Good morning. Welcome to the 2021 Express Investor Event. Before we begin, let me remind you of our company's safe harbor provisions. Any statements made during this webcast, except those containing historical facts. May be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in forward-looking statements due to a number of risks and uncertainties. All of which are described in the company's filings with the SEC, including yesterday's earnings press release. Express assumes no obligation to update any forward-looking statements or information, except as required by law. Our comments today will supplement the detailed information provided in both the earnings press release. The investor presentation available on the company's investor relations website. In addition, you can locate a reconciliation of any adjusted results. Discussed in our comments to amounts reported under GAAP on our website or in our earnings release. In a few minutes, you'll hear about what's been accomplished, and especially, what's ahead on The EXPRESSway Forward. When the presentation concludes, you will have the opportunity to ask questions in a live Q&A session. You can ask questions through the chat function on your screen. Thank you. Now, let's begin. [Presentation] Good morning. I hope you all listened to our second quarter earnings call yesterday to hear the very strong results we posted for the quarter and the momentum we are seeing in our business. Although I wish we could be together in person, this virtual format makes it possible for more of you, and especially for some of our new retail shareholders to attend. Thank you all for being with us today. I joined Express a little over two years ago with a vision to transform the company in order for it to grow and thrive well into the future. I quickly assembled an exceptional leadership team, skilled, seasoned individuals who began working together immediately to change the trajectory of our business in the near term, and develop a strategy to rebuild our business for the long term. In January of 2020, we launched The EXPRESSway Forward and declared our destination of profitable growth at a mid-single-digit operating margin. We gave our strategy the moniker EXPR, which, as you know, is our stock ticker symbol, as a constant reminder of our commitment to drive shareholder value. E is to engage our existing customers and acquire new ones. X is to execute with precision to accelerate sales and profitability. P is for putting product first. R is for reinvigorating our brand. The EXPRESSway Forward strategy introduced those four foundational pillars, product, brand, customer, and execution. Every one of our initiatives and investments aligns to one of those pillars and contributes to our overarching objective of a mid-single-digit operating margin and long-term profitable growth. We have not wavered and will not waver from that objective. Today, we are committing to generate over $100 million in operating profit on $2.1 billion of sales by 2024. Over the next hour, you'll hear just how we're going to do that from some of our executives and key members of their teams. I am incredibly proud of what we've accomplished over the past 19 months, and yesterday's earnings certainly indicate that our business results reflect the strength of this team and the power of our strategy. Let me take you through what was accomplished at a very high level. Product. We set out to completely reinvent our product across every category and each item, taking a more modern approach and building our assortments to reflect the way our customers build their wardrobes. We established a design and merchandising philosophy called the Express Edit, guiding every one of our seasonal assortments to be sharp, smart, and focused. Our new monthly product deliveries continue to post double-digit growth. We know that denim is the foundation of every modern wardrobe, and that we had tremendous opportunity, so we completely reinvented our offering. We introduced Express Essentials, which added an important new component to our assortments and provides the ultimate in wardrobe versatility. Response from both existing and new customers has been off the charts, with Express Essentials already making a high double-digit contribution to our knit tops business and showing strong purchasing in multiples. We reimagined our assortments in the categories we have long been known for and held strong market share in, such as dresses, suits, and knits for women, and suits and shirts for men. We brought innovation to each one of these categories and had standout performance and the biggest trend changes in our business as we moved through the second quarter. Brand. We set out to reinvigorate our brand and clarify our message and articulated a clear, compelling brand purpose: to create confidence and inspire self-expression. We reinvented our marketing model. Optimized the investment and allocation of our dollars and completely changed how and where our brand shows up. We're spending more at the top of the funnel. We've pulled back on store-wide and site-wide promotions and reinvested those markdown dollars into marketing programs and activations that drove traffic, engagement, and conversion at much higher profits. We launched the Dream Big Project to extend the power of our purpose beyond our associates and customers and into the broader community. This September, we're kicking off a year-long partnership with Big Brothers Big Sisters of America to lend our voice and support to their Big Futures program, which provides mentorship to young people so they can reach their full potential. Customer. We said that we would engage our existing customers and acquire new ones. We believed that we could drive higher retention, frequency, and spend, and knew that our loyalty program would be the most effective way to do this. We rebranded and relaunched Express Insider, and it has surpassed our expectations. Today, existing loyalty customer spend is up 8%. We're adding new members at a 16% higher rate than 2019 and have welcomed 1.1 million new insiders since the relaunch. Execution. We evaluated our existing go-to-market process, looked at the productivity of our inventory, assessed the opportunity to improve our multi-channel capabilities, and identified meaningful operational and financial efficiencies. We reimagined the go-to-market process and now operate with greater speed and agility. We carefully reviewed our store portfolio, right-sized our fleet, and introduced Express Edit concept stores. We achieved $130 million in cost savings through corporate offices and store restructuring, go-to-market advancements, and rent savings. We established a strong foundation to support an aggressive $1 billion e-commerce goal by investing in a site re-platform. As a part of that initiative, we redesigned our product pages and enhanced them with an outfitting tool and the ability for shoppers to see the differentiating details of our products. We amplified user-generated content across all of our digital touchpoints so customers and influencers could illustrate the versatility of our assortments in real time. We improved our buy online pickup in store experience, added a buy now pay later option, and launched a digital stylist feature. We also launched UpWest, a digitally native, purpose-driven brand with tremendous growth potential. We instilled financial discipline and effectively managed our liquidity to protect the company while remaining focused on our long-term goals. Everything I just described advanced The EXPRESSway Forward strategy, created momentum for our brand, accelerated our business. We are in the midst of a transformation from being known as a store in the mall to a brand with a purpose, powered by a styling community. Our business results show the strength of our strategy. We revealed another important element of our transformation just a few weeks ago when we announced the launch of Express Community Commerce as the cornerstone of our $1 billion e-commerce goal. We have so much opportunity ahead of us. If you think you know Express, I invite you to think again. Community is the cornerstone of everything we do. It's in the spirit of community that we maintain a continuous dialogue with our customers, always wanting to understand the role we play in their lives and how to best serve them. The Express brand purpose, to create confidence and inspire self-expression, was created through a dialogue with some of our most loyal customers. We believe that clothes can serve a higher purpose. They can give us confidence to take on new challenges, reach beyond our limits, and help people look the way they want to look and feel the way they want to feel. We're putting together something very special at Express, a diverse, dynamic styling community, working together, supporting one another, and helping people to dream big and dress accordingly. This new styling community will be at the center of everything we do, from the product we design to the content we create and the connections we make. It's a community connected by the confidence we find through personal style and by what we call the Express Edit, versatile, mood-boosting clothes, all made to express you. The Express Edit is our design and merchandising philosophy that supports our brand promise to edit the best of now for real-life versatility. Every word in that promise is grounded in our strategy and driven by insights we gain through rich dialogue with our customers. Members of our design and merchandising team are here to tell you how we bring that promise to life through four key strategies. Our first priority is new and now. We continually refine our plans to balance our inventory and investments in the core, the seasonal ideas, and the monthly drops. We have learned so much about our customers' desire for newness, and the performance of our fashion deliveries has exceeded our expectations, especially in men's and women's tops. We all know that since we entered the Zoom era, the right top matters more than ever. As we approach the return to office era, re-entry fashion will be a thing. It's so important for our customer to have the latest fashion trend, and frankly, it has always been. When Express was at its best over its 40-year life, it was because the product was right on trend. From blazers with strong shoulders that empowered women before that was even a thing, to the oversized sweater with leggings look, and so much more. We still commit to being of the now by looking around to understand where fashion and style are right now, and looking ahead to always keep our eye on where things are going. We established what we refer to as our nine enduring style codes. Our design and merchandising teams across women's and men's and every product category are aligned to ensure that we show up in the marketplace as one brand, with one handwriting and one voice. We layer on top of that, interpreting and bringing forward seasonal color, print, fabric, and silhouette trends. We have a strong product core that we complement each month with new fashion drops that are exciting refreshes and updates to the customer's wardrobe. Our second priority is versatility adds value. Our clothes have to work so much harder today because we expect more from them than ever before. The lines between weekend and work are forever blurred, that influences how we get dressed every day. This is where versatility becomes the star. We have developed a strong foundation of what we call the new core. Take our Express Essentials, which work extra hard as a starting point for multiple outfits and multiple looks. Think about our Body Contour line for women and our polos for men. These are all important foundational pieces that help to create flexible, versatile wardrobes. Express used to be known for getting dressed up and going out, and we will always cover our customer for those moments. We make sure to have versatility and balance throughout all of our fashion deliveries to address the many ways they put it together and the many places they go. Our sweater set dressing for women and men's modular suiting are great examples. They can keep the pieces together or pull them apart for more ways to style and wear something. Our customers don't want the throwaway feel of fast fashion. They want to be current, but they care about quality, and so do we. They fall in love with what they buy, and they want it to be with them for a while. When we cover them from day to night, work to weekend, casual with a twist, and dressed up, but still comfortable, we're doing our job right. Our third priority is drive denim. The foundation for every modern wardrobe is a great range of jeans. Two years ago, our customers told us that they wear jeans to work 80%+ of the time, and even more on weekends. That's amazing, right? Well, only 17% were buying jeans from Express. Talk about a big opportunity. We challenged ourselves to create a premium denim assortment with lots of choices for all the ways our customer wears denim, and to do it all under $100. We started a dialogue with some of our best customers and worked directly with them on everything, fit, fabric, leg shape, colors, washes, all of it. Our design teams loved it, and through that dialogue, we developed innovative fabrics, new silhouettes, like modern straight, and a whole new curvy fit just for the women we weren't serving with our standard fit. This dialogue hasn't stopped, and for all of us in design and merchandising, I don't think it ever will because it's one of the best parts of our process. Talking directly to the people who we're designing for, that's pretty powerful. How are we doing in denim? In 2020, we had our highest customer penetration in the company's history at 25%, which is incredible progress in a relatively short period of time, and we have a bold ambition to drive that number much, much higher. Our fourth priority is add an accessory. We think of accessories as an outfit completer and an outfit starter. In women's, it's the shoe or the earring that completes the look. This is what takes an outfit from good to great. It's also an easy way to put a toe in the water of a trend and feel current. It's a more emotional purchase, and it always fits. A stack of bracelets or layered necklaces can take an Express Essentials top and a pair of jeans to a more pulled together and polished place. A statement earring with a maxi dress can turn her into the most stylish guest at any event. Footwear is another easy way to complete a look. It might be a woven slide or a sky-high strappy stiletto that elevates a pair of jeans, or the softest, furriest slipper that she doesn't ever want to take off. Sometimes we like to imagine her getting dressed from the feet up. In men's, it's more functional. We start with the first thing he puts on in the morning, underwear. Multiple fabrics, multiple styles, and a balance of core and newness. Think of it as our way to earn a bigger share of the drawer he opens every day, and get ready for some exciting innovation in underwear that we'll be launching soon. For the accessories that add style and complete the look, we have belts and ties. Yes, there are still occasions for ties out there. Footwear is also important for men, from boots to sneakers and everything in between. Our assortment looks and feels elevated and is developed to complement his suits and his denim. For our design and merchandising teams, the Express Edit is our North Star, guiding us to what is right and true for our brand and straight into the hearts and closets of our customers. If you don't think customer co-creation sounds like the best thing ever, watch this. I am so in love with these. It is lightweight. It's not too heavy. Love it. The material is so amazing. What comfort gives you is confidence. Our job is really not to give you something comfortable, it's to give you something comfortable that's cool. I cannot wait to wear it. Community begins with conversation, and we have been engaged in continuous dialogue with our customers to understand the role that we play in their lives and how we can help to support their aspirations. This thought process influences the way in which we engage with our existing customers and also acquire new ones. We'll meet all of our customers exactly where they are by creating relevant, innovative content. Over the last year, our marketing campaigns have driven both brand awareness and customer acquisition. We've been expanding our storytelling on the platforms most relevant to Millennials and Gen Z, from styling campaigns on TikTok to integrated partnerships with podcasts and new media companies. We've been evolving our content through influencers and social media channels such as Instagram and Facebook, where we've utilized livestream selling and video. We've also supercharged our creative across paid and owned media channels with custom content for every activation and platform, resulting in a high volume of relevant and engaging content that is appealing to existing and new customers. We completely revamped our loyalty program, now called Express Insider, and we have gotten great traction. These Express Insiders are the centerpiece of how we will engage and connect with our community. We're enhancing benefits, creating new experiences, and driving stronger engagement by inviting some of our best loyalty program members into our design and merchandising process. We were very proud to be named one of Newsweek's Best Loyalty Programs of 2021, and we're equally proud of what customers have been saying about Express. Hey, guys. My name is Brandy. I'm from Charlotte, North Carolina, and I wear a size 12 long in Express jeans. I love these jeans. The waistband fits me perfectly. The length, I'm six foot, and they are perfect length. I love the detailing and the distressing. I feel like they're doing a great job at keeping them up to trend. One of my favorite things about Express is the fact that I can wear their outfits almost anywhere. This outfit, I can wear out on a date, or I can wear when I hang out with my friends. It's really nice that the shirt's breathable, because I get really hot during the summer. This shirt is perfect. I love being able to look cute and put together while feeling comfortable. Everything we will do to drive our e-commerce business to $1 billion will be aligned to our brand purpose: to create confidence and inspire self-expression. We expect to essentially double our e-commerce demand from what we achieved in 2020 through a number of initiatives that support two key strategies: to know our customers and to connect our customers. Knowing our customers means leveraging all of our rich data to provide more relevant experiences across all touchpoints. It's about creating personalized experiences that feel relevant to our customers, maximizing loyalty, and designing fit and styling experiences tailored to each customer's unique needs. Connecting our customers is about building community, leveraging digital tools that make it easy for our customers to inspire each other, to find and put together great Express fashion, to drive brand advocacy for Express, and to advance our evolution into a styling community. We want to give our customers more confidence in their choices and show them the benefits of letting us connect with them and having them connect with each other. We already know that our customers want us to make shopping easier, more intuitive, and to give them that confidence as they add something to their shopping cart. We are so excited by the opportunity to connect in a way that leads them to create confidence in one another. Our $1 billion e-commerce plan is based on four core ideas, all of which contribute to better knowing and better connecting our customers. Those ideas are personalization, omnichannel execution, styling and fit experience, and community commerce. Personalization means that we will take all of that customer data, what someone browsed, what they bought, their loyalty status, and more, and put it to work for them. Imagine helping someone complete an outfit for a special social or work occasion, or giving them the confidence to try a pair of jeans that just might become their favorites, or showing them that perfect accessory to finish a look with style. Those are the kinds of things that make great digital customer experiences. Our data is the engine that will allow us to create these for our customers. Omnichannel execution means really responding to the fact that customers have absolutely no patience with fragmented or broken experiences. They expect companies to figure this out. Mobile capabilities are the unlock here. We are committed to making continued improvements on every screen our customers and our associates use so that we become one Express. Styling and fit. We know that when people feel confident in the choices they are making, they flip that switch from shoppers to customers. As a brand whose purpose is about creating confidence, this is absolutely essential for us to get right in real time, and we're already well on our way. Why should our customer have to do the work of putting together an outfit, figuring out what jacket would be perfect with those jeans, having to wonder what a detail on a garment really looks like? Let us do that. We've already started to enhance our product pages. We've got an outfitting tool, close-up views on those differentiating details, and right there on the product page, incredible user-generated content from other Express customers and Express influencers. A customer on that page can see how what they're looking at right now is being put together in real time. Need more ideas or assistance? Chat with one of our digital stylists who can help you finish your outfit right there on the spot. A powerful way for us to know our customers and give them confidence in their purchase. In the future, look for us to further improve these experiences and also make advancements to our navigation, our category pages, our filtering results, all with the goal of helping our customer feel more confident in their choices. Community Commerce. Our e-commerce and digital teams couldn't possibly be any more excited about the launch of this new program, which embodies the idea of connecting our customers completely. This new program, and the style editors who will drive it, will be game changers in terms of how we approach our customer. As you can see, the way we think about the e-commerce experience is changing, all in support of our brand mission and the notions of knowing and connecting our customers. We will grow our core e-commerce business, and we will drive this exciting new Community Commerce program forward. The Express styling community is all about creating confidence and inspiring self-expression. I've spent the last decade connecting people through fashion and building a sense of community. I've worked in retail, and I've also been an entrepreneur doing exactly what our style editors will be doing through the Express Community Commerce program. If someone's got a passion for fashion, a great sense of style, and an entrepreneurial spirit, we want them to apply to become one of our carefully selected Express Style Editor. What's in it for them? The ability to make their own hours, make extra money, and make people feel great. Maybe they want to be full-time influencers, or maybe they're just looking for a creative outlet and a way to turn something they love into a successful side hustle. What's in it for us? An incredible customer acquisition opportunity by tapping into the networks of our Express Style Editors. The ability to fulfill our brand purpose in a bigger way by reaching more people through the power of community. Here's how it works. Express Style Editors get exclusive products not available to anyone but them. They get invitations to exclusive events, daily coaching and support, mentorship, and so much more. My entire job is to make them successful, so together, we can meet our Express business objectives. Our first group of Express Style Editors got together in Texas about a month and a half ago, and boy, are they excited. Let's go take a look. They will come up with that. The polos I wear. It's his version of a set. The Express Style Editor program appealed to me, first of all, because it's so community-centric. As soon as I found out who the other Express Style Editors were, we reached out to each other and just empowered each other, and we are each other's hype team. I have ultimate flexibility. I can work from anywhere. My lifestyle is naturally on the go. I travel a lot, and I can capture content when I'm on the road or when I'm in another city. The brand is so versatile, and you can pair any piece with any piece, all from business casual to loungewear to that cute brunch fit that you need. You can find something that works for everyone. One of the most powerful ways the Express styling community will come to life is in our stores. Only they won't be stores anymore. They'll be Express Style Studios. Instead of traditional retail sales associates, we'll have Express Style Squads. Physical stores have an important role to play in the future of retail. Customers aren't telling retailers to take stores away. They're asking retailers to transform them into more interesting and engaging places to shop. That's exactly what we're doing through a fleet optimization strategy that informs our current real estate portfolio and our future plans. First, our mall-based Express stores will present elevated product and elevated customer experience in a less promotional environment. Second, our Express Edit concept stores are smaller, off-mall locations that will present more tightly curated, localized assortments that reflect the spirit of the neighborhoods in which they reside. Third, our Express Factory Outlet stores, which are now fully aligned to the Express Edit design and merchandising philosophy, will allow us to be less promotional in our other stores while still offering the customer a powerful value option. To evolve from the store of today to the Express Style Studios of tomorrow, we are transforming every aspect of the Express experience for our customer. We will recruit, hire, teach, and develop our customer-facing store teams very differently. These teams, we're calling them Express Style Squads, will create a welcoming and energized environment, build positive, trusted relationships with customers, and help customers develop or refine their personal style. We have reimagined every aspect of the store model to ensure that it contributes to fulfilling the Express brand purpose: create confidence and inspire self-expression. Everything you've just heard about will come to life through the collective efforts of our 9,000 Express associates, grounded in a strong, shared commitment to our corporate values. Our three values, Express Yourself, Express Together, and Express Success, make clear what we expect of ourselves and each other, and they contribute to a positive working environment for us all. Express Yourself is about the way each of us shows up in the workplace, whether in one of our stores, our offices, or anywhere in between. It means being who we are, questioning the status quo, and bringing our passion to our work. Express Together is about how we interact with others and foster dialogue. It means both sharing and being receptive to feedback and fostering trust. Express Success is about how we recognize our individual role in advancing the EXPRESSway Forward strategy and how we hold ourselves accountable for the quality and the consistency of our work. It means taking ownership of our personal development and supporting the growth and development of others. Building upon these three values, Express Together also serves as our ESG mission and unifies our focus, our commitment, and our work across three areas: diversity, equity, and inclusion, giving and mentoring, and conscious sourcing and product. Our DE&I mission is to seek out, respect, and embrace different experiences, approaches, and points of view. Our giving and mentoring mission is to offer opportunities and resources for every generation. Our conscious sourcing and product mission is to make better choices through our products and practices. All of this work, which touches every part of our company, sits under the Express Together banner because we see ourselves as belonging to a larger community, a community of associates, vendors, and partners. We believe we are better together, we are stronger together, and our future is brighter together. For more information about our ESG goals and initiatives, please visit our website. UpWest launched in November of 2019 as a digitally native brand with a singular purpose: to provide comfort. We operate independently within Express, Inc. as a small but mighty team, bringing our brand purpose of providing comfort to life through the products we design and the impact that we make. The UpWest assortment is rooted in casual, relaxed apparel for women and men who enjoy the outdoors and want to unplug from the demands of their hectic lives. We also offer home goods that provide comfort, such as candles, bath products, and blankets. When we launched our brand, we also launched The UpWest Foundation, committing 1% of annual sales to support organizations such as Mental Health America and randomacts.org. Our support goes to charities who align with our mission and exist to make life more comfortable for those in need. We also strive to make our planet more comfortable by sourcing and manufacturing in a gentle and sustainable way. Today, more than half of our products are sourced from sustainable materials, and we plan to increase that number in the coming year. Our sales performance to date puts UpWest ahead of some of the most successful direct-to-consumer brand launches of the last several years. As a business that isn't yet two years old, our sales performance tracks ahead of where other standout digitally native brands were at this point in their life cycles. Like those other brands, we also saw an opportunity to present ourselves in a physical environment. After testing pop-up stores in 2019 and 2020, we have opened six stores in 2021, with two more to open before the end of the year. Our spaces, which average at around 1,000 square feet, are in a combination of outdoor lifestyle centers and street locations. We have already seen our digital business increase in the ZIP codes and surrounding areas of our stores. In keeping with our brand purpose, each store partners with a local charitable organization for the term of its lease. Our brand and purpose are resonating. Our product is performing, our business is growing, and we look forward to contributing to the long-term financial health of Express, Inc. Everything you've heard today positions us to significantly accelerate our sales and profitability, drive greater free cash flow, and power the long-term health of our business. We expect the following by 2024. Continue to build on our positive momentum, generate low single-digit comps, and deliver $2.1 billion in sales. This includes absorbing the $100 million impact of our fleet rationalization actions. Drive $1 billion in e-commerce demand, fueled by our new Community Commerce program. Deliver over $100 million in operating profit through margin expansion and expense control, leading to a mid-single digit operating margin. Achieve over $155 million in EBITDA, and generate over $80 million in free cash flow. Compared to 2019, we expect to achieve our operating margin targets through a combination of top-line growth, merchandise margin expansion, thoughtful management of B&O and SG&A expenses, and fleet optimization. We will achieve this by expanding merchandise margin by 100- 200 basis points through the ongoing evolution of our product assortment and fewer, more targeted promotions. Leveraging buying and occupancy by 450- 550 basis points through rent reductions, fleet optimization, and our 2020 corporate office restructuring. As a result, Gross margin is projected at 33%-35% of sales, which represents an expansion of 550- 750 basis points. We expect SG&A to be approximately 29% of sales and to deleverage by 100 basis points, driven by investments in technology, marketing, and community commerce, and the impact of inflationary pressures. The expense impact of these investments will be partially offset by store closures and our 2020 restructuring activity. As a result, we expect over $100 million increase to operating profit versus 2019, and a 450-650 basis points increase in operating margin, leading to a mid-single-digit operating margin by 2024. This will result in free cash flow of $80 million-$100 million by 2024, which will come from higher operating cash flow, partially offset by higher CapEx. Beginning 2022, we plan to invest around $50 million annually in CapEx to advance our e-commerce capabilities, fuel our Community Commerce program, refresh our stores to ensure strong, consistent representation of our brand across the entire fleet, and ongoing enhancements to our technology platforms. In summary, we're continuing to advance the The EXPRESSway Forward strategy. We expect sales to reach approximately $2.1 billion by 2024, which includes $1 billion in e-commerce demand, generate over $100 million in operating profit, leading to a mid-single-digit operating margin, achieve over $155 million of EBITDA, and drive over $80 million in free cash flow. We are building a bold, bright, profitable future for Express. We are in the midst of a very exciting transformation. From being known as a store in the mall to a brand with a purpose, powered by a styling community. I can't think of a better time to do this than right now. Community Commerce is the next significant step in our journey, and it also happens to be exactly right for these times and our customers' lives. The pandemic has accelerated forces and dynamics that were already in play, such as the breaking down of a sharp distinction between work and life, which influences how we get dressed every day. The rising power of influencers and social networks, the importance of community, and the desire for purpose. We are designing best-in-class product at incredible value and gaining market share across some of the most significant volume-driving categories. We are reinvigorating our brand and bringing our purpose to life in authentic and compelling ways. We are welcoming new customers into our brand, getting more engagement and a greater share of wallet from existing customers, and reactivating lapsed customers at high rates. We are executing with more speed, more agility, and more confidence. We have effectively navigated the pandemic and emerged as a stronger, more focused, and more aligned organization. We are well-positioned to take a leadership role in fashion specialty apparel. In the second quarter, we drove positive comps versus 2019 and delivered those sales with 3x the EBITDA. By 2024, we expect to generate over $100 million in annual operating profit. I am so confident, so optimistic, so excited about the future of Express, and I hope you are as well. If you are already an investor, thank you. Whether you've been with Express for some time or have joined us more recently, know that I appreciate your interest and belief in our company. Our vision, our strategy, and our team make Express a very compelling investment. If you are considering investing with us, I invite you to do so and to be a part of our success. Thank you very much. We will now begin the live Q&A session. I'm Greg Johnson, VP of Investor Relations. With me are Malissa Akay, Chief Merchandising Officer. Brian Seewald, SVP of eCommerce. Tim Baxter, Chief Executive Officer. Sara Tervo, Chief Marketing Officer. Matt Moellering, President and Chief Operating Officer. Mike Reese, Chief Human Resources Officer, and Perry Pericleous, our Chief Financial Officer. Some of our sell side analysts will ask questions of our panel. As I mentioned earlier, you may also include questions that were received during the video presentation. We ask that each of you please limit your inquiry to just one question, and if appropriate, one follow-up question. In keeping with the nature of what we just shared, please keep your questions focused on the strategic and the long term. Now, let's get started. Operator, please bring in our first sell side analyst. All right. Our first question is from Roxanne Meyer from MKM Partners. Roxanne, please feel free to unmute yourself and turn on your video. Great. Good afternoon, and thank you for all of the color as it relates to your progress and your strategies. My question is on the consumer environment. Can you elaborate on the inflection points you saw in your business as you've moved throughout the year? What role did consumer behavior play in your acceleration, and how sustainable is this momentum? Sure. Great. Thanks, Roxanne. I'll take that one. We've experienced inflection points throughout the year. Specifically in the second quarter, we experienced an inflection point at Memorial Day and at the 4th of July. As we moved through the quarter, our comps accelerated pretty significantly. We were tracking around +1% from the beginning of the quarter through Memorial Day. We tracked around a +3%, which is consistent with where the quarter ended between Memorial Day and the 4th of July. After the 4th of July, our comps accelerated to a +11%, and those double-digit comps have continued into the third quarter. There's no doubt that a part of what drove that momentum, particularly early in the quarter, was consumer behavior and consumers emerging from their pandemic lives and venturing back out into the world, whether it was returning to work, returning to occasions. Vaccinations were being rolled out aggressively across the country, so I think people were getting more and more comfortable with being out. Certainly, that was a part of our success. I attribute the vast majority of our success to the transformation that we've made to our brand and to our product over the course of the past 19 months. Many people are just discovering that. They are just re-emerging, and they're just discovering all the changes we've made. They're just discovering the incredible product that we're now offering. They're just experiencing the extraordinary marketing campaigns that support that product. They're creating user-generated content themselves because they're so excited about the product that we're offering. We're gaining incredible relevancy. I'd also say that the double-digit acceleration in comps can definitely be attributed to both consumer behavior and product. We have had great success. I said this yesterday in the earnings call. We've had incredible success with new core categories for us, core for us, like denim. We delivered a 21% comp increase in denim in the second quarter. Our Express Essentials have been absolutely incredible, with Body Contour really being a game changer for us in women's. Those things were driving the business at the beginning of the quarter. As we moved through the quarter, what we also saw was a real acceleration in the categories that we have long been known for, like men's suits, men's shirts, women's dresses, women's dress pants, blouses. We saw a major resurgence in what most people would refer to as occasion-based categories or wear-to-work-based categories. Those categories were down 36% for us in the first quarter, and they were down 12% in the second quarter, even though we drove a total 3% comp. As we moved toward the end of the second quarter and started delivering those double-digit comp numbers, it's because those categories ended up trending close to flat. I believe those categories are going to continue to gain momentum as we move through the back half of the year and as people in some parts of the country are going back into a more normalized work environment, and certainly as people are beginning to attend occasions again. I do think it's sustainable. I will say, Roxanne, I think that there are also many things that are unknown about how consumer behavior is going to evolve as we emerge from the pandemic and as we move forward over the next several years. What we just shared with you is a conservative approach, from my perspective, for what we can accomplish over the next several years, but a really firm commitment from this team of people and the team of people that you just saw, that we are going to deliver $100 million in operating profit and deliver over $155 million in EBITDA. I think that if you look at where we've been and where we are today, and you think about our company very differently when we're producing those kinds of bottom-line results. Great. Thanks for all that color. I do have a follow-up, if I may. On the topic of e-commerce, obviously very important to your growth strategy, can you talk about the beginning of your e-commerce strategy and really how it's evolved? Can you flesh out your longer-term strategy and where you're headed from here? Thanks a lot. Yeah. Roxanne, hi. I'll take that one. Obviously, I love talking about e-commerce all day long. I'll start by saying that our strategy from an e-commerce perspective is completely grounded in our brand purpose and in our product strategy and bringing that to life digitally for our customers. We remind ourselves consistently on our e-commerce team that we are a product-first organization, and that's our role is to bring that to life online. We really started in 2020 very foundationally. We moved our site to a new platform, the kind of platform that is a stable foundation for the type of growth we are talking about, going to $1 billion. To achieve that, we need a stable foundation. We need a lot of flexibility. That was job number one. Then we turned more to the customer experience, and we executed a lot of things that you heard about in the presentation. The redesign of our product pages with user-generated content, and our outfitting tool being central to that. The expansion of what was an already successful digital stylist program. We think that that was great for the pandemic times, but that has staying power post-pandemic as well. We also focused on re-imagining our omni-channel capabilities, and then a really heavy focus on our mobile app and our loyalty program. Because our mobile app is where our most loyal customers live, and they have to have a better experience. Maybe most importantly, we test all of these things. So we can see how our customers' behavior is changing, and we can also understand and quantify the impact of the things that we're doing. We think that the proof so far is in the results that we're seeing. In the second quarter, our e-commerce demand was up 20% over 2019. Our mobile app demand was up 70% over 2019. Very excited about the results. As we turn the page and think about the future strategy, it really is gonna be very consistently about those four core ideas we talked about, personalization, omni-channel execution, fit and styling experiences, of course, community commerce. I'll give just a little bit more detail on these things. From a personalization perspective, we'll start very simply by providing our customer with more relevant recommendations, better search results, matching our customers' escalating expectations for these types of experiences. We'll continue our work on the mobile app. We'll really focus on omni-channel and how our customer might use our mobile app in a store environment. Really making sure that we're bringing our store experience and our digital experiences closer together. Very important to us. We'll expand on things that are already working. User-generated content's really important to us. Outfitting really points out the versatility of our product. Those things will just be things that we continue to work on and expand. We're gonna test and learn our way into things like livestreaming technology, and selling on social platforms, because as we noted in the presentation, we want to be where our customers are, we're gonna explore those things. Of course, there is the Community Commerce initiative, which we view as that sort of perfect intersection between sort of where the customer and where the industry is already going, and how our customers are just living their lives. We're really excited about this new style editor community, and giving them the ability to share their love of Express fashion, and also create their own small business or side hustle. We've built these tools for them. We're gonna give them the chance to really optimize their business and reach out to their followings, and also give them chances in our store environments to have in real life experiences with their followings as well. Lots of experiences for them to help build our brand, and to also get us new customers. It's a great new customer acquisition opportunity. Finally, we've got a dedicated team to this, as part of our e-commerce team, and our marketing team as well. I mean, it all takes a village. We will be there every step of the way with them, with mentoring opportunities, coaching, education. We started beta mode on this a couple of months ago, and, as planned, we're gonna roll this out nationally in the fall, and couldn't be more excited about it. Excellent. Well, you've got a lot of exciting initiatives, and looking forward to monitoring your progress and your journey. Thanks, Roxanne. Yes, thank you. Thank you. Yeah. Thanks very much, Roxanne. Operator, would you please bring in our next sell-side panelist? Our next question is from Steve Marotta from C.L. King. Steve, please feel free to unmute yourself and come on video. Good morning, everybody. Good morning, Tim, Matt, Perry, Malissa, Brian, Sara, and Mike. Good morning. Good morning. Good to see you, Steve. Nice to see you all. Thank you for taking my question. Given the landscape changes over the last 18 months, much of it pandemic related, can you discuss your current market share opportunities? Does Express have those opportunities to capture that market share? Over the longer term, what are the trends from an industry standpoint, growth and, again, if you could talk about your opportunities vis-à-vis the industry? Sure. I'll take that one. You heard the presentation, one of our key product strategies is new and now. We are insatiably curious, and we love looking around to see what's happening in the world and in the cultural zeitgeist, not just in fashion, but sort of in total. We take that and we say, "Okay, this is interesting. What then fits into what matters to our customers?" We start with a customer first approach, and then we put it through our purpose and promise filter. Is this a trend, or is this something that is going to fulfill our purpose of creating confidence and inspiring self-expression? Check yes. Okay. Now, is it going to be something that we can hold up to edit the best of now for real life versatility? Yes, great. Once it goes through that filter, we say, "How do we do this in our own handwriting?" We have these nine enduring style codes. We are going to be authentically ourselves as we interpret what's happening in the world. We work cross-functionally with Brian and Sara and Matt and everybody to bring it to life. Let me give you a specific example. We have all been home for much too long, maybe, at least 12- 18 months. We've been at home mostly in comfy, stretchy pants. Maybe some of us haven't been the same size coming out of the pandemic that we were when we started. We saw this happening in the world. We said, "Okay, well, gosh, that's gonna be tricky getting back into clothes to go out to life, to go out and experience life again. How could we serve our customer best through this?" In the spirit of creating confidence, we said, "What would be amazing if we created product that flexed with them, flexed with their life." Sara and I did a lot of brainstorming with the design and merchandising and marketing teams and said, "Oh my gosh, let's create a jean that flexes with you." We worked really hard on fabric and fit and innovation, and we brought it to life digitally through incredible fabric detail pages in the stores, through the Style Squads and the associates on how they're wearing it and championing it. We brought it ultimately to the customer. Our whole campaign is real customers trying on the FlexX. So far, we're incredibly encouraged by those results, but that's just one example of how we think about what's happening in the industry and market trends and how we bring it to life. That's very helpful. Your comments regarding how we went into this and how we're coming out of it. You must have spoken to my wife this morning about meetings. It's so true. Yeah. In your prepared remarks, you mentioned driving higher customer acquisition, better retention, better spend. Could you talk a little bit about your data collection and analytics, how those capabilities have increased, where you're using this the best, where do you think you need the most help, and how do you maximize the customer marketing to them digitally? Thanks. Yeah, I'll take that one. Steve, what I would say is over the last few years, we have made significant investments in our analytics capability. The combination of marketing analytics team as well as decision science team, we have put in place, and they have developed some very sophisticated models through customer multi-attribution. What that does for us, one, it makes sure that we really optimize our marketing investment with high rate ROIs on those investments. More importantly, it really allows us to make sure that we are serving up the relevant content to the customers when they want it and on the frequency they want it, which is really important to keep them engaged in the brand or to bring in new customers through acquisition. It's been very successful to date. There's still a lot of room to continue to develop more models and improve on that. We're also expanding the scope of the decision science team over the next few months. We're doing things like inventory optimization modeling, pricing modeling, markdown optimization modeling. They'll be focused on that as well as the marketing side. I can't overstate as well the importance and impact of the new customer loyalty program. There's a lot of rich data in there for us to use, and we're also really making sure we have the capabilities to function very well in a cookieless future come 2023 as well. We feel very good about where we are, but we also believe there is a lot of opportunity ahead of us to continue to improve. That's super helpful. Thank you very much. Best of luck. Thanks. Thanks. Thanks, Steve. Thanks very much, Steve. Operator, please bring in our next sell-side analyst, please. Our next question is from Jen Redding from Wedbush. Jen, please feel free to unmute yourself and turn on your camera. Hey, guys. I was wondering if you could talk about the Express Insider loyalty program and how you guys determined what the customers wanted and how you added to the program and how the members are responding so far. Absolutely. I was hoping somebody would ask a marketing question. There's nothing I love more than talking about our loyalty program. We knew that it was very important to rebrand and relaunch our loyalty program in order to get after engaging customers and acquiring new ones. We know that these customers drive tremendous lifetime value. We dug deep. We looked at things quantitatively and qualitatively and identified really three main areas that we could focus on. One was acquire new customers by rebranding the program. We thought we could do a better job more clearly articulating the benefits of the program so customers were more enticed to join the program. Second, was we really wanted to drive more spend with our existing customers. We saw a big opportunity to introduce more tiers so customers could earn rewards faster and redeem faster, thusly driving more trips in frequency and spend. We also added birthday rewards for every tier. Before it was just for top tiers, but we know everybody wants a birthday surprise. We introduced a birthday gift for all tiers. Lastly, we really want to build on this notion of community, and we wanted to drive engagement with our customers beyond just the transaction. Before, our program was much more bank-like and transaction-related, and we wanted to bring in engagement and soft benefits. We worked with Malissa's team on creating opportunities for customers to co-create product with the design team, which has been incredible, insightful, and fun. We also have been testing things like in-store shopping events and in-store photo shoots, like you saw in the video, and just different ways to bring our community together. Those are just a few examples, but we're very, very excited about the results we're seeing, and we're going to continue to mine and nurture for ways that we can build our community and drive business. So far so good. I think Sara's being modest about our enthusiasm around the results. I'll give Sara and her team a giant plug on this one. Since we relaunched this program, we have welcomed over 1.1 million new members into the Express Insider program, which it's incredible. It's a 16% increase over the number of people we were bringing into the program back in 2019. We've reactivated over 900,000 of lapsed customers, people who had just stopped shopping at Express. Right. We reactivated them and brought them in. Huge testament to Sara and the work that she and her team did that she just described, really resonating with customers. The results, like she said, are really sticky and are gonna last a very long time. Kudos. Thank you. Jen, we can see you, but we can't hear you. Okay. Sorry about that. One more question for you guys. For your pricing strategy, can you talk about that and what your goals are for it and any kind of research you've done to help you form your pricing strategy? Sure. I'll take that one. First, we start with great product. We have put a lot of consideration back into every single garment, so elevating fabrics, obsessing over buttons, trim details. We've put a lot more into the product, and the customers are really noticing. We have seen pretty significant AUR expansion over the quarter and into this quarter. Because of that, we haven't had to promote. They are coming in, and the newness is selling through at maybe too fast of a clip. We're feeling really excited about the customer adoption. That's how we think about it to start. Now, promotionally, we plan to always be offensive with our promotions. Instead of defensive and liquidating, the pivot now is, we're so excited about this product, and we think you will be, too. Let's get you into a trial vis-à-vis a promotion. Two for $99 denim is a great example of that, or a Body Contour promotion is a great example for that because we're so excited about the customer to try it and to get into it. That's really the approach we're taking. Certainly, Q4 is different than Q2 or Q1. Even as we think about promotional and that posture for Q4, we are not racing to the bottom on that product. We are actually going up because that's what the customer has told us they want. They want something aspirational at an incredible value. I'll just end with denim. Tim said on the call yesterday, denim, we had a pretty remarkable spring season in recent history. We ended up 21%. Not the cheapest jean in town, not the most expensive either, but we really have found a great price positioning there. Great. Thank you. Thanks very much, Jen. We appreciate it. Thanks, Jen. Yep. We have a question from our audience. Janice asks, "As people are returning to offices and events, what do you think some of the big trends will be? Malissa. I'll take that. Again, we start with what's happening in the world and coming back into the world. One of the things we think is definitely gonna happen is they're not gonna give up on comfort. You've been in stretchy pants for a long time. You're not gonna give up on comfort, you are going to wanna look pulled together and polished, and feel really great. I think mix and match suiting. I think that comfort in suiting. We have put so much innovation into our tailoring programs. Literally, I can't wait for you to see what's coming in September. We have invented new knit fabrications, e-waist trousers. Making it fashion. This is not dum-dum, and it's not basic leveraging patterns. I think what's gonna emerge is, as you go back, you wanna look great, you wanna feel great, but you're not gonna do it at the expense of comfort. I think that's gonna be a primary theme. Thanks very much, Malissa. Operator, please bring in our final sell side analyst. All right, our final question is from Oliver Chen from Cowen. Oliver, please feel free to unmute yourself and turn on your camera. Hi, everybody. Great to see you. Hi, Oliver. Hey, Oliver. Hi. Good to see you, too. I had a question about experiential retail and the retail store strategy. You've been focused on optimizing your fleet to create a network of more productive and more profitable stores. Would love an update on the progress and the role physical stores will play in that strategy and how might this evolve. A second question was on community, which is a powerful and exciting theme. How will the styling community and your community program intersect with your technology roadmap and priorities there? How will community play into both physical and digital as this manifests over time? I had some follow-ups. Thank you. Thanks, Oliver. You take the stores. You wanna take Community Commerce, Scott? Yep. Great. Perfect. What I would say about the stores, Oliver, we have approximately 350 retail stores, 205 outlet stores today. As we have really improved the fashion content in our business, we've sharpened the brand proposition. We are gaining traction on The EXPRESSway Forward, as we've talked throughout this presentation here. Because of that, we are gaining traction not only online, but in our retail and EFO stores as well. As Tim talked about on the earnings call yesterday, we had a positive comp across all three of our channels of distribution in July. What I would say about that is, as we're coming out of the pandemic with all the changes we've made to the business, number one, we are gonna see what productivity looks like coming out of the pandemic with our stores. As you've mentioned, we have moved from fleet rationalization to fleet optimization. We're gonna see what the productivity looks like. With that being said, we did take our King of Prussia store, downsized it by 45% from a square footage percent basis, and our comps are up 12% to 2019. That's a huge productivity lift, and we're now doing the same with our North Park store in Dallas. We're remodeling that in the same manner. We'll get a second data point on that to see what we might want to do from a fleet optimization standpoint there. The second thing we're doing from that is we are really piloting the Express Edit concept, which you've, I'm sure, heard about. These are smaller square footage stores, 4,500 sq ft, typically off mall, curated assortment with localized feel to it. It also allows us to get the styling community piece really infused into the experience for the customer, and we'll do that with our stores as well in a while. We're doing that now in these stores, and initial results is piloting now. We have five open. We are seeing very good results from a standpoint of customer acquisition. Over 50% of the customers are new to the brand. Customer reactivation is also very high with this customer set. We're going to the customer where they want to be. Whether these are incremental stores over time or trade-offs with some of the stores within the mall is still to be determined. We are looking at all that as we're looking to optimize our fleet. Go ahead, Tim. Yeah, I was just going to say, before Brian starts on community commerce, the only thing I would add, Oliver, is you mentioned experiential retail. I've been very vocal in the past about my firm belief that physical retail is a very important component of any retail strategy. We are focused on experience, but it's not the kind of experiences that we often hear about. We're really focused. If you go to our King of Prussia store, which Matt mentioned, that we downsized by 45%, you go to our new American Dream store, or you go to these Express Edit locations, we're focused on fitting room experience. Our customers told us that's the experience they really want us to improve. We've got larger fitting rooms with better lighting. We've got call buttons to call associates when you need help. They've told us they want a place to sit. We've added places to sit. We've added lounge areas in many of our stores and are working to do that in additional stores because they also want to plug. They want to be able to recharge or they want their friends to be able to sit down while they try on. We are focused on the experience, as well, and making those kinds of advancements, not just in the new stores, but also throughout our fleet. Community Commerce, Brian. Hi, Oliver. The way we think about Community Commerce, it is just a core part of our growth of e-commerce to $1 billion by 2024. If anything, it is an accelerant and a supplement to an already growing e-commerce business. What Community Commerce will do for us more than anything else is it allows us to attract new customers. As we recruit and select our Style Editor community, we get access to all of the people that are following them. That brings new customers into our fold and just helps to accelerate our overall growth. It's not just a digital play either. We have plans to have our Style Editor community be a presence in our stores. It also sort of helps bring an element of experiential retail as well, because these Style Editors are very passionate about our brand. They're very passionate about fashion. It really brings all of these things together for our customer. From a planning perspective, we're going to handle it a lot how we handle e-commerce. Every year, we enhance our website. Every year, we improve the things that we're doing. Every year, we read the analytics. We're going to do the same thing with community commerce, and we're going to dedicate time, effort, and distort resources to making sure we're improving that program as well. Thank you for that. Two follow-ups, merchandise margin and product. As we think about the 100-200 basis points guidance, how will you balance the promotional atmosphere relative to offering the consumer value and what you see ahead there with opportunities on the merch margin? Second, on product, there's a lot of great things happening with innovation in denim and versatility in New and Now. What are the big mixes that you see happening in terms of the product mix evolving in the future, and what are the related implications in terms of average unit retail as well as contribution and gross margins? Thank you. Let me start. Thank you for remembering versatility, New and Now, and denim. I'm glad you're noticing that in product. We'd love for you to be a part of our community, wear it, tag it, and be a part of our community. For us, I think the mix question, it's about balance. Historically, we were party and wear to work, and not considered for other parts of your life. Through this pandemic, we are actually close to 50/50 now, what you might consider more occasion categories and more casual categories, because the way people dress today is jeans and a blazer, or a great Body Contour top with either the perfect trouser for a board meeting or cut-off shorts. We have incredible, and I think it's a competitive advantage, range in terms of what we can offer the customer. I think it's just about balance. We are not going to give up an inch on our men's suiting business. We're not going to give an inch on our dress business. We're just going to add these other components that help him and her get dressed more easily for their full and complete lives. That's how I would think about mix. Again, we're putting quality back into the product. We're not racing to the bottom. We are seeing AUR expansion through merchandise expansion and more importantly, through gross margin expansion ultimately. That's how we're thinking about product and the profitability of product. Oliver, on the merchandise margin, we've shown in Q2 that our merchandise margin expanded by about 200 basis points. Right now, the plans through the long range plan is for 100- 200 basis points expansion in the merchandise margin, and that will happen through the product, the brand, and execution that the team has been talking about. As relates to gross margin, in Q2, our gross margin was over 500 basis points better than last year, and we're expecting the balance of this year, even with some headwinds, for the gross margin to be about 200 basis points better than 2019. As relates to the longer-term goal of the gross margin, we expect as we grow the sales, for gross margin to leverage. We have all the improvements that we'll get in our expense structure in the B&O, getting the B&O at the 2022-2024 timeframe improving by about 400-500 basis points, which is a significant improvement, driving our gross margin improvement in our financial architecture. Thank you. That was very helpful. I love the bomber jackets and the FlexX slacks. Looking forward to seeing that. Yay. We're doing our job right. Good. Thank you, Oliver. Thanks very much, Oliver. We've come to the conclusion of the Q&A session. Let me turn things over to Tim for closing remarks. Thank you all for joining us for our first virtual investor event. Whether you are a long-time, a new, or a future investor, thank you for giving us some of your time today. We are so excited and so confident in where Express is going, and we hope to see all of you with us on The EXPRESSway Forward.