Good morning, and welcome to the Duluth Holdings, Inc. Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star then two. Please note, this event is being recorded. I would now like to turn the conference over to Nitza McKee. Please go ahead. Thank you, and welcome to today's call to discuss Duluth Trading's third quarter financial results. Our earnings release, which was issued this morning, is available on our investor relations website at ir.duluthtrading.com under Press Releases. I'm here today with Sam Sato, President and Chief Executive Officer, and Mike Murphy, Vice President, Chief Accounting Officer, and Interim Chief Financial Officer. On today's call, management will provide prepared remarks, and then we will open the call to your questions. Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified by the use of words such as estimate, anticipate, expect, and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, and assumptions, and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in our most recent annual report on Form 10-K and other SEC filings, as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. With that, I'll turn the call over to Sam Sato, President and Chief Executive Officer. Sam? Thank you for joining today's call. Reflecting on what has remained a dynamic consumer environment in which we continue to see customers gravitating to value, our third quarter performance was hampered by lower traffic in both our direct and retail channels, as well as an under-penetrated position in spring, summer goods, following strong unit sell-throughs during the second quarter. In addition to managing the business prudently on both the inventory and expense fronts, we strategically pulsed a higher-than-planned level of events, combined with select pull forward of fall/winter receipts, enabling us to maintain high levels of in-store shopper conversion, as well as improve our conversion and retention rates in our direct channel. To be clear, we are not satisfied with our performance, and we've made adjustments to improve the trend in the business for the final quarter of the fiscal year. I'm pleased to report that we've experienced a solid improvement in business trends over the Black Friday through Cyber Monday period, which gives us confidence the tactical adjustments we are making are resonating with our customers. Let me outline at a high level the actions we're taking to improve our business performance. In the fourth quarter, we're introducing more new products than we ever have, as well as pulling forward select items from our Spring 2024 assortments. We're chasing, and in some cases, expediting freight for targeted best sellers to capitalize on these winning products throughout the holiday season, and we've added back global events and pulsed our Black Friday deals throughout November. Despite the challenging third quarter results, we registered notable merchandising wins, highlighting that our brand and sub-brands remain strong, and our product innovation engine is creating winning assortments. Key wins for the third quarter included continued strength in our garden, landscaping, and planting category, which now represents over 10% of our total women's business. Our Heirloom Garden Collection posted triple-digit growth in the quarter over last year, fueled by new prints and colors and expanding offering into extended sizes and a very successful lined version of the Heirloom Gardening Bib. The customer is loving the added warmth from the lined bib so she can wear her favorite overalls year-round. The Heirloom Gardening Bib is our newest hero product. In fact, this product is the first purchase for nearly 40% of all new female customers and is number one in organic search for the garden overalls, a clear indication that our apparel styles have a foothold in this space. We continue to see strength in women's bras, which posted another quarter of year-over-year growth of 50%. She's responding well to innovation in the bra category, with an emphasis on soft fabrications and the seamless look and feel. Our top collections include Armachillo, Adjust-A-Bust, and Free Range. Our newest bra, Armachillo Tee-Lux, which leverages our jade-infused Armachillo fabric and first-ever molded cup bra, has quickly become our number one style. Women's AKHG had another solid quarter of growth and increased by just under 20%. Customer continues to respond well to our Meltwater collection, and we're also seeing a strong start to outerwear sales, driven by the Puffin collection. We also introduced the first women's parka in AKHG, and she's loving the added length and new waterproof innovation.... Duluth continues to show strength in its core programs. Within men's, DuluthFlex Fire Hose and denim were up double digits. Supported by our pants destination marketing, our DuluthFlex Fire Hose pants delivered solid growth in the quarter, with notable strength in standard and slim fits, an indication that these fits are attracting a younger customer. Now, a brief review of our third quarter results. Total net sales for the third quarter were $138 million, down 6.1%, with our retail channel down 9% and our direct channel down 4%. As I mentioned, the third quarter was impacted by lower traffic across channels and our under-penetrated position in spring, summer goods during the first half of the quarter. To maintain brand integrity, we remained competitive with our offers, but made the strategic decision to limit the depth of discounts in the third quarter. And while this may have also contributed to lower top line sales, we believe holding the line on price integrity is paramount to the long-term health of our business. Further, our product gross margin declines to last year stabilized considerably in the third quarter, and the erosion that we did see was almost exclusively from mix, as customers shopped less at full price and gravitated to maximizing their spend during periods in which we post events. When looking across our full price, promotional, and clearance sales buckets, product gross margins were essentially flat to slightly up in each. We'll continue to balance our efforts in the fourth quarter to stay competitive and drive the business, while preserving the long-term price integrity of our brands. Mike will provide greater details on the P&L, but our net loss per share in the third quarter was $0.32, versus a loss of $0.19 in the third quarter last year. As our teams continue to optimize efficiencies in our marketing spend, and with customers gravitating to a greater mix of promotional sales throughout the quarter, we made the strategic decision to pull back on advertising spend and delevered ad leverage in the third quarter. Our Q3 marketing spend effectively balanced brand awareness and high-converting digital tactics within our media mix. Digital conversion media achieved strong year-over-year performance within both paid, social, and email, which drove an 11% increase in reactivated customers. Importantly, our inventory is in a very healthy position, with a significantly higher level of newness, coupled with a 30% decrease in clearance inventory. Our quarter-end inventory balance of $174 million was 15% below last year, with a strong mix of fall, winter, and year-round goods. Our continued focus on effectively managing our inventory will enable us to increase profitability, enhance cash flows, and better serve our customers, both now and in the future. As touched on last quarter, we're also excited about our pipeline of new and innovative products that we have begun to introduce during the fourth quarter. This includes newness in our core categories of Buck Naked and Fire Hose, as well as within our sub-brand, AKHG. Our customer loves the performance of our Dry on the Fly technology, so we've added this to underwear and also to a new tee. This high-performance fabric has superior wicking and drying benefits that derives from the special fiber shape and fabric blend, which is unique to Duluth. The new tee combines the performance of a technical fabric, the weight and hand feel of a cotton tee, and comes in both long tail and un-long tail silhouettes. We will also be offering a new men's Fire Hose carpenter pants, featuring the strongest flex fabric on the marketplace, but still with a lighter weight than our original Flex Fire Hose. We're confident this will be a hero product and another example of Duluth's DNA by offering customers innovative products that solve a problem. In November, we also delivered newness in No- Yank. This is her favorite layering tank, and we're offering it in a new ribbed fabric in two different styles, and also brought in a boatneck silhouette in our core fabric. She's told us she loves this collection, and now there will be even more options to complete her outfit. Finally, as I mentioned earlier, women's AKHG continues to deliver significant growth. We're very excited to announce, this January, we will be launching a new women's AKHG fitness apparel line, which will include an assortment of styles from tanks, shorts, to hybrid jackets and After-Sweat sweats. We're bringing in product for the new year, as customers are focused on self-care and starting the new year off right. Given the strong start to the holiday season over Black Friday through Cyber Monday, coupled with our strong assortment of new and innovative products, we're positioned well heading into the remaining weeks of peak holiday selling. There's still a lot of business in front of us, and the trend we are seeing gives us confidence that our high-quality, solution-based products will continue to resonate with our customers, gift givers, and new-to-file consumers. Looking forward, we remain resolute on executing critical foundational strategic investments, and I'd like to provide updates on a few key components that represent cornerstones to our Big Dam Blueprint. We're making great progress on several important initiatives that will serve as enablers for long-term profitable growth, including our global supply chain strategy, our sourcing and product innovation strategy, as well as our technology roadmap. First, as I shared during the second quarter call, our new highly automated fulfillment center in Adairsville, Georgia, went live in September with a ramp-up plan to process up to 60% of all online orders and store replenishment volume by the end of Q3. I'm pleased to report that we reached this goal, and the facility is fully operational and exceeding output expectations thus far in the fourth quarter. In addition to shortening delivery times to keep pace with evolving customer expectations, the enhanced capabilities in this facility will provide both labor and shipping efficiency gains. In October, we already benefited from lower costs per unit to fulfill an order in this facility, which is less than half the cost of our three legacy fulfillment centers and will result in meaningful cost savings over time. We also continue to make progress with the growth of our sourcing and product innovation functions, which we believe is another critical strategic initiative to drive sustainable, long-term, profitable growth. Several team members were onboarded in the second quarter, and I'm pleased to share that we have recently hired a new vice president of sourcing, someone with deep and extensive sourcing experience, who previously led large sourcing functions, including at J.Crew. This initiative will enable us to further accelerate the introduction of high-quality, innovative products more frequently while increasing our speed to market at a reduced cost. In fact, as we move into and throughout next year, we expect this initiative to deliver significant improvement in our initial markups across our assortments, and these will continue to build over time. Finally, we have also made great strides with completing several foundational initiatives to execute our technology and transformation roadmap, which becomes the primary focus of our capital expenditure outlays in fiscal 2024. That said, total capital spend in 2024 will be down considerably compared to 2023. With the successful completion of Adairsville and the progress we've made on our sourcing and product innovation, and technology initiatives, our confidence only continues to grow in the investment strategy outlined by our Big Dam Blueprint. I look forward to sharing more on our fourth quarter call and will now turn it over to Mike to provide more details on our third quarter results. Mike? Thanks, Sam, and good morning. For the third quarter, we reported total net sales of $138.2 million, down 6.1% compared to $147.1 million last year, which brings our year-to-date sales decline to 2.5% versus last year. Our direct channel sales declined 4.4%, as lower web visits were partially offset by increased conversion of 70 basis points. However, sales on mobile devices increased roughly 2%, with even greater improvement in conversion up 80 basis points, indicating that our investments and continued focus on the mobile experience is paying off. Our retail channel sales were down 8.8%, driven by a store traffic decline of more than 6% compared to last year, coupled with a moderate decrease in shopper conversion. Total men's division sales decreased 7% during the quarter, while women's was down 3%. Women's momentum from the previous three quarters slowed but continued to grow as a percentage of our overall business as compared to the prior year. As Sam mentioned, the actions we are taking have resulted in improvements in business trends over Black Friday through Cyber Monday. We are pleased with our improved quarter to date sales trends, but we also recognize that we have many important selling days ahead of us leading up to Christmas. That said, we are lowering our guidance largely based on our Q3 results, which I will provide more details on shortly. Our third quarter gross profit margin was 50.2%, compared to 52.3% last year, and reflects a lower mix of full price sales this quarter versus last year, while gross profit dollars of $69.4 million declined 9.8% from last year. As mentioned last quarter, we started to see our year-over-year product gross margin decline stabilize at the end of Q2, and that remained consistent throughout Q3. However, as noted by Sam, we continue to see customers gravitate towards value and choosing to purchase during sale events more often. Turning to expenses, SG&A for the third quarter decreased 2.9% to $81.8 million or 59.2% of sales, compared to $84.3 million last year, or 57.3% of sales. This included an increase of $700,000 in general and administrative expenses, a decrease of $1.8 million in advertising and marketing expenses, and a decrease of $1.4 million in selling expenses. Selling expenses as a percentage of net sales increased 10 basis points to 17.2%, compared to 17.1% last year, driven by higher outbound shipping costs that resulted from contractual rate increases, as well as lower average order values on our direct channel orders. Within our selling costs, expenses related to variable labor across the store fleet and the fulfillment centers declined to last year, and the year-over-year leverage gained as a percentage of sales in Q2 nearly doubled in Q3. This is a direct result of the efficiency gains we continue to realize from the investments made across our fulfillment center network, most notably our new highly automated center in Adairsville that went live in September. As Sam mentioned, and worth repeating, the cost per unit we achieved in October at this new facility reflects savings of more than 50% compared to our other three centers. We expect the cost per unit benefits to be even more meaningful in Q4 and continue into fiscal 2024. Advertising and marketing costs were $17.8 million in the third quarter, compared to $19.6 million last year, and as a percentage of sales, decreased 40 basis points to 12.9%, compared to 13.3% last year. Our investment in brand awareness through national ad channels and TV streaming increased slightly versus last year, while our digital media channel spend was reduced. During Q4, we will continue to balance brand awareness and conversion marketing tactics with new cut-through creative concepts and a planned increase of digital media investments. These digital media investments focus on social media and influencers and online video and streaming, supplemented with a strong investment in search and shopping channels. We expect to deliver greater year-over-year advertising leverage in the fourth quarter compared to what we experienced in Q3. General and administrative expenses during the third quarter were $40.3 million, or 29.1% of net sales, compared to $39.6 million, or 26.9% last year. The increase in G&A expenses over last year reflect incremental costs associated with the aforementioned strategic initiatives, including depreciation and personnel expenses associated with the new Adairsville fulfillment center, as well as additional personnel costs to support the growth of our sourcing and product innovations functions. We expect our fourth quarter overhead expenses to be slightly less than Q4 of last year. Adjusted EBITDA for the third quarter was -$1.6 million, or -1.9% of sales, compared to a positive $1.7 million, or 0.7% of net sales last year. Our net loss per share was $0.32 versus a net loss per share of $0.19 in the third quarter last year. Moving on to the balance sheet. We ended the quarter with net working capital of $62 million, including $8 million in cash and $36 million outstanding on our $200 million line of credit. Our Q3 debt levels were in line with plans, and importantly, we expect all outstanding debt balances to be fully paid off by the end of next week. Our inventory balance ended the quarter down 15% compared to the third quarter last year. We planned inventories down year-over-year throughout 2023, which is reflective of our continued focus on being more efficient and driving increased inventory turns. Importantly, we feel good about the current mix between year-round and seasonal goods heading into the peak selling season, with total clearance units on hand down by more than 30% from last year, driven by higher sell-throughs of spring, summer items in Q2. We remain on track for our total capital expenditure plan of approximately $55 million this year, which will be funded by cash, and as we've shared on previous calls, the bulk of which relates to our new fulfillment center in Adairsville, Georgia. Now, moving on to full year guidance, we are updating as follows: Net sales in the range of $640 million-$655 million. EPS in the range of -$0.25 to -$0.15. And adjusted EBITDA in the range of $35 million-$39 million. These estimates reflect a full year gross profit margin decline of approximately 150 basis points and full year SG&A expenses as a percentage of sales to be roughly flat to up 70 basis points compared to last year. Our teams remain focused on prudently managing the business, controlling what's within our control, and continuing to execute on a strong peak season. On behalf of Sam and the entire leadership team, I'd like to wish everyone a happy and healthy holiday season. With that, we'll open up the call for questions. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble a roster. Our first question will come from Janine Stichter of BTIG. Please go ahead. Hi, good morning. Wanted to ask about Black Friday and Cyber Monday, specifically, understanding it was very strong, strong start to the holiday season. How do you think about extrapolating that into your, your go-forward outlook? Just knowing that, I think for you and, and for the industry in general, we've seen consumer shopping more around promotions. And then I have a follow-up. Thank you. Hi, Janine, how are you? Yeah, I mean, we're obviously pleased with the solid start to the holiday shopping period and saw a solid trend improvement in the business. ... from Black Friday through Cyber Monday. Yeah, obviously, you know, we continue to see the consumer sensitivity around price and, you know, certainly the Q3 results as we look at it by price bucket, you know, is a clear indicator of that. And so while the trend certainly improved, you know, we're taking a slight tempered look to, you know, the remaining upcoming weeks. Still a lot of business to do, and we're watching that closely. You know, still think that there's, you know, some consumer sensitivity, and we're watching that closely. At the same time, you know, as we continue to share, you know, while we've got to be promotional and in the case of Q3, we post events, you know, more frequently than we have historically, you know, we're not gonna chase bad sales, meaning we're not gonna discount the product to the point where it's not providing both top line and flow through to the bottom line, and damaging the brand position. So while the trend changed over the course of Black Friday weekend through Cyber Monday, you know, it was during a highly promotional time, and so we're just being cautious in terms of extrapolating that throughout the rest of the quarter. Great. And then I also wanted to ask around the inventory. It sounds like there's a fairly large bifurcation between some of the items that are really working, some of the hero products, and then kind of the balance of the assortment. So how does that inform how you think about SKU intensity and bringing product to market going forward? Is there an opportunity to kind of maybe strengthen SKU intensity and invest more deeply behind some of these clear winners? Yeah, absolutely. So I mean, you know, it's a dynamic, kind of, fluid scenario. So, you know, we've got some hero products, key year-round goods that, you know, we're on pretty fast recovery. So we're writing orders on a regular basis and flowing those goods, whether it's Flex Fire Hose or, you know, some of our key unders products. At the same time, you know, we're looking at these opportunities of products and categories that we're starting to see greater growth, and we're working hard to not only ensure that we stay in stock at the right time, but that we're looking forward and exploiting those opportunities. I think what's interesting about some of the things we've got going right now is the continued innovation against franchise like Fire Hose carpenter pant that is coming in. Then we identify new categories like our AKHG fitness line across women and men's. You know, No Yank has been a staple for us, and the team worked hard to introduce a few new silhouettes and new fabrications. So it's kind of a... You know, we're looking at new opportunities within new categories that we aren't currently participating in, as well as evolving, expanding, you know, kind of true blue categories and items that have really made Duluth what we are today. Great. Thanks so much, and best of luck for the rest of the holidays. Thank you very much. The next question comes from Jonathan Komp of Baird. Please go ahead. Yeah. Hi, good morning. Sam, I just want to follow up on the topic of promotions and discounting and just understand the strategy. You highlighted clearance units down a lot, you're not intending to chase sales. But you know, I think through yesterday, you had 40% off everything. There's still, you know, more frequency of deals. Just could you maybe go a little more in depth the strategy there? Why, you know, why pursue those deals at all, you know, versus maybe a more profitable base of revenue if you didn't? And then how should we think about the gross margin level you need going forward for this to be a healthy level of profitability for the total company? Yeah, sure. Thanks, Jonathan. Yeah, I mean, it's a, you know, it's a complex and kind of tricky scenario when you're balancing brand integrity with, you know, market competitiveness. And so, the whole house, what we call whole house global events that we have, we're comping those, and actually, we're not adding a lot more of those. We are pulsing in certain item kind of promotions. And as I said, you know, it's considerably more price promotional out there than it has been over the last couple of years. And so in order to remain competitive, yeah, we're having to promote a bit more frequently. But as I said, the depth of our promotion in terms of the discount, discounting is not significantly deeper, and that's where we're gonna draw the line a bit. So yeah, I mean, you know, we're always thinking about, you know, how much is too much? How much is too little? You know, how do we ensure that we continue to drive sell-through, brand awareness? Because all of those things, you know, have implications, you know, into the future, and certainly, as it relates to kind of mind share, you know, could we do less promoting? Yeah. I mean, we always could. Does that necessarily improve or help us meet some of our other required measurements, like sell-throughs and market share? No, we probably give some of that back. Margin rate, the rate itself might increase, but total profitability for the company, both near term and in the immediate kind of future, would be hurt. So, I mean, it's tricky, and I know the basis of your question, Jonathan. You and I have talked about this a lot, and I think just know that, you know, we're internally talking about the balance of, you know, promotions versus regular price. You know, the fact of the matter is, when we look at our sales mix, as I shared in the prepared remarks, customers are just gravitating, you know, more greatly to value. And so when we do run these events, the sales numbers jump during those events, and they're just choosing to purchase less during regular price periods. The great news is in all of our buckets, clearance included, although clearance is significantly down from a year ago, but all three of our buckets, regular price, promotions, and clearance, our margin rates are actually slightly, you know, flat to slightly up in all three buckets. And so in totality, you know, versus a year ago, and even when we look back a couple of years ago, you know, margin rates by bucket aren't that far off. They're just... The percentage of sales are being driven more by that promotional bucket right now than they are regular price or clearance. So, we're sensitized to it. You know, we're trying to remain competitive, but at the same time, not jeopardize our brand position. But no, we also have to ensure that we're delivering sell-through so that, you know, it doesn't come back to bite us, you know, next quarter. Is it, just as a follow-up, is it right to think, you know, at some point in the future, getting back to, you know, mid-50s, maybe high 50s gross margin might be required to drive higher profitability for this business? Is that sort of a reasonable expectation? And is there a path to get there, or if not, are there other- Yeah. paths to drive better profitability? Yeah, absolutely. I think, I think the way you're thinking about it is right, and, and what I would point you to is, you know, as I mentioned, you know, the, the enablers to our Big Dam Blueprint, specifically, logistics vis-a-vis Adairsville, that not only, that not only benefits us from a consumer expectation perspective, but certainly from a speed and expense perspective, you know, it's significantly more efficient than our legacy fulfillment centers. The second part is our, our sourcing and product innovation initiative. You know, last call, we mentioned we onboarded several new members. We just hired a new VP of sourcing, and she's got unbelievable experience in the industry, and she'll bring not only, you know, a greater depth of experience and expertise, but, you know, she's gonna really help us start to optimize the team that we're hiring to bring more innovation, more frequently, quicker, and quite frankly, with expansions in IMU. So, you know, we're addressing how we structurally change the financial model of the organization from the top, meaning IMUs, through the P&L on expenses like variable related to our fulfillment centers. And then, of course, we've got a whole technology transformation roadmap that will help us make better, faster, more informed decisions, that's more future-looking than it is kind of rearview-looking. So yeah, I think numerically, the way you're thinking about it is right, and I think that we've got a solid plan to deliver those things. And they're starting to, you know, come to fruition. Okay. And then could you just maybe talk about the factors in the fourth quarter guidance? It looks like the revenue range, you know, is somewhat wide, could be down slightly to maybe up mid-single digits year-over-year. So just how are you thinking about, you know, the factors embedded in the near-term outlook? Yeah. So I'll start at the top line. You know, the re-guide really was just. Well, it's primarily driven by the actualization of the Q3 number. Q4, you know, while we don't share quarterly numbers, what we had in our internal plans for the back half of the year, Q4 remains intact, and it's really the Q3 actualization. It does call for an improvement in trend from Q3 and year to date, and you know, we remain optimistic and bullish in that regard for a couple of reasons. One is, as I mentioned in my prepared remarks, some of the things that our team's been working on more tactically to change the trend, including chasing in, you know, kind of hot, hot sellers, as well as fast-forwarding some new introductions into Q4. So things like, I already mentioned it, but like AKHG Fitness, whole new category for us, the expansion of No Yank Tanks, big category for us, and we believe bringing in the new spring products will get us some upside, as well as, you know, I talked about Fire Hose HD, and then our Double Flex Denim program has really done well, and so we're chasing that in to take advantage of that, during, you know, this big sales period. So Q4 is largely intact, so that's part one. Part two is, you know, again, while I don't wanna lean too heavily on what we saw Black Friday through Cyber Monday, it was a solid enough business trend that it just affirms our confidence that Q4 is a deliverable quarter that then brings our year-end to, you know, within that range. Apologies, just the last one for me. That's all right. I'll just ask. Is just given some of the activity that looks almost more like liquidation online, is Best Made still part of the ongoing plan? And should we think acquisitions are off the table until the core business is stable for longer? Just any thoughts on those two. Thanks again. Yeah. So yeah, so a couple things. Our intent is not, not for it to look like kind of a liquidation. In fact, you know, we're, we're being purposeful, as I said, in, in the frequency of our global events, and then, and then really, you know, offering kind of post deals. I wouldn't say in reaction to the marketplace, but recognizing that the marketplace is significantly more price competitive and, and consumers are much more price sensitive than they, than they have been in, in recent years. Best Made, actually, we, we announced the sale of Best Made three weeks ago or something like that. And so in fact, the original founder, we were, we were talking with, and, and ultimately he repurchased the brand from us. You know, the fact of the matter is, you know, as we continue to work hard on growing the Duluth business, you know, AKHG is starting to get a lot of traction as well as our women's initiative. So our focus was to, you know, get our product development and merchandising teams really narrowly focused on making those brands kind of the winners in the near term. So this was an intentional act to just narrow the focus on those two brands. And then the last thing I would say relative to acquisitions is, you know, we're still in the kind of vetting mode. You know, we're vetting different potential acquisitions. But, you know, as we've always talked, you know, we're not gonna stray too far from where we are. We're gonna remain focused on Duluth and AKHG. If an opportunity presents itself, you know, we'll, we'll look more deeply. But I'll tell you right now, you know, we're in the crawl stage. We're not, we're not aggressively seeking out acquisitions as the next phase of growth. We think we've got some near-term opportunities with Duluth and AKHG. Okay, thanks. And, best of luck for holiday here. Thanks, Jonathan. Same to you. The next question comes from Dylan Carden of William Blair. Please go ahead. Thanks. Curious on the promotion, just following up with that. I mean, I don't know if you can answer this per se, but, you know, one thought would be that you've kind of trained your customer over time to sort of look for these, you know, rapid fire promotions. And, you know, the evidence of that potentially being that even if you pull back on promotions, the mix shift still skews higher clearance, higher promo. Is that something that you think is a valid concern, or, or is this sort of more a reflection of the environment for a value-seeking consumer? Yeah, I'd say a couple things, Dylan. One is we are highly, highly sensitized to that, and that's part, as I mentioned in my answer to Jonathan, you know, internally, we talk about this balance. The balance of being competitive with the broader marketplace, with brand positioning. And, you know, we have strategically, while, you know, maybe it doesn't appear that way, we've strategically shied away from more and deeper at the expense of driving greater top line. And we do that purposefully because at the end of the day, that additional top line doesn't necessarily, you know, flow through. And importantly, it starts to, I think, wade into this area of training the customer to think about Duluth as an off-price brand only. And so we're highly sensitized to that. I think, candidly, that as promotional as the marketplace is today and as sensitive to price and discretionary spend that the consumer is as well, that the level of promoting we're doing today is such that the brand is not being compromised longer term. And, you know, importantly, I think, you know, that's why we're putting so much energy into the service we provide consumers, whether it's click-to-doorbell speed or in our stores. You know, our metrics in the stores continue to be solid. Our measurable KPIs, whether it's conversion or units per transaction, continue to be positive year-over-year. Stores continue to be cash flow positive and Four- Wall profitable in the mid-teens. And so we know that customers are coming to us. Secondarily, the investments we're making in product innovation and sourcing, you know, that's the core of, of who Duluth is, and, and that's at the heart of our DNA. And so, you know, we're gonna continue to invest in bringing really high quality, problem-solving products, that are leading the marketplace, bring those to market. And we believe that the price value of the products we make, our goods, will withstand the test of time relative to price promoting. Great. Thank you. And then I'm kind of curious, the drag from not having the inventory in spring, summer goods in the front part of the quarter, was that simply just poor management on inventory, or did you pull back too quickly? Was that weather related? Just kind of trying to understand, particularly if you can maybe even size, you know, the- Yeah ... the drag that you estimate that, that had. Yeah. So, a couple of things I'll say there. Again, Dylan, pretty, you know, complex, Right ... answer to what seems like a simple question. At a high level, I'll start with saying, you know, philosophically, you know, we've talked about this for a little while now. You know, we're gonna continue to reduce inventories and get our stock to sales ratios in line. You know, I think, you know, our turns are slower than I want them to be, and obviously, there's all kinds of benefit that comes with faster turns, you know, not least of which is greater profitability and cash flow. But also, you know, the expectations around sell-throughs and those types of things increase. And so, at a high level, that's why the inventories are down, and they'll continue to be down, you know, as we move into the next couple of years. In terms of spring, summer goods or previous seasons carryover, it was largely based on greater sell-throughs during the season. So we typically have excess inventory that we carry over from season to season that will sell in the following season. And because of some of the price sensitivities that were happening and that shift we started to see into this promotional bucket, we were selling more units. So if you go back and look at our comments on, you know, the last couple of calls, unit sales were up. And so we're selling through more goods, and it, what ends up happening is the total sell-through for the season is just higher, which limits our carryover. So it's a little bit of a double-edged sword because in a perfect world, you'd want to sell everything at 100% at full price and not have any markdowns into the next season. But simultaneously, you know, it then forces you to be better planning in terms of your receipts for the following season's goods. And so one of the things we're starting to institute, as you've heard now, a couple of fall seasons, is we're starting to move the next season's goods up earlier to start setting our floors earlier. So for instance, this fall, we started to receive goods in July. We typically will set up in late August, and we brought, you know, certain items in earlier. And I think that that's the right way to run the business. A little early receipts on the next season's goods and not rely on carryover of, you know, previous season's products. Great. And then final one for me: the new distribution capacity in Georgia, can you remind us, as far as expanding out some of the wholesale, that's not part of this initiative, right? That would come later? Well, it is connected. So the capabilities of Adairsville allows us absolutely to expand in the wholesale. The other component, though, is really about the work we're doing with product innovation and sourcing. So the ability for us to develop products on a faster timeline with greater, you know, IMU efficiencies. That plays a role, and then there's an organizational requirement, you know, to really, I think, optimize a wholesale opportunity. And so we're building the parts for it, and ultimately, it will come together. But all of these things we're doing are with this, the broader intention of wholesale acquisition expansion into, you know, more stores, as an example. All of the technological and logistical things, and then product development initiatives, all are with those types of considerations in mind. Could you see wholesale, that relationship expand into next year, or is that too early to call? Yeah, I think that that's probably a bit early. Never say, never say never. In fact, you know, we are now testing with Costco. We see that as an opportunity to provide, you know, key items to a company that's got very similar... or has a number of similar customers to Duluth, and it becomes a bit of a gateway item to broaden our customer base. The initial test we ran was in summer, in a very small base, did really well. They've come back for this period right now, and then we're looking to expand with them as we go into next year. Their model requires, you know, a much less reliance on an organizational structure to support them. And so, you know, given the way we're testing with them, we think that there's an opportunity for us to continue to build our brand awareness in a business with a retailer that's got, you know, millions of customers, of which we see great overlap with Duluth. Excellent. Really appreciate it, Sam. Thank you. Yeah, you bet. Thank you very much. This concludes our question-and-answer session. The conference has now also concluded. Thank you for attending today's presentation, and you may now disconnect.