Good day, everyone, and welcome to the Boot Barn Holdings third quarter 2024 earnings call. As a reminder, this call is being recorded. Now, I'd like to turn the conference over to your host, Mr. Mark Dedovesh, Senior Vice President of Financial Planning. Please go ahead, sir. Thank you. Good afternoon, everyone. Thank you for joining us today to discuss Boot Barn's third quarter fiscal 2024 earnings results. With me on today's call are Jim Conroy, President and Chief Executive Officer, and Jim Watkins, Chief Financial Officer. A copy of today's press release, along with a supplemental financial presentation, is available on the investor relations section of Boot Barn's website at bootbarn.com. Shortly after we end this call, a recording of the call will be available as a replay for 30 days on the investor relations section of the company's website. I would like to remind you that certain statements we will make in this presentation are forward-looking statements. These forward-looking statements reflect Boot Barn's judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting Boot Barn's business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made during this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our third quarter fiscal 2024 earnings release, as well as our filings with the SEC referenced in that disclaimer. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. I will now turn the call over to Jim Conroy, Boot Barn's President and Chief Executive Officer. Jim? Thank you, Mark, and good afternoon. Thank you, everyone, for joining us. On this call, I will review our third quarter fiscal 2024 results, discuss the progress we have made across each of our four strategic initiatives, and provide an update on current business. Following my remarks, Jim Watkins will review our financial performance in more detail, and then we will open the call up for questions. We are pleased with our third quarter results, which marks the highest sales volume in Boot Barn's history. During the quarter, total sales grew by 1.1%, driven by the 49 new stores added over the last 12 months. It is worth noting that except for three COVID-impacted quarters, we have grown sales on a year-over-year basis every quarter since we went public nearly 10 years ago. The incremental revenue from new stores was partially offset by a 9.7% decline in same-store sales. To put this performance in perspective, our third quarter sales are up 83% from pre-pandemic levels, with our same-store sales up almost 50% on a four-year stack basis over that same period. Additionally, we achieved 300 basis points of merchandise margin expansion during the quarter, comprised of 250 basis points of freight improvement and 50 basis points of product margin expansion. The growth in product margin was driven by more than 300 basis points increase in Exclusive brand penetration, a reduced level of promotional activity, and buying economies of scale. The strength in sales and gross margin, combined with solid expense control, drove a 30 basis point increase in operating margin and earnings per diluted share of $1.81 during the quarter, up from $1.74 a year ago, and more than double our earnings per share in the same quarter pre-pandemic. We believe this demonstrates the ability of the Boot Barn model to utilize multiple levers to drive earnings growth and the team's ability to execute at a high level. As we approach the last two months of fiscal 2024 and prepare for 2025, we will maintain our focus on executing against our four strategic initiatives. I would like to spend a few minutes providing an update on each of them, beginning with expanding our store base. With 382 stores today, we are the largest player in the western and workwear industry. In the quarter, we added 11 new stores as we expand our footprint across the country. As a reminder, we typically underwrite the investment in a new store, expecting revenue of approximately $2 million with a two to three-year payback. The performance of the most recent 100 new stores has been considerably better than this model, with new store revenue projected to generate more than $3 million on average, or 50% higher than the typical investment thesis, with an accelerated payback of approximately 18 months. If we view this on a shorter timeline, the most recent 45 stores that have been open one full calendar year, opening before December 2022, have generated approximately $3.3 million of annual revenue on average over the last 12 months. We believe that the combination of 15% new store openings, a 60% return on capital, and the opportunity to more than double our units is one of the strongest, most compelling growth stories in the retail industry. Moving to our second initiative, driving same-store sales growth. Our third quarter same-store sales declined 9.7% within the guidance range we outlined in November. The decline was driven by lower transactions, partially offset by higher AUR and transaction size. The more functional categories, such as men's western boots and apparel and work boots, while still negative mid-single digit on a comp basis, outperformed the more discretionary Ladies' Western departments. Geographically, the West and North regions were slightly better than chain average, and the South and East were slightly worse than chain average. As I reflect on our execution in the quarter, I am very proud of the entire cross-functional team. The merchandising team managed inventory levels extremely well, improving product margin and constraining growth in clearance merchandise despite a nearly double-digit decline in same-store sales. The stores team also performed quite well, as evidenced by earning the highest customer service scores for any holiday quarter in the history of Boot Barn. They also supported our omni-channel business by fulfilling more than 45% of our total e-commerce orders over the holiday period. Before moving on to the next strategic initiative, I do want to provide a bit of historical perspective to our recent same-store sales results. I think it is helpful to remember that our average store volume increased by more than 50% beginning in March 2021, and has remained at elevated levels for nearly three full years now. On a year-to-date basis, our retail store same-store sales have declined by approximately 6%, cycling +2% for the full year of fiscal 2023, and +57% the year prior to that. Going forward, while same-store sales may continue to be negative for the near future, we believe it is unlikely that we will forfeit a significant portion of the higher average store sales volume. Similarly, when we look at our customer count metrics, we reach the same conclusion. The elevated level of average store volume that began a few years ago was a result of a nearly 50% growth in new customers in a comp store, and most of those customers became repeat purchasers. These two statistics give us confidence in our belief that we will likely maintain most of the elevated sales in an average store going forward. Moving to our third initiative, strengthening our omni-channel leadership. In the third quarter, our e-commerce sales declined 11.5%. Our online channel has felt pressure due to less efficient online marketing spend, partly caused by an increase in digital spend by a handful of vendors and competitors. To add some more color, our bootbarn.com business comped down low single digits in the quarter, and approximately three-fourths of the decline was due to the erosion of paid demand. Our other two sites, Sheplers and Country Outfitter, are more dependent on paid traffic, so the erosion of paid demand has a significant impact on them. Our objective continues to be to maximize profitability for our online business so we will remain disciplined with our digital spend so as not to erode earnings and our desire to grow top-line sales. Operationally, we've improved our ability to fill demand from nearly all of our store and warehouse locations across the country. This enabled us to commit to a pre-Christmas delivery later in the season than ever before. Now to our fourth strategic initiative, Exclusive brands. Exclusive brands' penetration increased 310 basis points in the quarter to 37.3%. I am pleased with this result, particularly as we were able to achieve healthy growth in penetration despite softness in our Ladies business, which over-indexes to Exclusive brands. In the quarter, we did launch a brand extension in approximately 50 stores called Cody James Black, which targets a higher-end customer for men's cowboy boots and cowboy hats. While this will be a relatively small contributor to the overall Exclusive brand business, we do feel great about the initial results and are in the process of extending the new assortment to 200 stores. Looking back over the last three years, we've expanded Exclusive brands penetration 1,400 basis points, far exceeding our historical goal of 250 basis points per year. This growth is a testament to the team's ability to develop world-class brands and compelling merchandise assortments. Turning to current business. Through the first four weeks of our fiscal fourth quarter, our preliminary consolidated same-store sales have declined 8.1% compared to the prior year period. On the surface, this is only a modest sequential improvement in our sales trend. However, we did see significant disruption in the business in the second and third week of the month due to a winter weather pattern that forced store closures, reduced operating hours, and presented significant travel challenges for customers. When we evaluate the business by region, the same-store sales trend in the South and West regions, which were less impacted by the weather, have improved sequentially from the prior quarter by more than five points of comp. Conversely, the North and East regions, which were impacted by the weather, have deteriorated sequentially from the third quarter by approximately four points of comp. While significant variability in weekly comp sales persists, we believe the underlying tone of the business has improved compared to the holiday quarter. I'd like to now turn the call over to Jim. Thank you, Jim. In the third quarter, net sales increased 1.1% to $520 million. Our sales performance benefited from new stores opened during the past 12 months, partially offset by a same-store sales decline of 9.7%, comprised of a decrease in retail store same-store sales of 9.4% and a decrease in e-commerce same-store sales of 11.5%. Gross profit increased 6% to $199 million, or 38.3% of sales, compared to gross profit of $188 million or 36.5% of sales in the prior year period. The 180 basis point increase in gross profit rate resulted from a 300 basis point increase in merchandise margin rate, partially offset by 120 basis points of deleverage in buying, occupancy, and distribution center costs. The increase in merchandise margin rate was driven by a 250 basis point improvement in freight expense as a percentage of sales and 50 basis points of product margin expansion. Selling, general, and administrative expenses for the quarter were $124 million, or 23.8% of sales, compared to $115 million, or 22.4% of sales in the prior year period. The increase in SG&A expenses compared to the prior year period was primarily a result of higher overhead costs and store payroll associated with operating an additional 49 stores when compared to the prior year period. Income from operations was $75 million, or 14.4% of sales in the quarter, compared to $72 million or 14.1% of sales in the prior year period. Net income was $56 million, or $1.81 per diluted share, compared to $53 million or $1.74 per diluted share in the prior year period. Turning to the balance sheet. On a consolidated basis, inventory decreased 5% over the prior year period to $563 million and decreased 1% on a same-store basis. We finished the quarter with $107 million in cash and zero drawn on our $250 million revolving line of credit. I would now like to provide an update on our fourth quarter guidance, which is outlined in our supplemental financial presentation. As the presentation lays out the low and high end of our guidance range, I will only speak to the high end of the range in my following remarks. As we look to the fourth quarter, we expect total sales to be $386 million. We expect a same-store sales decline of 6.3%, with retail store same-store sales declining 5.5% and e-commerce same-store sales declining 13%. We expect to open 15 new stores, with all openings scheduled for the second half of the quarter. As a reminder, this year's fourth quarter includes 13 weeks of sales, compared to 14 weeks of sales in the fourth quarter last year. We expect fourth quarter gross profit to be $136 million, or approximately 35.2% of sales. Gross profit reflects an estimated 160 basis points increase in merchandise margin rate, including a 140 basis points improvement in freight expense year-over-year, and a 20 basis points improvement in product margin. Included in the product margin growth, we expect fourth quarter Exclusive brands penetration to be flat to down 100 basis points when compared to last year. As a reminder, Exclusive brands penetration grew 770 basis points in the fourth quarter last year. The driver of the slowdown, besides wrapping remarkable growth the past few years, is primarily due to the softer Ladies business, which penetrates at a higher rate of Exclusive brand sales. We anticipate 310 basis points of deleverage in buying occupancy and distribution center costs as we cycle a 15-week quarter in the fourth quarter last year - 14-week quarter in the fourth quarter last year. Our income from operations is expected to be $38 million or 9.8% of sales. We expect earnings per diluted share to be $0.92. As a result of our year-to-date performance and our updated estimates for, for the rest of the year, we are updating our full year guidance. For the full fiscal year, we now expect total sales to be $1.66 billion, representing growth of 0.4% over fiscal 2023, which as a reminder, was a 53-week year. This compares to our previous guidance of $1.70 billion. We expect same-store sales to decline 6.3%, with a retail store same-store sales decline of 5.5% and an e-commerce same-store sales decline of 11.7%. This update compares to our previous guidance of a consolidated same-store sales decline of 5%. We now expect gross profit to be $611 million or approximately 36.7% of sales. Gross profit reflects an estimated 170 basis point increase in merchandise margin, including a 130 basis point improvement from freight expense and a 40 basis point improvement from product margin. We anticipate 180 basis points of deleverage in buying occupancy and distribution center costs. We now project 370 basis points of growth and Exclusive brand penetration for the full year, bringing our total penetration to 37.7%. Our income from operations is expected to be $198 million or 11.9% of sales. We expect net income for fiscal 2024 to be $146 million and earnings per diluted share to be $4.75. I'd now like to talk about our fiscal year 2025 that begins on March 31. While it is premature to fully outline our guidance for next year, we thought it would be helpful to share our thoughts on select components of the P&L as we get ready to begin our annual budget planning process. During fiscal year 2025, we again plan to open 15% new units, and these new stores are expected to generate at least $3 million of sales during the first 12 months of business. We expect to achieve approximately 25 basis points of product margin expansion through Exclusive brand penetration growth and better economies of scale with our vendor partners. Additionally, we expect to see a reduction in our overall supply chain costs that will benefit our merchandise margin beyond the 25 basis points of product margin expansion I just mentioned. These improvements are part of our larger efforts to manage expenses and drive efficiency in the business. As we look to SG&A expenses, we have outgrown our corporate office building in Irvine, California, which we first moved into in 2016. We've signed a lease for a building nearby and will move during the third or fourth quarter of fiscal 2025. The increased lease costs and associated depreciation will put some pressure on the SG&A line. We will provide more detailed financial projections on our May earnings call. Now I would like to turn the call back to Jim for some closing remarks. Thank you, Jim. We are pleased with our ability to execute during the third quarter. We were able to grow sales and earnings despite a negative same-store sales result. Further, it is encouraging to see that there has been only a modest decline in our average store sales volume since the outsized increase that began in March of 2021. I'm very proud of the team across the country. I want to thank you all for your dedication to Boot Barn. Now I'd like to open the call to take your questions. Camilla? Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, today's call is scheduled for one hour, so please limit yourself to one question and to one follow-up. Our first question will come from the line of Matthew Boss with JP Morgan. Please proceed with your question. Great, thanks. So maybe first question, Jim, near term, could you elaborate on the regional improvement that you cited in January sales relative to November, December, outside of weather, maybe at a category level? And then just to follow up on your, on the total company average unit volume. So multi-year, you've seen average unit volumes move from, I think it was $2.6 million pre-pandemic, to a peak of a bit over $4 million, and I think we're, you know, just under $4 million today. I guess, what do you see as the sustainable AUV for the company going forward, and what supports the structural improvement? Sure. On the first one, your first question was around sales by week in January, and actually it was sales by week in January by category. Essentially, what happened was weeks one and four had temperate weather. Weeks two and three, we had the winter storm that went across most of the country. The two regions for us, the West, which is Arizona and California and Nevada and a couple of others, and the South, which is Texas and a few other states, didn't feel the weather quite as much as the other two regions. So their business actually improved by about five points sequentially from the holiday quarter. The other two regions, we had just - an d as you know, Matt, we almost never call out weather. In this case, we had stores closing early or not opening at all, and we had a lot of customers that couldn't get out and drive to stores. So those two regions, our North region and our East region, their business decelerated by 4 points of comp from the third quarter. So we, as I said in my prepared remarks, we believe that the overall tone of the business has improved from the holiday quarter. In terms of your second question around average unit volume, I think your before number is in the ballpark. We used to be $2.6 million. Actually, if you go back just 5 years or something, we're $2.2 million. And then we've, you know, grown to much more than that. Well, one of the ways to think about it is, we looked at a base of stores that were open in Q3 of fiscal 2020 or had been open. We looked at a comp base, if you will, of 234 stores, and those stores were at $2.9 million average unit volume. Those same stores are now at $4.4 million average unit volume. So that 2.9 went to 4.4 for that base of stores, and I think that's greater than a 50% increase, right? 1, 1.5 on 2.9. I like doing math live with 300 people listening. If we want to think of the whole chain and what our average unit volume is going forward, it's still north of 4. Embedded in your question is what's driven that. The single biggest thing that's driven that is we've added customers tremendously over the last 4 or 5 years in total. Of course, part of that driven by new stores, but also on a comp store basis, or a customer count on a comp store basis is up approximately 50% also. When you put all those facts together, we look at the business over an extended period of time and see nothing but tremendous growth. On a year-to-date basis, we're down roughly 6% on a in our retail stores. When we cycle, you know, a +2 and a +57, we actually feel pretty good about that number. Got it. And then maybe, for Jim Watkins, just on flow-through in the model, could you elaborate on the magnitude of buying an occupancy and SG&A deleverage in the fourth quarter? And just how best to size up as we think multi-year, the magnitude of the supply chain efficiencies you cited, and how that may impact fixed cost leverage hurdles in the model moving forward? Sure. Yeah, so as we look to the fourth quarter, you're right. Given that 14-week period, we do have higher, you know, deleverage. And so if I look to the high end of the guide, and again, I'd point you to the slide on page 20, where we kind of go through the different components of that. But it's 310 basis points of buying occupancy in DC deleverage, you know, during that fourth quarter. And then as we look to SG&A for the same period, the OpEx, you know, it's 340 basis points. And the one thing I would remind you on, particularly around the SG&A deleverage, it's a little more outsized. Part of that is because of some unique factors that are working against us. You know, besides the negative same-store sales for the quarter and the 14-week period, you'll remember last year in the fourth quarter when we gave our report on that, as our sales turned negative, as we got out of January and went into February, and they deteriorated a little bit more as we got into March. We pulled back on several expenses such as marketing, and then we reversed incentive-based compensation. And so, you know, those are things that create a little bit more deleverage as we get into the fourth quarter around SG&A. As far as the magnitude of the supply chain improvements that we're expecting to see as we get into next year, you know, we'll give you more color on that and how they impact the leverage points. But the way I would, you know, model those out right now is around $6 million of an annual run rate in next year. You know, again, we'll give you more color on that as we look beyond, but that should be something that continues with us as we get into the years beyond fiscal 2025. Great. That's great color. Thanks again. Best of luck. Thanks, Matt. Thanks, Matt. Thank you. Your next question comes from the line of Steven Zaccone with Citi. Please proceed with your question. Great. Good afternoon. Thanks for taking my question. I wanted to follow up on Matt's question and maybe drill down on the preliminary commentary you gave about fiscal 2025. So you gave some details there, but I was curious for how you think about the potential recovery in same-store sales. You know, do you see that being transaction driven? You know, how do you think about that happening by category? Do you need a discretionary business to get a bit, a bit better? Any sort of commentary you'd give would be, would be appreciated. Sure. Yeah. As we look to on the same-store sales guide for the year, again, it's a little early for us to guide that, so we're not providing a lot of commentary around that. As far as the recovery goes, you know, if we look at the components, you know, the average unit retail, you know, I think a lot of the big price increases are behind us. You know, a low single digit increase in AUR is probably what the way I think about that. And so any recovery that we see as we get into next year, we would expect to be transaction based, in nature. From a category perspective, does it - I guess from a discretionary standpoint, that's been your most challenged category? Do you think that needs to stabilize, or could we, you know, start to see that improve at some point? How do you think about that? I think it's a good question. I think the Ladies businesses, which in an abbreviated way, we call all discretionary, which isn't completely true, but that business has been a drag on recent same-store sales, and we'd like that to get back to even just flat, so it's less of a drag. We do think that business has some unique challenges, simply in the sense that we're cycling just giant numbers, you know, 100% comp in the ladies business a couple of years ago. So that, if that can get back to, you know, low single digit declines or flat, that would help the overall math, of course. What we'd really like to see, though, is we've, when we look at our third quarter, the declines were broad-based, so ladies was worse, but most of the other businesses also were down on a comp basis. So going forward, I do think there's some optimism that our core customer is relatively healthy and is mostly employed. I think they are feeling the impacts of inflation still, and I think there is an overall concern around the economy, maybe geopolitical factors, et cetera. So I think there is a tendency to push off spending, but I don't think there's any endemic challenges with the health of our customer. So as we look into fiscal 2025, I think there's a possibility that we'll get back to positive comps over the next few quarters. Okay, thanks for the detail. Thank you. Our next question comes from the line of Max Rakhlenko with TD Cowen. Please proceed with your question. Great, thanks a lot. Jim, just curious if you could actually elaborate on that last comment. Just any color on when you think comps could flip positive as the underlying trends do appear to be improving, and then compares will ease pretty meaningfully, sequentially over the next couple of months? Max, I wish I could give you a date, a month, a quarter. It's very difficult to predict comps going forward, and I recognize that's very important to the folks on this call. What we can predict with a fairly high degree of certainty is we're gonna open 50 or 60 stores next year. They're gonna do $3 million or more. We think we still have the opportunity to grow merchandise margin. We still are by far the biggest company in the industry. So while I can't give you a specific day or timing for reversion to positive same-store sales growth, nearly everything else in the business is just operating extraordinarily well. So we'll manage our inventory levels based on the same-store sales trend that we're currently facing. We were able to continue to grow merchandise margin even in a negative same-store sales environment. We haven't built up a tremendous amount of clearance markdowns, so we're managing through the current sales trend, I think, extremely well. And for the folks that work for the company, we all recognize that, you know, we've had sort of a once-in-a-lifetime uptick in sales a couple of years ago, and to give back just a small portion of it really hasn't bothered the company. And again, I recognize that the folks on the call that trade, buy, and sell the stock based on the most recent quarter same-store sales, that may not give you a lot of comfort, but overall, the company is still pretty darn healthy. Got it. That's helpful. And then just on the new store economics, is it fair to assume that you now view $3 million as potentially trough level? And then just any color on dispersion between maybe some of the faster and slower ramping stores? And then just within that, if we are closer to the bottom, how are you thinking that the new store waterfall could look like ahead? So there's a few things embedded in that question. The new stores and the new store volumes are just every bit of it is a home run success, right? So historically, we would think a new store would open at $1.7 million and pay back in 3 years, and that was a great growth vehicle for us and we were happy about it, and Wall Street was happy about it. To some degree, we've been a victim of our success because we spiked that number up to $3.5 million, and now it's at $3.3 million. I don't view that as a bottom. It could go down, it could go up from there. What I do know is it's a 60% cash-on-cash return, which is double what we had promised when we first went public, and we'll continue to open stores in a very accelerated way. In terms of the new store waterfall, if the stores were opening at $1.7 million, we would really want them to start growing into an average store volume over time and get up to $3 million someday. But they're not. They're opening at double that. And while we'd love the waterfall to start right away, I'd circle back to my comment a minute ago, to some degree, we're a victim of our own success, where they're opening up at extremely strong volumes, and in their first year, the ones that just turned comp are comping kind of in line with the company's trend. One of the reasons for that, if you want to think about it category by category, is oftentimes our new stores have outsized success on the ladies' side of the business when they open. And because the ladies' business is under pressure from a bit of a fashion cycle, we think that's one of the reasons why we're not seeing the waterfall. Well, once again, recognizing that Wall Street does tend to be extremely focused on same-store sales, we're actually not that worried about that. We're getting more volume faster and a higher return on capital than we ever expected we could. And if we give a little bit of that back in the second year, that's fine. I mean, I suppose we could do something to constrain the first-year sales, so we'd go back to the waterfall, but, I don't think we have plans to do that. I appreciate that color. Thanks a lot, guys. Of course. Thanks, Max. Thank you. Our next question comes from the line of Jason Haas with Bank of America. Please proceed with your question. Hey, good afternoon, and thanks for taking my questions. I was curious if you could provide some color on how you thought through the comp guidance for fiscal 4Q, since it does seem to imply a deceleration through the quarter on a 2-year stack basis. And, you know, I'm especially curious about it because you talked about January being impacted by weather. Sure. Yeah, Jason, so in guiding the fourth quarter, we followed the same approach we've been using all year, which is to apply the historical seasonality of the business to the most recent sales. And while it hasn't been perfect, this has been a much better predictor of the business than looking at a two- or a three-year stack. And in this case, you know, we used the recent non-holiday sales, so really October, November, and January, and applied the historical seasonality of the business. And when we talk about using the historical seasonality, in this case, you know, we tried to exclude the COVID noise and looked at last year, the year before, and then two of the pre-COVID years and kind of blended out how the flow of those sales rolled out, you know, from the month of January, and that's what we used to project out the rest of the quarter. Interestingly enough, when you use just the January's business and exclude October and November and roll that forward to February, March, you get to almost an identical answer in the guide. So we've continued to look at it based off kind of the recent business and historical seasonality, and it's kicks out a number, and oftentimes it's not what you would expect when looking at a multi-year trend, but it's been a little bit more reliable. Got it. That's helpful. And then as a follow-up, I was curious if you could give us your sourcing exposure to China, since there's some talk about potential for more tariffs coming in. So I'm curious how that would impact you and the industry overall. Yeah, generally speaking, or rough numbers, about half of what we sell comes from China, about 25% from Mexico, and the balance coming from the US and other countries. Got it. That's helpful. Thank you. I would add to Jim's comment, we've lived through a tariff environment before, and it didn't really impact us, and we certainly would prefer that that doesn't come back to us. That said, it certainly doesn't make us uniquely less competitive in the industry. We could actually construct an argument that it makes us more competitive because we're the biggest player, we have Exclusive brands that are margin drivers, et cetera. So it's something we're watching and being cognizant of, but I don't think it's really keeping us awake at night either. Got it. Thank you. That makes sense. Thanks, Jason. Thank you. Our next question comes from the line of Dylan Carden with William Blair. Please proceed with your question. Thanks a lot. Just in anticipation that those comments on private label penetration flat to down in the fourth quarter might raise some eyebrows, any more color you can add there? It sounds like you're anticipating back to growth next year, but anything that would be helpful then? Sure. I wouldn't worry really at all about the Exclusive brand. It's not weaker brands or bad product. It's the result of arithmetic, essentially. So our businesses are penetrated at different levels, and our ladies businesses are penetrated the highest with Exclusive brands. And because those are a smaller portion of our sales in this quarter, because they're comping down more, it's taking the Exclusive brand penetration down with it, that we're facing 300 basis points of headwind in penetration simply due to the composition of the business. If said differently, if the composition of sales didn't change in the quarter, we would have seen, we'd be projecting growth for this particular quarter in Exclusive brands. So I hope that answers the question. I mean, it's, of course, we'd prefer to have growth. We get more margin that way. It helps build our merchandise margin, but it's truly just a result of the math of the business. And I think we also have other abilities to grow our merchandise margin in addition to Exclusive brands. And Dylan, as we look into fiscal 2025, we are planning on returning to growth and Exclusive brand penetration, right? So this is a one-quarter, you know, drag on the business. Great. And it kind of bleeds into another question around - o ne way to think about the unit volume question, perhaps, is what business you're losing. And as you kind of look through some of the categories where you've been weaker, obviously women's, do you feel like you're reaching a point where the discretionary nature of some of the what's remaining or just the behavior of newer customers or anything to kind of give you some comfort in and around how much more in theory you could lose? Does that make sense? It does. I think we continue to have a very solid base functional business. So all of work business, both men's and ladies, most of men's western business is functional, and a portion of our ladies business is functional. So the bit that is more cyclical, perhaps caught up in a fashion cycle a couple of years ago, it could still decline further, and we still have fashion ladies business in the store and still are doing some relatively significant sales there, but it's tempered to a large extent by the overall business that does tend to be much more functional. So I don't think we're necessarily out of the woods in the ladies business yet. I do think at some point, we'll probably, in the next few quarters, start to see that trend improve and hopefully get to flatten, perhaps positive after that. But I don't think that's gonna happen in the next, you know, one or two quarters. Understood. Thanks a lot, guys. Thank you. Our next question comes from the line of Janine Stichter with BTIG. Please proceed with your question. Hi, everyone. Yeah, wanted to ask about the e-commerce business. It seems like it's still kind of hovering down in that, negative low double-digit range. Want to know how you think about the pieces of the business that are not the bootbarn.com business. Remind us of the strategic importance of having Sheplers, Country Outfitter, the Amazon business, and then would love to hear just how you're thinking about driving that business into next year. We're hearing of ad rates continuing to push higher, so how do you think about how that business evolves, just in light of maybe higher costs on ad spend into next year? Thank you. Sure. Very good question. So, the four pieces, bootbarn.com, of course, is an extension of the store, and we do really pride ourselves on that omni-channel experience, and I think those two channels have been stitched together quite well, and they also share the same retail prices. sheplers.com, true to its heritage, is a very price-conscious customer and oftentimes, frankly, has a lower price than bootbarn.com. And we like that brand because it enables us to compete against other online players that are playing a price game. So that's kind of the Sheplers' strategic importance. Country Outfitter was an acquisition several years ago. It tends to be focused on ladies' fashion, which is one of the reasons why it's having so much difficulty right now. We do think there is some long-term possibility for that business to get back to growth. It also gives us a testing ground for trying new things without impacting the two bigger business. The Amazon business is, I think, a necessary evil. We sell some product on there, so do a lot of other people. It tends to be a low-margin business, for us, but still profitable. So we participate in sort of the behemoth of Amazon, and that business gives us a read on sort of the general public demand that might be more casual purchasers of our product. In terms of the future of the online business and the growth, the online spend and the inefficiency of that is real. We could quite easily get more sales and spend more money, and those sales would be EBIT eroding, so we just don't do it. So we manage it somewhat algorithmically. I do think that will normalize at some point. There'll be sort of a new equilibrium. That is another business, though, when we look at a historical perspective, it's grown extremely strongly over a few years, and while we'd like it to get back to positive sales, the fact that it's giving a portion of the business back, after such outsized growth, you know, might be kind of expected, but we do think it can get back to positive sometime in fiscal 2025. Perfect. Thank you. And then just wanted to follow up on the tariff question. Do you have an estimate of what you directly import from China? I understand that I think you said half of your products are from China, but only a portion of that is directly- That's correct. Yeah, it's similar with the Exclusive brands. Yeah, between Exclusive brands and third party, it's still about 50%. Perfect. Thank you. So it's - Best of luck. The direct import would be half of - Thirty-seven. 37%, roughly. Got it. Thank you very much. Great. Thank you. Our next question comes from the line of Jonathan Komp with Baird. Please proceed with your question. Yeah. Hi, thank you. Maybe just to follow up once more. When you run through the exercise and look at the sales volumes that you called out for projecting the fourth quarter, sales and comps, could you just share a little more insight? When you do that same exercise, you, what does that inform you to, you know, when the comps of the business could turn back positive, and how should we think about, you know, any swing factors one way or another? Sure. You know, it's encouraging as we look to, you know, this current quarter, and while it's a deceleration on a two-year stack and maybe a couple other stacks if we go back far enough, in the February and March period, you know, we're guiding that business in the stores to be, you know, -4 or -5, right? And so that's an improvement off of what we've seen, you know, more recently. And so that's encouraging. I would also say, I think if you go back a couple quarters, we talked about this time period where February, March, April, over the last several years, has had a lot of macro noise in it between, you know, COVID and Omicron and tax stimulus and- tax refund payments and different things in there. And so it is a little bit harder to read kind of where that business is going. But what I would say is, you know, February and March of last year, so just a year ago, we did see a slowing in the trend of the business, that was abnormal for the seasonality of that. So as we're planning this year and at least getting through February and March, you know, if there's any kind of reversion back to what's been normal, you know, there's some upside to February, March, and that would be encouraging as well as we look to fiscal 2025. It's a long way to not answer your question Jon, but, you know, as we look to fiscal 2025, I think we really just have to get through the next, you know, three months or so to give you a better read on when that, you know, turns positive. Yeah, that's helpful color. Maybe just a couple of follow-ups quickly. The fourth quarter, Jim, could you just confirm? It looks like maybe the implied product margin is a little lower today than it was previously, even after you account for the Exclusive brand update you gave. So I just want to confirm if that's the case, if anything's changing on the product margin side. And then just to clarify that SG&A comments for fiscal 2025, are you implying you still need, you know, more than a 4% comp to leverage? You know, that's similar to, you know, how the setup was in 2024. Just trying to read kind of the reason for giving that commentary today on the SG&A. Sure. Thank you. Sure. So yeah, no problem, Jon. So on the product margin for Q4, we're guiding that +20 basis points year-over-year on the product margin, and the freight would be 140 basis points. And so despite flat to maybe a little bit negative E xclusive brand penetration, we still expect that to grow from better economies of scale. And then as we look to fiscal 2025 on the SG&A side of things, oh, I guess I'll talk to both the buying and occupancy and SG&A. On buying and occupancy, we had talked about kind of that 4% comp needed to leverage buying and occupancy. We'll update you to see or to let you know if there are any changes to that as we get to next year. Assuming that there are not changes to that, then the benefits we called out on supply chain, you know, would help lower that leverage point. But it's too early to kind of say, you know, before we've done our full buildup of next year's budget, you know, whether that is 4%, you know, precisely for next year or not. And then on SG&A, that, you know, the leverage point there, same-store sales required to get leverage at SG&A, you know, has historically been at 2.5%. Called out the, you know, the new corporate building, we'll put some pressure on that. You know, that's going to be a, you know, again, it's still a little early to tell, but similarly, you know, probably a $5 million-$6 million hurt on SG&A next year. But again, we're working on things that will, you know, help offset some of that, hopefully. And we'll give you an update on kind of what that leverage point looks like as we get into next year, you know, on our May call. Understood. Thanks again. Thanks, Jon. Thanks, Jon. Thank you. Our next question comes from the line of Jeremy Hamblin with Craig-Hallum. Please proceed with your question. Thanks for taking the questions. And just wanted to start with the new store openings. I think I caught in the script that you were expecting for FQ4, that all of the openings for the March quarter were gonna be in the back half of the quarter. And then, you know, just if you could provide a little bit color on that. And then related, as we look ahead to your commentary on FY 25 unit growth, is there anything notable that you would point out on the expected cadence of those openings? I think you recounted the script comments. We are backloaded into this quarter. In terms of our fiscal 2025, at the risk of laying out guidance that we're certainly not prepared to do today, we'll do on the next call. There's nothing unique to call out that they're all gonna be in the first quarter or all gonna be in the last. You know, we're gonna try to make them relatively spread out throughout the year. So nothing specific to call out. I would just add Jeremy, the pipeline's healthy. We've got a lot of leases that we've signed, and so we're headed into next year with a very healthy pipeline. Got it. And then, if I could just dig in a little bit here on the new headquarters, which, you know, I guess the move is expected, Q3 or Q4 of fiscal 2025. You know, what is the annual lease cost, higher than what you currently are paying? And then what is the expected depreciation on an annualized basis? Yeah. So, it's still a little early to give you all of those costs because we're, you know, we haven't built out the property yet and the space. But the number I just threw out there, $5 million-$6 million, would be the P&L expense for next year, and that includes, you know, the increased lease costs. And it's important to point out that, you know, when we moved into this building that we're currently in, you know, several years ago, we're a much smaller organization where we just don't fit anymore. And so it will - i 's a bigger building. the lease costs, you know, are higher, you know, just given that it's a new lease as well. Included in that $6 million, though, is a period of some double rent, some depreciation that starts later in the year. And my expectation as we get into the following year, you know, this $5 million-$6 million will likely be a little bit lower than that, kind of on a run rate basis, as we, you know, we'll incur some costs that are more one-time in nature this year in moving. So again, the purpose of calling that out was that, you know, we'll have some benefits in, you know, some of our supply chain costs to the tune of $6 million and a little bit of a drag due to the corporate office building and the SG&A line. It's kind of a neutral between the two, but it may create a little geography work for you and your models, and wanted to just make sure you're aware of that. Got it. That's helpful. Best of luck. Thank you. Thank you. Thank you. Our next question comes from the line of Jeff Lick with B. Riley Securities. Please proceed with your question. Thanks for squeezing me in. Jim Conroy, I was wondering if, you know, by my math, it seems like, you know, you've taken your Q4 guidance down by about $23 million. I'm just curious, relative to when you previously gave kind of the implied guidance, you know, if you could just elaborate on, you know, what, what's changed in terms of your thoughts over that time period? And then, you know, another quick question would be, could you give us, as it relates to the new store openings in kind of nontraditional markets, I was wondering, you know, usually you have a couple of good anecdotes like you did with Scottsdale, if there's anything that just kind of shows how the concept is resonating in, you know, places like Connecticut or New Hampshire. Well, I'll take the one on new stores, and Jim Watkins can take the one on the guidance for Q4. The new stores are working pretty much everywhere in new markets and in legacy markets. I think the Phoenix/Scottsdale example that you might be alluding to is we used to have 4 stores there. Now we have 8 stores there, and with more and more development opportunities, in our view, are still there. And you know, those four stores used to, you know, their volume has gone up. We've comped up while we're adding stores there. So we've kind of learned that we can continue to build out legacy markets and have it be net new business and not erode our comp. We've also been able to open up in the Northeast and have had some real nice successes in markets that wouldn't traditionally be considered Western. Yeah, on the first part of your question, the change in the Q4 sales, the $23 million, is really a function of, you know, when we guided in, you know, November second on the, you know, we had the October business done, and we guided based off of kind of late September, October business. And unfortunately, you know, things softened a little bit more in the sales trend as we got, you know, particularly into December, more than what we had anticipated. And so we've and January was softer than what we had anticipated also. So we've just rolled that forward based off of, you know, what we've seen in the recent business. Yeah, and I'm assuming, I guess what I was looking for is, that's primarily the, you know, the ladies business or, you know, what you'd call the discretionary fashion business? Yeah. I mean, it's kind of a broad base, just lower than what we had thought. It's not that, you know, that one business got, you know, significantly worse and everything else kind of stayed the same, but it's more broad based than that. Okay, great. Thanks for taking my question, and best of luck. Look forward to chat with you soon. All right. Thanks, Jeff. Thank you. As we are coming up on the one-hour limit, our final question will come from the line of Mitch Kummetz with Seaport Global Securities. Please proceed with your question. Yes, thanks for taking my questions. A few things. One, I was hoping to get a little bit more clarity on the January comp. I do appreciate the regional breakout, given the weather, but Jim Conroy, I think you said that like weeks one and four were pretty normal weather-wise across the country. When you sort of isolate those weeks, was your store comp kind of in that low to mid-single digit range, or is there anything more you can say about, you know, those sort of non-weather impacted weeks? Yeah. So January in total was -8-ish and the non-weather impacted businesses were low single digit negative. And then, of course, the others were double-digit negative, with some markets just getting, you know, really, really hurt with the weather. So that's the color I'd provide. Okay. Could you say what your Ladies comp was for January or for the first four weeks of the quarter? In line with Q3. Maybe a little bit worse. Not, you know, the least functional of our businesses. Certainly somebody making a special trip during difficult weather to go buy. Okay. So implying a slight erosion or deterioration sequentially from our Q3 business. And then I guess lastly, just given your comments around Exclusive brands penetration in the fourth quarter and how that business skews to the ladies. The fact that you expect the penetration to be down, does that suggest that there's going to be a bigger delta in your performance between kind of ladies and non-ladies of the fourth quarter than what you've seen sort of year to date? Is that the right kind of takeaway from those comments? I feel like I'm doing a math problem with my son. It's a fair hypothesis. I think that what's the reason we called it out this time is because it pushed the penetration from positive to negative, right? We. If you work back to the most recent quarter, we had the same dynamic, but because Exclusive brands still grew 3 points, we. I suppose we could have called out that it would have grown, I'm making this number up, but 500 basis points rather than 300 basis points. But for comps, we just didn't, because we didn't think it was going to raise any eyebrows. We had a feeling that when we called out that Exclusive brands could decline from a penetration standpoint in this particular quarter, we worked up the math. I wouldn't read anything further into that other than the fact that because it pushed it to a decline rather than an improvement in penetration, we thought it was important to call out. Okay, fair enough. All right, thanks, and good luck. Thanks, Mitch. Thank you. We have reached the end of our question and answer session, and I would like to turn the floor back over to Mr. Jim Conroy for closing comments. Thank you, everyone, for joining the call today. We look forward to speaking with you on our fourth quarter earnings call. Take care. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.