Good day, and thank you for standing by. Welcome to the Abercrombie & Fitch Fourth Quarter Fiscal Year 2023 Earnings Call. Today's conference is being recorded. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear that an automated message advising that your hand is raised. To withdraw your question, please press star one one again. I would now like to hand the conference over to Mo Gupta. Please go ahead. Thank you. Good morning, and welcome to our first quarter 2024 earnings call. Joining me today are Fran Horowitz, Chief Executive Officer, and Scott Lipesky, Chief Financial Officer and Chief Operating Officer. Earlier this morning, we issued our first quarter earnings release, which is available on our website at corporate.abercrombie.com under the investor section. Also available on our website is an investor presentation. 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'll be referring to certain non-GAAP financial measures 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 include Abercrombie & Fitch and Abercrombie Kids, and references to Hollister Brands include Hollister and Gilly Hicks. With that, I'll turn the call over to Fran. Thanks, Mo. Good morning, and thank you for joining us to discuss what has been a very busy and productive start to 2024. I'm happy to report that our sales trend remained strong throughout the first quarter, exceeding the expectations we provided in early March. Net sales of $1 billion and operating income of $130 million were both the best first quarter results in the history of the company. First quarter sales grew 22% year-over-year, with broad-based growth across regions, brands, and direct channels. I'm also pleased to share that women's and men's divisions grew across our brand families in the quarter. We entered the year in a clean inventory position and maintained that discipline through Q1, allowing for fewer promotions, which contributed to gross profit rate improvement. With a strong top line and improved gross profit rate, we achieved a 12.7% operating margin for the quarter, while also funding strategic investments across marketing, digital and technology, and global expansion. These are simply outstanding results, adding yet another proof point of our global team's ability to execute at the highest standard. Always looking forward, we are laser-focused on showing continued growth through 2024, which is reflected in our increased full-year net sales growth and operating margin outlook. Before I dive deeper into the first quarter, I'd like to zoom out and share more context on where we are in our journey. Fiscal 2023 was a defining year for our company. We delivered 16% revenue growth and operating margin over 11%. These results would not have been possible without the hard work and dedication of our team to transform our operating model and our playbook. While there is no finish line, we have developed an extensive global platform to support our brands, leveraging strong inventory discipline and agile chase capabilities. We have further strengthened our operations by building our teams and modernizing our capabilities across digital and technology, stores, and data analytics. We leveraged these strengths to support and grow our global brands through 2023, while also improving the gross profit rate on reduced promotions and clearance selling. We've further defined what each of our brands stands for and the customers they serve, presenting a significant global addressable market opportunity they are capitalizing on with relevant assortments and compelling brand voice. Both brand families are contributing nicely to our business results while expanding their customer base through increased marketing spend and improved omni-channel customer experience. Abercrombie Brands has shown a double-digit net sales growth CAGR from 2019, and Hollister Brands returned to growth in 2023 in the midst of a challenging teen apparel environment. We entered 2024 with momentum and the objective of producing sustainable, profitable growth. We believe we have the pieces in place to deliver global brand growth this year, and our first quarter results are further evidence that we are off to a strong start. Diving into those results, we saw great progress across regions in Q1, starting with the Americas business, which continued to show strength with 23% net sales growth. Outside of the Americas, I am proud of how our teams are executing in EMEA and APAC. In EMEA, we delivered 19% net sales growth led by UK and Germany. Our teams continue to localize our assortments and operations, and we've made strategic investments in marketing to drive brand awareness in these two key EMEA markets. We saw great digital engagement and conversion from new marketing campaigns, along with the benefit of new store experiences, particularly in Greater London. In APAC, we saw similar themes played out with 10% net sales growth led by China. We believe we have more runway ahead in both regions, and the first quarter was another proof point that our playbook is working. Shifting to the brand side and continuing the theme of broad-based growth, both brand families delivered double-digit net sales growth. Abercrombie Brands' momentum continued, growing 31% on top of 14% growth in the first quarter of 2023.... Both women's and men's contributed nicely to this result, showing balanced growth across categories. Both AUR and units continue to contribute nicely to growth, with AUR improvement coming from category and style mix, as well as reduced promotions. Customer acquisition remains a key focus for the brand, and we increased global marketing investments year-over-year to help build community and brand affinity. Abercrombie's results this quarter were driven in part by our continued focus on building and growing concepts within the brand to speak to customers' needs in a relevant, authentic way. This quarter, we launched the Wedding Shop, a curated set of dresses and other apparel to outfit our customers from bachelorette parties to honeymoons to the big day itself. The Wedding Shop was a successful extension of our Best Dressed Guest collection, which has been a part of the assortment for a few years. We led The Wedding Shop with a mix of styles, including new fashion items, while also showcasing product that has performed and grown over several seasons. Congratulations to our team on the great initial reception. I'm excited by the continued opportunities for The Wedding Shop as we approach peak wedding season this summer and into the fall. At Hollister, we saw progress with both women's and men's contributing to the 12% first quarter sales growth, an acceleration from the 9% we saw in the fourth quarter of 2023. The men's division returned to growth, led by fleece tops and bottoms, as well as pants, which all did well throughout the quarter. Women's contributed nicely to the growth acceleration with balance across categories. We increased Hollister marketing in the back half of 2023, and we also increased year-over-year investment this quarter. We saw improved traffic trends across both stores and digital channels, which helped show teen customers the changes we have made to the assortment. Importantly, the Hollister team continued to seek opportunities to reduce discounts and promotions while tightly managing inventory levels, further supporting AUR and gross profit rate expansion in the quarter. A really great effort on all fronts, and we enter the second quarter with inventory flexibility and momentum as we build to the back-to-school season later in the quarter. Across brands, regions, and genders, we had an outstanding start to the year, carrying great momentum from 2023 to produce record first quarter results. We did this while also investing globally to attract and retain our target customers, further strengthening our brand portfolio. Our team remains focused on following up a defining fiscal 2023, leveraging the power of brands and operating model to deliver sustainable long-term growth and profitability. After an impressive record-setting first quarter and a strong start to Q2 across regions and brands, we have a high degree of confidence that we can accomplish our 2024 goals while also building and investing in the tools, technology, and people to realize the long-term ambitions we've previously shared. With that, I'll hand it over to Scott. Thanks, Fran. I'd like to thank our global teams for their continued strong execution throughout the first quarter, helping to drive record first quarter net sales and operating income. For the quarter, total net sales of $1 billion were up 22% compared to last year, with growth across regions and brands. This is the first time in the history of the company we have delivered sales of $1 billion in the first quarter. On a reported basis, we saw a 120 basis point benefit from the calendar shift from the 53rd week in 2023. Comparable sales growth for the quarter was 21%. By channel, we saw double-digit growth in both stores and digital. On a regional basis, we delivered double-digit growth in each region. Net sales grew 23% in the Americas, 19% in EMEA, and 10% in APAC. On a comp basis, sales grew 21% in the Americas, 23% in EMEA, and 22% in APAC. In the Americas, we saw balanced growth across markets. In EMEA, the growth was driven by the UK and Germany, two markets where we are accelerating our increasingly localized marketing efforts. In APAC, growth was driven by China. In APAC, we saw a larger spread from comp to net sales growth, which was primarily driven by foreign currency and a few store closures. From a brand perspective, Abercrombie Brands delivered another stellar quarter of growth at 31%, while Hollister Brands grew 12%. On a comp basis, Abercrombie grew 29% and Hollister grew 13%. Taking a look at gross profits, we delivered record first quarter gross profit dollars, driven by both a strong top line and a healthy gross profit rate. The gross profit rate for the quarter was 66.4%, up 540 basis points compared to the 61% rate in 2023. We saw year-over-year benefits from lower cotton costs and slightly lower freight costs. We also saw benefits from lower discounts and clearance selling across brands on continued strong inventory management. We leveraged our chase capabilities across brands during the quarter, and each brand was in a position to chase entering the second quarter. Moving on to expenses. Operating expense, excluding other operating income, was $550 million for the quarter, compared to adjusted operating expense of $474 million last year. On top of higher variable expenses on strong sales growth, the year-over-year increase was driven by inflation and increased investments in marketing, digital and technology, and people. For marketing, the first quarter spend was around 5% of sales, compared to around 4% in the first quarter of last year. As a reminder, we pulled back on Hollister marketing last year as we worked through our assortment and brand projection evolution. Even after these investments, we delivered solid expense leverage with operating expenses as a percentage of sales of 53.8%, compared to 57.3% last year. Operating income was $130 million, or 12.7% of sales, compared to adjusted operating income of $38 million, or 4.6% of sales last year. Net income per diluted share was $2.14, compared to adjusted net income per diluted share of $0.39 last year. This quarter, we've introduced an additional performance measure of non-GAAP EBITDA to our results. For Q1, EBITDA totaled $168 million, or 16% of sales, compared to Adjusted EBITDA of $74 million, or 9% of sales last year. Please refer to our press release for disclosures on EBITDA, Adjusted EBITDA and other non-GAAP metrics. On the balance sheet, we ended the quarter with cash of $864 million and liquidity of approximately $1.2 billion. We delivered operating cash flow of $95 million and had $39 million of capital expenditures. We repurchased $15 million worth of shares, ending the quarter with $217 million remaining on our current share repurchase authorization. We also purchased $9 million of senior secured notes at par value on the open market, ending the quarter with $214 million of notes outstanding. In the second quarter, we will continue to focus on debt and share repurchases as the primary options to put excess cash to work, pending business performance, share price, and our ability to increase investments in the business. For share repurchases, we continue to expect to buy back shares to offset dilution from stock compensation at a minimum. On the store fleet, we ended the first quarter with 753 stores. During the quarter, we opened 1 new store, remodeled 13 stores, and closed 13 stores. For the full year, we have updated and increased our store investment plan to deliver approximately 60 new stores, 65 remodels and right- sizes, and 40 closures. Moving on to our expectations for the rest of fiscal 2024. From a total company perspective, we had a strong start to the year, delivering record Q1 results. As we said last quarter, we believe we are executing well in those areas in our control across product voice and experience. For the second quarter, we expect net sales growth in the mid-teens, compared to the second quarter 2023 level of $935 million. This expectation includes the year-over-year benefit of around $30 million or 320 basis points for the quarter, due to the calendar shift from the 53rd week in 2023, as we pick up a peak back-to-school week in Q2 this year compared to Q3 last year. We expect growth across regions and brands and a slight adverse impact from foreign currency. We expect operating margin to be in the range of 13%-14%, compared to 9.6% in 2023. We expect the year-over-year operating margin improvement to be primarily driven by a higher gross profit rate on continued year-over-year cotton benefits and some AUR growth, combined with modest operating expense leverage. We expect an effective tax rate in the mid-20s%, with the rate being sensitive to the jurisdictional mix and level of income. For the full year, we are increasing our expectations, primarily based on the actual results from the first quarter and the outlook for the second quarter. We are leaving the back half outlook consistent with the levels implied in the outlook given in March. We expect net sales growth of around 10% from the 2023 level of approximately $4.3 billion, an increase from the previous outlook of up 4%-6%. This outlook continues to include an adverse impact of around $50 million from the loss of the 53rd week in 2023. We also expect the growth rate to be higher in the first half of the year, partially due to the calendar shift from the 53rd week in 2023 and the loss of the 53rd week in the fourth quarter of 2024, compared to 2023. We've included a table in the press release to provide more detail on expected sales and comparative growth impacts by quarter and for the full year. For operating margin, we expect to be around 14%, an increase from the previous outlook of around 12%. We expect the year-over-year improvement to be driven primarily by gross profit rate expansion from the combination of lower cotton costs and AUR expansion on lower promotions and clearance selling, slightly offset by higher freight costs. Based on the updated first half expectations, we also now expect some full-year expense leverage that will contribute to operating margin. We expect to continue to use our agile funding process to find ways to increase investments over the remainder of the year. We expect an effective tax rate in the mid- to high 20s% and capital expenditures of approximately $170 million. To close it out, it was another quarter of progress as we delivered strong financial results, managed inventory well, and continued to strengthen the foundation of our company. We have plenty of hard work ahead, but we believe each of our brands is in a position to deliver for our customers in the summer selling season, keeping us on track to deliver sustainable, profitable growth this year. Operator, we are now ready for questions. Certainly. As a reminder, to ask a question, please 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. And our first question comes from Dana Telsey of Telsey Advisory Group. Your line is open. Hi, good morning, everyone, and congratulations on the terrific results. Fran, as you think about the merchandise assortment for each of the brands, key drivers for men and women, did you see men improve? What are you seeing from women? How is the denim impact? And then, Scott, as you think about the drivers of gross margin, what was the AUR uptick in the first quarter? How are you thinking of it going forward, in addition to the benefit from any lower freight and raw material costs? Thank you. Hey, Dana, good morning. So I'll kick off on the first one. You know, it was a pretty incredible quarter, so super excited to have reported a record quarter for us. And what's great about it is that it was very balanced and driven across both brands, across genders, channels, regions, et cetera. ... So what we did see was a very balanced growth by category. The probably biggest standout I would talk about would be Abercrombie women's dresses. The launch of this Wedding Shop has clearly exceeded our expectations from the beginning, and the wedding season hasn't even technically started yet, right? We got out ahead of that and got that in early. The men's Abercrombie business also very strong, big contributor. Was super excited to see the guys' Hollister business return to positive comps that helped drive that acceleration in total to up 12. You know, in denim specifically, you know, we are seeing some new trends happening in denim, which is exciting. The rise is actually going back down a little bit, so this low-rise baggy is coming in pretty strong. Wide-leg jeans are happening. The biggest lesson that we learned from COVID, and the word that everybody knows on campus I love, which is balance. Denim is very important to our business. It always has been, but striking a balance on our assortments is most important. Hey, Dana, I'll pick up the gross margin side. So yeah, nice gross margin performance in Q1, so up around 540 basis points to last year. A couple factors, and we talked about the cotton. We're finally there. It's been, it's been a couple of years we've been talking about that cotton drag, but we've gotten to the, the good side of it. So that was a nice pickup here in Q1. And then we did see some, some AUR benefit in Q1, and it came from reduced promotions as well as less clearance selling. Obviously, with the, the top line results strong above our expectations, we were chasing throughout the quarter, good place to be. So we were able to pull back on some promotions and then reduce that clearance selling. You know, thinking about the go forward, expect cotton to be a benefit here again in Q2, and then just kind of moderate in the back half. Thinking about freight, specifically, a little bit of a help in Q1, that'll flip to a little bit of a hurt, I think, Q2 through the end of the year. We've seen those rates pick up a little bit, more recently, on the ocean side, and then we're keeping our eyes on the air rates. So a little bit of friction coming there. You know, all that said, expect to see that gross profit rate expansion this year, and that'll be kind of a key driver of our operating margin expansion that we put out there, that 14% versus that 9.6% last year. Thank you. Thanks, Dana. One moment. One moment for our next question. Our next question will be coming from Matthew Boss of JP Morgan. Matthew, your line is open. Great, thanks, and congrats on another nice quarter. Thanks. Two-part question. Fran, could you elaborate on drivers of the same-store sales acceleration that you're seeing at Hollister across men's as well as women's, and any change in current business momentum across the organization? And then, Scott, just maybe relative to 2024's operating margin guide of 14%, what do you see as the right long-term margin target for the business? Hey, Matt, I'll kick off. So Hollister's, we were super excited to see the men's business turn around a bit faster than we had anticipated. I mean, we've been, as you know, working hard on testing and chasing and reading into that business. We've seen a lot of success in the bottoms business over the past several quarters, and I would say this season, the biggest accelerator were the tops businesses. Excited to see that the, you know, there's a proportion happening and changing a bit in guys. You know, they're wearing these baggier jeans that involve, you know, looser tops, different proportions. So that was probably the biggest change in the accelerator. But overall, Hollister and Abercrombie, nice success across the genders and a pretty well-balanced category business. Hey, Matt, on the operating margin, yeah, so great to put that 14% out here for the year, up from the 12% original outlook. You know, really nice growth in the first quarter, you know, seeing that growth continue into the second quarter here. Not talking about long term at this point. You know, we, we've talked back in our Investor Day about getting to that double-digit operating margin that's been proven, you know, by some of our peers in the industry. You know, we're there, which is exciting. But right now, we've been focused, you know, 2024 is about sustainable, profitable growth. And so far, so good as we've come through the first quarter and into the second quarter, and that's our focus right now. We'll, you know, we'll talk a little bit more about the long term in the future. Great. Best of luck. One moment for our next question. Our next question will be coming from Marni Shapiro of The Retail Tracker. Your line is open. Hey, guys, congratulations. Could you talk a little bit about the marketing side? You've done an exceptional job on the Abercrombie side as the brand has, you know, come back to strength and continues to put growth on top of growth. Now that Hollister is on solid ground, will you follow that same kind of path, even though it's a younger customer? Could you talk a little bit about what that could look like and what the spend will look like over the next couple of months? Sure. Hey, Marni, good morning. So what's exciting about our current marketing spend is that we're actually with the strength of the brands, able to spend that marketing over the bottom, middle, and top of funnel. So to your point, you know, it was a build in Abercrombie over the years, you know, starting in the bottom and the middle, and now doing lots of top of funnel to make sure that we acquire those customers. We will follow that same pattern for Hollister. We've started to reinvest, you know, as we mentioned earlier in the script today. Just last week, we had a terrific top-of-funnel event for Hollister, a festival that we did at one of the schools out in California to really bring brand awareness. So we will definitely follow a similar playbook, but one that is focused on the teen consumer. Hey, Marni, as we think about spend over the next few months, same story. You know, we like this 5% of sales. It's something we talked about here for a couple of years. The great thing is, with the top line growing, that 5% equals more dollars, so we're putting more dollars to work. It is good to see Hollister kind of turn that back on. We slowed that marketing a little bit in the front half last year as we were, you know, getting that assortment right and getting that brand projection right. We feel both of those things are in a good place. So we're continuing to accelerate that Hollister marketing, like Fran said, up and down the funnel, which is great. You can drive the business, you know, short term, but you also wanna drive that business long term, and we're super focused on customer acquisition and getting people into our brands. We love our offering at this point, so we'll continue to get that spend around that 5% and find more customers. Great. Thanks, guys. One moment for our next question. Our next question will be coming from Alex Straton of Morgan Stanley. Your line's open. Great, thanks for taking my questions. Just a couple here. One, just on the full year sales guidance raise. It looks like you guys have a pretty big back half slowdown built in. Is that just a function of compares, or can you talk to us about the rationale there? And then secondly, just on Asia Pac, can you just elaborate on what you're seeing there for the brand in that geography, as well as your view on the consumer there? Thanks a lot. Well, let's just... Go ahead, Scott. Let's kick off with that. Yeah, I'll go with the first one. So let's talk about the full year guide. Yeah, so obviously, strong start to Q1. It was amazing to deliver $1 billion in revenue for the Q1. We've never done that as a company. So really nice to see better balance across the quarters for the year. So super exciting start. Good start to Q2 here. And then, you know, thinking about Q2, it's, you know, it's more back weighted. We'll see that build in the back half of the quarter for Hollister and Kids. So tons to learn, you know, as we go through the next couple months into that build. And so as we think about the back half, you know, sitting here today, there's still a lot of uncertainty out there, lots of learnings for us coming here in Q2. So, you know, we're excited to get through back to school, and we'll know a lot more in August, then we'll talk about the back half once we get there. Yeah, and then just real quick on the APAC piece. I know you know this, Alex, but it's a very small piece of our business. It's probably about, you know, 3% at this point in time, but we were excited to deliver 10% net sales growth. The team is hard at work, getting, you know, close to that customer, localizing our assortments, making sure that our promotions are lined up with the calendar appropriately. And we're gonna continue to, you know, believe and invest in that region. One moment for our next question. Our next question will be coming from Mauricio Serna of UBS. Mauricio, your line is open. Great. Good morning, and congratulations on the results. Just a few questions for me. Maybe could you talk about, you know, in Q1, what you're seeing in terms of customer acquisition in Abercrombie? Are you seeing, like, any new customers coming into the brand, a specific, you know, age cohort or anything like that? And maybe also, could you talk about the, you know, the playbook, provide more details, more details about the playbook implemented in the international markets? You know, how are you seeing that in... Like, what are you doing in, you know, UK and Germany to drive that strong growth? Then just finally, was wondering, like, for Q2, sorry, for the second half of the year, are you baking any expectation of OpEx leverage, considering, you know, that there's an implied slowdown in the sales guide? Thank you. All right, so back up to the top, Mauricio. Customer acquisition in ANF. Yeah, so there's a lot of exciting things happening in the ANF brand. And as we continue to launch all of these new concepts, we are definitely seeing new consumers coming into the brand. We saw that through 2023, as an example, with all of our licensing that we did, as an example, with the NFL. You know, for the first quarter, this launch of the Wedding Shop has brought in lots of new customers. It's also been an opportunity to add value to the customers that we already have. You know, it was built off an extension of the Best Dressed Guest collection that we had already seen success in. So we are seeing exciting acquisition by customer. As we mentioned just a few minutes ago, you know, we are investing in top of funnel, which is certainly helping to grow brand awareness. For the second question, our playbook is something that we are definitely exporting outside of North America. We had a terrific quarter in EMEA. In fact, we were just in London last week. We had my first international board meeting in London with the team, and we're really excited about the opportunity that we see there. We are focused on U.K. and Germany and exporting that playbook and making sure that we stay close to the customer. It's about aligning that product voice and experience, which is working very well for us in North America and is now working well for us, particularly in those two countries. I'll hand the third question over to Scott. I'll give you a break. All right, so OpEx leverage in the second half. You know, the outlook that's out there, that implied outlook, from our last one, there'd be minimal OpEx leverage. You know, as we think about approaching the back half, you know, as we're coming through Q1 into Q2, we're making investments. You know, number one, we're keeping that inventory agile and quick and using chase model. We're also making investments in marketing. We're making investments in stores. We have a good store plan here for the back half, strong store plan for the back half, with remodels, refreshes, new stores coming in, as well as that, you know, end-to-end customer journey. So excited about the investments that we're putting into place and, you know, optimistic that'll keep our growth trajectories going into the future. Understood. Thank you, and congratulations. Thanks, Mauricio. One moment for our next question. Our next question will come from—excuse me—Paul Lejuez of Citi. Your line is open. This is Kelly on for Paul. Thanks for taking our question. First one is for Scott. Just to follow up on the AURs, did you say what AURs were up in the quarter? I think your plan was for flat, so just curious how AUR has performed in any color by brand, and what your assumption is for AURs for the year now? And then secondly, for brands, I'm just curious on new customer growth at Hollister. I know previously you said Hollister was somewhat more limited by just the age range of the Hollister customer relative to ANF. Just curious if any of your thoughts have changed about what the ultimate, you know, customer acquisition opportunity is there. Thank you. All right, let's pick up the first one on AUR. So yeah, nice, nice growth in AUR. Didn't give a basis points impact there for Q1, but really saw AUR growth across brands. And, you know, we continue to see that mix benefit in Abercrombie. We talked about the dress shop that that's launch here in the quarter, late maybe first quarter. Really nice pickup there. So we're seeing a little bit of a mix benefit in AUR, but again, that doesn't exactly flow through to gross margin. When you think about those gross margin impacts, you know, nice pickup from just slightly reduced promotions as well as lower clearance selling. Again, we were, you know, chasing inventory throughout the quarter. The assortments have been well received, you know, specifically that spring, you know, summer assortment has performed well across those key categories, so we've been able to pull back promotions just a bit. So as we think about Q2 and going forward, expect to see some AUR pickup, you know, based on those trends coming out of Q1 and Q2. And then for the back half, sitting here today, we'll assume, you know, moderating AUR growth in the back half, and we'll pick that up when we talk in August. Yeah, and then just for clarity on the second question, Kelly. I think what we said was that the addressable market for Abercrombie is a bit larger than the addressable market for Hollister because it's a teen-specific consumer, as opposed to now what we look at for Abercrombie, which is coming into the brand in the early twenties and staying, you know, well, well past their forties. So there's always opportunity for new customers, and the fact that we are now investing, increased marketing across all, you know, parts of the funnel, will always help us bring new customers in. There's lots of exciting things happening within the brand. I just mentioned a few minutes ago some of the top-of-funnel activities that we're doing through the high schools. So new customers are always an opportunity. It's just the addressable market specifically, that was a bit different between the two brands. Yeah, Kelly, just to add on for Hollister. When you think about that customer, you know, very different than the Abercrombie customer. A lot of transactions happen in store, but they start the product search online. So for us, it's about a balanced investment in store locations. Obviously, we have a lot more stores for Hollister than Abercrombie because of that fact, but we're also increasing that digital marketing for Hollister because there is so much discovery that happens with that teen before they come in store. So looking at that kind of store and rent plus marketing is our way to acquire customers in Hollister. Thank you. Best of luck. Thank you. One moment for our next question. Our next question will be coming from Janet Kloppenburg of JJK Research Associates. Your line is open. Good morning, everyone, and congratulations. A really nice quarter. I wondered about the you're comparing against... still against high promotions and clearance last year at Hollister, and I'm wondering, you know, if, if you expect that to be a benefit for the year? Also, when you think about the international business, I think that you're in early innings there in terms of recovery plan. So I wondered if you thought that, you know, comps could be maintained at the kind of level we saw in the first quarter. And just lastly, on brand extensions, you know, with the wedding dress shop, do you see opportunities for additional brand extensions at both brands as we look forward? Thank you. Hey, Janet, let me get the first one out of the way. So when you think about those promos at Hollister, yeah, if we, if we look back into history, you know, that, that brand was over inventoried coming through 2022 after we saw that drop off in kind of the, the mid-2022 range. We cleared through most of that in 2022. Little bit of an overhang there in Q1 of 2023, so got that benefit here in Q1 of 2024. Yeah, that benefit moderates as we go forward. I would say, like I just said, in kind of second quarter, we'll see some benefit. We're gonna assume it's gonna moderate in the back half. The great thing is, like, kind of bringing it current and into the present, all brands are chasing, you know, we're chasing into the summer at this point, in late summer, into back to school. An exciting place to be for each brand, and that gives us the chance to hold the AUR or maybe get some growth. Yeah, regarding the international business- Thank you. We are very excited to report, obviously nice progress in both APAC and EMEA. You know, we've talked for a few quarters now, actually for a couple of years now, about building those teams, and we're really building the muscle. Exploring this playbook is working, the opportunity to start investing in marketing is working, and all of the comps of that is built into the outlook that we put out today. And then, Janet, regarding brand extensions, I mean, that is what we do. The team is busy and hard at work, always listening to the customer, trying to see what opportunities are out there. That, you know, the wedding dress shop is clearly an opportunity that came from our customer telling us that they spend long weekends away with their friends, and these weddings have become two, three, four-day events where they need outfits, you know, throughout the weekend for that. We're providing those now actually for both men and women, which is exciting. So we're gonna continue to stay focused on listening to them and hearing what the opportunities are, and there will certainly be new things as we move ahead. Okay, one more, if I could. Sure. Scott, I was wondering, is there an outlook, given the sales deceleration for the back half, is there an outlook for SG&A to leverage in that? I know you said for the year it could leverage. What would that pace look like in the back half of the year? Yeah, at this point, you know, with the implied outlook out there, we wouldn't see much SG&A leverage in the back half. It would be more front half weighted. Obviously, the growth rate's higher here in the front half versus that implied in the back half, so a lot of that full year leverage would come from the front half. But not deleverage in the back half? Yeah, we'll see. You know, we'll kind of bounce around, you know, leverage, deleverage, you know, basis points here and there. Okay. Thanks so much. Thanks, Janet. I would now like to turn the conference back to Fran for closing remarks. Thanks, everyone, for joining the call today, and we look forward to providing some more updates in the future. This concludes today's conference call. Thank you for participating. You may now disconnect.