Good morning, and welcome to the Caleres Second Quarter 2023 Earnings conference call. My name is Daryl, and I will be your conference coordinator for today. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the prepared remarks. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I would like to turn the call over to Logan Bonacorsi, Vice President of Investor Relations. Please go ahead. Good morning. Thank you for joining our Second Quarter 2023 Earnings call and webcast. A press release with detailed financial tables, as well as our quarterly slide presentation, are available at Caleres.com. Please be aware today's discussion contains forward-looking statements which are subject to a number of risks and uncertainties. Actual results may differ materially due to various risk factors, including, but not limited to, the factors disclosed in the company's Form 10-K and other filings with the U.S. Securities and Exchange Commission. Please refer to today's press release and our SEC filings for more information on risk factors and other factors which could impact forward-looking statements. Copies of these reports are available online. In discussing the results of our operations, we will be providing and referring to certain non-GAAP financial measures. You can find additional information regarding these non-GAAP financial measures, as well as others used in today's earnings release and our presentation on the investor section of our website. The company undertakes no obligation to update any information discussed in this call at any time. Joining me on the call today are Jay Schmidt, President and CEO, and Jack Calandra, Senior Vice President and CFO. We will begin this morning's call with our prepared remarks, and thereafter, we will be happy to take your questions. I would now like to turn the call over to Jay. Jay? Thank you, Logan, and good morning, everyone. Once again, the Caleres team performed at a high level during the second quarter of 2023, delivering strong financial and operational results despite the challenging consumer demand environment. We leveraged our diversified structure, our powerful brands, and our enhanced omni capabilities to drive earnings per share above the high end of our guidance range. This gain was achieved even with sales modestly below our initial expectations, because we prioritized profitability and generated strong consolidated operating margins. Our ability to deliver bottom-line results in a choppy consumer market demonstrates the desirability of our brands and the success of our efforts to tighten inventory and reduce promotion across our businesses. We have also reduced expenses across the enterprise. These actions have yielded a fundamentally healthier Caleres. Indeed, we believe our diversified model and operational discipline sets us up to drive value in a variety of market conditions. The structural improvements we've implemented over the last several years, coupled with our focus on cost control and commitment to our strategic initiatives, positions us well for sustainable long-term growth. Now let's turn to some key highlights in the second quarter. We delivered adjusted earnings per share of $0.98. We grew market share in our lead brands, Sam Edelman, Allen Edmonds, Naturalizer, and Vionic. We increased Famous Footwear's market share in shoe chains. We generated record second quarter gross margins in the brand portfolio. We achieved sequential improvement from the first quarter in the year-over-year sales trend at both Famous and brand portfolio. We maximized our inventory levels and managed them well, ending the period approximately 14% below 2022. We invested in consumer experience, analytics, and marketing, areas that are key to accelerate our strategic growth initiatives. We returned approximately $20 million to shareholders via share repurchases and the quarterly dividend. We utilized our free cash flow to reduce the borrowings under our asset-based revolving credit facility by $48 million from first quarter of 2023. This also represents a $105 million year-over-year decline in our borrowings. In recent years, we have prioritized debt reduction after funding our dividend as the top priority for free cash flow. During the second quarter, we reached our leverage ratio target of 1x debt to EBITDA. We anticipate strong levels of cash generation, and Jack will cover our capital priorities in more detail in a few moments. Now let's move to our second quarter operating results. Overall, consolidated sales declined 5.8%, falling short of our expectations. Famous Footwear sales were about in line with our expectations, while brand portfolio revenues were somewhat below our initial view. Despite this, we generated strong consolidated gross margins of more than 45%. This was driven by continued improvement in the brand portfolio's gross margin, as well as rigorous cost management across both segments. Faced with softer demand, we chose to prioritize profitability over promotions, as a result of all of these efforts, we achieved solid second quarter operating earnings. Now let's turn to our operating segments, starting with the brand portfolio, which remains on track to deliver an increased earnings contribution this year in both dollars and rate. During the quarter, we experienced some seasonal weakness in sandals as consumers prioritized casual flats and sneakers. We also saw conservative ordering patterns by our wholesale partners. As you may remember, last year, consumer demand surged as restrictions were lifted, and our wholesale partners built their inventories. As we move into the back half of 2023, though, these more difficult year-over-year comparisons ease, and we are ready with strong inventory in loafer, flat, and sneaker styles that our consumers desire. In contrast, our own channels performed well in the second quarter. Our own e-commerce sales were up 8% year-over-year, with standout performances from lead brands Allen Edmonds and Vionic. In addition, our brick-and-mortar business climbed more than 16% compared to the prior year. We continue to maximize top-selling items and get the consumer what they want and faster by leaning into our Edit to Win initiative and utilizing our Speed Program that takes advantage of the fully recovered supply chain network. It's worth noting here that our speed capabilities enable us to pivot quickly in this dynamic market environment, and we are closing in on our goal of speed orders representing 20% of our inventory purchases. As a result, the brand portfolio delivered second quarter adjusted operating earnings of $28 million and achieved a 9% operating margin. This performance was driven by a 295 basis point improvement in gross margins due to higher initial margins, lower freight costs, and strong inventory management. We believe our inventory is aligned with our top-line trends due to careful category planning. This benefits our wholesale partners as well, leading to healthier business across all channels, and this sets the stage for a stronger second half for the segment. Now to the performance of our lead brands. As we indicated last quarter, our lead brands have significant growth potential, and we are strategically investing in these lead brands to power growth. We expect these brands will represent a higher percent of our total Caleres revenue in 2023, with opportunities to increase that penetration further over the long term via a number of different growth vectors. Starting with Allen Edmonds, the brand delivered its 10th consecutive quarter of growth. Improvement was broad-based across all channels, with sales up mid-single digits compared to the second quarter last year. We saw strength in our direct channels with brick-and-mortar up 5% and e-commerce up 13%, driven by increased traffic and conversion. I am pleased to note that we've seen significant increases in the brand's average unit retail compared to pre-pandemic levels. There's a lot to be excited about at Allen Edmonds. Turning now to Vionic. Fresh off its new marketing campaign, emphasizing its Northern California roots, the brand saw a nice improvement in its e-commerce business during the second quarter. Early catalog performance helped deliver a +7% year-over-year increase in e-commerce, with newness, particularly loafers and white sneakers, driving the uplift. One of their new styles, the Uptown Moc, sold out during its spring launch and will be a top 10 style for fall. And Sam Edelman and Naturalizer continued to harness their significant brand strength to capture market share. For Sam Edelman, we saw strong consumer reaction to the brand's new Layla sneaker, as well as an impressive performance at retail with their flats. Naturalizer capitalized on the Caleres' speed-to-market capabilities I mentioned earlier, to accelerate delivery of the Morrison 2.0 sneaker, a new evolution of its best-selling lace-up sports shoe. Launched in early spring, this sneaker has grown to the number 2 style in the Naturalizer brand. In addition, Naturalizer had standout gross margin and operating contribution during the quarter. Now, we also had sales growth and profitability improvement from our portfolio brands, especially LifeStride, Franco Sarto, and Dr. Scholl's. As a reminder, these brands are growing assets within the portfolio that serve key consumer segments not currently served by our lead brands and benefit from our one Caleres capabilities. In each of these brands, the consumer responded to style, comfort, and value, and we even had a viral success in the Dr. Scholl's brand with the Time Off sneaker, which was a TikTok favorite, and I may add, sold 75,000 pairs at retail during the second quarter. Overall, the brand portfolio is performing well, with the first half of 2023 providing a solid foundation on which to build... as year-over-year comparison ease, we expect sales trends will improve, and more importantly, the brand portfolio will make a larger and more meaningful contribution to the total company's operating performance this year. Turning now to Famous Footwear. During the second quarter, Famous continued to navigate difficult spending trends among its target consumer and the challenging macroeconomic backdrop overall. Even in this environment, Famous outperformed its competitive set and increased market share in shoe chains. We saw strengthening sales trends as we moved through the quarter, and we delivered an expected sequential quarterly improvement in Q2. Our kids business, a key differentiator for Famous, was a bright spot again this quarter, increasing 5% over last year. Kids is an essential and growing category for Famous, and our focus paid off as families continued to prioritize purchases of kids' footwear. This strength is particularly important heading now into the back-to-school season. In total, Famous generated nearly $41 million in adjusted operating earnings on net sales down 5%, resulting in a return on sales of nearly 10%. Famous sustained its gross margin rate of 46% from the first quarter as we continue to be strategic around our promotional approach. About 50% of our business is now excluded from BOGO promotions, up from about 30% pre-pandemic. As we are with the brand portfolio, we are prioritizing the health of our business in Famous Footwear over trying to capture lower quality sales. Looking more closely at back-to-school, we executed a number of strategies to capitalize on this important demand opportunity. First, we focused on amplifying newness to drive excitement, interest, and relevance. Second, we approached inventory in a measured and agile manner. While we built up inventory behind key brands, styles, and patterns, we tightly managed our overall inventory position, which declined 2% compared to last year, in order to have the capacity to react aggressively to bestsellers in season. Finally, we continued to enhance, energize, and modernize the store experience through our new prototype stores. While we don't anticipate comping last year's record back-to-school period, we do believe Famous is uniquely positioned to maintain its leadership status in shoe chains and deliver a solid performance. Looking ahead, the Famous team is extremely focused on fueling what's working from a product, marketing, and digital perspective to maximize our earnings potential while managing inventory and expense levels. Overall, we believe in the power and agility of the brand and expect strong earnings in 2023 and beyond. In short, we continue to have great confidence in the long-term outlook for Famous, and we believe we can leverage our competitive advantages to accelerate our growth in this segment. These include our leadership position with kids and the millennial family, our leading assortment of national brands, our nationwide and largely off-mall retail footprint, and our elevated consumer experience in store and online. In summary, I'm extremely proud of our strong operational discipline and the financial performance we delivered in second quarter. I believe the most recent quarter underscored, yet again, the advantages of our diversified structure and the one Caleres model. We remain confident in our ability to achieve our annual sales and earnings guidance for the year. Our brands are strong and enduring, our strategies are clear and actionable, and our teams are dedicated to exceeding the expectations of our consumers in this dynamic marketplace. Moreover, we continue to believe the strong financial foundation we've built will enable us to consistently deliver our annual earnings baseline of more than $4 per share, while generating strong levels of free cash flow and creating long-term value for our shareholders. With that, I'll now hand it over to Jack for a more detailed view of our financials. Jack? Thanks, Jay, and good morning, everyone. We maintained strong financial discipline across the company in the second quarter. This resulted in earnings per share that exceeded the upper end of our guidance and healthy cash flow, which enabled us to reduce debt, invest in our critical growth initiatives, and return cash to shareholders. In today's call, I'll provide additional details on our second quarter performance, discuss the progress we've made on our cost reduction initiative, update you on our capital allocation plan and priorities, and share our outlook for the third quarter and full year. My comments will be on an adjusted basis. Please see today's press release for a reconciliation of adjusted results. Starting with Q2, consolidated sales were $696 million, a 5.8% decrease versus last year. At Famous, sales were down 5.1%, and comparable sales were down 4.3%. Sales declines versus last year improved each month of the quarter. Brand portfolio sales were $301 million, down 7.2% to last year, due to softness in seasonal categories, namely sandals and cautious buying behavior in the wholesale channel. While sales were down, we were able to protect margin with fewer markdowns and allowances. Consolidated gross margin decreased 45 basis points to 45.2%, which reflected an increase in brand portfolio gross margin, offset by a decrease in Famous gross margin. Brand portfolio gross margin was 41.3%, a 295 basis point increase versus last year. This gross margin was a record for the second quarter for the segment and was due to higher initial margins, lower ocean freight costs, and disciplined inventory management. Famous gross margin was 46.2%, a 273 basis point decline versus last year. This decline reflects lower initial margins and a more normalized level of clearance pricing and activity, given last year's clean inventory position. That said, clearance pricing and activity continued to compare favorably to 2019. SG&A expense was $263 million, or 37.8% of sales. SG&A expense was $5.6 million lower than last year from lower variable expenses and incentive compensation costs. Operating earnings were $51 million, and operating margin was 7.4%. Operating margin was 9.2% at brand portfolio and 9.9% at Famous. Net interest expense was $5.1 million, double versus last year, given a higher borrowing rate. The weighted average interest rate in Q2 was 6.7% versus 2.8% last year. Diluted earnings per share were $0.98, in excess of the high end of our guidance, and EBITDA was $65 million, or 9.4% of sales. Turning now to the balance sheet and cash flow. We ended the second quarter with $244 million in borrowings and no long-term debt. Inventory at the end of the second quarter was $661 million, down 14% versus last year, reflecting reductions in both in-transit and on-hand inventory due to both accelerated receipts last year in brand portfolio as supply chain challenges started to resolve and disciplined inventory management across the business. By segment, inventory at Famous was down 2% versus last year. At brand portfolio, inventory was down 26% versus last year. In general, we feel good about the amount and composition of inventory in both segments. Regarding cash flow from operations, we generated $88 million during the quarter and deployed cash for strategic investments in the business, paid our quarterly dividend, reduced borrowings on our asset-based revolver, and repurchased shares. Specifically, we spent $10.3 million on capital expenditures, $2.5 million on our quarterly dividend, $17.4 million to buy back 763,000 shares at an average price of $22.86, and $47.5 million to reduce our borrowings. With the Q2 paydown, borrowings are approximately $105 million below Q2 last year and down $64 million year to date. As Jay mentioned, we reached our target leverage ratio of 1x on a debt to trailing 12-month EBITDA basis. While we continue to evaluate our capital allocation options and maintain a flexible approach, we believe at this time, the best use of free cash flow is to continue to reduce our borrowings. This will allow us to reduce interest expense in this higher rate environment and maximize liquidity. That said, we view buybacks as an effective means of returning capital to shareholders, and with our valuation metrics still well below historical levels, we view Caleres stock as an attractive investment. We have 5.6 million shares remaining under our current board authorization, and we'll continue to consider share repurchases based on market conditions. Now, turning to our outlook. Given our performance year to date and our forecast for the second half, we continue to expect full-year earnings per share of $4.10-$4.30. In addition, we still anticipate consolidated sales to be down 3%-5%, including the impact of the fifty-third week, consolidated operating margin of 7.3%-7.5%. We still expect to generate $20 million of in-year savings and $30 million-$35 million on an annualized basis from our cost reduction actions. For the in-year savings, $3 million was realized in Q1, $7 million was realized in Q2, and the remaining $10 million will be realized in the second half. We continue to expect a one-time cash charge of about $4 million associated with this initiative. We took $1.6 million of that charge in the second quarter and expect to take the remaining charge in Q3. We still expect net interest expense of $17 million-$19 million, an effective tax rate of about 25%, and shares outstanding of approximately 34.3 million, which assumes no additional share repurchases this year. In addition, we now expect capital expenditures of $50 million-$60 million versus our previous revised guidance of $55 million-$65 million. This decline reflects an adjustment to the timing of certain projects, and we remain committed to investing in our strategic initiatives. Finally, we are providing the following guidance for the third quarter. We expect net sales to be down low single digits and earnings per share of $1.30-$1.35. With that, I'd like to turn the call over to the operator for questions. Operator? 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 your line is in the question queue. You may press star two if you would 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. We ask that you please limit yourself to one question and one follow-up question. One moment, please, while we poll for your questions. Our first questions come from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your questions. Hi, good morning. Good morning, afternoon, everyone. What a busy day so far. Can you talk a little bit about the puts and takes on the growth margin in the back half of the year across both businesses? How you're seeing it and planning as we go into the back half, and what you're thinking about in terms of promo versus full price, and is there any difference by category? Thank you. Yeah. Hi, Dana. This is Jack. Thank you for your question. You know, in terms... I'll take it by business segment. So in terms of Famous, the tailwinds in gross margin as we go into the back half include, I think, the disciplined inventory management that we've demonstrated. We do expect to have fewer days on promotion, but the headwinds there would include lower initial margins and the more normalized level of clearance activity and pricing that I mentioned earlier. For brand portfolio, I would say there's more tailwinds there than headwinds. The tailwinds there also include the disciplined inventory management that we've demonstrated. But there we have higher initial margins, continued ocean freight savings, and a higher contribution of sales from direct-to-consumer, which, as you know, is a more profitable business for us in that channel. Got it. Then as you're thinking about just as you went through this back-to-school season, any learnings from back to school that can inform for holiday on the merchandising side, what you, what you saw in either portfolio? And any thoughts on the wholesale division with branded portfolio, with some of those orders tightening, what do you see as getting the spigot to open again, or anything you're seeing from the wholesale accounts in particular? Thank you. Okay. Hi, Dana, this is Jay. We'll- Hi. Hi, Jay. Start with your brand portfolio question. You know, our ongoing disciplined approach to inventory management really helps us to chase these top-selling items in season through our speed programs, and we've been able to mitigate and navigate kind of some of the shifts in behavior. We saw a lot of positivity on the sneaker trend as we went into second quarter, and we're able to actually get enough inventory to make that a meaningful business as we walk into Q3. Our category business includes on flats and loafers. We're seeing really nice progress on that and really good sell-throughs on that, particularly with classic hardware and classics being so strong. And finally, there is some newness in the dress business with slingbacks coming in and really, particularly on low heels. So we're really focused on getting these right categories and then all the way down to the items to really help move this business back. And we still do get reorders from people on these really strong items selling. The conversation is very similar over at Famous Footwear. When we think about it, some of our biggest brands that are working well, that we're trying to get back into them. We saw really good strength with our Nike business continues to perform and continue to kids. Our Converse business is very strong. Hey Dude is working well for the brand during this period. And then, some really nice progress with New Balance, which we're excited about and looking to really expand that through as we get into third quarter. So there's a lot of that going through that we're working on. Clearly, though, when you look at Famous, our kids has been the differentiator, and, you know, we're seeing that, as we have continued to see, outpace the whole organization by almost, you know, almost 10 points, which is really exciting on that delta there. And, you know, that really is our competitive place. We outpace in the shoe chain channel in that category. We've done a lot of work on kids' marketing, and then also try-ons in stores, and really seeing some good reaction there as we focus on that business. So that's really the biggest learning so far that we've seen. Got it. And then, Jack, nice progress on the revolving credit, the debt paydown. What are you seeing for that going forward? And thank you. Yeah. Yeah. So, as I mentioned, Dana, you know, we've hit that 1x debt to EBITDA target that we had outlined. I think just, you know, given you know, certainly the continued macro uncertainty and consumer demand uncertainty, and also just the higher interest rates that we're paying. As I mentioned, you know, the average interest rate we paid in Q2 this year versus last year, I would say our most recent borrowings now are closer to 7%. And so I think those two reasons present a really compelling argument for continuing to pay that down. Obviously, we'll get some nice EPS benefit from continuing to reduce that interest expense. As you know, based on our guidance, we have somewhere between $0.34 and $0.38 of interest expense headwind in EPS. You know, we'll continue to focus on that in the near term. But again, as you know, we bought back shares in the second quarter, and so we are always, you know, looking to be flexible and opportunistic there. And I think the balance sheet that we now have gives us that ability. Thank you. Thank you. Thank you. Our next question has come from the line of Laura Champine with Loop Capital Markets. Please proceed with your questions. Good morning. I have a follow-on question about the brand portfolio business. Can you comment on anything of note within the different channels that you sell to on the wholesale side, and how you expect that to trend as we head into Q3? Maybe if you can comment on what you're seeing so far this quarter. Yeah. Hi, Laura, it's Jay. I will... Yeah, on the brand portfolio, we are seeing, I think our—as we said, our lead brands are continuing to taking share. Consumers are voting toward newness, and that's where we're seeing the prioritization there. You know, we sell in a dynamic way to some of our lead customers, so we sell both on, you know, brick and mortar upfront. We do a lot of direct-to-consumer online with them, and then we do work on a replenishment basis. So our model hasn't changed. We're continuing to see that demand for newness, but that's really what we're seeing so far. We did see, obviously, a dynamic shift if you compare it to last year, where we were selling a lot of ankle strap dress sandals and things to go out. And we're now seeing a shift more toward, I'd say, very versatile footwear in terms of these flats and other styles, and our customers are continuing to respond to that. But for sure, we're looking at it in a very dynamic mode right now. Lastly, as we said, our direct-to-consumer business on our brand portfolio was up nicely in the quarter, and we continue to work toward that. So that's how we're working with everyone, but it does, it's a very similar concept. We're just working with our partners in the same way. I guess I meant more about retail channels, meaning how are you using the off-pricers who continue to grow? And is there a significant difference in trends at department stores as opposed to specialty? That's the direction I was hoping to go. Oh, okay. So, just to refresh on that, our department store business for Q2 was down a little more than I would say other ones in the brick-and-mortar piece. You know, our shoe chain business was up in the quarter, which was nice. And then our off-price business is really more of a closeout piece for us right now. You know, so that has not been as big a piece for us. So that's what I would say for the quarter right now. That's where we saw in Q2, and we'll continue to watch that as we go forward. Got it. Thank you. Thank you. Our next question has come from the line of Mitch Kummetz with Seaport Research. Please proceed with your question. Yes, thanks for taking my questions. My first question is on Famous, and it does have a few parts. Jay, you mentioned that kids was up, I think you said five, and that was 10 points better than the business as a whole. Can you, can you tell us kind of how the rest of the Famous broke out, maybe casual versus dress versus athletic? Yeah. And then also on Famous. Well, maybe if you could just take that first. Okay. So, for sure, our casual business was better than our performance athletic business, the adult side. As we said, our kids business was up significantly, and then the other businesses, which were smaller, that we break out, dress was down, but that was a small piece of the total. Got it. Within athletics, though, our LifeStride business was particularly strong. And then, I mean, our lifestyle business, I should say, was particularly strong versus the performance piece of it right now. And then finally, Mitch, we did have, as I called out in the beginning, our sandal weakness was really, it's similar both across both channels, and it was down 11% in Famous, and in the brand portfolio, it was down a similar amount in our total shipments. Okay. Then on the comps, you know, you're -43. You said that sales declines improved each month. Can you say, you know, where you ended the quarter? Like, you know, what was comps in July, and have you seen continued improvement into August? And then I guess, lastly, in terms of that improvement, both, you know, 2Q versus 1Q, or even over the course of 2Q, you know, what would you attribute that to? Is some of it an improving macro, or is it just more a function of, you know, more newness in the product? So, Mitch, our comp did improve as we moved through the quarter. You know, May was our worst month. We improved in June, and then July significantly improved there, too. But when we look at ahead so far, based on what we know, our guidance for Famous really reflects, you know, really more this historic trend of where we've been, and we do think we'll deliver against that, that, that trend that we've put out there. And we've kind of built everything against that for the, certainly as we go into third quarter. Yeah, I would just, Okay. Just- Mitch, just to add to Jay's comments, as a reminder, you know, our back-to-school performance last year was a record performance. Mm-hmm. And so some of that comp, you know, we're up against some, some decent comps in the Famous business for back to school. Okay. Maybe, with that being said, Jack, on the 3Q guide, you said sales down low single digits. Can you provide any color on how you think about that between Famous and BP? And is there any change to your kind of overall outlook for the year between those two businesses? It did sound like maybe BP was a little slower than you expected in 2Q, and I don't know if that changed how you're thinking about that business as a whole for the year. Yeah, Mitch. So, we've you know, I would say our base case and our guidance for Famous is basically a continuation of what we saw in Q2, so call it that -5%. Obviously, you know, the guidance provides a range, and so if Famous does a little bit better, we're towards the higher end of that range, and a little bit worse, we'd be towards the lower end of that range. So I would say Famous is pretty well set on what we've seen pretty consistently for the year, because if we look at Q2, down five, and then if you take out March out of Q1, that quarter was also down five. So I would say pretty, pretty consistent performance, and that's what we've, that's what we've modeled. In the case of brand portfolio, that's where we're up against some really tough compares in the first quarter, I mean, in the first half. So in the first half of 2022, our brand portfolio business was up 41%, but then in the back half of 2022, only up 7%. And so part of our confidence, other than all the operating things that we've talked about in terms of inventory management and things of that, is we're just up against much easier comps going into the back half of this year on brand portfolio. Great. All right. Thank you. Thank you. Our next questions come from the line of Abbie Zvejnieks with Piper Sandler. Please proceed with your questions. Great. Thanks so much for taking my question. So just on the inventory, like, how should we be thinking about inventory levels for the balance of the year? And then, you know, how are you thinking about managing, bringing in this newness that's driving demand, versus, you know, keeping, you know, controlled inventory levels given the uncertain macro? So, Abbie, hi, it's Jay. Just in how we're managing inventory is really we're kind of setting up a new normal for us, and we're really managing to a new inventory turn. So, in looking at this, we really are driving newness continually. We think the consumer demands it, and we are chasing more product through our Speed Program, which is running at that goal, moving toward 20% of our receipts. So, we're not really seeing it as any detraction in terms of holding us back right now. And then the last thing I'll say is, in particular, in the brand portfolio, we had a lot of our product last year show way, way earlier up into second quarter than we had planned. So what you're gonna kind of see is a more balanced flow with us through this disciplined management, and we'll, I think, continue to be able to deliver the newness, but more importantly, chase it quickly. And that inventory amounts that we're now working on turn allow us to really pivot and react more aggressively. And then, Jack, I think you'd share some of the numbers there, too. Yeah, Abbie, thanks for the question. Just to add to Jay's comments, you know, for the back half, we expect to have lower inventory this year versus last year in both the third quarter and the fourth quarter. Now, they won't be down as much as they were in the first half, when they were down low teens, but we expect continued improvement, you know, year-over-year in that metric. You know, we're always focused on both the quantity and the quality of inventory, and certainly appreciate the importance of maintaining that healthy inventory-to-sales relationship. Got it. And then just one more on the brand portfolio. I guess, like, in this environment, I would assume that your wholesale partners, you know, are like that you, you know, have a good capabilities for Drop ship. Can you just talk about what you're doing in drop ship and if that's increased as a percentage of the business, you know, as wholesale orders have tightened? Thanks. Yeah. So we are funding our drop ship fully. It's a continued important portion of our business. Most likely, what we're seeing is our wholesale partners continue to want to receive newness in a very timely way, so they can react to it. And yes, they are acting more conservatively, but again, reacting more toward the real product that is working. So our model continues as it has been with a very dynamic piece with it, with both drop ship and then replenishment being a very important portion of this. And I think it's gonna be similar for us versus how we've operated in Q2 and Q1, so I'm not seeing a different shift for that as we go into Q3. Got it. Thank you. Thank you. Thank you. There are no further questions at this time. I would now like to turn the floor back over to Jay Schmidt for any closing comments. Okay. Well, I'd like to thank everyone for joining us this morning. Before we close today, I'd like to thank the talented Caleres team for their hard work and dedication. We remain confident in our ability to create exceptional product, to exceed our consumers' expectations, and drive value for our shareholders. We also look forward to providing you with some additional detail around our long-term growth strategies at our upcoming Investor Day in October. So with that, I'd just like to say have a great holiday and, we'll talk soon. Thank you. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.