Welcome to the Qurate Retail, Inc. 2023 Q3 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At this time, if you have a question, please press star one on your telephone. As a reminder, this conference will be recorded November third. I would now like to turn the call over to Shane Kleinstein, Vice President, Investor Relations. Please go ahead. Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Forms 10-K and 10-Q, filed by our company and QVC with the SEC. These forward-looking statements speak only as of the date of this call, and Qurate Retail expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Qurate Retail's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based. Please note that we have published slides to accompany the earnings release. On today's call, we will discuss our non-GAAP financial measures, including adjusted OIBDA, adjusted OIBDA margin, free cash flow, and constant currency. Information regarding the comparable GAAP measures, along with required definitions and reconciliations, including preliminary note and schedules 1 through 3, can be found in the earnings press release issued today or our earnings presentation, which are available on our website. Today, speaking on the earnings call, we have Qurate Retail President and Chief Executive Officer, David Rawlinson, Qurate Retail Group Chief Financial Officer, Bill Wafford, and Qurate Retail Executive Chairman, Greg Maffei. Now I'll hand the call over to David. Thank you, Shane, and good morning to everyone. Thank you for joining us today and for your interest in Qurate Retail. We unveiled Project Athens last year as our strategic multiyear framework to transform Qurate Retail, focused on double-digit growth in OIBDA and cash flow, and stabilized revenue through 2024 off of a 2022 baseline. Our 2023 first half initiatives were designed to increase operating free cash flow through working capital, and our second half initiatives are primarily margin-focused. The transformation plan is playing out as we anticipated, with tangible progress in Q3, despite a challenging discretionary retail backdrop. Let me walk through a few of the highlights of the quarter. First, we grew consolidated OIBDA, the first quarterly OIBDA growth since Q2 2021. Total Qurate Retail grew OIBDA 54%. I will remind you that we sold Zulily earlier in the year, in part to benefit total company profitability. Excluding Zulily from prior year results, OIBDA was up 35% in constant currency. Second, we grew OIBDA at all three of the businesses. This growth was driven by Project Athens and other work streams across the organization, focused on refreshing our merchandise assortment, enhancing our programming, sharpening our pricing, and improving our productivity and lowering our cost to serve. Third, we sustained gross margin improvement at our core video commerce businesses. These gains reflect successful execution on our elevated merchandise and pricing strategies, and meaningful improvement in fulfillment operations to reduce costs, improve efficiencies, and manage inventory. Fourth, we grew free cash flow, $464 million year-over-year in the first nine months of 2023. This growth was due to improved operating cash flow from higher earnings and working capital gains. Fifth, we substantially moderated the rate of decline in revenue. Qurate Retail revenue, excluding Zulily from prior year results, declined 3% in Q3, down from high single digits in the first half of 2023. We are proud of the teams and the hard work underlying our progress over the past 12-18 months, especially as we navigated massive impacts from post-pandemic supply chain challenges and the fire at our former Rocky Mount fulfillment center. Over this time, we have made meaningful improvements to execution. We reorganized our U.S. video commerce businesses and attracted key talent throughout the organization. In fulfillment, we negotiated better ocean and domestic freight rates, improved efficiency, and managed inventory to alleviate the detention and demurrage charges that followed the fire and post-pandemic supply chain disruption. We expanded product margins by refreshing our merchandise assortment with higher quality products, rotating into higher performing categories and higher price point subcategories, and affecting strategic price increases. We reinvigorated our core daily programming, the Today's Special Value at QVC and Today's Special at HSN, with elevated merchandise assortment, enhanced programming, events, and re-engaged hosts. We have also returned these specials to time-limited 24-hour events, reinfusing a sense of urgency. From these efforts, we beat expectations on per minute productivity and overall TSV or TS performance at both QVC and HSN. We affected workforce reductions throughout the company.... While these were difficult decisions, they are right for the long-term health of the business. And lastly, we conducted a deep dive customer analysis and have enacted changes that are beginning to stabilize the customer file. We expect these foundational improvements and Project Athens work streams to continue to drive progress. Now let me discuss each of our three businesses. QxH increased OIBDA 41%, driven by 480 basis points of gross margin improvement. From a top-line perspective, QxH moderated the rate of decline in Q3, with Q3 down 3% compared to mid-high single-digit declines in the first half of 2023. Our total sales outperformed the discretionary retail market. We achieved a better balance between unit volume and average selling price. Unit volume declined 3%, which was an improvement from the high single-digit decline in the first half of 2023, largely a function of higher quality product assortment. We continue to drive higher pricing, primarily through our merchandise mix, with average selling price up 1% in Q3. From an operational perspective, QxH continues to lower costs and improve delivery times. Rates for my new domestic parcel contract took effect in late July, and our operational cost per unit declined 12% in Q3. Our order to delivery time declined 2%. Our refreshed merchandise assortment and enhanced programming are contributing to this improving revenue performance. In terms of viewership, minutes viewed on our 5 linear channels increased 15% year-over-year in Q3. The number of new on-air items grew low double digits in Q3, which were met with strong consumer demand. QVC continues to enhance its programming for its core customer. Earlier this year, I told you about a limited run series, Over 50 & Fabulous. We broadcast season two of this series for six weeks from mid-August to late September. We enhanced strategies from season one and improved the show's sales per minute productivity. To date, there are more than 26.5 million views of Over 50 & Fabulous across social and digital platforms. For the series finale, we hosted customers for an in-studio live show and after-party live stream. Tickets for that event sold out in five minutes. Looking at the category performance in the third quarter, QxH saw a turnaround in the home category, driven by fresher products, exciting events, and inspiring personalities. We experienced year-over-year growth and demand during our Christmas in July event at QVC, as well as at HSN during its July birthday month. Food and kitchen gadgets were particularly strong as we leaned on our celebrity chefs, like David Venable and Wolfgang Puck, proprietary brands such as KitchenHQ, and special events and programming, such as our Foodie Travel Series and Foodie Fest. Home decor demand improved, driven by seasonal products, candles, storage, and a thirtieth anniversary event with Valerie Parr Hill. QVC U.S. continues to have strength in its wellness and supplements product offering. At HSN, the relaunch of Joy Mangano has drawn a number of our reactivated customers back to the platform. In fashion, we experienced growth in accessories, led by higher demand for footwear and loungewear, including loafers, wellness footwear, and brands like Barefoot Dreams and Cuddl Duds. In September, QVC refreshed its Monday night fashion lineup, featuring LOGO by Lori Goldstein, the relaunch of PM Style with Amy Stran, and new shows, Accessorize with Sean and Sean on Style. Each show was developed to deliver a strong fashion point of view and includes special sets and fresh production elements. At HSN, we were pleased to launch new brands and offers, including C. Wonder by Christian Siriano, Birkenstock for the first time as a Today's Special, Shark's FlexStyle hair tool, and Sofia Vergara's Toty Beauty line. Now let me touch on QxH customers. On a quarterly basis, total count, count declined 8% in the third quarter, partially offset by a 6% increase in average spend per customer, resulting in an overall 3% decline in revenue. The rate of decline in count moderated in Q3 from the low double-digit declines in the first two quarters of 2023. We're seeing the biggest turn from the low end of our customer file. On slide eight of our earnings presentation, you can see we are stabilizing the trailing twelve-month count near 8.2 million, down only modestly from 8.3 million at the end of the second quarter. Please note that while our press release discloses customer count on a trailing twelve-month basis, this is a lagging indicator and does not reflect the progress in Q3. The increase in average spend was driven by our existing and best customers and reflects our higher quality product assortment. The average dollar spend for each of these cohorts was the highest of any quarter in 2023.... We are taking a variety of actions to attract new customers, retain customers, and reactivate former customers. We have launched new programs and formats on both linear and digital forums. We have offered gifts and vouchers and have refined and enhanced our marketing spend, both of which have yielded high returns. We have created new on-site experiences, sent letters from the business presidents to recognize and appreciate our best customers, and we are testing a pilot loyalty program. As a result of these efforts, we're pleased to report that new customers grew 8% at QxH in Q3, which was the first quarter of growth since Q1, 2021. This growth was primarily attributed to strategic targeting of promotions based on marketing channel and product categories. We are constantly reviewing our customer acquisition costs and carefully managing overall return on our marketing efforts. We shift marketing spend to capitalize on opportunities in the market where we can efficiently acquire customers in our target demographic and track their lifetime value. We will continue to test, learn, and scale initiatives. We are executing with more success at a faster pace now than a year ago, and I look forward to telling you more on future calls. Before closing on QxH, let me provide a view on the important holiday season. Our customers are looking forward to activities with friends and family, and more importantly, ready for holiday shopping. Our target customer is mindful of her budget and cognizant of inflation, particularly for groceries and gas. Therefore, it is important for us to incite and inspire her with fresh products and compelling value. From a merchandise point of view, we feel good about our assortment and are in a substantially better inventory position than one year ago. At QVC, we are excited about several brand extensions and limited time collections from key brands. These include Susan Graver, Kim Gravel, Dennis Basso, and Denim & Co. We have new product launches, including Lawrence Zarian, and a new private label cashmere sweater collection from Pure Splendor. We are extending our chef family with new culinary lines from Aarti Sequeira and a cookware line from Carla Hall. In beauty, we have exclusive holiday packages from key brands. These include Philosophy, Elemis, Peter Thomas Roth, and more. In addition, QVC is the exclusive retailer for Beekman's launch in November of its Toll House partnership. HSN will also inspire with new merchandise, including an exclusive with Dolly Parton for the launch of her new rock album, Katharine McPhee's Radiance by Absolute Collaboration, Erin Andrews' licensed sports launch with Fanatics, and the launch of Tarte Beauty as today's special. We'll also have all our celebrity chefs cooking their holiday favorites and celebrity designers bringing new and exciting assortments. Looking now at QVC International. Like QxH, we're implementing a transformational program that is focused on margin opportunities, content, and broadcast strategies, and optimizing execution. These efforts are paying dividends. QVC International grew revenue and OIBDA compared to last year and sustained gross margin gains from Q2. Growth was stronger in the U.K. and Germany as Euro area inflation leveled off, and the U.K. was in comparison to the Queen's passing last year. Japan was flat as consumer sentiment continued to be affected by higher energy costs. QVC International's transformation actions are on track to deliver substantial OIBDA opportunities that will achieve full run rate by 2025. Looking to the holiday season, we remain optimistic about our product assortment and campaigns that we believe resonate with our customers. At both of our video commerce businesses, I'm especially pleased that we grew OIBDA while still investing in growth initiatives. Our domestic streaming operations have grown revenue and customer engagement year to date in 2023. The free ad-supported portion is the fastest growing sector. In March, we launched Sune, our next generation video and live stream shopping platform and app. We continue to build momentum in this beta phase. At QVC International, we launched integrated experience in the U.K. and Germany with a focus on gardening and food and kitchen, respectively. Both have shown positive customer engagement, and we believe we can scale to other category segments and markets over time. Looking at Cornerstone, the overall home sector remains highly promotional and competitive. Demand for most categories was soft across the four Cornerstone brands. Despite the challenging environment, we focused on factors in our control, managing inventory and lowering supply chain and operating costs. As a result, the business generated OIBDA growth in the quarter. We have seen continued progress in our retail store strategy as customers are gravitating to our new physical stores. Accordingly, we are planning to open five new retail stores by the first half of 2024. In closing, our Q3 results are in line with our Project Athens plans and amplify our confidence in our 2024 objectives. Going into Q4, we are cognizant of the challenges from inflation, interest rates, and geopolitical events. We remain steadfast in our transformation... We recognize we have much work still ahead of us, but remain confident in our ability to execute and drive results. The foundational changes we have enacted and the dedication from our teams are materializing in better financial results. We expect to sustain progress going forward, and I want to reiterate our expectations for a double-digit CAGR for OIBDA free cash flow and stable revenue through 2024. Now, I'll turn the call to Bill to discuss the financial results of each of our businesses in more detail. Thank you, David, and good morning, everyone. Unless otherwise noted, my comments compare financial performance for the three months ended September 30, 2023, to the same period in 2022. Starting with QxH. Revenue declined 3%, primarily on lower unit volume. These pressures were partially offset by 1% growth in average selling price and a 6% increase in average spend per customer. From a category perspective, QxH experienced growth in accessories, home, and jewelry, offset by declines in electronics, apparel, and beauty. As David mentioned, we experienced a turnaround in home, where revenue increased 2%. This growth was mainly due to higher demand for cookware, food, and seasonal products. Accessories grew 7%, primarily due to broad-based strength in footwear and higher demand for loungewear. Apparel was down 8%. We experienced softness in classic and contemporary apparel, partially offset by growth in outerwear. Beauty declined 7%. This performance was mainly due to declines in beauty devices and color, partially offset by higher demand for hair care. The decline in our electronics revenue by 18% was partially driven by the softness of the category in the market. We continue to strategically pull back on electronics airtime as we focus on higher-margin home and fashion categories. Adjusted OIBDA margin increased 380 basis points. Looking at the third quarter performance in more detail, gross profit grew 480 basis points, mainly due to favorable fulfillment, product margins, and inventory obsolescence. Fulfillment expenses improved 220 basis points due to Project Athens initiatives, less detention and demurrage costs, and favorable rates from our new parcel carrier contract that went into effect in late July. Product margins increased 185 basis points, driven by mix shift to higher-margin products, less clearance due to improved inventory health, and initiatives to increase initial margin. Inventory obsolescence declined, reflecting a favorable composition of higher quality inventory compared to the prior year. Operating expenses were favorable by approximately 30 basis points due to fewer customer service contacts, partially offset by higher commissions. SG&A was unfavorable by approximately 120 basis points. About half of the pressure is from the transformation-related costs associated with Project Athens. Marketing expenses were 20 basis points of pressure due to sales deleverage. These headwinds were partially offset by lower bad debt expense, reflecting provisional adjustments and lower installment counts. Moving to QVC International. My comments will focus on constant currency results. Revenue increased 1%, primarily on higher unit volume. Our largest markets in Europe, QVC Germany and the U.K., led our performance. Japan was flat and Italy declined moderately. From a category perspective, QVC International experienced growth in beauty, home, and apparel, partially offset by a decline in electronics. Adjusted OIBDA increased 23%, and adjusted OIBDA margin improved 210 basis points. These gains were driven by a 140 basis point increase in gross margin, mainly due to improved product margins and lower inventory obsolescence. Product margin gains were driven by lower supply chain costs and a mix shift to higher-margin products. Fulfillment was unfavorable 15 basis points, primarily due to $4 million of rent from the sale-leaseback transactions in January and increased labor costs. SG&A was modestly unfavorable due to higher fixed costs from outside services and management incentive accruals, partially offset by lower marketing expense. As David said, QVC International is executing its transformational plan and is on track to deliver significant run rate OIBDA opportunities by 2025. Moving to Cornerstone. Revenue declined 13% in the quarter. The broader home industry remains highly promotional, requiring Cornerstone to offer promotions to stay competitive. We experienced soft demand in most home categories, as well as in apparel at Garnet Hill. Despite the revenue decline, Cornerstone adjusted OIBDA increased 10%, mainly due to favorable supply chain costs from lower ocean shipping rates and less detention and demurrage costs. These gains were partially offset by increased promotional activity and higher fixed cost overhead, reflecting the opening of three new stores in the past year. Turning to cash flow and balance sheet. Year-to-date capital expenditures were $151 million. For all of 2023, we expect capital expenditures to be approximately $250 million. We spent $111 million on renewals of our TV distribution contracts in the first nine months of 2023. Our TV distribution payments can fluctuate year-over-year, depending on renewal cycles, though we continue to expect the two-year average to be approximately $100 million. We have already covered the majority of our 2023 distribution payments through September. Free cash flow for the first nine months of 2023, with a source of $359 million versus a use of $105 million last year. The year-over-year improvement was attributable to increased cash flow from operations, driven by higher earnings and working capital improvements. This was partially offset by higher TV distribution payments year-over-year. In Q4, we anticipate generating additional year-over-year OIBDA gains, which will continue to benefit cash flow. Looking at our debt profile. On September 30th, we had $995 million drawn on the QVC revolver, down $435 million in the third quarter, with $2.1 billion in available capacity. As of September 30th, 2023, Qurate Retail had total cash of $1.1 billion, of which $279 million was at QVC Inc, $448 million was at Liberty Interactive LLC, and $329 million was at Qurate Retail Inc. Our leverage ratio, as defined by the QVC revolving credit facility, was 2.6 times. During 2022 and 2023, we took substantial steps to generate liquidity and position ourselves for the successful execution of our transformation plan. We believe that our debt level is manageable, and our current cushion is sufficient in relation to the 4.5 times maximum net leverage covenant threshold specified in our credit facility. Note that covenant OIBDA includes adjusted OIBDA at QVC and Cornerstone. The gains on the sale-leaseback transactions for the 4 quarters following such transactions, and as of the beginning of this year, also includes a portion of the next 12 months expected cost savings. Our Q3 performance is a clear indication that we are effectively delivering on Project Athens. We grew OIBDA and generated gains in working capital, which in turn led to a significant enhancement in our year-to-date cash flow from operations. We remain confident in our ability to sustain OIBDA growth in Q4 and deliver on our transformation objectives. With that, I'll turn the call over to Greg. Thank you. So I'm pleased to say we're on track with Athens, and you can see some of the tangible results in the numbers today. OIBDA grew for the first time since the second quarter of 2021, and we moderated the revenue decline from the first half of 2023. We saw meaningful growth in cash flow year-over-year, largely due to higher earnings and working capital benefits. Qurate continued to reduce debt and lowered its revolver balance by $435 million, and we retired or exchanged the remaining 1¾ exchangeable debentures during the quarter or right after quarter end. We continue to assess incremental opportunities to improve the balance sheet, and you should expect in the near term, we will devote free cash flow to debt repayment. We look forward to seeing many of you at our Annual Investor Day on Thursday, November ninth, in New York. Additional information is available on our website. John Malone and I will be hosting our annual Q&A session alongside management teams. If you would like to submit questions in advance, you can email investorday@libertymedia.com. With that, operator will open the line for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. The first question comes from the line of Jason Haas with Bank of America. Please go ahead. Hey, good morning, and thanks for taking my questions. So it's good to hear that you're starting to see some signs of stability in the customer count. I was curious if you could talk about what you've seen from spending behavior from your newer customers as they've entered into the ecosystem. Are you seeing them behave similarly to prior cohorts, or are you seeing, you know, a good chunk of those sort of graduate up into your best customers? Thank you. Yeah. Thank you, Jason. I appreciate the question. So new customers, as I mentioned, it was the first growth of new customers really since the pandemic. We tend to look. We find the best correlation for future behavior to be repeat purchase behavior. I would say so far, we've been encouraged by the repeat purchase behavior. All of the data we have suggests that they're going to graduate into being better and better, and eventually best customers at about the same rate as some of our historical trends. What we've learned through the pandemic, though, is that not all customers behave the same. So we try to measure different time periods to predict behavior. Like I said, what we've seen so far suggests that this crop of customers is a relatively healthy, stable, and high-quality crop of customers. So we're very encouraged both by the growth of new customers, the continued attractiveness of the platform. We think we're continuing to find new tools that will be attractive to new and different types of customer within our core customer target groups, and we feel good there. I would say, in addition to new customers, we also feel really good about the performance ... of our best customer group. Keep in mind, best customers, which we define as, in QVC, as customers that buy over 20 times a year, they make up about 18% of the count and 75% of the sales. So even though refreshing the product file with new customers is important to the count, the best customers tend to be the most important to the overall performance of the business. And when you look at QVC, on the last 12-month trailing basis, we were up five percent, or we were up 9% year over year on the 12-month basis in Q3. We had the highest average spend for any quarter in 2023, in Q3. So our best customers are just continuing to really show up for us, and the rate of decline for those customers are substantially under the rate of decline for the overall account. Our retention of those best customers are still in the nineties, which I think is fair to say, world class across world class across retail. Both on the new win for bringing new customers into the platform, but also our most loyal and best customers who drive an awful lot of our results, we feel good about the results of the third quarter. It's great to hear. And then as a follow-up, I'm curious if you could talk about what you saw in terms of the cadence through the quarter. We've had a number of companies calling out some macro-related headwinds. So I'm curious if that's weighed on top-line revenue at all, you know, partially offsetting some of the success you've had with your initiatives. Yeah, it's a fair question. I would say, you know, we definitely saw fluidity through the quarter. But certainly in terms of bottom-line results, we saw pretty good consistency through the quarter. We were a little bit better in July and September than we were in August, but a pretty solid quarter as we went through the quarter. And we saw some different revenue trends across the businesses. I'd say a little bit of deceleration at QxH, but some acceleration in the international businesses as we went through the quarter. But none of that looked very sticky. So I'd call it a pretty even quarter as we went through the quarter. Got it. That's helpful. Thank you. Thank you. Next question comes from the line of William Reutter with Bank of America. Please go ahead. Hey, good morning. This is Rob Rigby on for Bill. So just a question around the category trends. You know, you guys had some pretty strong sales in some of your more discretionary categories, but then you saw softness in beauty sales, which had actually been performing okay on an overall market perspective. So can you just kind of discuss, like, the category trends and what you're seeing? Thank you. Yeah. So Bill, Bill went through some of the dynamics. Do you want to retrace category trends real quick a bit, Bill, and then I'll give some more color over the top? Yeah, and just kind of refresh your memory, and if you look at even on our, you know, slide deck, right? So home, we saw a little bit of return around in performance there relative to the prior quarters, right? We were up 2% in home. I'll talk to QxH, right, just to, you know, kind of normalize a bit. Electronics, that's continuing to be soft, but if you look, we've seen that trend pretty much all year long, right? We started to reduce airtime, and we have been reducing airtime, you know, kind of throughout. And so that's been, you know, softening, you know, kind of category for us, you know, throughout the year. Apparel was down 8%, beauty was down 7%. We've seen a little bit of volatility in that category. You know, we were up in Q2, but down in Q3, and then saw strength within accessories and jewelry. So I think... I mean, I'll let David get into some of the kind of key highlights there. You did see some of this, you know, driven really strong TSV and TS performance at both QVC and HSN, I think, and new item introduction in both of those businesses are probably the largest driver when you look on a period-over-period basis, but relatively consistent across. I mean, I think the only thing you're seeing is a big outlier right now in terms of the business, you know, from just being a kind of on an average of that down three electronics, right? Which continues to be soft for us. Yeah. I would agree with everything Bill said. I'd maybe lift the level above category to make some general observations that we've seen cut across categories. I think the first is, our customer is still willing to spend, even on very expensive items, whether it's a Land Rover, electric bike or scooter, or a leather jacket, or lab-grown diamonds, they're willing to spend on very high price category items. But for things where they don't perceive urgency, they don't perceive an especially strong value, what may have been more throwaway type purchases, she's keeping the credit card in the pocket or in the purse. So we're having to be really sharp. When we are sharp, and I think we've gotten sharper on things like our Today's Special Value, we continue to see a response. But some of the lesser sharp value propositions are, it's harder to get a purchase. So that's been. I think that shows what we're seeing in the overall data around consumer sentiment. But that's been one of the trends that I would say, we've seen. The other thing we've seen, and I think it's related to that trend, is that the customer has responded to our special events, and that's true across categories. And And so we're leaning into that with things like the Foodie Fest. We went pretty big on Christmas in July at QVC. We went pretty big on the HSN birthday anniversary month. Right now, we're doing a nice push with, with Dolly Parton. I talked a little bit about, but those are becoming more important in the business to drive, to drive performance across categories. And I would say they've also been really critical to some of our more recent success with new customers. Okay, great. Thank you. And then just one follow-up from us. So you talked about focusing on debt repayment moving forward, and I was just wondering if you could give a little bit more around your thoughts on repurchasing the notes due in 2024 and 2025. Thank you. Yeah, I think, you've seen us take some of those actions already, and you'll see us continue to look at opportunities to take advantage of attractive opportunities in the debt markets, but I'm not gonna come out and tell you which ones we're buying this week. Thanks. Thank you. Thank you. Next question comes from the line of Carla Casella with JP Morgan. Please go ahead. Hi, great. Just a couple, clarification and follow-up. So, on the new customers, you showed there in your slides that, that your new customers are now 4% of the mix of the sales shift. And I know... Well, in 2021, that was as high as 7%, and in 2022, 5%. I'm wondering how much of the new-- is-- how important and how much of those new customers are funneling into that next basket of existing kind of key, more longer-term customers, and how do you-- how should we think about that? Yeah, it's a good question. So, I don't think we've publicly disclosed this, but we basically know from our historical data, how long it takes a new customer to become a best customer, and what percent of new customers eventually become best customers. Because our best customers are such a small percentage of our file, of course, it's a relatively small percentage of new that end up being best customers. But what we know is that percentage holds relatively consistent, and if we don't have enough, just raw count of new, that we will not graduate enough best customers down the line, say, 12, 18 months from the time they walk into the door. So it's not new, very rarely is a driver of the in-period results. They're usually a driver of results 12-18 months out, once their buying behavior becomes habitual, enough for them to be a substantial customer. The other reason they tend not to be as much a driver of present results is we tend to get new customers coming in into lower margin categories, and then they graduate, up to higher margin categories. So they might come in on electronics and eventually graduate to being a very good fashion customer, where we have, better margins. So that's, that's a little bit about how we think about the progress of new over time. You know, part of that, Carla, I think also it speaks to just the strength of the existing customer base. You know, we talked about kind of the average spend per customer there and how important that core customer base is to us, and that's why you're seeing such a large index, you know, when you're looking at this quarter alone. Okay, great. And then, so are we back to about the same level of, like, your typical new customers as a percentage of the mix from pre-pandemic? I only have the numbers from 2021 on. I would have to, I would have to take a look at that. I don't have it right in front of me. We can, we can get back to you on that. I think we're, we're probably, we're probably a little bit lighter, as on a percentage basis of new in terms of the total customer file, but getting back to what the mix was, pre-pandemic, but we can get back to you with specific numbers. Okay, great. And then just a couple other questions. One, on the product margin favorability, we love seeing that it helped gross margins 180 basis points this quarter. I'm wondering seasonally, should we think about a similar improvement in fourth quarter, or just fourth quarter being more promotional across the industry, should we see less gains in fourth quarter? I think we feel really good about kind of where we're gonna be from product margins and, you know, overall gross margins in the fourth quarter. When you look, I mean, there's a couple of elements to that, right? You know, one, we had we were highly promotional as we were clearing inventory last year, and so you kind of deflated margins associated with that. We had we were still working through high detention and demurrage costs, you know, high ocean freight rates. And so if you as you've seen those things come down from a fulfillment perspective, we still feel really good. Even though there's gonna be like-for-like promotional activity, you know, in the quarter, we, we still feel really good about kind of the trajectory of where gross margin's at, relative to where we were this year, and you should, you know, continue to see kind of year-over-year build there. Okay, that's great. So year-over-year, but probably not quarter-over-quarter. Is that for most retailers, that's what I see? I mean, I think, you know, depending on, you know, 'cause of last year being an anomaly, I think you're looking at pretty close there. Okay. And then one last question. The cost reductions, a lot of it seems to be some—you're taking out the excess freight, but I'm wondering just the sustainability of them, and then can you scale these, even if we don't see tremendous revenue gains, but just the stability? Can you—is there—are there further cost reduction opportunities? So, you know, Bob's gonna let me take that one, right? System, right. When you look at the supply chain costs of, you know, kind of detention, demurrage, ocean freight, all that stuff, right? Kind of coming down to get to what we would, we'd call a normalized level. When you look at everything else in terms of a cost to serve, I mean, we're part of Athens is kind of continuous improvement, and we look at lowering, you know, our cost per unit on from a fulfillment perspective. How do we think about customer acquisition costs? We feel good about the ability to continue to maintain, you know, kind of strong or even a margin growth. We know that, you know, it's a challenged top line environment, and that's a key focus for us, but that was a lot of the work that we've been doing and continue to do with Athens. Yeah, and I would say—I'd say a couple of things. One, some of the cost work that we're doing in some of the international markets, you haven't had an opportunity to really see those show up yet because they're layered in more as sort of 2024 actions. And I'd say they're discrete places where, because of the delay, some of the work we've done hasn't quite shown up in the numbers, and so that's a bit of a tailwind. The other thing I'd say is a lot of our work is not just cost reduction. I think of it more as efficiency increases. And so I think there are a number of places in the business where we can continue to get more efficient. In fact, we have a number of places that we are working on now where we can get more efficient. And then finally, we do have some pretty exceptional one-time costs that have been headwinds this year that are not there next year. We have Athens transformation costs that include some things like third-party and consulting fees that don't repeat. We had the sale-leaseback rents that will cycle next year. And so, we do have both some opportunities to continue leaning into efficiency and some cost type actions that haven't shown up in the numbers yet. And we have some tailwinds from costs that will fall out as we go into 2024. That's great. Thank you so much. Thank you. Next question comes from the line of Karru Martinson with Jefferies. Please go ahead. Good morning. Just following up on Carla's margin question. So if I heard it correctly, parsing kind of through that is, you know, we'll see that continued improvement, we'll see product margin, we'll see freight rate or fulfillment costs coming down, but just not at the same pace as that we saw in the third quarter. Is that the correct way to translate that? I mean, I think over time, I mean, third quarter, obviously, on fulfillment piece, you know, there was a lot we worked through there and a lot on a year-over-year basis. We still feel, you know, kind of that we've still got room to go, especially, you know, on the balance of the year, you know? And then as you get into kind of this time, you know, next year, hopefully, we've kind of normalized, you know, at a lower, you know, kind of cost per unit basis. So we, we feel good about, hey, the, you know, kind of Q3 rolling into Q4, and then obviously, you know, over time, that's gonna work its way through. Okay. And just on the customer count here, when I was taking my notes, you know, you had talked about that the rate of decline had moderated, and you'd seen the biggest turn from the low end of your customer base. Were you talking about your lower-end customers, or were you talking to the folks who, you know, occasionally shop? And I guess in that line, you know, what do you see from your lower-income customers these days? Yeah, so when we said we're seeing the biggest churn from the lower end of our customer file, we were talking about customer frequency. Okay. So it's the customers who purchase the least frequently where we see the highest churn. In terms of customer demographic by income, I'd say generally, keep in mind, we have a higher than average income customer who is even more different than the average when it comes to wealth because of where they tend to be at the stage in their life when they come into our platform. So that customer is a bit insulated, and they've also been a little bit insulated by some things like student loan repayment, where they're affected in a number of ways, sometimes because they're helping kids, sometimes because they're younger and still have student loans, but probably less affected than the average customer. So we see some of the benefits of the insulation from our core customer and their performance. In some of the less wealthy customers, we definitely see more impact of the economy. Okay. And just for a point of clarification, paying down the revolver here, that will free that up. That's fungible. You can use that to redeem the bonds, correct? Yeah, we got 0.1. Yeah, I think it's fair- Go ahead. I think it's fair... It's Ben Oren. I think it's fair to say that the 2024 and 25 notes will be dealt with with cash on hand and revolver over time. I'm not gonna talk about what the pace of that is, but that's probably the best expectation. Thank you very much. Appreciate it. Thank you. The last question comes from the line of Hale Holden with Barclays. Please go ahead. Hey, good morning. I just had two questions. It was, David, it was great to hear you throw that marker out for flat revenue growth in 2024. You know, when you said that earlier this year, at least my impression is things have slowed down a little bit. So maybe you could talk about puts and takes on how you keep that flat despite maybe a slower macro environment? Yeah, thank you for the question. I'd say a couple of things. I don't think I said flat revenue growth for 2024. I think I said stable revenue growth through 2024. The way we think about stable is plus or minus a few points on flat. And so I'd say we, we got to stability in Q3 on the, on the top line. The reason why that's important is we're doing a lot of cost and margin work, and if you see the type of declines in revenue we had in, say, 2022, it's hard to do enough of that work for it to show up on the bottom line. I think given our Project Athens transformation and the way it's shaped, as long as we have relative stability on the top line, we should still be able to achieve our free cash flow and, and OIBDA growth objectives, which, we continue to have real confidence in. I would say we've designed this from the beginning to be able to do well in a wide variety of macro environments. We don't need strong growth in our most relevant categories to be able to deliver. In some ways, the macro environment in Q3 wasn't great. We think on a sales basis, we grew better than the discretionary general merchandise data suggests that the categories we play in grew, so we haven't had the benefit of a great macro environment so far. Looking into Q4 and first half of next year, we think we can deliver in anything that's foreseeable. If we end up in a deep recession, obviously, that's a different situation. But I think, we can, we can continue to execute and have good, free cash flow and OIBDA performance in a variety of macro environments. We are, we are not premising, this on a substantial improvement, certainly in the overall macro environment. Great. Then, I think one of the—I'd have to check my notes, but one of the other numbers you gave was a 16-minute improvement in viewership on a daily basis. And I was wondering if you could help give us some context on, you know, where average length of viewership was versus kind of historical norms, 'cause that seems like a really strong improvement metric. Yeah, it was. It was 15% improvement in viewership for the quarter. We think that has a lot to do with some of our. We think that has a lot to do with some of our programming. We think we're bringing people, we think we're bringing people into a lot of the special events. I walked through some of them in the context of our script. And so, we think it also just shows stability in the file. We think it shows a lot of stability and our ability to continue to bring people back. And keep in mind that also that's a linear channel measurement, and so, that's not including some of the growth that we were having in our digital platforms. And so, we feel very good about being able to continue increasing viewership. Great, thank you. I'm gonna go try to find that Land Rover bike for Christmas. I appreciate it. Buy two. All right. Thank you, for your attendance and interest in today's earnings announcement. We look forward to, as we said, to seeing some of you next week in New York. With that, operator, I think we'll close the floor. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.