nicely to last year. That brand is chasing, so as we're trying new things and then broadening that assortment globally, we're able to chase into those winners, and that's been part of the driver of Hollister, you know, having that +8 and then having that +11. So we're excited about going forward with clean inventory. Great. Thank you, and congrats. Thanks. Thank you. Our next question coming from the line of Mauricio Serna with UBS. Your line is open. Great, good morning, and thanks for taking my questions. I guess just on the 4Q guidance, should we assume kinda like the similar growth trend in terms of, you know, Abercrombie outperforming Hollister? And then maybe could you elaborate on the inventory decline by brand? Like, just want to understand, like, which brand has, like, a, you know, higher decline or, you know, or we see like a, you know, a more moderate inventory levels, on a brand perspective. And then, when thinking about fiscal year 2024, I know you're not giving guidance yet, but just thinking about the raw material cost, you know, recapture or tailwind that you expect or that you have for 2024, maybe you could quantify that. And then just very lastly, ... Could you talk about maybe the growth opportunities across each brand? I mean, I'm particularly interested in Hollister, because I remember you had talked about the international business still being well below pre-pandemic levels. I just want to understand where we stand on that front. Thank you. Hi, Mauricio, good to hear from you. All right, let's start with the Q4 guidance. So yeah, similar trends is what the expectation would be as we've seen throughout the year. A&F outperforming Hollister. You know, we do expect growth across regions, you know, good to see a nice acceleration in the Europe and APAC regions in Q3, and you know, optimistic, we can see you know, continued trends there in Q4. Inventory by brand is where we want it to be. Hollister is down, you know, much more than Abercrombie is down. Obviously, you know, with the Abercrombie growth trend where it is, we've been adding inventory to that brand, chasing throughout the year, and Hollister is down. You know, we were stuck last year with some of that carry-forward inventory, and really through year end last year on the Hollister side, but very clean now and excited about moving forward. On the 2024 raw materials, you noted it, we're not gonna talk in detail about 2024. You know, what we've said throughout the year is holding. We'll see a little bit of freight benefit there in Q1, rolling into next year, and then raw materials become a tailwind as we get into 2024. So we'll talk a lot more about that on the Q4 call. And then the last piece was growth opportunity by brand. Yeah, Hollister International, yeah, we feel like we have an opportunity. You know, COVID was tough for us. We've talked a lot about having a slow recovery coming out of COVID, and more recently, it's nice to see that business pick up. It started in Q2. Q3, we're seeing nice traffic back to our stores. You know, we've done a lot of localization efforts this year, pricing, marketing, inventory, and we're seeing that play out. You know, one example is we've been focusing on U.K. and Germany, two of our biggest countries in the region, you know, localizing our content, putting more marketing dollars there, and we've seen a really nice response on an omni-channel basis. So we have some optimism there outside of the U.S. for the Hollister business going forward. Great. Thanks so much, and congratulations on the results. Thank you. And our next question coming from the line of Paul Lejuez from Citi. Your line is open. Hi. Thanks. This is Kelly on for Paul. Just curious, your 4Q guidance assumes a pretty meaningful deceleration in sales relative to the strength you, strength you saw in 3Q. So just curious what's driving that, and if you could provide any more color on, on the 4Q quarter to date comp trends, and any color by brand would be helpful. And then I have a follow-up. Sure. Hey, Kelly, it's Scott. I'll grab this one. Yeah, so Q4 guidance, you know, we're sitting here. We talked about an encouraging start to the quarter. Yeah, I wouldn't say these three weeks don't matter, but, you know, they're very small in the grand scheme. The game really starts, you know, today into tomorrow, into the next, you know, 40 days through Christmas. So that's how we're sitting here today. We think this is a reasonable outlook. You know, happy to be putting up another low double-digit outlook coming into the quarter. Inventory is in a great place. You know, excited about pressing our bets in marketing as we go through the fourth quarter, and, you know, our profitability has afforded us the opportunity to do so. So really excited about the opportunity ahead of us. When we think about brands, you know, we're not gonna talk about brands for the last few weeks, but just, like, on the last question, you know, expect Hollister, you know, or Abercrombie to outperform Hollister in the quarter in growth across brands and regions. Got it. And just two quick follow-ups. Just on the strength you're seeing at A&F, just curious if you could maybe talk more about the customers or new customers you're bringing to the fold and, you know, some of the new categories that the customer is giving you permission to offer. And just what gives you confidence that you can comp the comp at ANF next year? And then just on cash uses, you know, any thoughts on share repos, given the significant cash you'll likely generate in the fourth quarter? Thank you. Sure, Kelly, I'll take that one. So as I mentioned just a couple minutes ago, so we have really expanded Abercrombie to be a lifestyle brand, and that has afforded us the opportunity to add many new categories, things that we never, you know, were able to sell in the, in the past. Non-denim bottoms is one particular one. I mean, our pant business is very strong, both in men's and women's. There's a lot of fashion happening today in that category, and he and she continue to choose that category. You know, they can wear that for many different wearing occasions, and that's also a big win for us. So expanding the addressable market as far as who's buying from us, you know, age, you know, late teens, early twenties, all the way up to 40, 40+. We're seeing a very varied customer in our stores, which is super exciting. As far as franchises go, we just talked a little bit about YPB. Our Best Dressed Guest business is also very good. Our fleece and licensing business has been very strong. So we continue to learn lots about what the customer is looking for and continue to offer that to them. On the cash piece, yeah, so great to see the cash flow generation this year, $350 million of operating cash flow through the first nine months. You know, as the business and profitability has improved, inventory is obviously nice and lean. We're seeing that cash flow come in. We did put $50 million to work. We bought in some of those high yield bonds this quarter, $50 million there. So exciting to put that cash to work. Going forward, it's really the same story we've talked about, you know, over the past couple of years. We're gonna look at debt and share repurchases as our main ways to put excess cash to work. Thank you. Thank you. And our next question coming from the line of Janet Kloppenburg with JJK Research Associates Inc your line is open. Can you guys hear me? Morning. Yes. Yes. Good morning, Janet. Congratulations on really exciting results and trends. It's just thrilling to see this comeback. Couple questions, Fran. On Hollister Men's, do you look for that momentum? ... to pick up, you know, just as we look out, I'm not talking about any particular timeframe, but given what you see in the merchandising execution going forward and the opportunities that you appreciate. And then for Scott, when we think about the AUC opportunity, should we think about that building starting in the fourth quarter and then going through fiscal 2024, like each quarter, consecutively better, you know, as you sell through higher cost goods? I just wanna understand about how we should think about that, and for Scott as well, when the fleet benefits might start to wane. Thanks so much. Thanks, yeah. We'll start with Hollister Guys. So it's exciting to see the progress in the entire brand, right? The second quarter of total growth, and as you know, you know, led by the girls business, which is exactly the same pattern that we saw when we turned the A&F business. Right. What's good today, though, is that our supply chain and our ability to chase is back in the business, and that is really the win for us. So for Hollister Guys, you know, we're going category by category. We're testing, we're learning, we're chasing after those opportunities. So we saw progress in non-denim bottoms, in fleece and sweaters. Those categories we expect to continue, you know, into the fourth quarter, and we're gonna go category by category as we head to 2024 and continue to put tests out there. Mm-hmm and drive that business. Yeah, on the AUC piece, Janet, so as we think about Q4, we'll continue to see freight benefits here in Q4. And then, like I said, cotton and raw materials, you know, just a little bit of a hurt here and then turning into a tailwind next year. Not gonna break apart Q4 or 2024 in a big way, but we, we talked about freight being kind of a first half Q1 benefit tailwind coming into 2024. And then on the cotton side, we'll talk more about that on Q4 call. Congratulations. Thank you very much. Thank you. One moment for our next question. Our next question coming from the line of Dylan Carden with William Blair. Your line is open. Thank you. I just have two. The first is just kinda trying to get a sense of, particularly on the A&F brand, how many remodels, repositionings, you feel you have left and the timeframe one might expect to see as well? Yeah, on that one, Dylan, yeah, we have some opportunities left, and we've actually made a lot of progress on the A&F fleet, and it was really through the closures that we did back in 2020. We closed a bunch of those legacy, oversized Abercrombie stores, and we've just come back into those markets with newer, leaner, more modernized stores. So we've made good progress there. Do we have some more remodels left? Yeah, we do, but not in a huge way. You know, the path to the future for Abercrombie is really about opening new stores in markets where we don't have a presence. We've talked about these neighborhood stores and street stores that are a new thing for Abercrombie, and we're probably about eight or 10 in at this point, and there's a nice opportunity heading forward in that regard. Will those add to the total fleet size then? Those are incremental, it sounds like, as opposed to- Those will be incremental. When you think about this year, you know, we're talking about 35 opens and 35 closes, so we'll be kinda net flats. And then we're also doing 20 remodels and right sizes. So the way I like to look at it is we have 55 new experiences coming to the customer this year, and that's really exciting. Got it. And Scott, I know you're not gonna talk much about this, but to the extent that we're trying to sort of underwrite earnings power of the model, you know, we've kinda come a long way quick as it relates to operating margin. I mean, trying to couch the question in terms of you might speak to, sort of, I guess, in relation to the 8% longer term target, how much of this kind of low double-digit margin that you're seeing now, can you kind of attribute perhaps to outperformance comp relative to the cost environment? And what do you feel like you're left with in sort of more growth? I mean, anything to kinda help us at least intuitively think about some of the earnings power beyond 2024. Yeah, I'll go back to 2022. Whenever we had our Investor Day, we talked about, you know, getting some growth on the top line, a little bit of leverage, and then getting some of that cost back in on the gross margin line. And what we've seen is both of those things happen in a bigger way than we expected, you know, back in 2022 this quickly. You know, really solid sales growth this year. You know, talking in that range of 12%-14%, we're gonna see great leverage fall through to the bottom line there. And then on the gross margin side, just seeing that freight cost come in pretty quickly, and then, you know, getting to the end of the tail here in cotton. You know, so it's just the same formula as we go forward. You've seen a really strong flow-through in the business on growth this year, so, you know, our goal is, is gonna be the same for next year. We wanna grow, we wanna see some of that cost come back in, and that, and that's what we're thinking about for 2024. We're in the middle of our budget process right now, and we wanna set this business up for long-term growth, sustainable growth. Awesome. Really appreciate it. Thank you. Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Fran Horowitz for any closing remarks. Yeah, I just wanna thank everyone for joining the call today, and we look forward to providing some more updates to you soon. Ladies and gentlemen, that does end our conference call today. Thank you for your participation. You may now disconnect.