Good morning, and welcome to the Kohl's Corporation First Quarter 2024 Earnings Conference Call. Please note that today's conference is being recorded. All participants are in a listen-only mode. After the speaker's remarks, we will have a question-and-answer session. To ask a question, please press Star followed by the number one on your telephone keypad. It is now my pleasure to turn today's call over to Mark Rupe, SVP of IR and Treasury. Please go ahead. Thank you. Certain statements made on this call, including projected financial results and the company's future initiatives, are forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in Item 1A in Kohl's most recent annual report on Form 10-K and as may be supplemented from time to time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference. Forward-looking statements relate to the date initially made, and Kohl's undertakes no obligation to update them. In addition, during this call, we may make reference to non-GAAP financial measures. Reconciliation of non-GAAP financial measures can be found in the investor presentation filed as an exhibit to our Form 8-K, filed with the SEC and is available on the company's investor relations website. Please note that this call will be recorded. However, replays of this call will not be updated, so if you're listening to a replay of this call, it's possible that the information discussed is no longer current, and Kohl's undertakes no obligation to update such information. With me this morning are Tom Kingsbury, our CEO, and Jill Timm, our Chief Financial Officer. I will now turn the call over to Tom. Thank you, Mark, and good morning, everyone. Our first quarter results did not meet our expectations and are not reflective of the direction we are heading with our strategic initiatives. We knew the first quarter would be our toughest comparison of the year. This was predominantly due to last year's elevated clearance activity, which was more than 600 basis points of drag on comp sales in Q1. That said, we expected our regular price business to offset this headwind. Regular price sales were strong through the first eight weeks of the quarter, though softened in late March and into April, especially for our spring seasonal product. And while regular price sales did increase low single digits in the first quarter, their best quarterly comp performance since 2018, they were below our expectations. With a clearance headwind now behind us, we expect our performance will improve, building on our positive regular price trends, driven by our early success in new categories and continued growth in Sephora. We are also effectively managing inventory and controlling our expenses, which resulted in gross margin expansion and an SG&A decline in the quarter. However, there are areas of opportunity that we are actively addressing, including our active and jewelry businesses. We continue to have high conviction in our strategy, supported by the traction we are gaining in our key growth areas, as well as the increase we are seeing in the number of new customers. That said, as Jill will discuss in more detail, our updated fiscal year guidance reflects the first quarter underperformance and a more conservative outlook, given the ongoing uncertainty in the consumer environment. As it relates to the consumer backdrop, our customers continue to be pressured by a number of economic factors, including high interest rates and inflation. While spending among our high-income customers has remained steady, our middle-income customer continues to be impacted. In this environment, we are working hard to deliver even more value, recognizing that the discretionary spend of our customers is pressured. Part of this is having a strong private brand portfolio, which positions us well as the consumer is looking for value. While navigating what remains a challenging consumer backdrop, we remain focused on executing against our four strategic priorities, which are: enhancing the customer experience, accelerating and simplifying our value strategies, managing inventory and expenses with discipline, and further strengthening our balance sheet. Over the past year, we have implemented a significant amount of change across the organization to reposition our business. Efforts of this scale take time. As I look at our progress against these priorities, we are executing well against two, managing inventory and expenses tightly and strengthening our balance sheet by reducing our long-term debt. When it comes to enhancing the customer experience and simplifying our value strategies, we are making progress but continue to have opportunities in front of us. Taking a step back, let me start with what's working. Sephora at Kohl's continues to deliver exceptional results. In Q1, Sephora sales increased 60%, including greater than 20% comparable beauty sales growth and better-than-expected contribution from shops opened in the past year. We saw especially strong growth in our skincare, bath and body, and fragrance offering, driven in part by the continued success of brands such as Sol de Janeiro and Sephora Collection. In 2024, we will open 140 Sephora shops, of which the majority will open in Q2, and we will end the year with Sephora in approximately 1,050 stores. Sephora continues to be an important driver of our new customer acquisition. We are also continuing to attract a younger, more diverse customer, who shops more frequently as we have expanded Sephora across our store base. In addition to Sephora, we are also making progress in building our presence in under-penetrated categories, including home, gifting, and impulse, and look forward to the launch of Babies "R" Us. We outlined these collectively as a $2 billion+ sales opportunity for us in the coming years. We continue to have confidence in our ability to achieve this target. In home, while the category underperformed the company average, we did deliver incremental sales from our growth initiatives in decor and pet. In home decor, we are seeing the initial benefits from our expanded assortment and marketing investments, with sales of seasonal and everyday decor up more than 30% in Q1. New areas like wall art, lighting, and glassware have been well received. In pet, sales increased more than 100% in the quarter, benefiting from last year's assortment expansion. In gifting, sales increased more than 30%, with strong performances across Valentine's Day and Easter, and more recently, we were pleased with the performance of our Mother's Day gifting presentation. In impulse, sales grew more than 60% as we introduced queuing lines in nearly 100 stores during Q1. We expect continued growth in gifting and impulse going forward. We have invested in more receipts around key gifting events, such as Father's Day, as well as Americana merchandise to celebrate the Memorial Day and July 4th holidays. In addition, we will add dedicated queuing lines to 250 more stores to reach more than one third of our store base by year-end. We also continue to be excited about our upcoming partnership with Babies "R" Us. This partnership allows us to serve the family in a more complete way during an important period of their lives by creating a meaningful presence in the baby gear category. Baby gear is a large category that has seen disruption in the competitive landscape in recent years. Kohl's new commitment to this space represents a significant growth opportunity and broadens our reach with younger customers. We will open Babies "R" Us shops in approximately 200 Kohl's stores in Q3, which will coincide with the launch of our online presence. It's also important to mention that we are making progress in some areas of our apparel and footwear business. We have seen the most progress in our efforts to build our polished casual and dress wear offering across categories. This is most evident in the positive underlying trends we are seeing in our women's business. In Q1, regular price sales were up 3% in women's, which indicates that the newness we are introducing is resonating with our customers. One example of this is our dress business, where the customer response has been very favorable. Dresses is an area we identified as a large opportunity for Kohl's, and for those that have visited our stores recently, you'll likely notice a much greater dress presence. We launched a dedicated in-store dress shop in 700 of our stores and will expand the offering in Q2, supporting continued sales momentum. Our efforts to amplify polished casual more broadly are working. We have leaned into Lauren Conrad and Simply Vera Vera Wang and have seen solid reception with both brands delivering positive growth in the quarter. We are also seeing positive regular priced sales in our juniors business. This is an area where a lot of change is happening, and we've introduced market brands to better react to fashion trends. To build our efforts, we are repositioning the juniors offering next to Sephora in stores to better capitalize on cross-shopping opportunities. Overall, we are pleased with the direction of our women's business as it is instrumental in driving business across other categories. In addition to women's, we have seen solid demand for men's suiting, dress shirts, and dress pants, as well as kids' dresses and suitings. We've also seen casual and dress footwear perform well in both of these areas. Moving beyond product, let me share some of our other initiatives that are working. First, our efforts to simplify our value strategies have shown early signs of success. We are seeing positive signals through our customers' insight work, with more customers agreeing that Kohl's is delivering great value. In February, we scaled high volume pricing across our private brand offering, which has been received positively by customers. Also during Q1, we increased the number of targeted offers to our loyalty customers and continued to leverage Kohl's Cash as a key differentiator. We amplified the messaging around rewards for our loyalty program and Kohl's credit card to drive greater enrollment. Collectively, these actions helped us drive an increase in new customer acquisition in the first quarter and higher enrollment and redemption rates in our loyalty program, all of which are positive indicators of future engagement. With that said, we know our most loyal customers are most sensitive to our promotions, and therefore, we will ensure that we continue to bring value to these customers with targeted promotions and personalized offers while we continue forward with our strategy to simplify value. Second, we are successfully managing inventory and expenses with discipline. Inventory in Q1 was down 13% as we continued to benefit from our disciplines, where we operate with greater flexibility and open to buy. This led to an increase in the inventory turn despite the lower sales. We will continue to target inventory declines in the mid-single percent range with a focus on driving inventory turns. We controlled expenses tightly across the organization, resulting in a slight decline as compared to last year, even as we invested in marketing and our new growth initiatives, including new Sephora shops and in Kohl's queuing lines. And third, we are further strengthening the balance sheet. In Q1, our revolver borrowings of $355 million were down significantly from $765 million in the prior year. This level was in line with our expectation, despite lower than anticipated sales, as strong inventory management benefited cash flow. In Q2, we will reduce long-term debt by $113 million by executing a make-whole call on our May 2025 notes, which Jill will discuss in more detail. We are making solid progress across several of our initiatives. We are delivering incremental growth in new underpenetrated categories in Sephora, as well as in portions of our apparel and footwear offerings. In addition, we are managing inventory and expenses with discipline and further strengthening the balance sheet. Now, let me discuss some of the headwinds we faced in the quarter in areas of opportunity for us going forward. As I mentioned at the outset of this call, clearance is a major drag on our comp sales performance in Q1 as we lapped last year's elevated activity. This was a unique headwind that weighed heavily on results across our apparel and footwear businesses, and especially in active, juniors, and kids. Importantly, this headwind is now behind us as our clearance sales normalize following the first quarter of 2023. In addition, we experienced softer demand in spring seasonal product, dampening what otherwise was a strong positive trend in our regular price sales through the first eight weeks of the quarter. Categories including tees, shorts, and tanks were uniquely challenged, impacting our men's and kids' businesses, which have historically been sensitive to seasonal transitions. In addition to these headwinds, we also identified areas of opportunity for us going forward. The first area is active, which accounted for the majority of the overall sales decline in the quarter. Clearance is a major factor in the active decline and was felt most significantly in our men's and kids' businesses. We continue to work with our brand partners to increase newness in the back half of the year, and we are leaning into our value-oriented private brands, FLX and Tek Gear, which performed well in the first quarter. FLX apparel was especially strong, growing in excess of 50% as we further expanded the brand to all stores. We see a long runway of growth for FLX as we build awareness for this very affordable athleisure brand that is building a solid reputation with customers. The second area is accessories. Over the past few years, as we made space for Sephora in our stores, we did not do a good job of retaining our jewelry sales, which have been on a consistent sales decline. We know there is still an opportunity to offer jewelry to our customers, especially during key events and holidays in the year. We are currently working to reestablish our presence, which will include expanding our in-store assortment and improving its in-store positioning by placing it near Sephora. We will also have a stronger presence in jewelry during the holiday season. The third area is our legacy home offering. During the first quarter, select areas within our home business underperformed with softness in the kitchen electrics, floor care, and bedding. To improve results, we are increasing newness in kitchen electrics, as well as introducing new brands and ensuring we are providing excellent value to our customers across bedding and floor care. And lastly, it's important that we continue to drive traffic across our Omni-channel platform. In Q1, store sales slightly outperformed digital sales, though both declined given the headwinds I discussed. However, transactions in each channel improved as we moved past the clearance headwind. Looking ahead, we expect store performance to benefit from our growth initiatives, which are highlighted in stores. In digital, we will continue to reinforce our value simplification in all communication and scale new targeting initiatives, while also improving the search and product recommendation capabilities of our site to drive increased traffic and higher conversion. I will now summarize my comments today, and I want to leave you with three things. First, our Q1 results were not up to our expectations. Clearance was a major headwind to overall comparable sales, and demand softened in late March and into April, especially for our spring seasonal product. However, regular price sales increased low single digits, and we are actively addressing the areas of opportunity identified in the quarter. Importantly, the clearance headwind is now behind us, and we have confidence in our ability to address the opportunities we laid out. Second, many key areas of our strategy are working. Sephora at Kohl's has maintained its strong growth momentum, and we are driving incremental sales in Home Decor, Gifting, and Impulse, and we are seeing positive underlying trends in our women's business. And during the balance of the year, we'll open more than 100 additional Sephora shops, expand Impulse queuing lines to an additional 250 stores, and launch our Babies "R" Us partnership in 200 stores and online. For these reasons, we remain confident in our strategic initiatives. And third, the underlying structure of our business remains sound. While we work to drive top-line sales growth, we are managing inventory effectively, expanding gross margin, and tightly controlling expenses. We are also demonstrating our commitment to returning capital to shareholders through the dividend and strengthening the balance sheet by reducing long-term debt. Repositioning a business of this size is not a simple task, and I want to recognize our associates across stores, distribution centers, and corporate for their continued resilience and dedication to improving Kohl's results. I will now turn over the call to Jill to discuss our first quarter results and outlook for 2024. Thank you, Tom, and good morning, everyone. For today's call, I will provide additional details on our first quarter results, as well as an update on our fiscal year 2024 guidance. Net sales decreased 5.3% in Q1. Comparable sales declined 4.4%. As Tom indicated, clearance was a significant headwind in the first quarter, representing more than a 600 basis point drag on comp sales. Stores slightly outperformed digital in the quarter, with both down to last year. Other revenue, which is primarily our credit business, decreased 5.7% in the quarter as loss rates increased year over year, in line with our expectations. Now let me turn to the rest of the P&L. Gross margin in Q1 was 39.5%, an increase of 48 basis points. The improvement year-over-year was driven primarily by strong inventory management and lower freight expense. SG&A expenses declined approximately 1% to $1.2 billion in the first quarter. As we continue to control expenses tightly across the organization, we're also investing in marketing and our new growth initiatives, including new Sephora shops and Impulse queuing lines. Depreciation expense in the first quarter was $188 million, flat to last year. Interest expense was $83 million in the quarter, down $1 million from last year. Net loss for the quarter was $27 million, and loss per diluted share was $0.24. Now onto the balance sheet and cash flow. We ended Q1 with $228 million of cash and cash equivalents. Inventory at quarter end declined 13% compared to last year. As we have discussed in past quarters, inventory management has been a key focus of ours, with the goal of increasing churn, which we were able to do in the first quarter. Our new disciplines once again allowed us to operate with greater flexibility and manage inventory more efficiently. Operating cash flow with a use of $7 million, significantly better than last year's use of $202 million, driven by effective inventory management. Adjusted free cash flow was negative $154 million in the first quarter. Now, let me provide an update on our capital allocation priorities. Capital expenditures for the quarter were $126 million. For the full year 2024, we continue to expect CapEx to be approximately $500 million, which includes investment in Impulse queuing lines, Sephora small shop openings, the launch of Babies "R" Us partnership, and new store openings. Strengthening the balance sheet and returning capital to shareholders also remain top priorities. We ended the first quarter with $355 million on our revolver, down from $765 million last year. Our goal in 2024 remains paying down our revolver balance, rebuilding our cash position, and capitalizing on opportunities to reduce debt. Earlier this month, we provided notice to the holders of our May 2025 notes that we'll be executing a make-whole call on them in mid-June. As a result, we will take out the 10.75% note, totaling $113 million, which will result in an approximate $4.5 million pre-tax charge, or $0.03 per diluted share in Q2, with subsequent interest savings going forward. This action not only lowers the average interest rate on our outstanding debt, but also reduces the amount of maturities coming due in 2025. We expect to end the year with $1.5 billion in total debt. Looking ahead, we will continue to monitor our options with respect to the July 2025 notes and will likely address them closer to maturity, given the favorable coupon rate. As for shareholder returns, maintaining our dividend at its current level remains a priority. In Q1, we distributed $55 million in dividends to our shareholders. As previously disclosed, the board on May 15th declared a quarterly cash dividend of $0.50 per share, payable to shareholders on June twenty-sixth. Now, let me share some detail on our updated outlook for 2024. As you've heard this morning, we are making progress against many of our key strategic initiatives. We are also working to address several opportunities identified in Q1. We are approaching our financial outlook for the year more conservatively, given the first quarter underperformance and the ongoing uncertainty in the consumer environment. For the full year, we currently expect net sales to be in the range of 2%-4% decrease versus 2023. Comparable sales to be in the range of a 1% decrease to a 3% decrease. This implies a comp of flat to down 2% for the balance of the year. We continue to expect gross margin to expand 40 to 50 basis points and SG&A dollars to be down 1%-1.5% for the year. We expect operating margin to be in the range of 3% to 3.5%, and EPS to be in the range of $1.25 to $1.85. As a reminder, our guidance includes the potential impact from the CFPB late fee rule, assuming it's effective August first. While this rule is currently being challenged, we will continue to monitor developments and will provide an update when appropriate in the future. In closing, I want to reiterate that our underlying financial structure remains solid. We are expanding gross margins through effective inventory management and managing expenses with discipline, and we continue to strengthen our balance sheet by reducing long-term debt. With that, Tom and I are happy to take your questions at this time. As a reminder, to ask a question, please press star followed by the number one on your telephone keypad. To withdraw any questions, press star one again. In the interest of time, we ask that you please limit yourselves to one question and one follow-up question. Thank you. Our first question comes from Bob Drbul from Guggenheim. Please go ahead. Your line is open. Hi, good morning. Tom- Good morning. I was just... Sorry. I was just wondering if you could just talk some more just around the, I guess, the general confidence in the strategy on a go-forward basis. I think when, when you think of some of the, you know, some of the challenges that you're seeing, you know, within the, your own business and even within, you know, the, the industry. Okay. You know, as the prepared remarks indicated, we feel very good about what we have in terms of our overall strategy. You know, we're gonna tweak things along the way. You know, I think when you look at the first quarter results, the clearance headwind really hurt us, you know, 600 basis points. So we had a strong performance in our regular price business, which, you know, obviously is important, especially for go forward. But, you know, fundamentally, you know, things that are working as part of our strategy, Sephora is still working very well, you know, with a 60% total growth and 20% comp. And we've done very well in categories in the home, which are part of our major strategies, like seasonal and everyday decor. Our pet business is good, our gifting business is good, impulse is good. You know, we've made a lot of progress in our apparel businesses by growing the polished casual and dress business really across, across the board. You know, our value strategies are working. Our high volume pricing has worked very nicely. We've gotten a lot of positive feedback from our, from our customers. And you know, we're, we're doing a good job of managing our inventories and expense, and so those fundamentals are still in place. And Jill talked about reducing our long-term debt, but you know, we have work to do, though, candidly, you know. Even though we feel our, our strategy is, is a good one, but we need to do a better job in rebuilding our active business. It's one of our priorities. Overall, the accessory business, our jewelry business, is a huge, huge opportunity for us. We've lost a lot of business with the Sephora rollout, overall, and some of the legacy businesses in home, such as floor care and bedding and kitchen electric, underperformed. So we're working hard on that to bring in more newness in that. And then, you know, we're working hard to drive traffic in stores and in digital. So, but, you know, long, long answer, but... We feel good. We feel good about what's happening, and, you know, we feel good that the clearance headwinds, you know, we took a ton of markdowns in the fourth quarter of 2022 to clean all the inventory up. So obviously, that was a huge headwind for us in the first quarter. Great. Thank you very much. Our next question comes from Oliver Chen from TD Cowen. Please go ahead. Your line is open. Hi, Tom and Jill. A lot of helpful comments. Why do you think the clearance impact was worse than you had originally guided to? And as you think about the biggest needle movers going forward, it sounded like juniors, active apparel, jewelry. What will really drive the comps better, you know, as we think about guidance and what should happen sequentially in the back half? And a follow-up, with your comp guidance for the quarter, what's assumed for June and July, you know, relative to May? And are you thinking that traffic will be negative, positive, or flattish? Thank you. Sure, I'll start. Just for clarification, it wasn't clearance that I think we got wrong on the guide. It was just, it was a big headwind in the quarter I think that was unique to us. What we did is we started the quarter well with our reg price business incredibly strong, and it was offsetting the clearance headwinds. So as we came out to the market, we felt really good with the initiatives and the momentum behind those to help offset clearance. As we moved into the latter part, the late part of March and into April, we saw a slowdown in our reg price selling, particularly around our spring seasonal goods, and that became the headwind that we couldn't overcome to get back into that flattish comp that we had guided to. So that really was what happened in the quarter. I think, you know, fundamentally, the company still did well. We managed the inventory, which is a lot of new discipline. In the past, we wouldn't have had to bring down 13% in inventory when we saw the sales decline, really is a testament to that new muscle that we have. That obviously helped drive our margin, and we were able to hit our margin, and then we pulled back on expenses. So our expenses actually came in better than we had anticipated because we were able to react. So I think that just is a testament to this organization and the agility we have when we do have some of those misses on the top line. But really, it came to that regular price slowdown. So then if I go to the comp guidance, for Q2, obviously not gonna speak to the months and how we're guiding, but what I would say is, when we saw improvement in our business, once we got through the clearance impact, we saw a lot of that come through our traffic and transactions, and that was actually relatively flat as we went into March and April. So we do see that we are gaining those steps in the momentum, but we also know the customer is a little bit more discerning out there, so we have to make sure we're putting our first best step forward with that value, which, you know, Kohl's is known for, and that's what we're gonna go ahead and do. You know, May did start out a little slow like April ended, but what I will say is that we are progressing. We're seeing our sales pick up, particularly in that spring seasonal, so it's coming a little bit later. We continue to see the momentum and the strategic initiatives that Tom has outlined, and that's what's really, you know, helping us drive back to say the rest of the year will be flat to down too. But we're still being mindful of the uncertainty in the consumer and the macro environment. Yeah, and to answer the question about what's gonna drive the comps, you know, as I mentioned before, you know, Sephora obviously is gonna help us a lot. The balance, 140 shops will be rolled out by the end of the second quarter, so that, that should help us a lot. Building on our underpenetrated categories, as I mentioned before, our decor business is up 30%, pet was up 100%, gifting up 30%, impulse up 60%. We opened up 100 impulse queuing lines in the first quarter. We have another 50 that we're rolling out in the second quarter and 200 in the third quarter. So obviously, that, based on the performance of that, that'll be good-- that'll be good. You know, we're doing well in juniors from a regular price perspective with all the new market brands that we're introducing. The women's dress business has been very, very strong. Men's suitings has been very good as well. One of the things that we're working diligently on, as I mentioned, is how to re build our active business to the level that we want it to be. But it was really negatively impacted by a significant amount of clearance in the first quarter as well. We ended inventories at the end of 2022, high in active. So we have a lot of things that are working that are gonna help the comps overall. And obviously, you know, we're working diligently on that. Thank you. Best regards. Thanks, Oliver. Our next question comes from Mark Altschwager from Baird. Please go ahead. Your line is open. Good morning. Thank you for taking my questions. Good morning. So the 600 basis points headwind on the lower clearance, how much of that would you categorize as somewhat one time as you cycled last year's actions? And how should we think about that moving forward? I guess you continue to manage inventory very lean, so, you know, would it be fair to think that reduced clearance product availability, it would be a headwind moving forward? And then, I mean, bigger picture, do you think you're losing a cohort of your customer base to other retailers as you manage to this much lower level of clearance product? And what are you doing to reengage that customer and make sure they still see value in the overall assortment?... with that clearance product no longer being there to such an extent? Well, first of all, the clearance levels going into 2023, it totally unique. You know, it was a once in a lifetime clearance level because of trying to clean everything up as we went into 2023. So it's highly distorted, you know. As a percent to total of our business, it was, it was obviously larger than ever. So, we never want to get to that level. You know, we wanna sell the appropriate amount of clearance, but, you know, we're focused on regular price as well. But, the situation going into 2023 was totally unique, and, we're never gonna get to those levels. It's always gonna be part of our business, but, you know, reducing our inventories overall, you know, as we were down 13%, at the end of the first quarter, we're not gonna have as much clearance. And we're gonna go after the customer with, you know, building our Sephora business and building our underdeveloped, under-penetrated categories in home. We're gonna go after gifting. We're gonna go after impulse. We're gonna continue to broaden our mix in apparel to include even more polished casual and dress. So, you know, we have a lot more than clearance. You don't wanna pivot, or you just don't wanna have a business that has a underlying huge clearance position, because that just shows... I mean, those are mistakes, you know? You know, we wanna focus on the regular price business. Yes, I think just to summarize it, I would assess the whole 600 mark as really kind of a one-time, to Tom's point, coming off of what I would say is a highly unique one-time situation of clearing out the inventory. We're gonna have the regular balance of, of clearance going forward. I think it's not a headwind, it's not a tailwind, 'cause it's just, as Tom mentioned, part of the business, and that's really how we looked at it when we gave the guidance. I think the other thing is the newness we're bringing in and is really working, and that's really that discovery element that we're bringing with these market brands and having a faster turn, which we were able to improve our turn quite significantly in the quarter. That's really what we're looking to do, is making the reg price inventory work harder for us to better margin. We can deliver newness more frequently. It's really just a better model that we are moving into, which will be a healthier business for us to be in and really deliver for the customer. But not for lack of value. We're still gonna have value, we're just not gonna find it on the clearance rack. You're gonna find it when you come in and find new brands, brands you're not expecting, and having it at a great price. Thank you. And, and Jill, with the reduced comp outlook for the year, can you speak to any incremental opportunities you see on the cost side of the equation? And then is the 7%-8% still the right way to think about the longer term, and just any help in bridging the kind of that 400 basis points of expansion versus what you're planning for this year? Thank you. Yeah, absolutely. I think, you know, we, we held our margin, so we're still, you know, in the 40%-50%, which I think puts us over that 37 mark, which we spoke about as being, you know, at the high end of that bridge in the 7%-8%. So we feel really confident with that. I mean, everything we spoke to on inventory management and reg price selling is really helping us continue to drive the margin, and that's really what you're gonna continue to see as discipline through the organization. So I feel very good with the margin. We held that guide. It's within the 7%-8% framework that we outlined, you know, a couple years ago. From an SG&A perspective, you saw the numbers came in better for Q1. We did say they'd be down in that 1.5 range and, you know, for the rest of the year, so we know we're gonna pull back commensurate with the sales being down. It's something that we're really good at Kohl's. We have a great cost discipline culture. We're always looking for operational efficiencies across the organization. And so this is where, you know, we'll play into that game. We'll pull back on some of these expenses. We're still gonna invest in growth initiatives. So as Tom mentioned, we're rolling out the impulse lines. We're gonna do Babies "R" Us, and we have the Sephora shops. Those are important, and so we're gonna make sure that we're putting the expenses where we're gonna get that return back, and those are key projects that are gonna be drivers for sales as we move forward. The big piece of getting back to 7%-8% right now is gonna be growth, and that is really, you know, a huge focus of what we're looking at. A lot of these initiatives, like we mentioned, are working, but we also are addressing the fact that we have opportunities. And we're, you know, well versed in what those opportunities are, and we're working towards correcting those. And when we get back to growth, that's when you're gonna see that margin expansion happen, but it will obviously take some time. Thanks again. Best of luck. Thank you. Thank you. Our next question comes from Matthew Boss, from J.P. Morgan. Please go ahead, your line is open. Great, thanks. Hey, Matt. So Tom could you elaborate maybe on first quarter trends that you saw at stores versus digital, and how best to think about the sequential cadence across channels that you're expecting in the second quarter versus back half of the year? And then, Jill, I just wanted to circle back, on trends that you cited in May relative to what you saw in March and April with regular price selling. As far as the digital to stores business, we're closing the gap. You know, as you know, stores way outperformed digital last year. And in the first quarter, they were much closer together. Going forward, incorporated in our guidance, is the fact that we see digital and stores performing at the same similar levels in terms of comp. All the heavy promotions that we did previously are behind us now, and now it's obviously normalizing, and we should see, you know, digital and stores come together. Yeah, and then in terms of the trends for May, I think we were really past the clearance component of that, Matt, in February into early March. So as we saw the softening in late March and April, I think that's just really the regular price business, the core business. I mean, clearance is a small percentage once we get through the beginning part of the quarter. And like I mentioned, we saw the softness progress into May, but we are seeing progressive improvement as the month has gone on, particularly in that spring seasonal. It's coming a little bit later, but it's coming. And then the momentum that we've called out, Sephora, home decor, gifting, impulse, continuing to still be very productive. As we're making some of those corrections that Tom mentioned, particularly like newness start setting in small electrics, you know, leaning into some more value in that space as well around home. And then impulse lines, we'll have more of them. We have 140 Sephora shops that will be opening in Q2, and then you have Babies "R" Us, that really is a Q3 endeavor as well. So a lot of newness and a new initiatives coming in front of us as well, that help give us confidence in the flat to down two for the rest of the year. Great. And then, Jill, just with the operating margin setback for this year's guide, is there any change to longer term that the 7%-8%, or do you see today's change as more transitory? I would say there's not a change. We do believe we can get to 7%-8%. I think a couple of things, obviously, remember, we do have the CFPB legislation beginning in August in our number. We, you know, do think that we have offsets that we're working towards, but that obviously is weighing in this year. When we have more clarity on that, you know, we'll give an update, but at this point in time, I think, you know, there's still a lot of uncertainty as that remains in the court system. That's a one step back, but I think we can get to 7%-8%. Like I mentioned, we're already at over 37% for our gross margin, so that was above the bracket. As you can see in SG&A, the discipline is there. I mean, our numbers are down year-on-year. And I think if you look over the last several years, our SG&A really hasn't risen. We've held it despite the inflation among wages and some of these other projects that we're putting in. So we've gotten that discipline. It really comes to growth. And I think that's why the biggest focus here is how we continue to drive top line. And once we get that growth, the financial structure is sound, and it's there, and it's ready, and as soon as that growth happens, you're gonna see that expansion from an operating margin perspective, but it will be more long term as we step into the growth, and we can take advantage of that. Great color. Best of luck. Thank you. Our next question comes from Chuck Grom from Gordon Haskett. Please go ahead. Your line is open. Hey, thanks very much. Good morning. Just wanted you guys- Good morning. To talk about the health of your customer today across income cohorts. And then, maybe if we could talk about trends across apparel and footwear in the quarter relative to the down four. I don't know if you want to unpack it, regular versus clearance, or if there's a way to split it out just to assess the health of those two parts of your business. Thanks. So I think, you know, we know the customers are definitely feeling pressure. You've heard that across the retail space. Particularly for us, it continues to be that middle-income customer that's been the most impacted. You know, I think that's been a pretty consistent theme for our... So that's where we really have to lean into value for that customer and make sure we're delivering them value, whether that be through newness of value or really through our core customers who enjoy the coupon or going into deeper pricing events. But making sure that they know that they can come and get value because obviously, their dollar has to be stretched further. Another positioning is private brands. It provides an opening price point for us, so I think that's definitely a place that we can lean into from that perspective. You know, we've done a lot with our key high value pricing, where we're able to take some better pricing on our opening price point brands like Jumping Beans and Tek Gear. And as Tom indicated, we're really getting credit from a customer for delivering value, as we go out and talk to them. And also in the quarter, our proprietary brands, our reg price business was flat. So we can see that it's really resonating with them as we move into that space, and we're able to take those markdowns to happen. So that's what we're really gonna focus on, is making sure that we continue to deliver value to that customer because we know at this point in time, their dollar has to be stretched a lot further, and particularly in that middle-income customer who's really core to Kohl's. As far as trends go, you know, we're seeing... I'm just gonna put it all together between clearance and regular price. You know, we're seeing great trends in expanding the assortments in apparel to have more and more polished casual and dress-up product. Overall, the customers are really looking for that. You know, people are going back to work. People are obviously spending time on special occasions, et cetera. So not only is the polished casual and dress good in apparel, we're also doing well in the footwear business as well. So that whole package is trending very well. The one area that's negatively impacting us from a trend perspective, as I mentioned, is our active business. We've done well with our own product, Tek Gear and FLX, but the balance of it, we have a lot of work to do in order to turn that business around overall. You know, we really think it's an important business. We don't think it, you know, we don't think it should be in lieu of the polished casual and dress, but it's a big category, and we're working on that a lot. You know, whenever we have some special things in our assortments- As I mentioned in home, that really helps us. You know, the gift, the gifting business is really trending well. We've made a big emphasis in our stores on the gifting side of it. You know, like, our Mother's Day business was very good. We anticipate a good Father's Day business. Americana product is selling very well, also. So, you know, the impulse thing, you know, that's a big opportunity for us in the future, and again, it's up, like, 60% already. So, you know, that's pretty much the trends we're seeing. Obviously, the beauty trend is huge, as well. So that sort of sums it up. Yeah, that's, that's very helpful. Thank you, Tom. Just one for Jill on the model. Just, how should we think about the cadence and phasing of, of comps, over the balance of the year? Should we think about it somewhere in the down 1%-3% range by quarter, or are you anticipating fourth quarter to be a little bit lower because of the five fewer days? And then, on credit, you may have touched on this earlier. I hopped on a couple of minutes late. Are you, are you still anticipating down mid-teens, dollar growth in 2024? Thank you. Sure. I'll start with the second one. We are. There's no change from a credit perspective. It came right in line with our expectations in terms of the quarter. You know, we'll expect that. We still include, as I mentioned, the CFPB legislation in that number, and that's obviously why it's down mid-teens for the year. So the back half is much more down due to the legislation assumption starting on August first. And then I think in terms of the comp cadence, you know, we're not really giving it. I think we feel really good with the flat to down two. The one thing that I would tell you is we do have new initiatives in front of us. And so as you think of Q2 to Q3 and then in holiday, we're opening up more Sephora shops in Q2, so that obviously would benefit partly Q2 and in the back half of the year. Babies 'R' Us, really opening in that Q3 period to help benefiting Q3 and then Q4. And then, as we talked about with Impulse, we'll have 50 stores in Q2 opening, and I think it's, like, another 200 in Q3 to bring it to the 350 for the year. So that too, in front of us. And then gifting, just in general, I think, has been working. We've called it out in terms of Valentine's Day and Easter and Mother's Day. So we're really taking advantage of all those periods, and I think we're getting better at it and having a much bigger presence in the stores, and really resonating with customers to know we can be found for those type of holidays and those types of gifts. So particularly in the holiday period, I think you're gonna see a much bigger set from that perspective, and that should be a benefit as well. So really leaning into those key initiatives. And then, I mean, I just wanna call it the fact that our, our women's business, our reg business, is up 3%, and we haven't seen and talked about women's and juniors being positive in any sense in a long time. So really continuing to build off of that momentum as well. We have dress shops, like Tom had mentioned, in 700 stores, those set in Q1, but we're expanding them as we move into Q2. So I just think there's going to be some build as these initiatives come throughout the year, but I guess I'm not gonna give you what that cadence looks like. I'll, I'll let you kinda discern how you feel that should be. All right. Thanks, Jill. Appreciate it. Thank you. Sure. Our last question today will come from Dana Telsey from Telsey Group. Please go ahead. Your line is open. Hi, good morning, everyone. Hi, Tom. A while ago- Hi. And hi, Jill. And hi, Mark. A while, a while ago, you had talked about enhancements being made in stores, whether it's the queuing lines, anything you're seeing in stores with these strategic initiatives that is, that you expect to help as we go through the balance of the year? And can you talk about the difference in performance of the digital channel versus the stores channel and what you're seeing? And I think you were thinking about either some remodels or downsizes or new stores. How should we be thinking of that in light of the current environment? Thank you. To answer the last question first. We, you know, we're doing our regular maintenance on our stores this year, but we're not gonna, we're not gonna have any major remodels or any resets in the stores right now, focusing on the business in totality right now. So, you know, that's really key. The digital versus store business, we're really looking at them being comparable in terms of trends. There was a much smaller spread between digital and stores in the first quarter. But, you know, we think going forward, they're gonna perform at a similar level, as I mentioned earlier in the call. Yeah, and then I would say, you know, we've talked a lot about in-store enhancements, like you talked about, but there are things in digital that we're working on as well, which is why we think they'll really run more in parity. We're doing a lot of scaling initiatives around targeting initiatives in terms of when you go out in the store or on a site, if we're out of stock on something, how can we give you your next best choice? A lot of this, we're using AI to help us power do that. We're doing more personalized and relevant content recommendations based on consumer behavior. So really trying to work on that side of it from a conversion perspective. And then we're improving our search and product recommendations. We're moving to a new platform there as well. So I think the enhancements we're bringing in store are also complemented with a lot of enhancements we're doing on the digital side, and that's why we think they can run more at parity. And then just to complete out your question, you asked about new stores. I think we have about five new stores this year that are opening, one relo. What I would say is, you're not gonna see a lot of new store space from us. In this year or the upcoming years. I think really right now, we want to get that formula right in our stores. We're making a lot of changes and a lot of enhancements. I do think you're going to see that smaller store as we move forward, but we have a lot of work to do there, I think, within, you know, the 1,200 stores we own today. So you won't see a lot of newness there until we get that formula right, and then we do think there is opportunity. It'll just be more in a long-term perspective. To answer your first question now, in-store, in-store improvements, as I mentioned earlier, you know, the impulse business is really growing. It's up 60%. We opened 100 queuing lines in the first quarter, doing 50 in the second quarter and 200 in the third quarter, and it's doing very well. And, you know, over the next couple of years, we plan to roll it out to all of our stores where it makes sense in general. We've really built the gifting centers. They're much more robust than they have been before. We're taking the junior business, and we're moving it from within the women's business to the front of the store where it used to be, so that when the customer comes out of the Sephora shop, they walk right into juniors, and we're working really hard on making sure that we have more trend product in the juniors area, maximizing our efforts with the market brands overall. So, you know, the stores I think are coming together very nicely and, you know, we feel good about what's going to happen in the future. Thank you. Thank you. I think that's it. Thank you to everyone for listening on the call today. Have a good day. Bye. This concludes today's call. Thank you for your participation. You may now disconnect.